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April 8, 1998

SAP and Federal Express Launch Integrated Solution to Extend Global Supply-Chain Capabilities to R/3 Users

HP Implements Certified Interface to New FedEx Application; Joint Collaboration Team Created to Provide Ongoing Development

WALLDORF,Germany and MEMPHIS, Tenn. (April 8, 1998) --SAP AG, the world's leading provider of enterprise application software solutions, and Federal Express Corp. ("FedEx"), the world's largest express transportation company, jointly launched the first in a series of integrated software solutions that will link FedEx's logistics, information technology and transportation capabilities with the SAP R/3 System. As part of this alliance, FedEx is delivering a new shipping and tracking application designed specifically to provide R/3 users with real-time package lifecycle information. SAP has worked closely with FedEx to develop a certified interface, providing SAP and FedEx customers with a fully integrated supply chain solution for today's competitive global marketplace.

The initial implementation is currently in progress at Hewlett-Packard Company. Wade Thompson, responsible for designing the distribution processes for R/3 users at HP's Medical Products Group, said, "For our R/3 users, the solution will simplify every related process step from order entry through shipment and tracking by providing a tight integration with FedEx. That, ultimately, should help us serve our medical customers better."

The new integrated solution offers customers real-time shipping and tracking functions, from order entry through package delivery, all from within R/3. SAP customers will be able to streamline their supply chain by reducing inventory management and resource costs. A FedEx tracking number, as well as freight charges, can be obtained and assigned immediately via R/3 order entry while a customer order is being placed. Subsequent order status and package status is available immediately as the package moves by FedEx from an R/3 customer's shipping dock through the FedEx delivery network to its final destination.

"The combined power of FedEx and SAP offers customers a single integrated solution that allows them to extend their R/3 System to include FedEx's transportation, information and logistics expertise," said Dennis H. Jones, Executive Vice President and CIO of FDX Corp. "By leveraging the information-rich content FedEx maintains on every shipment, customers will realise improvements in planning, order entry, inventory management and customer satisfaction across the supply chain.

"The leadership positions of FedEx and SAP are well-established in supply chain activities. Our customers have told us they are excited about this joint effort and so are we," added Jones.

In addition, the two companies will create a Joint Collaboration Team (JCT) - a jointly staffed and funded development team - to develop further logistics solutions enabling R/3 users to execute the complete supply chain seamlessly. The first effort of the JCT will be to further integrate and link the world-wide logistics operations of FedEx with the supply chain management functions of the SAP R/3 System. The JCT effort will benefit customers by improving planning, smoothing product flows, reducing or eliminating unnecessary inventory, trimming costs, and improving service.

"Supply Chain execution depends heavily on global delivery fulfilment services. Therefore, Supply Chain Management needs information integration between internal order fulfilment systems and external logistics service providers. Given its extensive global network and express delivery fulfilment services, FedEx was a natural choice for a transportation and distribution provider," said Peter Zencke, Executive Board Member, SAP AG.

"By leveraging the openness of the SAP Business FrameworkTM, our joint development work with FedEx will provide customers the seamless information link between FedEx logistics and SAP's Business Processing, further extending the SAP Supply Chain solution."

AVAILABILITY

The pilot program will be expanded to additional customers throughout April 1998 with general availability in June 1998. The interface specifications will be published by SAP and available through the SAP Complementary Software Program.

ABOUT SAP

SAP is a market and technology leader in client/server enterprise application software providing comprehensive solutions for companies of all sizes and all industry sectors. Cultivating innovative technologies on a solid foundation of business experience, SAP delivers scalable solutions that enable its customers to continually improve upon best practices. SAP products empower people to respond quickly and decisively to dynamic market conditions, helping businesses achieve and maintain a competitive advantage. Founded in 1972, SAP is based in Walldorf, Germany, and employs more than 13,000 people at offices in more than 50 countries who are dedicated to providing a high level of support and service to the more than 13,000 installations of R/3 world-wide. The SAP World Wide Web site can be found at www.sap.com.

FedEx currently services the Asia Pacific market with over 5,000 employees in more than 30 countries and territories. Operating its own wide-bodied MD-11, DC-10 and A310 aircraft, FedEx offers over 180 flights per week to the following locations: Beijing, Cebu, Hong Kong, Jakarta, Kaohsiung, Kuala Lumpur, Manila, Osaka, Penang, Seoul, Shanghai, Singapore, Subic Bay, Taipei and Tokyo.

Federal Express, a subsidiary of transportation powerhouse FDX Corp, is the worldÍs largest express transportation company providing fast and reliable services for more than 2.8 million items in 211 countries each working day. The company employs approximately 130,000 people, has nearly 43,000 drop-off locations, and operates more than 580 aircraft and 38,000 vehicles in its integrated global network. FedEx maintains electronic connections with more than 650,000 users via FedEx Powership®, FedEx Ship ® and FedEx interNetShipSM. Federal Express reported revenues of U.S.$11.5 billion for its fiscal year ended May 31, 1997.

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