RENO DeCA 2000 ALA Vendor Stocking Committees

What is Vendor Stocking Retail (Outside Gate) Commissary Answer: Product Which Vendor’s Pay to Stock in Commissaries, Which the Store Stocks Outside Gate.

How Did Vendor Stocking Get Started? Industry Started to Stock Categories Which Were Not Adequately Stocked by Commissaries in the Late 1960’s and Early 1970’s New Categories Authorized for Sale in Commissaries Required Vendor Stocking –Light Bulbs –Batteries –Gourmet

Scanned Package Volume % Sales By Subgroup (CONUS) *Empower IT 12 months Ending February 1999 CONUS

Vendor Stocked Categories

Vendor Stocking Has Served the Commissary System Well Over the Years But Times Have Changed!

Store Sales (7 Day a Week Operation) Vendor Stockers Do Not Like to Work Seven Days a Week. 45% to 50% of Weekly Sales (45% of ACV)

Economic Trends

Low Unemployment Has Created a Competitive Job Environment $8.00 Per Hour $10.00 Per Hour $9.00 Per Hour $8.00 Per Hour Significant Bonus

Many Stockers are Saying “No!” to Working in Commissaries

Defining The Vendor Stocking Problem ALA Report 1999 Don Goetz Richard Walker

Setting The Sample Base Region Directors Supplied Commissaries With Vendor Stocking Concerns –Determined random sampling of stores to visit and evaluate during April Created MBU/ALA Joint Evaluation Worksheets –Obtained CSO Input to Analyze FDS/DSD Categories, FDS Distributors and Vendor Stocker Issues –Obtained input from Vendor Stockers

ALA 1999 Vendor Stocking Report Opportunities –Identify Reasons for Inadequate Vendor Shelf Stocking Inadequate Weekend Vendor Stocking Top 25 Locations Where Problems Exist Determine Reasons for Turnover of Vendor Stockers –Interview Stockers –Interview Sales Representatives

ALA 1999 Vendor Stocking Report Findings

Vendor Stocking Analysis Store Classification 1=POOR 2=BELOW AVERAGE 3=AVERAGE 4=ABOVE AVERAGE 5=EXCELLENT CategoryR1 AverageR2 AverageR3 AverageDeCA Total FDS Without HBC HBC Average Rating Subtotal Refrigerated Overall DSD Average Rating Subtotal CATEGORY RATING TOTAL

Vendor Stocking Category Regional Analysis

Vendor Stocking Category Regional Analysis Continue

Vendor Stocker Evaluation DeCA Concerns Consistency Reliability Weekend Performance Turnover Responsibilities –Store Requirements –Accountability Training

Shelf Stocking Issues Industry/ Independent Contractor Concerns Store Ordering Quantities –Ordering Enough Cases to Fill Displays to Capacity –Ordering Extra Cases of Proven Seller Store Job Expectations –Cleaning –Ordering –Warehouse Maintenance –Display Removal Access to Product Seven Day Work Week

Vendor Stockers Hourly Rate Components I. # of Hours in Commissary II. # of Cases Stocked III. Rate Per Case

Vendor Stocking Compensation Package

Vendor Stocking Problem Inadequate Training Inconsistent Deliveries Seven Day Operation Difficulty in Accessing Product Inconsistent Ordering Same Pay

2000 ALA Vendor Stocking Initiatives

Vendor Stocking Task Force Organizational Chart

Purpose of Executive Vendor Stocking Committee To Provide ALA & DeCA a Support for Recommendations to Improve Vendor Stocking Problems –Achievability Real Solutions –Financial Impact Broker Manufacturer Distributor DeCA –Criteria for Membership to Executive Committee Have Financial Responsibility for Military Within Company

Executive Vendor Stocking Committee Members

Recommended Solutions

Total US Vendor Stocked 12 Pack Cases

DeCA/Vendor Stocking Estimated Total Expenses US *DeCA Average **Industry Supplied

Vendor Stocking Solutions (Draft) DeCA Assumes Responsibility for Vendor Stocked Category Industry Uses DeCA Contractors (Potential $ ,000,000 Incremental Cost To DeCA) (Potential $30,000,000 Incremental Cost To Industry)

Draft Vendor Stocking Solutions Currently the Financial Committee is Evaluating The Cost of Solutions –DeCA –Industry Target Date of Completion - May 30th

Draft Vendor Stocking Solutions (None or Limited Cost) More Flexible Authorized Stocking Hours Training Video (Coordinated With ALA) Better Working Environment Improved Ordering of Vendor Stocked Items Improved Accessibility to Vendor Stocked Inventory Better Hiring of Vendor Stockers –Job Fairs

More Flexible Stocking Hours Evaluate Vendor Stocking Hours –Needs of Commissary –Needs of Stocker –Needs of Patrons Create When Possible a Better Working Environment

Training Video Coordinated with ALA Responsibilities Policies Importance of Job Payment Method Tools

Improved Ordering of Vendor Stocked Items Problem That Exists Mostly on Weekends. Industry Needs to Ensure Stockers are Stocking on Weekends. DeCA Needs to Ensure Product is Ordered Properly

Better Hiring of Vendor Stockers Job Fairs Career People Families

Improved Accessibility to Vendor Stocked Inventory Organize Backroom Freezer –Shelving on Perimeter Separate Area in Backroom for HBC Inventory. If area secured Need DeCA Personnel With Key Available. Use of Carts When FDS Merchandise Separated.

Draft To Summarize Vendor Stocking Has Been a Part of The Commissary System for Over 30 Years. The Seven-Day Commissary Operations & Low Unemployment Necessitates Change. DeCA & ALA are Evaluating Several Solutions. Significant Progress in Solving Problems Can Be Made by DeCA & Industry at Commissary Level.