Global SCM IT Application & IT Profession

1. Global SCM IT Application&IT Profession Hans Chen TestRite International Inc. May 31, 2007

2. Personal Background • 6 years in Mechanical Engineering academic training (NTU + Cornell) • 11 years in 3D imaging research (UCSF) • Technical staff • 2 years in airport security equipment (GE) • Control Software Manager • 2 years in semiconductor equipment (Apply Materials) • Control Software Manager • 6 years in trading (TestRite) • Head of MIS (5 year) • Head of SIT business unit (1 year)

3. Outline • Global Retail SCM IT Application • 4 Retail Challenges • Right product, right price, right time & right quantity • Real time supply chain visibility is a must • Wal-Mart warehouse service case study • IT Profession • IT Role & Responsibility • Key Characteristics

4. 4 Retail Challenges • Right Product • Shopping is an entertainment • Right Price • Value sell a product not price • Right Quantity • Right Time • Slim margin & short product life cycle • Inventory control is critical

5. Global Sourcing Evolution Supplier market research Over 70% of China IPOs are focusing on the development of fundamental capabilities Fundamental capabilities Supplier identification & qualification Supplier development Identify saving opportunity Product Quality Inspection Supplier database development Execute bidding To materialize identified saving opportunities, China IPOs needs to develop transactional capabilities Transactional capabilities Logistics management Procurement transactions Invoicing & payment Category management Progressive & sustaining capabilities To maximize and sustain saving achievement, China IPO needs more sophisticated capabilities Develop supplier market strategies Inventory management Procurement & sourcing training *Source: Accenture and CSCC IPO Survey, 2005 0% 50% 100%

6. Global Sourcing Obstacles and Risks Source: March 2006, “Sourcing in Low-Cost Countries” by eyeforprocurement

7. Global Logistics Overview Demand Planning Exception Management SCM Strategy Supply Planning Fulfill -ment Sales forecast management Logistics Master Plan Implemen-tation Plan Definition of Role and Responsibility of all parties Order Processing Inspection Shipment management Payment Management Warehousing Supply planning management Order processing Shipment Consolidation Under Forecast Management Over Forecast Management Delay Shipment Management Supply Chain Collaboration Platform

8. Global Supply Chain Overview Factory PO Factory PO 2W Lead Time Asia Buying Office Head Office Factory PO Receiving ASN US DC Asia Warehouse Consolidation Yard Asia Factory Replenishment 5 Day Lead Time Store Inventory Production 6W 6W 4W 4W 4W Import Warehouse On Water Factory Store

9. Demand Specialist Supply Specialist Retail System GSS* DC 3PL Supply Chain Visibility & Collaboration Homeland Asia Supply Planning Exception Alert Demand Forecast Rebuy PO Store POS Store Inventory Asia Factory Integration PO Acknowledge Factory Inventory Booking Shipment Container Loading Freight Invoice Receiving DC Inventory Store Order * Global Sourcing Solution

10. Complete Supply Chain Visibility Weekly Store Sales Monthly Store Sales Monthly DC Demand Monthly DC Demand Forecast Monthly DC Supply Monthly DC On Hand Qty Day On Hand

11. Test Rite Experience Test Rite Logistics Operation Summary Period: August,05 ~ August,06 8+DC Inventory Yearly Turnover Rate

12. Test Rite Experience Test Rite Logistics Operation Summary Period: August,05 ~ August,06

13. Wal-Mart 2006 Storage Business Performance 2006 2005 Sales: $43.9M $31.4M 39.87% Instock: 95.17% 92.61% 2.76% Retail Turns: 6.49 5.60 15.98% Net Margin %: 46.46% 42.32% 9.80% Avg Lead Time: 3.33 4.80 31% Repl Order Fill Rate: 95.13% 89.73% 6.02%

14. SCM DEMO

15. Outline • Global SCM IT Application • 4 Retail Challenges • Right product, right price, right time & right quantity • Real time supply chain visibility is a must • Wal-Mart warehouse service case study • IT Profession • IT Role & Responsibility • Key Characteristics

16. IT Application Development • Application Analysist • BA/SA • Application Architect • Frame work, design pattern, etc • Database Architect • Data store, modeling, backup, restore, etc. • GUI Designer • User interface, fool proof, online help, etc. • System Engineer • Hardware sizing, performance tuning, etc. • Report Manager • Management report design, access control, etc. • Deployment Manager • QA, QC, configuration management, etc.

17. IT Roles & Responsibilities From “What business wants IT to do” to “What can IT do for business” From cost management to investment management From operation support to business strategy partner IT play a vital role in business evolution

18. Key IT Profession Characteristics • Business Orientation • Communication • Analytical • Flexible • Technical

19. Business Orientation • Industry overview • Company competitive advantage • Company challenges and weakness • Short & long term business focuses

20. Communication • Proactive • Feel the pulse of business life line. • Propose a solution before it is asked • Multidiscipline • Management view • Operation view • Technical view • IT Business view • Confirm understanding is critical

21. Analytical • Understand history, support today business and ready for tomorrow challenges • Assemble whole picture from segmented inputs • See beyond the surface • Never expect user give you the whole picture

22. Flexible • “Changes” is part of business • Business survive by being able to catch up with the changes. • Business succeed by being able to lead the changes. • Foresee changes, prepare for changes and welcome changes

23. Technical • Timing is critical, schedule is the key • Be as broad as possible • Don’t have to be my way • Fast learner • Think twice before committing any in-house development project

24. To be successful, learn from ….