A Blink into Supply Chain of the Future

Opportunities & Threats for Puerto Rico

Jose E. Quinones Quintana

October 5th, 2012

LASCE 2012, San Juan, PR

Agenda

• Welcome and Intro• Baseline• The Institutions• The New SC

– Relationships– Technology– Logistics

• Put it together • Q&A’s

A Focused Private Sector

Source: www.weforum.org

A Focused Private Sector

Source: www.weforum.org

Fertile Ground

Source: www.estadisticas.gobierno.pr

A Solid Foundation

Act 73 of 2008

Source: www.puertoricodoesitbetter.com

Platform for Growth

Incentives for Puerto Rico Businesses Exporting Services

4% max corporate tax rate

100% tax exemption on dividends from export services businesses

60% exemption on municipal license taxes

Decree of 20 years, guaranteeing these rates

No federal taxes

Act 20 of 2012A Sample of Applicable Services:• R&D• Advertising and public relations • Consulting • Call centers • Shared services centers • Storage and distribution centers • Educational and training services • Architectural and engineering services and project management • Professional services, such as legal, tax and accounting • Centralized management services • Centers for electronic data processing • Any other service that is later decided to be treated as an eligible service because it is in the best interest of Puerto Rico

Source: www.puertoricodoesitbetter.com

Foreign Direct InvestmentAct 22 of 2012

Source: www.puertoricodoesitbetter.com

A History of Supply Chain

Demand

Source

Manage

Make

Deliver

Use

INFORMATION FLOW

MATERIAL FLOW

A New Supply Chain

Demand Source Make Deliver Use

INFORMATION FLOW

MATERIAL FLOW

Connect to the Customer

• Connect with the Customer (CRM)– Understand the needs of the Customer,

• Feedback your Supply Chain & Your Customer• Align or re-design your Supply Chain• Never ignore a return• Manage your Product Lifecycle

– Be Socially Responsible

Demand Use

An Integrated Supply in a Complex Environment

• Connect Your Supply Chain (incl. Suppliers)• Sustainable Sourcing• The World is flat

– Air – Ocean

• Foreign Trade Agreements• Inventory Management• Cargo Security

– Intermodal– Maritime Domain– Tracking Technology

Source Deliver

Supply Chain Strategy

• Maximize Your Tools (ERP, MRP, DRP)• In Source vs. Out Source• Control & Measure the process• Lean Manufacturing / Continuous Improvement

Driven by Customer Demand• Align Organizational Culture• Customer feedback is key

– Innovate

Make

Goals

Best Practices

Evolution of Supply Chain in the Future

Today

• Supply Chain professionals• Regulatory Agency• Unit Cost• Supplier Collaboration• Order Fill Rate• Order Management• Inventory Management• Improvements are opportunistic

Tomorrow

• Highly Specialized Supply Chain Professionals

• Complex Regulatory Environment• Total Cost of ownership• Supplier Integration• Customer Relationship

Management• New Technologies and

automation will drive additional efficiencies

• Continuous drive for improved efficiencies

Wrapping Up

• We have the Geographical Advantage• We have the People• We have the Business Environment• Foreign Investment will Drive Infrastructure• Access to Technology• We know the Risks• Put it together and we have…

The Manufacturing & Services Hub for the Americas

Source: www.puertoricodoesitbetter.com

Thanks

Jose E. Quinones Quintana