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Microsoft Entertainment &DevicesMicrosoft Entertainment &Devices--

David Warrick David Warrick -- General ManagerGeneral Manager Manufacturing & Supply ChainManufacturing & Supply ChainEMEA & APJ EMEA & APJ

CIES Supply Chain ConferenceCIES Supply Chain ConferenceOctober , 2007 October , 2007

Entertainment & Devices Entertainment & Devices (E&D)(E&D)

World Class E2E Supply Chain World Class E2E Supply Chain Capabilities & Solutions supporting Capabilities & Solutions supporting 

Retail sales channelRetail sales channel

MandatesMandates

Virtual Global Supply ChainVirtual Global Supply Chain

Global FootprintGlobal Footprint

FPPFPP

PC HardwarePC Hardware GamesGames

ZuneZuneXboxXbox

Rapid & Complex Product InnovationRapid & Complex Product Innovation

Forecasting Forecasting and Planningand Planning

Direct Direct Material Material

ProcurementProcurement

Hardware Hardware ManufacturingManufacturing

Software Software Manufacturing Manufacturing & Packaging& Packaging

LogisticsLogisticsWarehousing Warehousing

and and DistributionDistribution

Channel Channel ManagementManagement

Returns & Returns & RefurbishmentRefurbishment

Systems & Systems & Program Program

ManagementManagement

Product / Product / Regulatory Regulatory ComplianceCompliance

E&D E&D Manufacturing Manufacturing

and and Supply ChainSupply Chain

CMsCMsDCsDCsT2 SuppliersT2 SuppliersOperations/IT CentersOperations/IT CentersReturn & Return & RefurbishmentRefurbishment

Supply Chain ChallengesSupply Chain Challenges……

Extremely competitive business environmentsExtremely competitive business environmentsRapidly evolving product portfoliosRapidly evolving product portfoliosIncreasing product cost and margin pressureIncreasing product cost and margin pressureLong product component lead timesLong product component lead timesHigh reliance on outsourced service providers High reliance on outsourced service providers Cyclical and pronounced product lifecyclesCyclical and pronounced product lifecyclesIncreasingly complex regulatory requirementsIncreasingly complex regulatory requirementsNumerous and dissimilar business modelsNumerous and dissimilar business models

Halo 3 ChallengesHalo 3 Challenges……Day 1 Launch volume of over 1.5 million Day 1 Launch volume of over 1.5 million unitsunitsLocalised in 15 languagesLocalised in 15 languagesSimultaneous launch in over 25 countriesSimultaneous launch in over 25 countriesOne street date: 26th SeptemberOne street date: 26th SeptemberRetailer Lead TimesRetailer Lead TimesSupply Chain SecuritySupply Chain SecurityForecasting and AllocationForecasting and AllocationMultiple locations and VendorsMultiple locations and Vendors

E&D Supply Chain ModelE&D Supply Chain Model

Raw MaterialRaw MaterialSuppliersSuppliers

Packaging SuppliersPackaging Suppliers

ManufacturingManufacturing

DistributionDistributionCentersCenters

Distributor orDistributor orWholesalerWholesaler

RetailRetailCustomersCustomers

ConsumersConsumers

Effective Product Launch ManagementEffective Product Launch Management

Optimal Lead Time Optimal Lead Time Management.Management.

Shared Understanding & EducationShared Understanding & Education

VisibilityVisibility

To Be ProactiveTo Be Proactive……....Understand future business needsUnderstand future business needsSolutions need to be scalableSolutions need to be scalablePrioritisePrioritiseOptimise capabilitiesOptimise capabilitiesReRe--engineerengineerGet the right peopleGet the right peopleExpect the unexpectedExpect the unexpectedThe most important part of a plan is the The most important part of a plan is the part not in the plan!part not in the plan!

Proactive Supply Chain Management – From Factory to Store

Thursday, October 11th 2007

David Warrick – Microsoft

Total Supply Chain VisibilitySupply Chain

is Customer Experience

Cost to Serve Transparency

“Anticipate Action”

“On Time Right Quantity”

100% Street Date Accuracy

on Store Level for 3,500 ship to’s

across EMEA

Pro-Active SC Management

AgileSupply Chain

Challenges

Delivery CreationDelivery Creation

Picking & Packing

Picking & Packing

Goods shippedGoods

shipped

Departure hub carrier Departure hub carrier

Arrange Book in slot at customer

Arrange Book in slot at customer

Information of Delivery (IOD)

Information of Delivery (IOD)

PaymentPaymentSales Order Creation

Sales Order Creation

Arrival hub carrier

Arrival hub carrier

Outbound Supply ChainOutbound Supply Chain

Actual EventsEDISMSWEB

EDISMSWEB

Suppliers Warehouses Carriers

Planned Events

SCEM IT Platform

Planned Events

Alert Framework

Web basedT&T

Consignees

Exception Mgt

Perform. Ctrl.

Cost Calculation

Payment

Paperwork Mgt.

MIS

Event Management (SCEM)

Suppliers

Carriers

Software Hardware CommercialOther

Clients

FTL/LTL Parcel OtherAir/Ocean

flow of information

flow of money

flow of goods Delivery

90 Ship-To Countries - > 3.500 Ship-To’s

Event Management (SCEM)

Sales / Stock Data

Replenishment OrdersReturn Authorization

= EDI - Interface

Orders

Order Response Despatch Advise

Warehouse

Carrier

Retail Store

ERP – System

Businesspartner

Managed Inventory (VMI)

Information first, then physical event

Corrective action before problem with customer impact occurs

Transparency on root cause before investigation

Cost determination before actual delivery

Payment “before invoice generation”

Fulfill before demand detection

Return before obsolete

Inform before asking

Paradigm Shifts due to Pro-Active Event Management

Approach & SolutionsParadigm Shifts