Savings Presentation

Agenda Opening Remarks Update on progress to date Category by category report More work to be done Requested support from client

Overview Spend Category 2 - $900K savings on $4.7M in spend Packaging - $81K savings on $807K in spend MRO - $52K savings on $250K in spend Spend Category 1- $900K in savings Sub-Category A - $200K savings on $1m spend Sub-Category B- $56K savings on $322K spend Sub-Category C- $108K savings on $268K spend Sub-Category D - $56K savings on $211K spend Sub-Category E - $84K savings on $284K in spend Sub- Category F - $207K savings on $377K spend Sub-Category G - $187K in savings on $233K spend

Potential Annual Savings of $1.9 Million Spend showing results so far Spend Category 1 Current spend Savings potential Percent savings Sub-Category A $1,003,000 $203,000 20% Sub-Category B $377,000 $207,000 55% Sub-Category C $322,000 $56,000 17% Sub-Category D $268,000 $108,000 40% Sub-Category E $211,000 27% Sub-Category F $284,000 $84,000 30% Sub-Category G $233,000 $187,000 80% MRO $250,000 $53,000 22% Corrugated $807,000 $40,000 5% $67000  $13,000 19%  Spend Category 2 $4,600,000 $900,000 Totals $8,355,000 $1,903,000 23%

Additional $1 Million in Target Savings Work Still to be done Spend Category Current Spend Target Savings Sub-Category H $1,400,000 $300,000 Sub-Category I $1,258,000 $150,000 Sub-Category J $1,428,000 $100,000 Sub-Category K $272,526 $81,758 Sub-Category L $400,000 $80,000 Sub-Category M $261,000 $78,300 Sub-Category N $200,000  $65,000 Sub-Category O $250,000 $55,000 Sub-Category P $420,000 $50,000   Totals $6,141,526 $1,000,058

Sub-Category 1 Overview Next Steps Test Products? Sign Agreement? Current Supplier – Supplier A Current Spend - $1,000,000 Most Expensive Supplier in the market Monopolistic Tendancies Potential Savings -$203,000 New Suppliers Supplier B Supplier C– Test Products? Sign Agreement? Order materials?

Sub-Category 1 Production by Country Rank Country World Production, By Country (Thousand metric tons) 1 China 19,500 2 Australia 18,844 3 Brazil 6,890 4 Jamaica 3,941 5 United States 3,900 6 Russian Federation 3,300 7 India 2,900 8 Suriname 2,200 9 Venezuela 1,900 10 Ukraine 1,700 11 Kazakhstan 1,556 12 Spain 1,400 13 Italy 1,327 14 Canada 1,220 28 Slovenia 30 Sub-Category 1 Production by Country

Sub-Category A - $87K in savings Current Supplier Part # Description Quantity Current price Spend Supplier B Supplier C Supplier D Supplier F Supplier G Total Estimated Cost Savings Percent Savings Supplier A 101001 Item 1 168,000 $0.5145 86,436 $0.375 $0.413 $0.488 $0.575 $0.39 $19,865 23% 101002 Item 2 212,000 109,074 $25,067 101003 Item 3 192,000 98,784 $0.625 $22,702 101004 Item 4 148,000 $0.542 80,216 $0.425 $0.47 $9,916 12% 101005 Item 5 48,000 24,696 $0.41 $4,578 19% 101006 Item 6 26,016 $0.384 $0.43 $5,045   Cost Savings  Cost Savings $87,173 21% $118,786 $86,438 27422 $ - 0 87173 Frieght not incl

Sub-Category A (Cont.) - $116,153 in savings Current Supplier Description Quantity Current price Spend Supplier B Supplier C Supplier D Supplier F Total Estimated Cost Savings Percent savings Supplier A Item 1 66500 $1.31 $87,381 $0.86   $0.95 $30,191 35% Item 2 14000 $2.14 $29,932 $1.13 $1.40 $14,112 47% Item 3 182904 $0.38 $69,504 $0.305 $0.35 $0.372 $13,680 20% Item 4 186000 $0.61 $112,530 $0.575 $5,580 5% Item 5 10500 $6,353 $0.62 $0,575 $315 Item 6 245,000 $0.709 $173,705 $0.57 $32,830 19% Item 7 260,000 $98,800 $19,446 Cost Savings $116,153 $44,303 $33,126 $9,217

Sub-Category C Supplier B Supplier C Supplier D Overview Next Steps Current Supplier – Supplier A Current Spend - $332,438 Potential Savings -$56,114 New Suppliers Supplier B Supplier C Supplier D Second Round of negotiations with suppliers Obtain Supplier References Sample materials from Suppliers B and C

Sub-Category C- $56,114 in savings Current supplier – Supplier A   Annual Usage is 962500 Supplier Price Annual Spend Savings Percent Savings Delivery Point Supplier B China $0.2767 $266,324 $56,114 17% Baltimore, MD Supplier C $0.3000 $288,750 $33,688 10% Supplier D India $0.3062 $294,718 $27,720 9% Supplier A - Incumbent $0.3350 $322,438

Sub-Category D Supplier B Supplier C Overview Next Steps Current Supplier – Supplier A Current Spend - $268,035 Potential Savings -$108,007 (40%) ew Suppliers Supplier B Supplier C Obtain Supplier References Order Sample materials from Suppliers B and C

Sub-Category D- $108K in savings Current supplier – Supplier A   Supplier Annual Spend Savings Percent Savings Delivery Point Supplier B $160,028 $108,007 40% Baltimore, MD Supplier C $208,750 $59,285 22% Supplier A - Incumbent $268,035 Supplier D Supplier E

Sub-Category E Supplier B Supplier C Overview Next Steps Current Supplier – Supplier A Current Spend - $211,461 Potential Savings -$56,156 (21%) The low cost producing regions are South America and China. Many low cost sellers in the US obtain their material from South America or Turkey New Suppliers Supplier B Supplier C Trial Materials from new suppliers Finish Negotiations with suppliers

World Production of Sub-Category E Country 2012 Turkey 2500 Argentina 600 Chile 500 Russia 400 Peru 300 Bolivia 140 China 100 United States 57 Khazakhstan 30 Iran 1

Category E- $56K in savings Current supplier – Supplier A    Annual Spend  Annual Savings PCT Savings Supplier B $155,305 $56,156 21% Supplier C $172,522 $38,939 15% Supplier A $211,461 Incumbent Supplier D

Category F Supplier B Overview Next Steps Current Supplier – Supplier A Current Spend - $283,860 Potential Savings -$84,132 (30%) New Suppliers Supplier B Work with Supplier B to test their product

Category F - $84k in savings Current supplier – Supplier A   Supplier Annual Spend Savings Percent Savings Supplier B $199,728 $84,132 31% Supplier A - Incumbent $283,860

Sub-Category B New Suppliers Overview Next Steps Current Supplier – Supplier A Current Spend - $377,452 Potential Savings -$207,136 (78%) New Suppliers Supplier B Supplier C Supplier D Next Steps Test materials from Suppliers B and C

Sub-Category B - $207K in savings Current supplier – Supplier A   Supplier Annual Spend Savings Percent Savings Supplier B $170,668 $207,136 78% Supplier C $258,660 $118,792 44% Supplier D $290,290 $87,162 33% Supplier A- Incumbent $377,452

Sub-Category G Overview Next Steps Supplier B Supplier C Current Supplier – Supplier A Current Spend - $233,149 Potential Savings -$187,389 (80%) New Suppliers Supplier B Supplier C Finish negotiations with Supplier B and C Test supplier B and C

Sub-Category G - $187K savings Incumbent Supplier – Supplier A Part # Description QTY Spend Supplier B Supplier C Supplier D Total Estimated Cost Savings Percent savings 50330000 Item 1 4840 $41,833 $7.49 $3.90 $2.00 $32,153 77% 50340000 Item 2 18040 $191,316 $4.20 $5.65 $155,236 81%   Cost Savings $187,339 $121,129 $112,347 $187,389

Spend Category 2 Finish Negotiations with Supplier B Overview Next Steps Current Supplier – Supplier A Current Spend - $6,000,000 Potential Savings -$900,000 New Suppliers Supplier B Finish Negotiations with Supplier B Finish Negotiations with other suppliers Begin testing of Supplier B

Spend Category 2 - $900K in savings Part # Description Quantity Updated Contract price Historic Spend Supplier B Each Cost Savings Percent Savings 11030051 Item 1 26,260 $16.90 $427,303 $13.03 $101,731 23% 25049401 Item 2 157,691 $1.02 $160,845 $0.60 $66,214 41% 25049431 Item 3 383,985 $391,665 $0.85 $65,239 17% 25388351 Item 4 135,616 $1.76 $238,549 $1.40 $48,740 20% 11030101 Item 5 9,183 $149,343 $13.00 $35,850 25387251 Item 6 58,728 $2.03 $119,218 $1.50 $31,126 26% 25042351 Item 7 133,875 $0.84 $112,455 $0.67 $22,786 25388251 Item 8 62,529 $110,051 $22,498 25391431 Item 9 56,410 $1.79 $100,861 $1.42 $20,742 21% 25384351 Item 10 64,922 $1.45 $94,072 $1.15 $19,405 25042401 Item 11 107,723 $90,487 $18,334 25381351 Item 12 34,961 $1.61 $56,462 $1.28 $11,694 25042431 Item 13 67,520 $56,717 $11,492 11030081A Item 14 2,815 $45,755 $10,990 25384251 Item 15 31,825 $1.47 $46,687 $10,089 22%  

Packaging Overview Next Steps Current Supplier – Supplier A Current Spend - $807,000 Potential Savings -$81,000 Savings comes from low bidder on 27 items which represent $417K in spend 61 items in total $70K in savings comes from top 11 items Issues Not all parts have drawings Top bidding suppliers Supplier B - $41K in savings (bid 6 of 27 items) Supplier C - $40K in savings (bid 6 of 27 items) Supplier D - $30K in savings (19 of 27 items) Bring top bidding companies in to allow them to see the product Obtain better quotes from the suppliers After Negotiations are completed, negotiate with Incumbent and/or award business to a new suppler

Packaging - $81K in savings on $417K in Spend Part # Description Annual Volume Historic Spend Current Price Low Bid Percent Savings Annual Savings 423B Item 1 29055 $52,616 $1.81 $1.27 30% $15,716 420B Item 2 20249 $32,498 $1.60 $1.05 35% $11,236 4SICBK1 Item 3 27292 $25,364 $0.95 $0.58 39% $10,207 426B Item 4 8321 $27,676 $3.33 $2.38 28% $7,872 4126F Item 5 38813 $38,103 $0.98 $0.78 21% $7,829 4SICBK7 Item 6 5512 $5,928 $1.08 $0.24 78% $4,605 412B Item 7 2990 $9,385 $3.14 $1.85 41% $3,853 4112F Item 8 27630 $9,596 $0.35 $0.23 34% $3,241 4SICBK Item 9 77550 $100,900 $1.30 2% $2,412 4317F Item 10 79018 $30,691 $0.39 $0.36 7% $2,244 415B Item 11 1630 $5,648 $3.46 $2.47 29% $1,622 4220F Item 12 101562 $46,912 $0.46 $0.45 3% $1,209 $417,256 $81,336

MRO Overview Next Steps Current Supplier – Supplier A Current Spend - $600,000 Potential Savings -$53K (Savings could reach $100K) Savings on roughly $250K of the spend 250 items of the 750 items being looked at $70K in savings comes from top 11 items Issues Need to have the supplier and supplier part number for 73 items Potential Areas of opportunity Buy from low cost suppliers - $29K savings Try an alternative Toner – $4,200 savings Provide Manufacturer and Part numbers for 73 items Test alternative Toner Buy from low cost suppliers