TECHNOLOGY SECTOR TRENDS · Business Models • Opportunities to optimize supply chains on costs and flexibility • Overall moderate market growth of 3.1% forecasted until 2017 •

TECHNOLOGY SECTOR TRENDS

DHL CSI Technology Sector Team

CONFIDENTIAL

DHL Global Technology Conference

Dubai, April 14-16, 2015

CONFIDENTIAL

2 DHL Global Technology Conference | April 2015 2

Technology Sector Trends

Technology Market

Drivers of growth and accelerated player dynamics

New Technologies

Impact on Markets and Supply Chains

Solutions for the Technology Supply Chain

Trends and new Developments

CONFIDENTIAL


TECHNOLOGY MARKET – Forecast 2014-2017

+5.8%

CONSUMER

ELECTRONICS

ENTERPRISE

COMPUTING

NETWORKS ULTRAMOBILE

& NOTEBOOKS

MOBILE

DEVICES

IMAGING &

PRINTING

324.9 252.0 276.0 137.1 72.5 49.9

+59.8

+1.2

+0.2%

+21.8

+2.6%

Market

Size 2014

Incremental

Growth 2017

CAGR 2017

+20.7

+4.8% +2.1%

+4.6

-1.9

-1.3%

SEMICONDUCTOR

+3.8%

+31.8

Total: + USD 106.4bn CAGR +3.1%

Source: Gartner, various reports

332.5

in USD bn

DHL Market Databook: Moderate growth of 3.1% forecasted until 2017

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TECHNOLOGY MARKET– Pockets of incremental growths 2014 -2017

China

Smartphones

US EUR Rest

Ultramobile & Notebooks

26.4

7.1

Basic

Utility

Feature

Phones

-1.8

8.0 11.9

8.8

MEA

59.8

34.9

7.1

-40.9

Premium

Note-

books

Ultramobile

Networks

Carrier Infrastructure

is 61% of the market in

2014 …

137.1

… and 100% of total

incremental growth

until 2017…

20.7 20.7

Networks Carrier

… of which

56% are in China,

US, MEA and India

100%

18% CN

14% US

12% MEA

9% INDIA

BRICMI & MEA

High Growth

regions such as

BRICMI and

Middle East &

Africa will

have more than

80% of the total

incremental

growth

until 2017 MEA

BRICMI China (44%)

is leading the

incremental

growth

followed by

MEA (14%)

Overall flat growth with divergent

growth trends per product

1.2

Semiconductor

31.8

Communi-

cation

Industrial

Auto-

motive

41%

25%

19%

85% of growth in Communication,

Industrial and Automotive

Total

Enterprise Computing

22% CAGR

11.6%

60%

CAGR 6.1%

Servers Storage

Largest

growth in

China

45% in

decentral

Network-

attached

storage

systems

CN

53%

1.6 3.0

Source: Gartner, various reports

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Technology Market – Accelerated Dynamics in the last eighteen months

Source: DHL Technology Sector Team

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New Technologies Shaping Markets and Supply Chains

Cloud

Computing Internet of

(Every-)Things Big Data

Social

Mobile

• New Technologies drive innovations impacting business and every-ones lives

• Products are changing to support myriad of new services & software solutions

• Existing business models are being disrupted and new players take the lead

• More and new partnership models to link technologies, platforms and services

Augmented

Reality

How do these trends impact the market and supply chain?

http://www.google.com/url?url=http://cloudtimes.org/2013/07/30/seven-steps-for-success-in-social-mobile-and-cloud/&rct=j&frm=1&q=&esrc=s&sa=U&ei=l91RVJ_RJ8bfmgX1zIKgBg&ved=0CCYQ9QEwCDgU&usg=AFQjCNGH2Afu74XGI8CaD0S4G0-pRTBIkw

CONFIDENTIAL



Market Supply Chain

• From 15 bn connected

devices today to some

50bn by 2020

• Expected 8.0 trillion

USD value at stake

• New network standards

and technologies

• New insights creating

new service and

business models

• Logistics use cases about

“Sensing & Sense Making”

• Smart management of

inventory

• Predictive Maintenance

• Workforce Health & Safety

• Asset utilization, location

and condition monitoring

• Automatic replenishment

and anticipatory shipping

Internet of

(Every-)Things

Source: DHL Technology Sector Team; DHL Trend report: Internet of Things in Logistics

http://www.dhl.com/en/about_us/logistics_insights/dhl_trend_research/internet_of_things.html.VTkYjtKUfzg



CONFIDENTIAL



Cloud

Computing

Big Data

Market Supply Chain

• Data is becoming an

asset to be exploited

• Increasing storage

capacity needs -

enabled by software

• Buying services instead

of hardware

• Hyperscale datacenters

with commoditized

hardware

• Move to hardware

agnostic servicing models

• Redesign of service

logistics supply chains

• Predictive analytics to

forecast supply chain

demand

• Strategic network planning

and real time route

optimization


CONFIDENTIAL



Market Supply Chain

• Instant information

anywhere and anytime

• Changing Customer

buying behaviors and

channels

• Customer Experience

supersedes product

features

• New mobile hardware

category – wearables

• Higher pace in product

launches to position new

innovations

• Omni-channel supply

chains to support growing

e/m-Commerce

• Mobile technology in the

supply chain – time critical

deliveries

• Drive efficiency leveraging

augmented reality

Social

Mobile

Augmented

Reality



CONFIDENTIAL


Case study: Augmented Reality - Ricoh

Bringing Innovation to live:

From our trade fair at the last

Technology Conference in San

Diego to a proof of concept in a

real working environment

Technology Conference 2014

https://www.youtube.com/watch?v=I8vYrAUb0BQ



CONFIDENTIAL


New Technologies – Impact on Logistics

Which of these technology trends will have an impact on your supply chain

within the next two years, e.g.?

• The way you plan and manage demand and capacity

• Pilots & implementations using new technologies in your supply chain

Cloud

Computing Internet of

(Every-)Things Big Data

Social

Mobile Augmented

Reality

62.5% 52.1% 33.3% 26.0% 40.1%

Source: Live Voting DHL Technology Conference, April 14-16 2015

N=97


CONFIDENTIAL


Supply Chain Trends and Solution Developments

Trends are driving changing supply chain requirements

CONFIDENTIAL



Lead Logistics Provider

Delivering Supply Chain

Transformation

Resilience360: Risk Management

A collaborative approach to

managing Business Continuity

• We have seen significant increase in

demand from the Technology Sector

for LLP solutions globally

• A broad range of services from

redesigning operations to providing

flexible, day-to-day management

control.

• 15 implementations with customers in

Automotive, Life Science & Technology

Sector

• Launch of next phase Resilience360 with

new features such as

• Route visualization

• Country-specific risk overview

• Global Risk reports

• Resilience360 risk bulletin

CONFIDENTIAL



• The on-balance sheet solution is an

asset based lending (ABL) program for

small to mid sized companies. Focus is

on faster and cheaper financing due to

DHL acting as custodian to the collateral

• The off-balance sheet solution is an

IFRS compliant concept for large cap

companies. Focus is on cash and

working capital optimization and

improvement of financial KPIs, e.g.

ROCE

Technical Services

Integrate value added solutions

into your E2E supply chain

• Integrated Technical services solutions

fully operational in three regions

• Assembly of base station cabinets for

telco OEM in Hungary.

• Expansion of our Set Top Box repair

activities in Brazil

• Expansion in partnership approach

with new partners like TXO Systems

(Asset Recovery) and Pegaservices

(APAC regional repair)

Inventory Financing

Leveraging Supply chain

to create financial value

CONFIDENTIAL



Multimodal – China: Europe

Optimization of

transportation modes

Technology Communities

Drive collaborative subsector

agenda

Semiconductor Customer Community

with list of joint initiatives (examples)

• Supply Chain Benchmarking and

Mapping

• Review Options for Multi-User

warehousing

• Joint sourcing of Packaging material

• Analysis of I2M supply chain

• Resilience360 for Semiconductor

Industry

Strong increase in demand for Rail

services connecting China & Europe

• More than 250 customers using the

service, many from the Technology sector

• Lead times of 14-17 days with high

reliability, different LCL and FCL options

• New Asia connection (Japan, South

Korea) and LCL container solution

• Alternative South East Gateway OFR via

Suez Canal to Piraeus – connecting LTL /

FTL / Rail

CONFIDENTIAL


Sector Trends – Customer Experience

Which of the following statements are true for your supply

chain (two year horizon)?

… higher number of new product launches with specific supply

chain requirements

… emerging new sales channels and higher need for across (omni)

channel supply chain solution

… higher need for late customization of products in the supply

chain

… higher focus & investments in after sales services and

processes to drive customer satisfaction

52.2%

43.3%

47.7%

56.7%


N=90

CONFIDENTIAL


Sector Trends – Supply Chain Efficiency



… exploit untapped optimization potentials in I2M supply chain

… higher focus on warehouse automation leveraging new

technologies

… increasing share of Rail as part of mode optimization on Air,

Ocean & Rail

… increasing focus on repair & return supply chains and asset

recovery to improve costs and efficiency levels

… increasing commoditization of products requiring new concepts

for E2E low cost supply chain solutions

21.6%

37.5%

36.4%

45.5%

58.0%


N=88

CONFIDENTIAL


Sector Trends – Supply Chain Management



… higher level of logistics management outsourcing to

specialist providers (e.g. LLP)

… more systematic approach to supply chain resilience to

mitigate risks of globalized supply chains

… higher focus on supply chain collaboration / partnerships

with other industry players

53.8%

39.8%

54.8%


N=93

CONFIDENTIAL


Sector Trends & Solutions

New Technologies

• New Technologies

impact Markets and

Business Models

• Opportunities to

optimize supply

chains on costs and

flexibility

Technology Market

• Overall moderate market

growth of 3.1%

forecasted until 2017

• Underlying drivers of

growth largely vary

along products and

regions

Solutions for the

Technology Supply Chain

• High market dynamics

demand for innovative

supply chain solutions

• End to End customer

experience, efficiency and

flexibility are key drivers

for change


CONFIDENTIAL


Contact

Thomas Dammann

VP Strategy Technology Sector

Phone: +4922818230202

Mobile: +49 171 2286783

[email protected]

Documents

TECHNOLOGY SECTOR TRENDS · Business Models • Opportunities to optimize supply chains on costs and flexibility • Overall moderate market growth of 3.1% forecasted until 2017 •