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Stamler Machines Stamler machines affect inventory during in-transit phase • Current status: o P&H take delivery from

CCC upon delivery to ships side USA o Risk and title transfer to customer takes place upon delivery to Jakarta and/or customer location o Machines stay in P&H inventory whilst in-transit • The following to be explored: o Can risk and title for customer take place at back-to-back with CCC? o Can P&H risk and title take place at time of delivery that is back-toback with customer?

Stamler Parts Supply chain • Principle o Hold inventory in one (1) main location (National Stock) and distribute to all regions via main warehouse.  Backorders can be shipped direct to Regional plant  International backorders can be shipped direct to customer via triangulation order • Q. is there problem with part numbering system that would prevent this, i.e. CCC parts are numbers, when converted to Australian inventory, 98- is added to part number. • Stock parts in Australia, one (1) location (National Stock) o Benefits:  High turning stock held, instead of relying on vendors to supply  Minimise inventory holding  Only have to maintain one (1) lot of inventory, instead of multiple locations  Minimise duplication inventory holding in the regions  If in regions, then threat of stock in one location, and buying new stock for another instead of utilising inventory on hand o Weakness  Stock not held near customer 1. 8 hr hotshot to most east coats customers 2. will be improvement on current non-stock status  PPV booked against the one (1) plant, instead of regional warehouses 1. Consideration to spread PPV for Stamler parts, proportionally to all regions? o Brisbane preferred area for Main Holding warehouse due to  Geographic mid-point for east coast sales, which are main areas for sales, plus nearest export port for SEA

JMM. Millersburg. to ensure stocks consumed prior to going to JMM and CCC  Triangulation order can be raised after reviewing Australian stocks  Jakarta has slow internet for order processing in SAP o CSR’s in Brisbane to process orders. change the buyer group (?) • Australian Customer purchase orders o CSR’s to take orders. can triangulation orders be processed when Australian Stamler parts have 98. with copy to Jakarta for information purposes o Benefits:  Brisbane to review Australian held stock at time of entry. 1. for breakdowns o Weakness  Stock sitting for prolonged time  No visibility at time of order entry  Different levels of communication required to supply goods  Have to check and clarify if P&H are permitted to hold stock in Indonesia as it is a project office o Opportunity  Sales to customer o Threat  Stock sitting  Customers not buying due to high cost  Harder to re-export for use elsewhere • • . same as Batu and Freeport o Q. and process sales order o Stock can be transferred to region for sale or o Stock can be despatched direct to customer from main holding area SEA Customer purchase orders o Can be sent to Jakarta for vetting first. then forwarded to Brisbane for actioning or o Can be sent to Brisbane for actioning. Example. local supplier  Regional plants to have the vendor set-up as the main warehouse  Do not change source origin for each front of Stamler part? Holding Stocks in Jakarta o Strength  Close to customers in Indonesia 1. Lack of space in other regions o Main Warehouse  Supplier to point to where the part/s will be sourced.

Stamler Parts Supply Chain Process Map MIL Customer R Stamler Main Parts Storage JMM Standard Supply Chain SEA Backordered Parts Option Customer Backorder Option for International Customers .

e. o Base list to be made known o Then apply T&C’s in relation to any requests for increase in stock levels. instead of 1A1 o Can be re-directed via Singapore to 4H1.6m @ Std cost price o By end of FY09 • Agreement between Batu and P&H is to hold $5-5. Point of Origin • Batu to amend point of origin in-line with location of current stock. prior to approval of credit request  Parts which can not be cancelled with Vendor are to be taken by Batu  Parts which have been approved for credit (via P&H returns and Inventory policy’s) are to be returned and/or redirected to 4H1 • Amend point of origin. Batu Consignment Stock contract review • Batu consignment stock contract should be reviewed in-line with Consignment Stock Terms and conditions document.Batu Inventory Policy covering Pinjam Pakai period 1. On-site • Batu to return cancelled orders to point of origin o Where possible. parts being cancelled. as per K&N 3. due to holding warehouse change as result of Pinjam Pakai o Advice from site is that point of origin can be changed per order or item. return to 4H1.2m of consignment stock (@ sell price) 4.e. i. where applicable 2. as required 5. Prevent • Stock replenishment going to site o Exceptions:  Confirmed shutdown schedule • Via check-book policy  Order on demand o Duplications  i. then cancel back-orders in system o Order cancellations (by Batu)  P&H credit policy applicable for credit requests (i. What can be returned from site and sold on global market or stored in 4H1. . slow/non-turning parts • $2.e. re-stocking fee)  Inventory policy applicable.