1. Georgia Tech January 27, 2005

2. “ Our Mission is to be the Reseller’s Preferred Source of Business Products and Services through Leadership in Operational Excellence, Customer Support, and Integrity”

3. S.P.Richards Sales Results  2004$1,543,943,000+ 6.0%  2003 $1,457,149,000+ 4.3%  2002$1,396,453,000+ 1.2%  2001$1,379,882,000+ 2.5%  2000$1,346,844,000+10.5%

4. S.P.Richards History  Established in 1848  Over 150 years of experience in the Office Products Industry  Oldest continuously operating business in Atlanta, Georgia  Purchased by Genuine Parts Company in 1975

5. GPC Overview Sales Results 2000 – 2003  2003 $8,449,300,000+ 2.3%  2002$8,258,927,000+ 0.5%  2001$8,220,668,000- 1.8%  2000 $8,369,857,000 + 5.3%

6.  Automotive Parts Group ( NAPA )  Industrial Parts Group ( Motion Industries )  Office Products Group ( S.P.Richards Co. )  Electrical/Electronic Materials Group ( EIS )  Common to all divisions is expertise in warehousing and distribution GPC Overview 2003 Sales

7.  NAPA - Automotive Parts Group  Motion Industries - Industrial Parts Group  S.P.Richards - Office Products Group  EIS - Electrical/Electronic Materials Group GPC Overview 2003 Operating Profit

8. Office Products Supply Chain VENDOR WHOLESALERDEALEREND USER DEALER

9. S. P. Richards Competitive Overview  National wholesaler - United Stationers  Regional wholesalers  Computer supplies wholesalers  Furniture wholesalers

10. How Our Customers Compete  Mega Dealers ( Office Depot, Corporate Express )  National scope ( National contracts )  Next day delivery  Purchasing control  Low price  Independent Reseller  High service  Next day ( or same day ) delivery  Internet Reseller  Ease of ordering  Quick delivery

11. How Our Customers Use Us  Items Mega Dealers don’t buy direct  Retail versus Commercial business  Items Independent Resellers don’t stock  The smaller the Reseller the fewer items they stock  Total Fulfillment services to Internet Resellers

12. How Our Customers Use Us  ‘First Call’ business relationships  No such thing as a backorder  Missed order is lost business  Most orders are for pre-sold merchandise  Wrap & Label  Consumer packaging  To:End User  From:Office Depot  Approximately 75% of our orders

14. - Charlotte - Atlanta

15. S.P.Richards Strengths  36 full stocking Distribution Centers  2 Furniture DC’s  3 Horizon USA ( Data Supplies ) DC’s  4 Canadian Distribution Centers  Broad inventory offering  24,000 catalogued items featured at every DC.  Over 30,000 total items in inventory  Best service  Fastest delivery  Highest service levels  Fewest errors  Lowest cost structure

16. S.P. Richards Logistics Challenges  Rapid Delivery  Orders received today are shipped today  Unattended; key access  All customers have merchandise at the start of the next business day  Requires reduced cycle times for S. P. Richards

17. S.P. Richards Logistics Challenges  Rapid Delivery - Examples:  Corporate Express - Whippany, NJ  Shipped from:Moorestown, NJ  Order cutoff:6:30 PM  Truck departs:7:00 PM  Delivery:8:00 PM  Staples - Ontario, CA  Shipped from:Mira Loma,CA  Order cutoff:5:00 PM  Truck departs:5:45 PM  Delivery:6:00 PM

18. S.P. Richards Logistics Challenges  Rapid Delivery  No pre-planning of orders  “Real-time”  Constantly adjusting  Difficult to plan quantity and timing of labor  Statistically based  Tuesday, Wednesday, Thursday are heaviest shipping days  Managing overtime a challenge  Adjust and stagger starting times as appropriate  Many facilities use part time labor

21. S.P.Richards Philadelphia DC  8,000-9,000 lines per day  Three kinds of pick zones  18 inch shelving – B and C zones  30 inch shelving – A and B zones  Pallet Racking – F and W zones  Active – Each Pick  Reserve – Overstock  Focus on B, C, F and W zones

22. Virtual Tour - Philadelphia

30. S.P.Richards Philadelphia DC  B and C Zone Analysis  B intended to be a quick pick area  B a combination of both 18 and 30 inch shelving  C zone for slower moving items  Re-vamp just before going live on PkMS  B zone has top shelf reserve  Overstock for items in C zone is in R zone, another section of shelving

31. S.P.Richards Philadelphia DC  B and C Zone Analysis  Picking in batches  Batches built by WMS System  Pick Truck volume defined in PkMS  User Defined groups  B & C zone cartons  B Only  C Only  PkMS orders each group by first pick location  Creates pick trucks, assigns pick truck number

32. Virtual Tour - Philadelphia

40. S.P.Richards Philadelphia DC  B and C Zone Analysis  Increase pick truck size  Separate B and C zones  Move high movers from C to B  Some improvement, but not significant

41. S.P.Richards Philadelphia DC  B and C Zone Analysis  Boxes vs. Totes  Currently pick directly into boxes  Option of picking to totes  More picks will fit onto the pick cart  Double Handling  Separate one line and multi-line cartons?  Highly efficient pulling for one liners  Potentially visit the same location twice

42. S.P.Richards Philadelphia DC  Challenges/Questions for B and C Zones  Propose new slotting for B and C zones, maintain vendor lines together in C zone  Stockers do putaway by vendor  Determine the amount of product to put in the active location for each item  Recommend whether to pick to totes or boxes  Recommend whether or not to separate one line orders and multi line orders  Should Flow Rack be used in B zone for fast moving items? Other MHE?

43. S.P.Richards Philadelphia DC  F and W Analysis  Pallet Racking  Primarily reserve, some active in F zone  Two types of reserve locations  Case Reserve  Cases removed from pallets when stocking and stacked on shelves  Pallet Reserve  Entire single sku pallets are stocked  PkMS directs pickers to pull full cases from either of these reserve locations

44. Virtual Tour - Philadelphia

52. S.P.Richards Philadelphia DC  F and W Analysis  Items exist in B zone with overstock in W  Replenishment would be significantly faster if B overstock was in F zone  Not properly slotted  F and W zones can run out of work before B and C zones

53. S.P.Richards Philadelphia DC  Challenges/Questions for F and W zones  Determine the best slotting of the items in F and W given current layout  Some locations may be forced to be case or pallet locations  How much will it improve picking if the changes are made?  Suggest changes to location sizes/beam height that may change the slotting and improve productivity  Provide a tool that can be used to give a list of moves to relocate the product efficiently

54. S.P.Richards Philadelphia DC  Available Data  Order Data  Order lines and quantities  Item Data (not complete)  Length, Width, Height of each and case  Number of eaches in a case  Pick Truck Sizes  Standard Box Sizes

55. Virtual Tour - Philadelphia

62. Questions?