Supply Chain Solutions

Supply Chain Solutions Decisive Added Value for Your Company www.arroweurope.com

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Supply Chain Solutions 3 Services create added value Optimal Supply Chain Management is a vital instrument in the value-added chain. Due to the high significance of Supply Chain Management for our customers, Arrow operates a separate business unit solely for this purpose. Alongside the main Supply Chain & Value-Added Services functions, this unit also includes the functional areas of quality assurance. In the interests of its customers, Arrow has dedicated itself to the creation and operation of high-performance supply chains. As a worldwide distributor, Arrow can cover the global supply chain and serve development and production plants all over the world. This involves a worldwide business transfer process, through which practically every component from all 900 suppliers on the global line card can be provided to every purchaser anywhere in the world. Beyond the standardised delivery services, Arrow offers a comprehensive portfolio of services in the area of Supply Chain Management (value-added services and supply chain solutions), which meets almost every requirement. Content: P4 Logistics Models P6 Electronic Data Exchange Component Storage P9 Programming Services P10 Value-Added Services P11 Delivery Chain Controlling Arrow applies the same total solutions approach that it offers at a product level to its logistics solutions. This means that in addition to their purchased goods, customers receive an additional service through a range of logistics elements to offer them optimal delivery and optional product finishing in accordance with their individual requirements. Take advantage of the significant added value offered by Arrow!

4 Supply Chain Solutions Competent support partners for your process chain The Supply Chain Solution Manager, or SCSM for short, is your specialist contact for all matters. Together you will find the optimal solution, regardless of whether you already operate your own logistics system or wish to design and implement a new procedure. In light of this, an initial meeting is always held to analyse what is required of the joint process chain. During this stage, the maxim Keep it simple is followed complex procedures are simply illustrated for the customer. As a result of these joint efforts, an individual concept is created especially for your company. After all, as our customer, you have your own specific requirements and needs concerning logistics procedures. The experience we have gathered in hundreds of discussions and implementations has proven this. Arrow is not concerned with carrying out projects or optimisations one-sidedly. Instead, fundamental importance is placed on working together with internal and external contacts to find solutions which can benefit both parties. The overall aim is to establish an optimal, high-performance supply chain based on proven methods and standardised logistics modules. How the SCSM works with you to find the optimal logistics model During the concept phase, you work together with the SCSM assigned to your company to define the existing requirements and goals concerning your logistics chain. Arrow s SCSM can operate as a consultant to help you understand the current Total Cost of Acquisition for your business. This is a measure of all of the costs associated with bringing materials to your business and presenting them to your production team. It is important to establish this baseline measure in order to calculate the cost reductions made by a supply chain enhancement. The following are examples of some of the logistics modules that you may choose: Forecast management VMI (Vendor Managed Inventory) Replenishment strategy EDI (Electronic Data Interchange) Special Handling, such as specific labelling etc. Afterwards, the SCSM accompanies the execution of the project, from process definition through contract signing all the way to implementation and commissioning. The SCSM is on hand as a neutral intermediary, forming the link between you and Arrow s specialist departments and assuming project management and coordination tasks. Meanwhile, you benefit from the SCSM s in-depth experience gained from previous projects and their expert knowledge of the sector. After all, although every project is customised to suit the specific requirements of the customer, branch-specific conditions do often require consideration. Such factors must be taken into account in order to find the perfect logistics model. Note: Once processes are created, they are by no means written in stone. Regular reviews and, if necessary, optimisation in accordance with the PDCA principle (Plan - Do - Check - Act) and in mutual collaboration ensure that processes are adapted to current conditions.

Supply Chain Solutions 5 Perfect logistics: Modules for all requirements Arrow offers you delivery models and replenishment strategies which are fully tailored to your company s situation. Keywords here are automatic delivery, delivery plan, material requirement planning (MRP), Kanban and the order point procedure (Min/Max). Individual adjustments can also be made, such as the inclusion of agreed batch sizes or the registration of a coverage profile. Arrow can deliver (examples) Frozen windows (automatic delivery) Min/Max/order point procedure Kanban Just-in-Time On-site warehousing for guaranteed supply Concerning components which are subject to supply restrictions, individual customer stock is recommended. Using Arrow s warehouse (security storage) or storage at customer s premises (consignment warehouse) can overcome unexpected demand fluctuations that cannot be identified through forecasting. A so-called InPlant terminal with an Arrow staff member can assume customer-specific tasks, such as stock monitoring, order processing and forecast management, directly on-site on the company premises. The advantages Short reaction times Direct link Reduced handling costs Amidst the complexity of the current delivery situation, such a solution represents a valuable competitive advantage. Our goal: High flexibility for your benefit In short, this means modest stock inventories, low costs throughout the delivery chain and straightforward execution. This increases profit through reduced costs and improves flexibility. Of course, a prerequisite is prompt stock replenishment and the right components at the right time in the right packaging and, if necessary, the right (pre-)programming at the right place. For you, it is important that You can make orders at short notice You receive your orders quickly Changes to your order are possible Delivery promises are accurate Delivery times are met The aim of all our efforts is to provide you with a flexible solution to ensure that you always have production-synchronised stock.

6 Supply Chain Solutions Interfaces for electronic data exchange Electronic Data Interchange (EDI) offers enormous potential compared to information exchange on paper. EDI is an optimal tool for the rapid and cost-effective transmission of company data, such as invoices, orders, delivery notes and article master data. Electronic data exchange removes the need for manual data input, thus avoiding input errors. Generally speaking, this enables the automation of business processes. Arrow supports interfaces for communication via EDI, XML and VDA 4905. Supported business processes include Forecast (DELFOR) Single orders (ORDERS) Order confirmation (ORDRSP) Order change (ORDCHG) Invoice (INVOIC) Despatch advise (DESADV) Call off (DELJIT) Comprehensive component storage as basis for value-added services Providing additional, value-added services is fundamental to delivering the high performance levels that our customers expect. Through booking suitable services, such as programming, taping, drying and testing, our customers can process the delivered products directly. Alongside the services offered by the Venlo Programming Center, you can take advantage of the special handling services of our Distribution Logistic Center (DLC), such as customer-specific labelling. At its Dutch premises in Venlo, Arrow boasts one of the largest component warehouses in the world, uniting all requirements for truly excellent supply chain management with its cleverly designed concept. Through the DLC in Venlo, more than 35,000 customers have access to over 110,000 components. The cutting-edge complex also meets special customers requirements, such as nitrogen storage. Two further warehouses in Sweden (Lunda) and Italy (Cornaredo) are also used for deliveries to our customers throughout Europe. As a web-based platform, Arrow CARES (Customer Auto Replenishment System) supports Kanban and MIN/MAX logistics models. Designed as an open system, it enables the inclusion of an unlimited number of customers and suppliers. Data security and confidentiality are guaranteed through an external service provider. Data input is carried out via the menu or, preferably, a hand scanner.

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Supply Chain Solutions 9 Arrow Programming Services Arrow has three programming centres in Europe (The Netherlands, UK and Norway) with a combined capacity of 25 million units per annum. In addition, Arrow has programming and NPI centres in Nevada, California, Malaysia, Mexico and China with a combined capacity of some 150 million units making Arrow one of the largest programming service providers in the world. All of Arrow s facilities are linked by a global production system allowing seamless and instant transfer of software code between centres to support global production. Arrow s centres are ISO9001:2000 certified and TS16949 compliant. The programming facilities in Norway, The Netherlands, Nevada and Malaysia all operate 24 hours per day, five days per week. With our programming centres we are able to offer you a wide range of additional services. With the integration of Arrow programming services and third party providers to the logistics process, Arrow can reduce throughput times by several days: Programming Marking + Laser + Label + Ink marking (coloured dots) Taping + SMD taping Component preparation for SMD and radial parts - Cutting connections (loose or taped) - Changing modular dimensions - Modifying radial in SMD Baking Nitrogen packaging (special packaging) Tin coating Programming samples are generally provided 24 hours after receipt of request. 48 hours are required if serialisation is also desired. Arrow service: Many samples are available free of charge. Instructions for programming samples can be sent via the following three methods: Via email Via master device Via Arrow Pre-Programming Worksheets (PPW) Your advantages You receive everything from one single source: One invoice One goods reception process One contact person Minimum throughput times Integration with the Arrow logistics solutions offers even more added value and accelerates processes.

10 Supply Chain Solutions Value-Added Services from Arrow Material management Replenishment strategies Kanban Delivery plan Pull/Push Min/Max Order point processes Automatic delivery Forecast management InPlant terminal Stock management Buffer stock InPlant store Consignment Value-added services & special handling Barcode delivery notes Customer-specific labelling e-pcn Service Consolidated delivery Special packaging Traceability Programming Centre in Venlo Tape & reeling Drying Supply Chain Solutions Manager (SCSM) Project management Logistic concepts Optimisation Process analysis Logistic contracts Distribution Logistic Centre DIN ISO 9001:2008 DIN ISO 14001 AOE Export Certificate B2B e-commerce EDI/XML Order process Forecast Invoicing Programming Centre VenLo Netherlands Bedford UK NEDRE VATS Norway Distribution Logistic Centre VenLo Netherlands LUNDA Sweden Cornaredo Italy Purchasing Accounting Stock Receipt Inquiry Approval Order Confirmation Invoice Delivery

Supply Chain Solutions 11 The delivery chain in information, material and value flow An overview of the advantages Simplification in the physical material flow from receipt through delivery to production Through the use of barcodes or the adaptation of delivery packaging and delivery frequency, processes in the physical flow of material are harmonised and supported Material flow concepts are supported through logistic modules in the physical flow of material, thus enabling the constant implementation of stock reduction measures whilst decreasing process costs Arrow s logistic modules enable processes to be simplified Logistic modules support purchasing goals, such as stock reduction with consistent availability Based on customer forecast, various approaches can be taken. Standards such as delivery plan organisation can be implemented, in addition to customer-specific replenishment strategies Controlling as a further component of logistic solutions You expect your supplier to offer you the best possible solution for your requirements. Your supplier should also react flexibly to your individual needs. Simultaneously, the logistic chain management has to carry out constant and thorough monitoring of the entire inter-company value-added chain. Arrow monitors processes with a range of effective tools to ensure that Any problems are identified as early as possible and measures can be introduced along the delivery chain early warning Customer satisfaction is continuously increased through improved transparency and ability to react forecast accuracy Stocks are reduced and stock quantities are constantly transparent with efficient range control stock report Efficiency is increased through improved coordination of procurement processes no Duplication Depending on the complexity of the supply chain, regular reviews make management by exception a real exception Only those who are aware of their total costs and cost drivers across the entire company can combat them with the appropriate tools and work towards the permanent optimisation of the supply chain. Warehouse Provision of Goods Production Receiving Warehousing Stock Removal Production

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