1. e-Enabling an Efficient Supply Chain Robert Pyzdrowski President, Operations R.R. Donnelley

2. Agenda papiNet Goals Why Standards? The Need for Collaboration Other Industry Standards Intel and RosettaNet Benefits for the Print Supply Chain

3. papiNet’s Goal is … Improve the efficiency of the paper supply chain and remove cost by: - Enabling collaboration - Documenting standard business processes - Improving communications - Reducing the cost of electronic communications

4. Standards enable collaboration Why Standards? Standards are fundamental to an efficient supply chain: - Enable timely, efficient and effective communications - Avoid costly/non-value added translation activities - Enable fast and widespread connectivity - Avoid “one-off”custom connections

5. The Need for Collaboration Challenging economic and market conditions An inefficient supply chain Significant “muda” in the supply chain Our customers need and expect more from us

6. "90% of enterprises that fail to provide visibility and supply chain automation by 2004 will lose their status as preferred suppliers." Karen Peterson, Director, Gartner Inc., August 2002 The Need for Collaboration

7. Electrical safety Quality systems Internet Electronics Supply Chain Paper Supply Chain UL (Underwriters Labs) ISO HTML RosettaNet papiNet IndustryStandard Other Industry Benefits From Standards

8. In 2002, Intel used RosettaNet standards for: 10% of revenue ($3 billion) 10% of supplier spend ($2 billion) 30,000 transactions/month 90 customers and suppliers in 17 countries Intel’s objective 100% e-enabled corporation Source: Intel press release 12/10/02 Intel Leverages RosettaNet Standards

9. Intel sees a $500 million long-term opportunity to reduce supply chain costs through collaboration and use of RosettaNet standards: Collaborative demand forecasting Order management Shipping/receiving logistics Invoicing Payments Elimination of EDI –Source: InformationWeek 12/9/02 Why Standards?

10. Standard or “one-off” custom interfaces? Publishers/ Catalogers Paper Companies Printers/ Converters Agents Brokers Merchants dot coms Which is better for our supply chain? Our Choice

11. Improved customer satisfaction Reduced I.T. infrastructure investment Reduced administrative costs Faster communications Better information for decision making A more efficient supply chain keeps print viable! Benefits for Our Supply Chain

12. Defining papiNet Sara Freund Executive Director, E-Business American Forest & Paper Association

13. Defining papiNet papiNet Organization and Membership papiNet Goals How papiNet automates the Supply Chain Implementation Status How to Become a Member Agenda

14. papiNet Is… An international paper and forest products industry e-business initiative. A set of standard electronic documents that facilitates the flow of information among parties engaged in the buying, selling, and distribution of paper and forest products. Enabler for collaborative electronic business using the internet.

15. papiNet Executive Committee papiNet NA Membership Board papiNet Euro Membership Board Implementation Coordinating Council Convergence and Partnering Council Note: There is considerable collaboration between ALL the boxes in the papiNet Organization model. Highest priority is Implementation! Segment Implementatio n Groups Central Work Group 2003 papiNet Organization

16. Ahlström AssiDomän Burgo ENCE Expresso Fedrigoni Holmen Paper International Paper Kappa Korsnäs Lecta Mayr-Melnhof M-real Mondi Myllykoski Norske Skog Portucel/Soporcel Sappi SCA Smurfit Södra Stora Enso UPM-Kymmene papiNet Europe Membership

17. Abitibi-Consolidated Advance Magazine Publishers Bowater America Brown Printing Dupont ForestExpress G+J USA Publishing International Paper Lands’ End Madison Paper Industries MeadWestvaco Perry Judd’s Quad Graphics Inc. Quebecor World R.R. Donnelley Sappi Fine Paper, NA Seeburger SP Newsprint Stora Enso NA Tembec Tietoenator Majiq Time Inc UPM-Kymmene Weyerhaeuser Company papiNet NA Membership

18. To increase efficiencies in transaction and marketplace activities through -documented business processes, with -Supporting standard XML messages, and -consistent data definitions, common terminology and formats -“real-time” exchange of information through the internet To ensure that the standards are interoperable -Between trading partners in the paper and forest products industry. -Between trading partners in other industries -ebXML envelope -Engage other standards initiatives To provide standards that are open and freely available papiNet Goals

19. Set of common electronic formats and terminology for the paper and forest products industry -Designed to facilitate system-to-system real time exchange of information between buyers and sellers -Categories: Basic Order Fulfillment Supply Chain Management Product Quality papiNet Standard

20. papiNet messages can be categorized according to the Supply-Chain Council’s, Supply-Chain Operations Reference (SCOR) model Product Attributes Planning Request For Quotation Availability Purchase Order Order Confirmation Call-Off Order Status Inventory Status Product Quality Usage Inventory Change Product Performance Delivery Message Goods Receipt Invoice Credit/Debit Note Business Ack Information Request Complaint Complaint Request Supply Models

21. Implementation benchmark survey completed November 2002 80 trading partners engaged in implementation 2003 goal -All 80 in production -50 more in testing Quarterly surveys throughout 2003 Implementation Status

22. Total Live and Planned Implementations

23. Basic messages are used most frequently including Delivery Message, Purchase Order, Invoice, Order Confirmation, Business Acknowledgement and Goods Receipt There is still a long way to go on Basic messages before other messages will be implemented Europe is moving faster than North America Implementation Comments

24. Groups Already Formed: -XBITS (NA Book Manufacturers) -Publication Papers (Europe) -Fine Papers (Europe) -Packaging (Europe) Groups To Be Formed in 2003: -Publication Papers (NA) -Fine Papers (NA) -Packaging - Containerboard and Paperboard (NA) -Label Stock (Global) -Recovered Paper (Global) Segment Implementation Groups (SIGs)

25. Enhancements to the papiNet Standard Understand benefits of integration and use of the standard Develop ROI information Develop typical business cases Document best practices for use of the standard in this channel Network and share implementation information Collaborative web site Segment Implementation Group (SIG) Activities

26. Corporate Members ($10,000 for new members, $5,000 current members) -Seat on papiNet NA Board; official member -Seat on One Segment’s SIG Oversight Council -Participation in One Segment’s Implementation Group -Support for Ongoing papiNet Operations Membership in an Implementation Group Only ($2,500) papiNet NA Membership Categories

27. www.papinet.org papiNet NA -David Steinhardt, 703 837-1066 or dsteinhardt@idealliance.org Contact Us

28. Implementing papiNet Al Ivan Executive Director, E-Business MeadWestvaco Corporation Paul Reid Manager, Paper Systems Time Inc.

29. Agenda What are the papiNet Messages? How do I get a papiNet project started? How can I improve my chances of success? What are the benefits?

30. V2.0 August 2002 Release Usage Order Status Inventory Status Inventory Change Information Request Product Attributes June 2001 Release Purchase Order Order Confirmation Call Off Delivery Message Invoice V1.0 Feb 2002 Release RFQ RFQ Response Goods Receipt Credit Debit Note Business Ack V1.1 Schema V2.1 January 2003 Industry Review Availability Planning Product Performance Product Quality Complaint Complaint Response papiNet automates the complete supply chain

31. Use E-Business as an opportunity to review your entire supply chain Recognize that papiNet is an industry-wide opportunity to lower costs Position papiNet as a partnership with your key trading partners to improve the supply chain -include suppliers, publishers, merchants, printers, component vendors Develop a vision of a papiNet-enhanced future business model that includes your trading partners Sell the project as essential to this future model of doing business How Do I Get a papiNet project started?

32. Dedicate key IT and business people to becoming knowledgeable about papiNet Recognize the learning curve of new technologies in trading XML over the internet Be realistic about the timeframe of an initial implementation -6-9 months based on how papiNet fits with your existing systems -Services of 3 rd party marketplace vendors may aid implementation Leverage experiences from other implementers Use the papiNet Implementation Guide How can I improve my chances of success?

33. Consider using papiNet messages as a key component to retool your core systems Target simpler, logical message combinations first -Purchase Order, Order Confirmation -Delivery Message, Invoice Then build from these implementations to more complex messages like Planning Develop a comprehensive test plan that involves key trading partners How can I improve my chances of success?

34. Mutually supportive engagement with your trading partners Modest cost savings in handling paper Cost savings due to Value Added Network elimination if migrating from EDI Decline in errors Reduced Paper Inventory What are some Benefits?

35. Motivated, XML-knowledgeable staff XML is the directional “language of the Internet” XML can open the door to smaller and medium size customers papiNet is gaining traction in the entire paper and forest products industry (Book, Wood, Label Stock, Pulp, Recovered Paper) What are some Benefits?

36. Questions???