Wearables Tech Con_ModusLink_Final

Keys For International Expansion

Paul GoatesSenior Director of Client Solutions ModusLink

March 11, 2015

COMPANY CONFIDENTIAL

Introduction 18 year career in logistics industry

Advises on global supply chain and logistics strategy and growth for top high tech accounts, including Apple, Micron, Microsoft, Dell and Fitbit.

Supporting programs for high tech and healthcare clients in the supply chain divisions of Schenker, UPS and FedEx.

Graduated from the University of Utah in Salt Lake City with a degree in history with an emphasis on the logistics of warfare.

Played on the 9th ranked 1994 Freedom Bowl Championship football team

2

Paul T. GoatesSenior DirectorClient Solutions for ModusLink


About ModusLink ModusLink (NASDAQ: MLNK), is a global, omni-channel logistics provider.

The company gives clients real-time visibility into their end-to-end supply and demand chain operations, with expertise and facilities worldwide to manage forward and reverse logistics.

ModusLink is also affiliated with @Ventures which provides venture capital and growth resources to early stage clean technology companies.

The company’s operations are supported by more than 25 solution centers across North America, Europe and the Asia/Pacific region with 3 contact centers – one in each region.

3


The Keys to International Expansion - Overview As companies enter a high-growth period, one of the main ways they look to expand is by

adding international sales. This is easier said than done. For a small but growing business, there are numerous considerations that you may not be

aware of. How can you expand quickly to transform your supply chain to a competitive advantage? What are the best practices and potential problems you need to be aware of when partaking in international business? What questions should you be asking yourself?

Today’s discussion will provide a "next steps for international expansion" guide, highlighting the many and various things that companies need to take into consideration – and offering practical advice on how and where to start.

4


Logistics 101 – The Basics So, what is logistics after all? What does it entail –

and why is it important to the burgeoning wearable technology industry?

You are only as strong as your …

Wikipedia defines logistics as:

– “The management of the flow of goods between the point of origin and the point of consumption in order to meet some requirements of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, animals, equipment and liquids, as well as abstract items, such as time, information, particles and energy.”

To truly understand the importance of logistics, one must look back at its history…

5


Logistics in Warfare:The Very Model of a Modern Major General

"Gentlemen, the officer who doesn't know his supply chain as well as his tactics is totally useless.“ - Gen. George S. Patton, USA

"Amateurs talk about tactics, but professionals study logistics.“- Gen. Robert H. Barrow, USMC (Commandant of the Marine Corps)

6


Logistics in Warfare: The Very Model of a Ancient Major General

“The line between disorder and order lies in logistics…”- Sun Tzu

“My logisticians are a humorless lot ... they know if my campaign fails, they are the first ones I will slay.”- Alexander

7


Logistics in Corporate America:The Very Model of a Modern Chief Logistics Officer

"Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics."- Tom Peters - Rule #3: Leadership Is Confusing As Hell, Fast Company, March 2001

Dell in the mid-90’s …. Walmart …. Apple

8


Growth of the Wearables Market The wearable technology market has seen

tremendous growth recently – with even more expected in the next few years.

– The wearable electronics market is expected to grow from over $14 billion in 2014 to $70 billion in 2024, according to recent research from IDTechEx.

– The dominant sector will remain healthcare, which merges medical, fitness and wellness.

9


Moving to a Global Marketplace As companies become successful and enter a high-growth

period, international expansion is often the next step.

– The idea of selling goods that are “new to that market” is enticing – and often allows for resource re-use.

– International expansion is an excellent way to improve brand awareness and solidify your company’s place in the industry.

– There’s a premium placed on beating the competition to new geographies.

10


Challenges of Rapid Growth International expansion is not easy:

• Localization of Product • Packaging • eCommerce• Call Center / Customer Support• Transportation• Government: Regulations & Taxes• Reverse Logistics/After Sales• Outsourcing• Sustainability

11


Keys to Expanding Correctly – Getting Started Evaluate Set a plan-of-attack Determine Timeline Assess Infrastructure Ensure Flexibility Mitigate Risk

Resources: Consultants, Logistics Providers, Mentors

12

COMPANY CONFIDENTIAL13


eCommerce, Foreign Currency and Exchange Rates Can your eCommerce site handle the expanded

traffic?

Can it easily be ported to a new language?

Do you accept foreign currencies and automatically factor in the latest exchange rates?

Will your site and back end systems scale successfully as new geographies are added?

14


International Shipping and Transportation What are the best routes to keep shipping costs

low?

Have we traditionally guaranteed product delivery in a short period of time? Can we maintain that guarantee internationally?

How will differences in fuel costs affect my operations?

Where do our facilities – manufacturing, assembly, distribution, etc. – need to be placed to maintain a sustainable shipping and transportation cost structure, while continuing to meet customer demand?

15


Reduce carbon footprint while improving the bottom line.

By reducing the size of its product packaging, using more recyclable materials, decreasing carbon emissions and cutting transportation costs. (Bonus: Reduced Labor)

Better IT = better visibility across the entire supply and demand chain = better decision making and correcting problems sooner so that more efficient ways of doing business can be implemented and overall costs of doing business decreased.

The antagonist: marketing focused on “customer experience” …more balance needed

16

Sustainability in the Supply Chain


Outsourcing Many growing companies have found it helpful

to outsource many of these logistical issues to a third party, freeing the young company up to continue innovating.

How much/how little is right to outsource?

What should we retain control over?

How do you choose a partner that is committed to your success?

17


Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust Communication / Relationships / Trust

18

Outsourcing (Continued)


Government Involvement, Regulations, Requirements and Taxes

How involved/not involved do you have to be with certain governments?

Are there countries more open/less open to supporting business expansion?

What do you need to do/file to sell goods in a particular country?

Each country has its own differing regulations and requirements for selling products within its borders – everything from environmental, to privacy, to disclosure to the materials used in the product.

How can you manage different regulations in different countries? Which country has the strongest regulations – and if we design the product to meet those, will we be covered?

What taxes exist in different geographies – and will factoring these in affect where facilities are placed?

19


Packaging

20

Does your packaging meet the need of every country you’ll be selling to?

How many packaging variations will you need?

What environmental concerns need to be taken into account?

Are your facilities configured to support different packaging for different countries?

When do I kit/package? Origin or in region?


Customer Support Needs: Contact Center vs. Call Center Support is a critical element of maintaining a strong

connection with your customer base.

Are your current systems able to handle international customers?

What training needs to be done to handle international customers? Do you need facilities in specific countries to serve your growing base?

What analytics can drive better decisions and more profitability?

What kind of upselling or data gathering is possible for expanded sales?

21


International Returns and After Sales Can your reverse logistics be handled on an

international scale?

Do you have one global facility to accept returns, or have customers return goods within their regions?

Do you have processes in place to not have the returned goods be a total loss – i.e., the ability to accept and refurbish the goods or strip them down?

Don’t walk away from real money.

22


Case Study – GoPro Nick Woodman founded GoPro in March 2004 to build and sell a wearable

camera to enable surfers to capture close up pictures while surfing.

By 2012, GoPro had outgrown its existing supply chain process, as it needed to improve scalability and better manage the supply and demand realities it was facing – while setting itself up to manage future growth.

The company sought to reduce supply chain costs and ensure scalability by establishing final assembly in three continents.

ModusLink had already built and was running a full reverse logistics process for GoPro, getting returned products sorted, broken down and back into circulation.

The company had also been handling GoPro’s contact center operations and soon began managing eCommerce, payment processing, packaging and fulfillment….created powerful synergies.

23


GoPro Supply Chain 2011


Case Study – GoPro As a part of its supply chain evolution, GoPro began the “regional

postponement” process to lower its overall assembly expenses – including inventory, labor, packaging and transportation costs.

GoPro and ModusLink set up a process raw finished goods were transported in trays sent to regional warehouses for final kitting and assembly to be shipped directly to retail and consumers.

This allowed GoPro to better manage supply and demand for its products, ensuring regions of high demand had the products they needed to fulfill customer orders – and that there wasn’t product waiting around to be shipped in times of lesser demand.

25


Hong Kong (SAL)B2B

(Non-EU International Distys)

Cameras and remotes air freight to region

Fremont, CA (DCL)

B2C (NA)Riverside, CA (ModusLink)

B2B, RL Postponement (NA)

Venray, NE(ModusLink)

B2B, B2C, RLPostponement (EU)

Singapore (ModusLink)

B2C, RL (Asia)

Camera assembly in China.

Regional Asia pack-out Futian

(ModusLink), distribute to Asia distributors from

HK

Ocean freight lower box accessories to region

Key to success: partnered with a single global 3PL that could provide all of these services

GoPro Supply Chain Today


GoPro’s Supply Chain Success Using one omni-channel logistics provider to work with,

GoPro realized synergies through increased visibility, supply and demand planning

By working with ModusLink, GoPro was able to:– Lower freight costs 75%– Bring down inventory costs 11%– Drop cut pick, pack and ship costs by 10%– Increase final camera pack-out capacity from

15,000 to 70,000 per day – Increase daily fulfillment capacity from

25,000 to 120,000 per day– Improve air lift space efficiency by 10 times

27


Contest #1 What is a key difference between a Call center and a Contact Center?

#2 T/F: The best time for planning for holiday peak is six months in advance.

#3 T/F: The end of the Supply Chain is when the goods arrive in the customers hands

#4 T/F: Logistics is best described as the physical movement of goods

#5 What are the two best countries outside the US for Europe and Asia logistics?

#6 If Alexander fails in his military campaign, who is slain first?

#7 Most important thing to remember with a logistics partner?

#8 What year did the Utah football team win the Freedom Bowl (and National ranking that year)

28

Paul GoatesSenior Director of Client Solutions, ModusLink425-998-7556 [email protected]

Thank You!…Questions?

Wearables Tech Con_ModusLink_Final

Documents

Transcript of Wearables Tech Con_ModusLink_Final