2 Wolff Karstadt Quelle Fachhochschule Nurnberg He

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1. Nürnberger Logistik-Tag an der Georg Simon Ohm Fachhochschule Nürnberg am 24. Oktober 2006 Supply Chain Management bei KarstadtQuelle ein Praxisbericht Carsten Wolff Managing Director KarstadtQuelle International Services AG

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Schiff

1. What is KQ IS AG / Noris Trading – MISSION : 

We deliver Time Price Quality Our network and our experience secures our common success. We provide added value to the customer’s global sourcing. 1. What is KQ IS AG / Noris Trading – MISSION

2. Organisation of the Buying Division : 

NIT NIT Milan Latvia Hong Kong New Delhi Nuremberg Istanbul Romania Shanghai Bombay St. Gallen Izmir Dalian Tirupur Hungary Beijing Pakistan Hong Kong Bulgaria Shenzen Vietnam Thailand Bangladesh Korea Indonesia KarstadtQuelle IS St. Gallen KarstadtQuelle AG, Essen Noris International Trading Europe ASIA  All buying offices are managed by KQ IS AG  Non-group business through N.I.T. 2. Organisation of the Buying Division

3. Selling is Local – Sourcing is Global : 

Karachi Taipei Seoul Tirupur QC Shanghai Beijing Hong Kong New Delhi Jakarta Milan Bangkok Dalian Ho Chi Minh City Bombay Bangladesh Sophia Vilnius Budapest Bucharest Istanbul Izmir Quingdao 3. Selling is Local – Sourcing is Global

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The standardized organisation within each office is grouped according to the customer or relevant products. Hongkong Taiwan South Korea P.R. China Italy Turkey Bulgaria Lithuania Hungary Romania Supplier A Merchandise Manager T-Shirts M 1 M 2 M 3 Supplier B Supplier C 4. Buying Organisation Staff Merchandising: 501 Staff QC: 318 Staff Administration: 254 Total 1‘073

5. USP‘s – Advantages of our Buying Offices : 

KarstadtQuelle offers a unique combination of benefits for third party customers. 5. USP‘s – Advantages of our Buying Offices

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Previously established for the KarstadtQuelle organisation, the buying offices today already handle a substantial and growing volume for Non-Group Customers. Total sourcing volume 2005: € 1,1 billion 6. Customer Structure Other KQ Group Non Group Customer Karstadt Neckermann D Quelle D

7. Trading volume by region and product group : 

Our offices combine expertise in the local markets with fundamental product knowledge for many merchandising groups. Trading volume by regions Trading volume by product groups Northern Asia/HK Western Europe Eastern Europe Indian Sub- continent South-East Asia Textiles Hard- ware Ladieswear Menswear Under & Swimwear Home textiles Shoes Childrenswear Other House & Home White Goods PC/ Telco Sports Brown Goods Toys Other 7. Trading volume by region and product group

8. KQ IS AG – Services provided by the Buying Offices : 

8. KQ IS AG – Services provided by the Buying Offices

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The IPOS system constitutes the connection between your buying department and the buying offices. 9. IPOS - KQ IS AG own order system Technology Web-based interface Software based on QRS/Rockport development (Tradeweave) Open system / interfaces to supplier and logistics systems Features Up-to-date and online information about the status of each order System can be accessed by all parties involved Means of interaction between the buyer and the buying office

10.1 Standard Core Process 1: 

Offer Sheet Offer Sample Buying / Counter Sample Order Placement Release of Buying / Counter Sample Shipping Approval Final Inspection Production Release Size Set Lab Dip Photo Sample Production In-Line Insp. Logistics Execution Invoice / Payment Finance / Administration System Support: IPOS, PILOT, Target:AQM+ Lab Test Order Clearing Supplier Customer 10.1 Standard Core Process 1

10.2 Standard Core Process 2: 

10.2 Standard Core Process 2 Total process Description: .................................................................................................................................... Process step Product request A1 Producing Counter Sample Sending Counter Sample ... A2 A3 ... Execution: ....................................................................................................................................

10.3 Standard Core Process 3 – Process Overview “Order Development Textiles and Non technical hardware” : 

Product Request: photo / descrip- tion / original sample 1A1 Producing the Buying / Counter Sample Sending the Buying / Counter Sample Negotiations Order Placement Order Development A B C Buyer‘s Request Auctions BO obtains offer by Supplier 1A2 1A3 1A4 1A6 Product Offer to Customer by BO 1B1 Offer Sheet Sending the Offer Sheet Reviewing the Offer Sheet Confirmation / Sample Request 1B2 1B3 1B4 1B5 Producing the Offer Sample 1B6 Shipment of the Offer Sample Negotiations Order Placement 1B7 1B8 1B10 A B C Preparation for an Auction 1C1 Online Evaluation Final To-Do‘s before Auction starts Auction Auction Wrap-Up 1C2 1C3 1C4 1C5 Ordering Buying / Counter Sample 1C6 Producing the Buying / Counter Sample Sending the Buying / Counter Sample 1C7 1C8 Offer Sample Review 1B9 Order Placement 1C10 Buying / Counter Sample Review 1A5 Buying / Counter Sample Review 1C9 Textiles and Non technical hardware 1 10.3 Standard Core Process 3 – Process Overview “Order Development Textiles and Non technical hardware”

10.4 Process Overview “Order Fulfilment” Textiles – Non technical hardware – Technical hardware : 

10.4 Process Overview “Order Fulfilment” Textiles – Non technical hardware – Technical hardware

11. C.I.S. Screen Shot : 

11. C.I.S. Screen Shot MC QM Admin Supplier Customer X Description: The buying office passes all information received to the supplier. In some cases there are several suppliers requested to make the buying / counter sample Execution: Depends on the request, photos per e- mail, sketches per fax or mail, samples per courier service X LINK to operational IT system Special instructions

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Comparison of important operating figures of KQIS and Li & Fung 1) There of several sales offices (London, Amsterdam, div. USA) Turnover 2005 (in bn. EUR) Offices Countries Number of suppliers Number of employees 1,2 26 20 ~2.000 ~1.000 ~5,5 731) 41 ~7.000 >7.000 Advantages Li & Fung Economies of scale for Li & Fung/much more buying power Li & Fung with higher presence in sourcing markets Longer payment terms for KQ L&F is world market leader in international sourcing! Li & Fung generates new options for the international sourcing – Countries, suppliers, more favorable buying conditions….. 12. Li & Fung

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Comparison of operative services of KQIS and Li & Fung Headline Quality Inspection Documentation Sourcing (fabrics, raw materials) Financial Services (Payment)  Order-Management            Commission rate stays the same! Volume Increasing – Positive price effects … as well as more services for KQ 13. C.I.S. Screen Shot

Pudong Shanghai 1990: 

Pudong Shanghai 1990

15. Pudong Shanghai 2005: 

15. Pudong Shanghai 2005

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16. How to describe Emerging Markets?

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Thank you for your kind attention

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Contact: Carsten Wolff Managing Director KarstadtQuelle International Services AG Professional Buying Services Worldwide Phone: +41-71-274 63 33 Fax: +41-71-274 63 31 Email: carsten.wolff@karstadtquelle.com