1HONEYWELL - CONFIDENTIALHONEYWELL - CONFIDENTIAL

Hermes (Warrington Hub)

Tuesday 20th January 2015

1st Time Delivery

On time, Every time

A critical path for profitability

The true cost to deliver

Resolving the redelivery issue1% improvement could save £65,2m

What happened in 2014?

“2014 was the year online shopping changed forever. No one expected it. Not the

analysts, not the retailers, not the parcel carriers, not the media, not consumers.

It broke the mould and put immense pressure on the whole sector.”

“Black Friday became a huge event in the retail calendar and it’s here to stay”

What happened in 2014?

“What’s clear is that we can’t put the ‘sales genie’ back in the bottle. The

changes will continue and accelerate, which is why the whole industry needs to

transform”

“The very sound and respectable estimates that have served the industry so

well for years were exceeded by 46 percent”

What happened in 2014?

“The scale of the orders taken in this short period exceeded the next day

delivery capacity of the country’s parcel market. Inevitably, promised delivery

dates were missed leading to customer frustration and dissatisfaction.”

“We’d started planning 11 months earlier, in January 2014. Investing heavily in

a detailed Christmas operations plan. By peak we’d boosted the workforce with

over 5,000 additional members of the team, over 700 additional vehicles on

the road and procuring 13 further sites to handle the increase in parcel

volume.”

Delivering Power to the Edge

to Become the Workflow Performance Company

Imagine the Possibilities

What if…

You could track defected equipment in advance?

What if…

You could detect accidents before they occur?

What if…

All of your employees went to the right place at the right time?

Imagine the Possibilities

What if…

You could make all of your lowest performing employees average performers?

Mobile technology

Each courier has the computing power of back-office server in his pocket.

Predict ETA and see if deliveries will be on time.

Mobile technology

Track the couriers location and ETA and show it to recipient.

Each customer has a computer connected to internet in his pocket.

E-Commerce growth

Percentage growth and revenues across the globe

11%

(€211bn)

40%

(€22bn)

22%

(€214bn)

40%

(€14bn)

48%

(€130bn)

Summary & Key Takeaway

• “.....it’s clear 2015 requires a different strategy”

• “.....need to work closely to predict volume and manage consumer

expectation better”

• “consumers' expectation is that online delivery should be no more

expensive than buying instore”

• “....the industry as a whole needs to find a method of spreading

volatile parcel volumes to match the industry capacity”