VMI Program – SSCI Hungary Suppliers Briefing Page 1
Proposed VMI Solution The VMI Hubbing solution that SSCI has requested Exel to provide enables SSCI and its Suppliers to enjoy the specific benefits of a VMI program under the Hungarian „Public Bonded Warehouse” and “Free Trade Zone” (FTZ) regulations. This bonded environment enables Suppliers to avoid paying any duties and VAT levied on the inventory value, that would otherwise apply due to the DDP INCOTERMS, as long as the inventory is exported from Hungary. Also there is no requirement to register the Supplier in Hungary to set up consignment stock in the HUB. 2
Benefits for Suppliers participating in the VMI Program • Visibility of the stock in the HUB through automated daily system reports generated by EXEL WHS system and sent by e-mail. • Reduced costs of inventory storage, handling and administration through consolidated volumes from several suppliers (multi-customer facility) • Reduced shuttle costs from Exel HUB to SSCI factory through consolidated orders. • Global and local Exel expertise in Supply Chain Management and VMI solutions. CONTINUING… 3
Benefits for Suppliers participating in the VMI Program CONTINUING… • 24/7/365 customs capability (receiving and release from bonded warehouse) in the Exel HUB via EDI link to the customs • No need to VAT registration in Hungary for the suppliers • Dedicated customer service to SSCI suppliers • High quality and security standards maintained in the HUB • Better service to SSCI and IBM - SSCI can call off different materials from many suppliers from one point (one contact for SSCI for orders, total inventory in one hub) - Visibility for SSCI/IBM on the whole inventory from different suppliers through one system - System integration is in place between Exel WHS system and SSCI production system -> automated orders - Avoid line down from guaranteed supply • Special Exel rates can apply for the inbound transportation (Airfreight, Roadfreight, Seafreight) to the HUB for suppliers participating in the VMI program in case Supplier is interested in using Exel for the whole Supply Chain -> improved visibility through the whole pipeline 4
Process Steps For all Suppliers 1. Hub inventory levels will be contractually agreed between SSCI and each Supplier, and communicated to Exel by Supplier, for example… • 2/3 weeks Hub stock inventory for air-shipments and • 5/6 weeks Hub stock inventory for ocean-shipments 2. Weekly rolling forecast for reference will be passed by SSCI to Supplier providing information for the following 13 weeks. 3. SSCI will issue quarterly blanket purchase orders (95%) or discrete PO’s (5%) to suppliers, with e-mail cc also to Exel 4. Inventory is shipped via ocean/rail/road or air depending on buffer stock level and ability to replenish in line with SSCI forecast 5
Process Steps For all Suppliers 5. T 1 or T 2 transit document or T. I. R. Carnet (customs declarations) has to be issued in case of international bonded transport within Europe (or “T 0”, so called “EV” in case of domestic bonded transport to accompany the goods e. g. from the boarder customs office or from the Budapest International Airport) issued by the supplier’s customs broker or Forwarder. -For T 1 and T 2 in box „ 53” (destination customs office) “VH 81100” has to be indicated. -For T. I. R. carnet “Budakornyeki Vamhivatal” has to be indicated as the destination customs office. The delivery address has to indicate “Exel Szallitmanyozasi Kft, M 1 Uzleti Park, Paty, H-2071, Hungary” (in box „ 8” on T 0, T 1 and T 2 documents) 6. The international waybill (B/L, C. M. R. or Air Waybill) has to be addressed to SSCI Hungary, C/O Exel Szallitmanyozasi Kft, M 1 Uzleti Park, Paty, H-2071, Hungary 6
Process steps for all Suppliers IMPORTANT In case you are using such a transportation mode when your shipment is NOT escorted by a direct T document, but coming through e. g. the Budapest Airport please bear in mind that the forwarder -whoever it ishas to customs clear the goods from the airport to the hub. For this procedure a CUSTOMS GUARANTEE is always needed. Without it your shipment can not be delivered to the hub. Please make sure that this issue is settled with the forwarder already at the origin so there will be no delay because of that. 7
Process Steps For Suppliers directly selling parts to SSCI…… 7 a. Supplier will move parts to Exel Hub by issuing a proforma invoice, specifying…… • Consignee : Sanmina-SCI Hungary, c/o EXEL Szállítmányozási Kft, M 1 Üzleti Park, Páty, H-2071, Hungary • Country of Origin • Incoterms DDP Tatabanya • Description of Goods and customs tariffs and commodity codes (Supplier and SSCI part numbers), • Quantity • Unit price, Value of goods, Currency • Number of packages • Gross and net weight of goods, • Terms of Payment 8
Process Steps For Suppliers directly selling parts to SSCI…… 8 a. Importer of record is SSCI, Exel will register the goods under SSCI name and VAT number (no need to register the supplier in Hungary for taxing reasons) 9 a. Dispatch from Hub requires pro-forma invoice from Supplier to enable Exel to perform customs clearance. Exel will use the original (inbound) proforma invoice to perform deliveries (even for partial deliveries) – no action needed from Suppliers. 10 a. Exel will perform customs clearance for bonded transport and deliver inventory in bond to SSCI FTZ same day. 9
Process Steps For Suppliers selling parts to IBM Singapore… 7 b. Supplier will move parts to Exel Hub by issuing a pro-forma invoice, specifying…… • Consignee : IBM Singapore C/O EXEL Szállítmányozási Kft, M 1 Üzleti Park, Páty, H-2071, Hungary • Country of Origin • Incoterms DDP Tatabanya • Description of Goods and customs tariffs and commodity codes (Supplier and SSCI part numbers), • Quantity • Unit price, Value of goods, Currency • Number of packages • Gross and net weight of goods, • Terms of Payment 10
Process Steps For Suppliers selling parts to IBM Singapore… 8 b. Importer of record is IBM Singapore, Exel will register the goods under IBM Singapore name and Exel VAT number (no need to register the Supplier or IBM Singapore in Hungary for taxing reasons) 9 b. After pick and pack procedure completed and manifest printed Exel will inform IBM Singapore who will then issue a pro-forma invoice to SSCI Hungary for relevant pull quantity, indicating also gross weight and number of packages and fax copy to Exel for customs clearance. 10 b. Exel will perform customs clearance for bonded transport and deliver inventory in bond to SSCI same day. 11
Material, Information and Financial Flows High Level, SSCI Suppliers Send goods Confirm receipt Supplier Inform supplier of the exit from stock EXEL Order is placed Goods are delivered Invoice customer Payment of supplier 12 SSCI
Material, Information and Financial Flows High Level, IBM Suppliers Send goods Confirm receipt Inform supplier of the exit from stock EXEL Order is placed Goods are delivered Supplier Invoice IBM Singapore IBM Payment of supplier Invoice SSCI Payment of IBM 13 SSCI
Receiving at Exel HUB Shipping from Exel HUB to SSCI 14
SITE INSTRUCTIONS FOR EXEL M 1 WAREHOUSE Exel Szallitmanyozasi Kft M 1 Uzleti Park 2071 Paty Hungary 1. M 1 Motorway to 21 km marker, exit at MOL petrol station 2. Report to Gate Security to park directions to Exel warehouse 3. Report to Exel security guard for entry authorization 15
CONTACT DETAILS Melinda Molnar - Supplier Integration Tel: + 36 23 556033 Fax: +36 23 556030 email: melinda. molnar@exel. com Tamas Piroska - Logistics Supervisor Tel: + 36 23 556036 Fax: +36 23 556030 email: tamas. piroska@exel. com David Ringrose - Tel: + 36 23 556035 Business Manager Fax: + 36 23 556030 Exel M 1 facility email: david. ringrose@exel. com 16
FACILITY SPECIFICATIONS · Built · Floor space · Measurements - 2000 - 6060 m 2 - Height = 11 m - Width = 60 m - Length = 101 m · Warehouse Construction Reinforced concrete frame, water proof, thermal insulation, heated. Exterior walls constructed of enamel coated, galvanised panel steel sheets with insulated layer. · Office Construction – Brick · Temperature controlled to +6 Celsius · Warehouse floor 1. 2 m above yard level 17
SECURITY ON SITE l Perimeter Fence, Security at entrance of park l 2 External CCTV Cameras l 9 Internal CCTV Cameras l Restricted Entry via alarmed doors, magnetic card entry to authorized personnel only l Security Personnel on site 24/7/365 l Fire Protection; · Fire hydrants, Fire extinguishers, Fire alarm system signals local fire authorities · Sprinkler system, factory mutual and VDS approved standards, fire protection wall, separate chambers 18
Exel Locations in Hungary and SSCI FTZ in Tatabanya Headquarters M 1 Warehouse/ VMI HUB (In-House Logistics) FTZ Airport Customs Office 19
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