Background & Aims Growing demand for coffee To meet growing demand – Costa Express Machines Petrol stations Companies Airports Railway stations Convenience stores Hospitals etc. Aim in 2011 – increase Costa Express Machines from 900 in UK to 3,000 by 2016

Managing & replenishing coffee making ingredients to partner sites Old System Send out coffee-making supplies (for free) and share revenue with partner Managed by finance division of Costa Wasted stock / turned away deliveries Too much data from telemetry chips inside machines – not put to best use Logistics provider managed purchasing of ingredients Costa had few relationships with ingredient suppliers

A Fresh Start – Supply Chain Manager Appointed Move responsibility for replenishing machines to supply chain team Make better use of telemetry data Tender for new logistics partner Purchase ingredients directly Gives better control of quality & costs One central warehouse location enabling next day delivery Greener transportation New IT system to improve forecasting accuracy

Savings / Wins 20% fall in stock being held at ‘partner’ sites 50% fewer delivery refusals Centralised stock-holding locations reduced from 9 to 1 Developed direct purchasing relationships with 15 suppliers Negotiated new product prices and pack sizes leading to a reduction in the purchase price to consumer for some items 30% fall in annual logistical operating costs CO2 emissions reduced by 70 metric tons

Other benefits Employees can focus on serving customers and increase sales Increased revenue and customer satisfaction

Going Forward 3,000 machine target achieved by 2013 Now introducing Costa Express machines in Ireland and ‘Costa Heaven’ machines in Poland