NextLeap 2.0 Questions and Answers
What have we achieved since the beginning of NextLeap?
Here are some of our achievements in the past 8 quarters. We have:
 Expanded our existing global platform in freight forwarding, customs
brokerage, and compliance to include contract logistics
 Moved up the ranks among our global logistics competitors
 Deepened our relationships with our existing strategic customers and
developed new ones
 Delivered 12 enterprise projects
 Completed 3 major strategic acquisitions
 Created substantial shareholder value
 Grown to over 11,000 UTi team members.
How is NextLeap version 2.0 changed from the original?
We have refined our NextLeap strategy by:
 Updating the names of our core initiatives to more clearly reflect their intent
 Adding agility and passion as two qualities that link our differentiators
together
 Including our principles, which were developed by the Corporate Governance
enterprise project, as part of our strategy foundation
 Adding the Integration Triangle to focus our efforts on customer relationships
 Developing Industry Markets as a new and important part of our growth path.
These are the major changes.
Why have the core initiatives changed?
We have refreshed and relabeled some of the original Core Initiatives to more clearly
reflect their intent. For example,
 The GAME (Global Account Management Enterprise) initiative has been
renamed the Primary Logistics Partner (PLP) initiative to reflect the specific
scope and focus of our plan to become a PLP to strategic, global and local,
customers.
 The Processes and Operation Strategy (POPS) initiative has been renamed
to Processes & Execution to more clearly reflect our focus on executing and
delivering results to our customers.
 The Product Strategy initiative has been renamed to Services, Solutions &
Markets to reflect our growing emphasis on solutions and key industry
markets.
 The Tools initiative has been replaced by the Strategic Acquisitions arrow
because tools development is being addressed within other initiatives. Also,
it became increasingly clear that in order to reach our AIM within the
NextLeap timeframe we can not rely solely on organic growth, but must also
be successful in making strategic acquisitions.
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Has the NextLeap target changed?
No, our NextLeap target remains as twenty to the power of five (205) which is made
up of the following five twenties:
 20 global PLPs
 20% annual growth rate in revenue
 20% operating ratio by year 5
 20 performance metrics
 20 quarters of deliverables
Why is this called version 2.0? (What is the meaning of 2.0?)
The title of the presentation is NextLeap version 2.0 because, like software
companies that improve their products with each new release, we have improved,
refined and refreshed our strategy. However, the foundation and the target have not
changed and there is complete continuity between the original strategy and version
2.0.
What is the difference between local deployment and local initiatives?
Local Deployment refers to local activities that support the rollout of Enterprise
Projects, such as adoption of Yield Management practices. Local Deployment
projects require coordination between the global and local levels of the organization.
Local Initiatives, on the other hand, are projects that are developed and managed at
the branch or country level to help to achieve our NextLeap target. However, Local
Initiatives may become enterprise-wide solutions if the success of the local activities
is shared with others on a global basis.
What is Global Integrated Logistics?
The key to Global Integrated Logistics is the ability to integrate our stand-alone
services into customized solutions for our customers on a worldwide basis. Global
Integrated Logistics is an emerging growth market that requires us to add new
services, bundle them into solutions, and deliver them on a global basis with an
integrated view of the supply chain.
Are we going to make more acquisitions in freight forwarding?
We do not plan to make any major additional acquisitions in freight forwarding. Our
global footprint in freight forwarding is largely complete. Small acquisitions to fill
gaps may occur, but our principal focus will be on acquiring contract logistics
capability, as well as, specialized service providers in target markets, such as IHD.
Who is responsible for managing the integration triangle?
Because the integration triangle is central to achieving our NextLeap targets,
everyone at UTi is involved in managing some aspect of the integration triangle.
However, some parts of the organization may have more direct responsibility for key
activities. For example, the sales team has primary responsibility for account
management. Visibility will be managed through the teams that are involved in
delivering eMpower5, BI applications and knowledge sharing. Operations is the key
manager of customer solutions as they must stitch together our services to create a
seamless solution for our customer.
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How will we organize freight forwarding and contract logistics ?
Freight forwarding and contract logistics will be organized in each region and country
as stand alone operations. For example, Standard will not be combined with the
freight forwarding operations of UTi and will continue to operate as a stand alone
company. However, when the customer requires it, we will integrate the
management of the customer relationship and product visibility. While we will
continue to offer stand alone solutions, our core services will be integrated at a
customer level when we design customized solutions.
Will Standard and SLi change their names?
It is our belief that this should be a customer driven decision. When customers
recognize that UTi and Standard or SLi are one organization and they request a
name change then it will be considered it at that time.
Is a common brand a good idea?
Developing a common brand will become increasingly important as we begin to sell
customized integrated solutions. A common brand is more than just a name. We
want to provide the same level of service and customer experience in Hong Kong as
we do in Paris or Cape Town.
When will eMpower5 be launched?
eMpower5 is currently available for demonstration. Development will be completed
by the end of July and over the following 12 months it will be rolled out to our key
customers as a pilot.
Can we simultaneously improve the quality of our core business and offer
customized solutions?
Yes, we will always continue to improve the quality of each of our core stand alone
services while we offer our customers more customized and integrated solutions.
Core services are the building blocks of our specialized solutions. By improving
quality and expanding our core services we will deliver greater value, strengthen
customer relationships, and create further growth opportunities for all of us.
What value do strategic customers obtain from UTi when they become a
strategic PLP (Primary Logistics Partner)?
Specific benefits have not been finalized, but strategic customers will receive a
deeper customer experience through a dedicated Director of Account Solutions
(DAS) and executive sponsor. In addition, they will have preferred access to our
people and technology. Also, we will invite our strategic PLP customers to special
events that will give them the opportunity to share ideas, solve problems and network
with others.
Can we maintain our high revenue growth rate?
Yes, net revenue will continue to grow through effective yield management, customer
service, and sales efforts. As each branch, logistics center, country and region sets
its own growth target in light of the opportunities present in the marketplace, we will
continue to exceed our NextLeap target.
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What can we do to improve our operating ratio in Freight Forwarding?
To improve our operating ratio in Freight Forwarding we must grow our business by
increasing our net revenue, improving our customer service and focusing on cost
controls. We need to take action to improve customer profitability, especially for
unprofitable accounts, through intelligent changes in pricing, transportation cost and
service levels, and by expanding and upgrading our relationships with all customers.
In addition, we need to ensure that costs rise at a slower pace than net revenue.
This one simple accomplishment causes an automatic ongoing acceleration in the
operating ratio.
Can we reach a 10% operating ratio in contract logistics?
Yes, we can reach a 10% operating ratio in contract logistics. We have expanded
our contract logistics capabilities significantly since the start of NextLeap with the
acquisitions of Standard, SLi and IHD, which already operates well in excess of the
10% ratio. By continuing to focus on customer relationships, productivity gains and
cost controls we will be able to meet the 10% operating ratio target.
What is the difference between principles and values?
Values are a representation of our core beliefs whereas, principles are the very
specific definitions or explanations of how we will demonstrate our core values. In
other words, principles are derived from our values and represent the rules by which
our team will play the game.
What is the meaning of common global processes in freight forwarding?
As you know we were able to move from many different processes and systems in
freight forwarding to 4 primary IT systems that support individual regions. This was
the first step toward the larger goal of achieving common global processes in freight
forwarding. Our ultimate goal is to create common, best practice operating
procedures that are consistent and shared by all 4 regions in order to streamline
work, reduce cost and better serve our customers.
How can I make a difference in the NextLeap journey?
Everyone has a part in the NextLeap journey. Each of us needs to ask ourselves
“What is my contribution to NextLeap?” You can support NextLeap by embracing
the target and by finding ways to contribute to the goals in what you do each and
every day. For example, you may develop your own Local Initiatives that improve
your branch’s or logistic center’s performance on each of the “five twenties”. Our
future success depends on every team member and specifically, your contribution.
At the end of NextLeap each one of us will benefit from standing on the podium as
part of our winning team.
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