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-to-
back 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
  Lack of space in other regions
o Main Warehouse
 Supplier to point to where the part/s will be sourced,
1. Example. Millersburg, JMM, local supplier
 Regional plants to have the vendor set-up as the main
warehouse
 Do not change source origin for each plant; change the buyer
group (?)

• Australian Customer purchase orders

o CSR’s to take orders, 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, with copy to Jakarta for
information purposes
o Benefits:
 Brisbane to review Australian held stock at time of entry, 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, same as Batu and Freeport
o Q. can triangulation orders be processed when Australian Stamler parts
have 98- in front of Stamler part?
• Holding Stocks in Jakarta
o Strength
 Close to customers in Indonesia
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
Stamler Parts Supply Chain Process Map

MIL

Customer

Stamler
R Main Parts Storage
JMM

Standard Supply Chain

SEA

Backordered Parts Option

Customer
Backorder Option for
International Customers
Batu Inventory Policy covering Pinjam Pakai period

1. Prevent
• Stock replenishment going to site
o Exceptions:
 Confirmed shutdown schedule
• Via check-book policy
 Order on demand
o Duplications
 i.e. parts being cancelled, then cancel back-orders in
system
o Order cancellations (by Batu)
 P&H credit policy applicable for credit requests (i.e.
re-stocking fee)
 Inventory policy applicable, 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, where applicable

2. On-site
• Batu to return cancelled orders to point of origin
o Where possible, return to 4H1, instead of 1A1
o Can be re-directed via Singapore to 4H1, as per K&N

3. What can be returned from site and sold on global market or stored in
4H1, i.e. slow/non-turning parts
• $2.6m @ Std cost price
o By end of FY09
• Agreement between Batu and P&H is to hold $5-5.2m of
consignment stock (@ sell price)

4. Point of Origin
• Batu to amend point of origin in-line with location of current stock,
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, as required

5. Batu Consignment Stock contract review

• Batu consignment stock contract should be reviewed in-line with
Consignment Stock Terms and conditions document.
o Base list to be made known
o Then apply T&C’s in relation to any requests for increase in
stock levels.