BT Business Conversations Series

Transport & Logistics In association with Transport Intelligence September 26th 2013 Singapore, Grand Copthorne Waterfront

Introduction  Building upon the success of BT’s discussion roundtable on global logistics kicked off in Dubai last May, BT, in association with Transport Intelligence, will be hosting its second discussion roundtable on the future of global logistics. The event will combine key note presentations by Ron Totton, VP Global Logistics BT Global Services, John Manners-Bell, CEO Transport Intelligence as well as industry wide discussions will be facilitated by Mark Millar, Senior Supply Chain Consultant.

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Summary points of the Dubai roundtable: As more people and goods are transiting through the Middle East and imports increase towards emerging markets, efficient trading flows control and passenger queue management are paramount.

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Predictability and having the right data at the right time to react to sudden changes in the supply chain and optimise illiquid assets (ie such as port infrastructure) are top of the agenda of logistics players in the Middle East The logistics and shipping industry is still very dependent on paper documents and remains innovation advserse Collaboration can work even between competitors when it regards industry wide innovation According to the Dubai audience, BT should facilitate discussions across the globe around innovation in the logistics sector and is already involved in the WEF’s “Connected World Transforming Travel, Transportation and Supply Chains” initiative. In particular BT is co-chairing the Tracking and Transparency-Based Logistics Optimizer (TATLO)* All agreed the 4 megatrends were clear and present. 40% of the Dubai participants prioritized the unbalanced economy as their leading global trend, 30% instant globalization, 20% the end of limitless resources, while 10% identified the power of the individual.

Agenda 8.30: Registrations open 9.00: Welcome note and BT in the transport and logistics sector by Kevin Taylor President BT AMEA & President BT Global Logistics 9.15 The transport and logistics sector in Asia Pacific, TI offers its perspective by John Manners-Bell , CEO TI 9.30: Session 1: Megacities and the rise of a new middle class 10.15: coffee break 10.30: Session 2: The end of globalisation? 11.15: Session 3: The implications of 3D printing and other technologies for supply chains 12.00: Lunch 13.00: Session 4: Succeeding in a world of increased catastrophic risk 13.45: coffee break 14.00: New models for supply chains 14.45: Wrap up by Ron Totton Vice President BT Global Logistics 15.00: End

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The project "Connected World - Transforming Travel, Transportation and Supply Chains" attempts to understand and shape the transformation that the various mobility industries undergo by increased connectivity until the year 2025. In the first project year, a unique group of >50 stakeholders from relevant industries, government agencies, and experts conducted an analysis of the relevant megatrends to develop four scenarios of how the world, in respect to travel and transportation, could look like in 2025. From this, over twelve solutions were derived addressing the biggest challenges within the scenarios. Four of these solutions which offer the greatest value for society and commercial potential were identified to focus the 2013 project on: 1. Integrated Proactive Intermodal Travel Assistant (IPITA), 2. Condition-Based Megacity Traffic-Management (COMET) 3. Fully-Automated Check-In, Security, Border Control/Smart Visa (ACIS) 4. Tracking and Transparency-Based Logistics Optimizer (TATLO)

Source: World Economic Forum

“Asia Pacific continues to develop at a swift pace despite economic unease within its two largest trade partners – the EU and the US. Shifting trade lanes, the growth of the ASEAN community and increasing intra-regional trade have prompted a transformation in the region’s logistics market and significant investment by logistics providers.” Transport Intelligence

Network enabling the logistics sector Logistics Providers constitute the backbone of the manufacturing industries, ensuring a steady supply of material into and out of the world’s factories.

Section 1: Context: An unbalanced economy Megacities and the Rise of a New Middle Class The increasing urbanisation of rapidly growing populations will have a massive implication for supply chains. Transport and logistics strategies need to be hard wired in to urban development plans to create social cohesion and facilitate economic growth. A rising Middle Class in the emerging world will present huge opportunities for manufacturers and retailers – but it also risks creating widespread income inequality.

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How will governments, manufacturers and retailers deal with the new social and economic environment? How can the environmental impact of transport and logistics be mitigated? How can logistics in the urban environment be made more efficient How can Government and Private sector work together? What will be the role of technology, both in planning and transportation

Moderated by: John Manners-Bell, CEO Transport Intelligence Panelists: Kevin Taylor BT; Mei Tang DHL; UPS representative

In a world of just-in-time and just-in-synch manufacturing strategies, of lean business processes in which inventories are synonymous with waste, of consumer expectations for instant gratification and zero tolerance for stock outs the importance of having things where they need to be, when they are needed cannot be overstated. Yet the smooth movement of goods through the supply chain is fully dependent on the ability of all involved to exchange information. Any interruption to that flow of information is quickly felt downstream in the form of delays, added cost, broken promises and disappointed customers. BT works with leading Logistics Providers to enable, secure and manage their information flows. Providing them with real time visibility of supply chain information and enabling them to communicate and collaborate across complex commercial ecosystems without regard to organizational, geographic or systems boundaries. We have deployed a wide range of network services on behalf of our clients, helping them to reduce cost and maximize efficiencies. And our specialist expertise - across a range of areas, from messaging to ports management - has enabled BT clients to address complex business challenges with cost effective, network based solutions.

Section 2:

Section 3:

Context: Instant Globalisation

Context: The Power of the Individual

The end of globalisation? Throughout most of human history, the limitations of transporting physical entities – goods and people – have dictated the pace of global trade and exchange. With digitization, the speed limits are disappearing. Timezones don’t matter anymore. People can buy, sell and do business whenever and wherever they want. Recent years have seen a rapid growth in globalisation as multinational manufacturers seek ever cheaper locations to produce goods for an increasingly global marketplace. To date, Asian markets, particularly China, have benefited from this shift and are leading the way as the main centres of manufacturing today. However, a number of companies, driven by various external factors, are now questioning whether this global approach to supplying the world’s consumers with goods will remain the best method in the near to medium future.

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How will the growth of consumer markets in Asia impact on Supply Chains? What will happen to supply chain strategies if transportation costs soar? Is Near-Sourcing a tangible threat to production in the Asia Pacific region? How will the development of trade blocs such as ASEAN impact on trade with other regions? What will this mean for shipping and cargo airlines? What will this mean for the end to end visibility of the value chain? Would near sourcing fragment end to end visibility of the supply chain?

Moderated by: Joel Ray, Head of Consulting, Transport Intelligence Panelists: Ron Totton BT; Cathay Pacific representative; Fedex representative

The Implications of 3D Printing and other technologies for Supply Chains New technologies, such as Additive Manufacturing (3D Printing) or big data, could revolutionise production techniques and create significant value for organisations. 3D printing could lead to a reversal of the trend of globalisation; the re-integration of unbundled manufacturing processes and a transformation in how spare parts are distributed around the world whilst harnessing Big Data can drive profitability; enhance productivity and competitiveness.

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How close is the technology to being developed? Which sectors will be impacted first? Where is it already being used? What does this mean for global flows of goods? How will logistics companies be affected?

Moderated by: Ken Lyons, Managing Director Virtual Partners & Advisory Board Member Transport Intelligence Panelists: Geoff Nicoll BT; Marc Dragon Anuit

Section 4: Context: The End of Limitless Resources Succeeding in a World of increased Catastrophic Risk External threats to supply chains have received considerable attention in recent years following the natural disasters in Japan and Thailand. The risks themselves could well become more acute over the next ten years, due to the increasing prevalence of natural disasters, increased geopolitical instability and economic volatility. Allied with this, the evolving supply chain and production strategies of the major global manufacturers will increase the level of risks inherent within various parts of the supply chain. This will produce greater levels of risk as extended supply chains become more vulnerable to external threats. 

Why are supply chains so vulnerable to risks?

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What impact will volatile fuel prices have on product sourcing and supply? How can IT be used to mitigate increasing risks? How must supply chains adapt to deal with external threats? How do the world’s largest manufacturers deal with catastrophes?

Moderated by: Mark Millar, Managing Partner M Power Associates

all partners to develop the types of disruptive innovations needed to solve the vexing challenges facing today’s supply chains. Moderated by: John Manners-Bell, CEO Transport Intelligence Panelists: Talib Yousry BT; Michael McLary UPS; Guhan Periasamy Kewill; TNT representative;Deanne De Vries Agility; DB Schenker representative

Panelists: Michael Simm BT; Deanne De Vries Agility; Exxon Mobil representative; VP Kuehne + Nagel representative

Section 5: Looking forward New models for supply chains Since 1945 global expansion has proceeded with few resource constraints. Commodities, energy, labour, food, the environment, and capital: all have been treated as though they were simply there for the taking. But as we know, many of these resources are now dwindling at an unprecedented rate. The changing and challenging dynamics of a world in which manufacturers and retailers must intensify their efforts on efficiency will lead to enhanced levels of cross-industry collaboration. Volatile oil prices and increased environmental awareness will mean that present levels of transportation asset utilisation are unacceptable, meaning that policy makers – if not corporate leaders themselves – will insist that improvements must be made. This could mean that even competitors pool their volumes to make deliveries to the same customers.

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How can manufacturers work together to increase transport asset utilisation? The case for BT Global Trace and BT Trace for Ports Innovation Platform What will this mean for distribution strategies? How has collaboration worked in practice? Initiatives, ie WEF’s hyper connected cities programme What are the main obstacles to its implementation? The role of IT and telecom as an enabler for new supply chains models

It takes truly collaborative and strategic relationships among

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By 2016, more than 40 percent of new logistics application purchases will be delivered through the cloud. Companies that choose to go this route will find this makes their upfront costs lower and preserve capital for strategic IT projects. It can give also them flexibility and agility if they find a partner that can satisfy their demands and business needs now and scale with the business over time. Source: Gartner

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