The document discusses HP's supply chain and logistics network. It describes how the network adapts to volatile markets and creates new capabilities for emerging markets. Key points are developing a highly responsive, predictable, and cost-effective supply chain while ensuring social and environmental responsibility. The challenges are anticipating changing customer needs, business models, competition, and disasters as well as expanding into new markets with different practices and regulations.

1. Supply Chain & Logistics
adaptive to volatile and
emerging markets
Bert de Winter
Director, EMEA Logistics Operations
Printing and Personal Systems Group
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential

2. HP SC & Logistics network adapts to volatile markets
and creates new capabilities for emerging markets
Key take away’s
• Characteristics of highly responsive supply chain to cope
with changing business needs
• Challenges to grow your supply chain capabilities for
Emerging Markets
2 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

3. Leading Innovation for More Than 75 Years
1963 1975 1989 2003 2012
Frequency Standard for Digital data Smart cooling Moonshot
synthesizer interface bus storage drive
1956 1986 2011
Oscilloscope 3D graphics 2002 MagCloud
1972 workstations Rewritable DVD for
1951 Pocket scientific 2011
standard players
High-speed calculator 1986 3D Photon
frequency counter Commercialized Engine
2001
1968 RISC chips
1942 Utility data center 2011
High-reliability voltmeter Programmable desktop
StoreOnce
calculator 1999
1984
Inkjet printer Molecular logic gate
1939 2010
Company founding 1966 ePrint
Resistance capacitance audio oscillator Light emitting diode (LED)
1964 1980 2005
Cesium-beam atomic clock Office laser printer 1994 Virus throttle
1980 64-bit architecture
64-channel ultrasound
3 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

4. Today, HP Is the World’s Largest Technology Company
Solutions Customer-centric solutions that make it all work.
Services Industry and technology services solving key customer problems
Software Best-in-class software providing confidence, insight, and agility
Infrastructure World’s largest provider of technology hardware infrastructure
Cloud Security Information
4 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

5. One of Industry’s Largest Supply Chains
Procure Make Deliver Customer
>600 136 92 ~42k
Suppliers Manufacturing Sites Distribution Nodes
Direct Enterprise Customers
$60B+ 120M 98+ ~160K
Total Spend PCs & Printers/Year Logistics Partners
Retail Stores Worldwide
5 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

6. We aspire to build the industry’s
best “a 10 out of 10” Supply Chain
(FY11 vs. FY09)
Nodes 26%
Total Suppliers 47%
IT Assets 52%
Supply Chain Processes 30%
6 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential
notice.

7. Every 60 Seconds….
Printing & Personal Systems group delivers to our customers
7
120 PCs 100 Printers
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

8. PPS EMEA Supply Chain at a glance
Customers
150 Countries • 150 Corporate Enterprise Public accounts
• 2000 Channel partners
25 Localizations
• 500 Retailers
35 Languages • 15-20,000 “ship to addresses”
Products
8 Printers Factories • 10+ Inkjet Platforms
9 PCs Factories • 40+ Laser Platforms
Shipments 2012 • 5 product categories in Graphics
5 Distribution Centers
• 8.4M Deskbased PCs • 20+ Notebook Platforms
• 14.5M Notebooks • 13+ Desktop Platforms
• 9.2M Inkjets printers 8 Forwarders • 5 Workstation Platforms
• 5.7M Laser printers • 20+ Monitor Platforms
• 20M accessories & monitors • + Accessories
• 200M supplies 450,000 tons shipped • + Custom Integration services
8 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

9. Key PPS EMEA supply chain characteristics
PCs
• Build to order
• Ship from factories
• Average order to delivery (OTD) by truck or air = 10 WD (DT) / 15 WD (NB)
• OTD sea = 40 WD, cost = -$xx vs air
• Inventory = 15 DOI
Printers
• Build to plan
• Ship from DC’s in Germany and Dubai
• DC OTD = 7 WD, Factory OTD = 40 WD (ink) / 60 WD (laser)
• Inventory = 45 DOI
Supplies
• Build to plan
• Ship from DC’s in Germany and Dubai
• DC OTD = 6 WD, Factory OTD = 20 (ink) / 60 (toner) WD
• Inventory = 30 DOI
9 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

10. PPS EMEA Operations
OUR VISION
Customers choose We invent
PPS products for the the future of
differentiating value Printers &
we provide through PCs
a cost effective, Supply
responsive, and a Chains
predictable supply
chain while ensuring
environmental
responsibilities
10 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

11. PPS EMEA Operations
Key Priorities Strategy FY13
Cost & quality advantage
Refine the Network
Competitive speed & predictability
Converge Processes and Tools Minimize fixed costs, assets and Inventory
Improve Quality E2E Adaptive and resilient to environment variation
Leverage capabilities across GTM and product categories
Optimize Inventory &
Cash Flow Favor growth in graphics and emerging markets (CEE/MEMA)
Lead in Social &
Environmental Responsibility Develop & Grow our resources
11 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

12. PPS EMEA – Deskbased – FY13
A regional network of factories located close to the key markets
FY13
priorities Inbound Logistics costs
For Russia
All EMEA
RU
MEMA Network expansion
CZ
TR Russia Export to KZ & VMI
For MEMA only
Retail Predictability
Consolidation Hub in CZ
Factory
DC
Inbound Hub
12
Cross dock Hub
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

13. PPS EMEA – Notebooks – FY13
Rely on Asia manufacturing and improve deliveries to emerging countries & CEP
FY13
priorities IDS CEP Direct customers
IDS Air NL
Speed and Predictability
IDS Air Russia
NL
Rail Deployment to
Russia, Kazakhstan
IDS Air Turkey
IDS Air
Shangai
Sea via Greece
Middle-East Chongqing
+FOB
IDS Sea
IDS Sea
NB Factory
IDS Air South Africa Cross dock Hub
13 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

14. PPS EMEA – Laser – FY13 / FY14
FY13: Manufacturing in Asia, delivering from regional distribution centers
FY14: Direct Ship from EU and Asia factories + ad hoc Ship from Stock
FY13
priorities Factory Build to Order
NL Direct ship from Factories
Germany
Long Scheduled Orders
Shangai
Dubai
Shenzen
Rail from China
Hanoi
Printer Factory
Distribution Center
Hub cross dock
14 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

15. PPS EMEA – Inkjet – FY13
Manufacturing in Asia, delivering from regional distribution centers
FY13
priorities Sea from Dubai to RSA &
Tanzania
Factory Build to Order
Germany
Direct ship from Factories
Dubai
Bangkok
Shenzen
Long Scheduled Orders
Malaysia
Sea to RSA
& Tanzania
Inkjet Factory
Distribution Centers
15 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

16. PPS EMEA – Graphics – FY13
Manufacturing in Europe, US, Middle East & Asia.
Delivering from Israel & Regional distribution center
FY13
Direct ship from Factories
US
priorities
Sweden
Direct ship from Israel via
NL
Koper
Israel Scaleable special logistics
China
services
Singapore
Graphic Factory
Distribution Center
16
Hub cross dock
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

17. “Putting PCs on Trains, Not People”
1,900 44 3.6M
Containers Trains PPS Products
Venray-Oostrum Pardubice
Netherlands Czech Republic
Chongqing
China
17 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

18. CO2e Emission Factors in Transport
0.57 0.01
International Air Ocean
CO2 Emission Factors
kg-km/CO2
0.072 0.02
Surface Rail
18 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

19. Driving Factors for Selecting Ocean Freight Gateways
Supply Chain Costs Turn-around Time Ocean Freight Dynamics
19 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

20. HP SC & Logistics network adapts to volatile markets
and creates new capabilities for emerging markets
• Design and execute a highly responsive, predictable and cost effective supply chain while
continuously streamlining operations and ensuring social and environmental responsibility
Anticipate challenges Cost
• Changing customer needs
• Different business models criteria
Cash flow
• New competition
• Macro economics Transit time
• Natural disasters
considerations
Customer satisfaction
Emerging Markets
• Local practices Quality
• New or fast changing Regulations
• Logistics Infrastructure Partner development
20 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential

21. Working to Build
Industry’s Best
Supply Chain
21 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without not ice. HP Confidential
notice.