E- HOS C LIBER. QMS + C2K = TSA s? A Shipper s Perspective. Microsoft s View on Transportation Service Providers and Visibility into the Supply Chain

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1 QMS + C2K = TSA s? A Shipper s Perspective Microsoft s View on Transportation Service Providers and Visibility into the Supply Chain C LIBER Jim Patton E- HOS Jim Patton Director Global Trade Compliance and Policy March 10, 2010

2 Microsoft Corporation Co-founded in 1975 by Bill Gates, Paul Allen. Now 92,000 employees Original Mission: A computer on every desk and in every home, running Microsoft software. With release of Windows 7 in December 2009, Windows finished the year with a 92.2 % share in operating systems. World's largest software company by revenue, with $58.43 billion of revenue in Now far more than a software company, with MSN, MSNBC, Xbox 360, WindowsLive and Online Services In 2008, Standard & Poor s upgraded the stock to AAA, the highest possible rating and only the 5 th US company to reach such rating. Microsoft: Your Potential, Our Passion 9

3 Microsoft Global Trade Organization: Scope 60% of sales outside of the US Ship to 147 different countries Sales subsidiaries i on every continent t 4 Regional Operating Centers and Mini-OC s Hardware and software shipments employing all modes of transport Third party management of supply chain activity 10

4 Microsoft Global Trade Organization: Mission GTO Mission: Drive access to global markets and set the standard for world-class trade compliance with breakthrough approaches in risk management, thought leader engagement, and excellence in personal leadership. 11

5 Microsoft s TSA Selection Criteria Ability to integrate service provision across supply chain Reliability and timeliness of services Supply chain security Regulatory compliance standards Visibility for MS into goods movement Performance measurement and data connectivity Price competitiveness 12

6 Cargo 2000 Customer Service Aspects Provide a range of guaranteed door-to-door, time definite services globally at competitive price levels. Deliver as promised against agreed measurable criteria, deliver on-time, deliver complete, deliver secure contents, with no loss, damage or pilferage. Pro-actively communicate reliable and timely information, including 24 hour 365 day customer service. Simplify procedures industry wide while migrating to electronic trading. Ensure accurate billing and total cost transparency between all parties. 13

7 TSP Management from Set-up to Operations TSP Onboarding Corporate standard Transportation Services Agreement, SOW Onboarding meetings between regional, corporate and TSP team. Close coordination between MSFT trade and logistics teams, TSP s and brokers from onset. Establishment of data sharing standards upfront. Supply Chain Management Regular meetings between service providers and our managers Data shared between transportation service provider, broker and importer Regular reporting of issues, delays and errors, with RCA and corrective action plans tracked 14

8 Compliance/Infrastructure Projects to Meet Needs C LIBER E- HOS chain activity SAP back-end enhancements (invoicing and screening) TradeNet Compliance Documentation Broker/Freight Forwarder Management system Robust user interface Impacts: Tracking, screening, invoicing, reporting, delivery speed, record keeping, awareness of ftrade requirements Standardizes requirements for supply chain activity Establishes SME oversight of supply chain management processes Enables reporting and visibility into costs and payments (FCPA compliance, VAT recovery) Impacts: Compliance standards, d itemized costs, auditable data and reporting, delivery speed 15

9 ETHOS Infrastructure: Leveraging MS Solutions The Backbone - Compliance Screening - Enhanced and flexible documentation - Electronic Invoices Cost and shipment delay reductions SAP Backbone Trade Broker Database - Electronic feeds from Brokers - Data granularity & clarity - Access to data and reporting enhancements Electronic Feeds Brokers + Freight Forwarders C Costt reductions d ti / VAT retrieval Trade Database Electronic Feeds TradeNet Portal - Portal for all Trade Information - Access point to product information - Feeds directly from backbone for reporting Base IT Platform Microsoft Corporation, 2007 OS ETHO Access to information and basis for reporting Data availability, management reporting, access to training TradeNet Portal Users Common IT infrastructure Infrastructure and Management Layer

10 Uniform Standards, Data Reporting, & Audit CALIBER BROKERAGE MANAGEMENT Tier 1 Tier 2 IMPROVEMENTS Vendor Freight Forwarder Broker Customs Clearance Broker Data Opportunity to do direct filing to Customs through system Customs Gov t Agencies SED SED Filing AES AES Filing Standard data reporting elements mandatory for all brokers and vendors Broker Systems XML Vendor Systems Electronic order info Transfer between systems G/L Accounts accommodate Trade elements Broker Data Vendor COO/etc. data from system to DTVs Approved Brokers Only Broker Broker Trade provides standards and conducts audits of brokerage community Customs Government Agencies ETHOS SYSTEMS IMPROVEMENTS Direct Filing (Where appropriate) SAP/GTS Global Process Vendors engage a specific broker community who meet Microsoft Trade Standards and undergo rigorous training and audit Compliance Increased accuracy Real-time updates Data Access and granularity Trade Management Planning/Strategic Management Manage brokerage for compliance and payment accuracy FCPA review Broker Compliance Manager (GTO) GTO Broker control including validation of C-TPAT and related compliance obligations.

11 End State: Quality Service Delivery through Visibility and Data Integration The quality, visibility and reliability provided by your adoption of C2K standards enables MSFT to accelerate product development and delivery, reducing costs and uncertainty. Security and Compliance capacity are minimum thresholds for business with Microsoft. Your coming to the table with tracking, reporting and measurement systems ready for integration with our systems = accelerated realization of benefits And hence QMS + C2K = TSA s 18

12 QUESTIONS Jim Patton Director Global Trade Compliance and Policy 19