1. Optimization of
Global Business Operations
A Case Study for a
Telecom Company

2. Review of Business Performance
Focus Areas Findings
• Manufacturing • Manufacturing not core
• Inventory Control competency
• Logistics • Organization lacked
• Component Cost discipline for inventory
Control
• Forecasting
• Needed strategic partners
Goals for logistics, not shippers
• Increase Gross Margin • Design was using too
• Reduce Operating many unique components
Expenses from too many different
• Better use of Capital & suppliers.
Cash • Forecasting by Sales was
inefficient & wrong

3. Review led to changes
Solutions Result
• Outsource Mfg • Sold plants to contract mfg
• Partner with 3PL • Consolidate warehouses
• Implement virtual • Outsource logistics, partner
fulfillment and visibility w/ 3PL, integrate suppliers
across global supply chain • Reduce unique
• Collaborate on designs components, reduce
with select suppliers, end suppliers
silo design process • Forecast moves from Sales
• Develop forecast tool to Supply Chain
based on Supply Chain • Moved to build-to-order
from build-to-stock
inventory model

4. Operational Efficiency
45.0 8.0
7.5 41.8
40.0
6.9 7.0
36.8
35.0
6.0
33.1
32.1
5.6 31.3
30.0
4.9 5.0
4.6
25.0
4.0
3.8
20.0
3.0
15.0 15.3
12.6
2.0
10.0
1.3
1.0
5.0
Integrated Business Solution Tactical ERP Project Strategic Initiatives
0.0 0.0
2001 2002 2003 2004 2005 2006 2007
Gross Margin Inventory Turns

5. Critical Issue: Reactive Problem Management
Spreadsheets E-Mail • Lack of end-to-end visibility:
from order entry to final delivery
• Reactive, partly manual, error-
prone order fulfillment process
• Difficulty managing the end-of-
quarter process
• Information Flow Through .XLS,
Phone Fax
e-Mail, Phone & Fax
• Missing, old and inaccurate
Multiple SAP supply chain data
Access Databases Instances &
Modules • No visibility to exceptions:
labor-intensive mitigation
• Multiple points of process
failure
• Material availability issues
negatively impact delivery
performance
We know what we have
We don’t know of what we don’t have

6. Optimization of Inventory
Q4-01 Q4-02 Q4-03 Q4-04
Total Inventory
$3,646M $1,363M $632M $822M
($5.1B in Q4-00)
Inventory Turns 1.3 5.6 7.5 6.9
Finished Goods Inventory
$1,693M $711M $465M $604M
($2.8B in Q4-00)
End to end visibility and streamlined warehousing
operations allowed Client to move towards a virtual
fulfillment model by consolidating warehouses and enable
just-in-time deliveries from their suppliers, helping to lower
overall inventory in hand.

7. Improved Margins
Q4-01 Q4-02 Q4-03 Q4-04
Manufacturing Budget $1.9B $435M ~$150M ~$150M
90% in High 70% in Low 85% in Low 90% in Low
Circuit Pack Manufacture
Cost Regions Cost Regions Cost Regions Cost Regions
Employees (127,000 in Q4-00) 77,000 47,000 34,500 31,800
Deferred Revenue $1,473M $682M $507M $593M
Gross Margin 15.3% 12.6% 31,3% 41.8%