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ADTRAN: The Network Access Company

ADTRAN: The Network Access Company. Telecommunications. Multi-billion dollar industry Voice and digital data transmission Carrier and End User. Where we are today. Product portfolio - 1,400 16 year profitability history 2004 revenue - $454 million 2004 units produced - 2.3 million

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ADTRAN: The Network Access Company

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  1. ADTRAN:The Network Access Company

  2. Telecommunications • Multi-billion dollar industry • Voice and digital data transmission • Carrier and End User

  3. Where we are today • Product portfolio - 1,400 • 16 year profitability history • 2004 revenue - $454 million • 2004 units produced - 2.3 million • 1,674 employees • Huntsville, Alabama

  4. “Disruptive” Market Strategy • Identify proven, high-volume market opportunities • Out-engineer the competition • Re-engineer/cost-reduce products • Drive for market share leadership

  5. Solid Customer Base CarrierGlobalEnterprise

  6. The Winning Edge • Engineering innovation • In-house silicon development • Instrumental in industry standards development • Proven engineer development program • Culture of cost engineering • Released 241 new products in 2003 • Manufacturing efficiencies • Advanced supply chain management • High-volume production • Superior customer support • Attentive pre- and post-sales technical support • Comprehensive training programs • Supportive installation and maintenance programs

  7. Supply Chain Overview • 200 Employees • Planning • Purchasing • Transportation / Logistics • Manufacturing / Outsourcing • Raw Material / Finished Goods Warehouses • Finance • Systems

  8. Supply Chain Mission & Strategy Charter To Be A World Class Telecommunications Supply Chain Focused On Customer Service, Quality And Financial Performance Mission Our Mission Is To Develop And Implement “Best In Class” Supply Chain Processes and Strategies

  9. OUTSOURCE MANAGEMENT

  10. OUTSOURCING CONSIDERATIONS • Global Services Supply Chain • Align Outsourcing Strategy with Corporate Strategy • Define Scope • Manufacturing • Supply Chain Management / Logistics • BPO • Define Specific Objectives • Tactical • Reduce Operating Costs; Reduce Capital Expense; Demand Variability Management; Supply Chain Optimization • Strategic • Leverage CM Core-Competency; Improve Internal Business Focus; Shared Risks; Supply Chain Leverage; Global Footprint Benefits DF Model

  11. OUTSOURCING CONSIDERATIONS • Service Provider Selection • Considerations • Global Footprint; Process Maturity; Sectors Serviced; Scope of Services; Certification / Industry Specifics; Process Controls; IT- System Capabilities, Integration Opportunities; Supply Chain - Organization, Annual Spend, Processes • Partnership Model • Drives Best Long-Term ROI • Involvement in business goals and development of associated strategy • Improves Risk Management • Contingency planning • Associated Communication Flow Process • Robust data exchange • Focused resources • Supply Chain Initiatives • Cost reduction • Enhance flexibility / Reduce liability

  12. ADTRAN GLOBAL MANUFACTURING PARTNERING FOR SUCCESS

  13. Supply Chain Supply Chain Logistics MIGRANE

  14. Negative Impacts • Asia Trade Lane Capacity-Congestion • Supply Chain Complexity • Security Regulations-Initiatives • Carriers Market • U.S. Logistics Infrastructure

  15. Offensive Logistics Strategy • Leveraging your transportation spend • Plan what-if scenarios with executive management • Partner only with 1-2 major service providers • Take control of your inbound freight spend

  16. Offensive Logistics Strategy • Offer incentive based contracts • Share capacity forecast with primary carriers, daily, weekly, monthly • Plan alternate ocean methods to intercept or transfer containers on the west coast

  17. Offensive Logistics Strategy • All water routes through the Panama Canal to East Coast Ports • Negotiate flat all-in rates to include surcharges, with tiered pricing negotiated in advance for Peak • Set clearly defined performance expectations with carriers

  18. Offensive Logistics Strategy • Maintain high corporate visibility at VP and CEO level • Campus visit and supply chain operations tour • Establish penalties for damaged, late, bumped freight

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