Overview for Parker EMEA Inventory-Sharing Solution for Wholesaler-Distributors Overview for Parker EMEA Mark Tomalonis WarehouseTWO, LLC CONFIDENTIAL

Agenda Principles of inventory-sharing Tour of WarehouseTWO tools Q&A 

Principles of Inventory-Sharing Tour of WarehouseTWO tools Q&A 

Principles of Inventory-Sharing Inventory-Sharing defined: Formal collaboration by a manufacturer and its network of wholesaler-distributors Virtual aggregation of available inventories Critical customer needs are fulfilled quickly, by leveraging inventory in the network. Win, win, win 

Principles of Inventory-Sharing Inventory-sharing is your distributors’ Unfair Advantage! 

Principles of Inventory-Sharing Inventory-sharing helps your distributors mitigate these common business challenges: Lack of product availability (long lead times) Minimum PO quantity/value requirements Expedite / quick delivery premiums Quantity discount policies Surplus inventory* 

Principles of Inventory-Sharing Distribution of sales by unique item (SKU) 

Principles of Inventory-Sharing Distribution of sales by unique item (SKU) “A” & “B” items lots of transactions distributors often stock Parker may stock in EMEA everyone makes money selling these items high service level is easy not likely to be “shared” 

Principles of Inventory-Sharing Distribution of sales by unique item (SKU) “C” items infrequent transactions distributors might stock lead times from Parker may be long high service level is hard good “inventory-sharing” candidates 

Principles of Inventory-Sharing Distribution of sales by unique item (SKU) “D” items very rare transactions no one wants to stock high service level is very hard may be money-losing sales excellent “inventory-sharing” candidates

Principles of Inventory-Sharing Distribution of sales by unique item (SKU) “D” items customers judge the supply chain on the availability of these items “inventory-sharing” has its greatest value on these items low sales; high transaction costs and lots of headaches 

Principles of Inventory-Sharing Do end-customers judge Parker on the majority of the time when you or your distributors perform to their satisfaction? OR Do end-customers judge Parker on those rare events when you or your distributors let them down? Inventory-sharing helps prevent those events that hurt your reputation 

Principles of Inventory-Sharing One distributor’s inventory

Principles of Inventory-Sharing One distributor’s inventory w/ inventory-sharing… …with no additional capital investment or risk! Serve customers from vast inventories! 

Principles of Inventory-Sharing How inventory-sharing helps Parker EMEA: Increased overall sales Improved brand reputation Increased “operational efficiency” “Buy back VS make” 

Principles of Inventory-Sharing What you said was important to you: 

Principles of Inventory-Sharing Tour of WarehouseTWO tools Q&A 

About WarehouseTWO Principles of inventory-sharing Tour of WarehouseTWO tools Q&A 

About WarehouseTWO WarehouseTWO is the easiest to use, most cost-effective inventory-sharing solution available to wholesaler-distributors today. 

About WarehouseTWO “SaaS” (in “the cloud” solution) Simple for all Sophisticated for those who want it Restricted access 

About WarehouseTWO Restricted access (no end-customers) manufacturers and wholesaler-distributors only 

About WarehouseTWO Restricted access (by product line) “Inventory-Sharing Communities” distributors can see only products for which they are an authorized wholesaler-distributor 

About WarehouseTWO A complete TURN-KEY solution Customer/technical support Training Server hosting & website development Communications (reports, tips, best practices) 

About WarehouseTWO Fast facts Created for Parker Hannifin USA, 2005 350 Parker distributors participate in NA 49 Parker-branded communities 340,000 inventory data records posted 

About WarehouseTWO  Distributors upload their inventory data to the WarehouseTWO web site  Distributors browse aggregated data at our web site When a distributor finds what he needs, he contacts the posting distributor No transactions take place at WarehouseTWO No transaction records No transaction fees        

About WarehouseTWO Site tour... SEARCH and MULTI-SEARCH BROADCAST REQUEST POST INVENTORY METRICS EXPORT DATA / MEMBERS RELATED ITEMS 

About WarehouseTWO Principles of inventory-sharing Tour of WarehouseTWO tools Q&A 

Q&A Principles of inventory-sharing Tour of WarehouseTWO tools Q&A 

Q&A 

Next Steps 

Mark Tomalonis mark@warehousetwo.com www.warehousetwo.com Thank You! Mark Tomalonis mark@warehousetwo.com www.warehousetwo.com

Principles of Inventory-Sharing Product attributes conducive to successful inventory-sharing: Durable goods (non-perishables) Branded products (not commodities) Manufacturer-defined part numbers Can ship via UPS, FedEx or on a pallet Sold through regional stocking wholesaler-distributors 

deployment challenges 

deployment challenges Typical distributor interest levels in anything: Bottom 20% “conspiracy theorists” Top 20% “enthusiasts” Middle 60% “on the fence” (“Convince me”) 

deployment challenges “Wait and See” “Constant Gardener” “Evangelist” 

deployment challenges Keys to Success: 1 “CRITICAL MASS” Many participating distributors 2 LOTS OF INVENTORY >60% members uploading 3 MANUFACTURER PARTICIPATION 4 CHANGE IN CSRs’ BEHAVIOR Non-stock backorders  WarehouseTWO, LLC CONFIDENTIAL

deployment challenges Principles of inventory-sharing Tour of WarehouseTWO tools Inventory-sharing deployment challenges Tips for successful deployment 

Tips Principles of inventory-sharing Tour of WarehouseTWO tools Inventory-sharing deployment challenges Tips for successful deployment 

Tips Understand your audience. ____% Purchase items to fulfill my end-customers’ backorders. Prevent over-buys of backordered non-stock items. Replenish my active inventory at lower-than-distributor-costs. Gain additional revenue by selling to other distributors. Turn surplus inventory into cash. 100 % No interest Lots of interest 1 2 3 4 5 6 7 8 9 10 

Tips Essential steps for successful deployment: Initial announcement Distributor visits by regional managers Show this video: https://youtu.be/HMLdaYYifT0 Live demonstration of WarehouseTWO Help them register an account (level 2) Monthly email reminders, for at least 1 year Training at distributor conferences Change of behavior by your staffs Teach your customer service and regional sales managers to redirect your distributors: “Have you searched for this item at WarehouseTWO?” “Have you sent out a BROADCAST REQUEST to the other Parker distributors at WarehouseTWO?” 

Tips “Carrots” and “Sticks” Carrots Sticks Reimburse subscription fees for 6-12 months More favorable inventory exchange policy for active participants (buying and selling) Include “participation in inventory-sharing” in distributor metrics Sticks Increase expedite fees Reduce discounts on rush orders 

Tips Principles of inventory-sharing Tour of WarehouseTWO tools Inventory-sharing deployment challenges Tips for successful deployment 

Agenda Principles of inventory-sharing Tour of WarehouseTWO tools Inventory-sharing deployment challenges Tips for successful deployment 

Pre-Q&A Summary WarehouseTWO is the easiest to use, most cost-effective inventory-sharing solution available to wholesaler-distributors today. 

Agenda Principles of inventory-sharing Tour of WarehouseTWO tools Inventory-sharing deployment challenges Tips for successfully achieving “critical mass” participation 

Inventory-Sharing Solution for Wholesaler-Distributors WarehouseTWO, LLC CONFIDENTIAL