1 Field to Table Analysis

2 List of Ideas / Opportunities

3 SKU Proliferation Over the last 3 years SKUs grew by 33%, but sales/profit had not

4 SKU’s scanned – Current Month

5 SKU’s below $25 sales in current month Didn’t include zero sales items, too hard to acquire data for this analysis

6 Store Checkout Safety - ergonomics Customer service / speed Labor productivity

7 Checkout Data 7.13 seconds per item –Based on 22 separate time studies –Equivalent to $0.44 per case (labor cost) –Total checkout labor cost $67.2 million Reduce 1 second per item- transaction equal to: –$9.4 million labor savings

8 Observations Safety implications in scanning One checkout - 15 min for 96 items UPC on shrink-wrap veggies not scan-able Competitors – multiple UPC on package Competitors – aggressive beam technology Coupons take extra time EBT transactions take extra time Customer survey at register takes extra time

9 Inbound Transportation Vendor Product shipped to Distribution Center

10 Data & Observation Our process does not promote reducing inbound transportation costs Vendor transported vs. In-House Broker or Backhaul –Currently company handles only 18% of all inbound loads –Industry standard: 36% –Each 1% increase equals net $471,500 annually –Reaching 36% equals net $8.5 million annually

11 Recommendations Process flow mapping project –Backhaul, brokering & vendor truck –Procurement, distribution & accounting –Identify decision gaps & non-value added steps –Design new process incorporating best-cost options Deeper understanding of the implications of changes to our current process/method Change the process of how we handle inbound transportation

12 Minimum Case Order Quantity

13 Data & Observations Data collected from Winchester DC March 12 th, 2009

14 Data & Observations 1.9 sec drop

15 Case Productivity Data Company previously had a 3 case minimum for many items, but it was changed If we had a 3 case minimum for the DCs –Need 10 fewer Order Selectors ($360,000) If we had a 3 case minimum for Stores –Stocking times are about 3x of a DC order selection –Need 30 fewer Stockers ($540,000) –Reality is that this improves scheduling at the store and will impact labor productivity