Pilgrim’s Pride “We’re Passionate About Our Food.”

About Pilgrim’s Pride Pilgrim's Pride is the second-largest poultry company in the United States. We process approximately 55 million pounds of chicken and 8.5 million pounds of turkey per week. Vertically integrated, Pilgrim’s controls every phase of the production of our products by operating feed mills, hatcheries, grow-out facilities, processing plants and distribution centers.

Accounts Payable Centralized Operation – Corporate Office Internal Customer Base: Three Divisions in Two Countries Annual Accounts Payable Process Volume: 200,000 Purchase Orders Invoices (90%) 25,000 Non Purchase Order Invoices (10%)

Purchasing Centralized Purchasing Department –Central, East, & Mexico Divisions Internal Customer Base –Three Divisions in Two Countries Annual Purchasing Volume: –$1 Billion

Process Support Team Buy-IT Process Team –Chaired by VP of Purchasing –Representatives from Purchasing, Accounts Payable, and Information Technology –Brings together the Purchase-to-Pay Process for Tighter Coordination –Sets Priorities for Both Process & Technology Issues

Why SAP AP Workflow? Manual Invoice Exception Processing –Time Consuming –Lost Invoices / Duplicate Invoices –Impossible to Track –Flexibility for Expansion Vendor Relationships –Lost Discounts / Late Payments AP Workflow Project was Initiated!

AP Workflow Project Goals Headcount Reduction –10 Positions Between AP and Purchasing Obtain More Vendor Discounts Invoice Exception Turnaround –Average of 30 days to 10 days Elimination of Duplicate Invoices –Average of 1200 a month to zero Reduce Vendor Hotline Traffic

AP Workflow Solution Evaluation Build vs. Buy Workflow –Build: low cost, more time, reduced functionality –Buy: less time, high level of functionality SAP vs. Non-SAP Workflow –SAP: central platform, no interfaces, familiar GUI –Non-SAP: more platforms, new GUI, high complexity Pre-Packaged vs. Custom Workflow –Pre-Packaged: less time, best practices, supported –Custom: more time, pitfalls, support, scope creep Selected Pre-packaged SAP Workflow-based solution from Optura

Optura Solution Technology Landscape –Single Instance, SAP 4.5b –IXOS Imaging –Optura “Inside-SAP” Workflow Solution Solution Scope –Quantity & Price Blocking –Suspension Reasons (tax, freight, matching, vendor maintenance, etc...) –Non-PO Invoice Approval –AFE Invoice Approval –Duplicate Invoice Processing

Scanner AP Processor Issues With Old Process: Time Consuming / Manual Process Lost discounts Poor vendor relations Late payments No Reporting / Tracking Lost invoices Uncoordinated appearance AP Problem Solver Receiver Buyers, Receivers Accounting Managers, Project Managers Old Manual Process

Scanner Buyer Receiver Project Manager Accounting Manager AP Except Handler Indexer New Process: No More Cloud Diagram Right Person / Right Time Entire Process is Monitored Reporting is available Duplicate Invoice Monitored AP Processor New Workflow Process

Anticipated Benefits Headcount Reduction Increased Efficiency of AP Processing Happier Vendors –Less Vendor Hotline Traffic –Better Negotiation Position on Future Contracts –More Discounts Realized Tighter Controls –AFE Invoices –Non-PO Invoices

Next Steps APFlow Phase II – Supplier Portal –Extend Invoice Exception Workflow to Vendors –Online Vendor Invoice Status Checking –Direct Invoice Entry by Vendors Timeline: 4 th Quarter 2003