1. Defense Commissary Agency
Thank you.
I am very happy to have the opportunity to meet with all of you today.
Defense Commissary Agency
Valued Benefit of a Global Force
Mr. Joseph H. Jeu
DeCA Director

2. Anniversaries
Many of you already know that this year begins our observance of two important anniversaries:
October 1 of this year was DeCA’s 20th anniversary. Many of you remember when DeCA started out… can it really be 20 years already?
They have been 20 years of challenges, but also of ongoing excellence and improvement.
And on July 1, 2012, the commissary benefit celebrated its 145th anniversary – 145 years since men of all ranks could buy goods ‘at cost’ at their commissary.
We definitely look different now than we did when it all began, and we look forward to continue to making this benefit more and more valuable to our service members and families. And I am honored to be a part of our continued transformation.

3. “Excellence is not a skill.
     
Leadership Philosophy
Store Focus
Collaboration
Excellence in Service
Entrepreneurial Spirit
Innovation
As we start I’d like to share my thoughts on what will move this Agency forward in spite of challenges set before us. My belief is If we can maintain these focus areas we can transcend any roadblock. This doesn’t mean the work will be easy, but remembering the key areas and acting on them will help us progress.
First is a store focus. We have been chosen to serve as leaders of this valued benefit. The store is the first line interface with the military war fighter and their family. It is critical that we support those that provide the face-to-face interaction with the patron. For the patron the “face” in the store is the “face” of DeCA. We cannot dismiss the concerns of our employees. They face challenges that are immediate and directly affect the customer. We must be attentive and responsive to their needs as they look to do the same for our patrons.
Of course excellence in service should be par for the course at the store level, and I’ve seen it demonstrated throughout the Agency. I understand there has been civil treatment training among all ranks, which is great, but the training is not the end all, be all. Excellence in service starts at the leadership level and cascades to that store worker. As you demonstrate excellence in your behavior and efforts, the workforce will follow and demonstrate the same.
I encourage an entrepreneurial and innovative spirit. As leaders we must encourage ideas and thoughts that help us to succeed and improve. Yes, we should question the why of what we do and if there is a better way. Sometimes we may get buried so deeply in the day-to-day that we forget to examine and reexamine our processes and the efficiency of our functions. Things that may have worked well yesterday may no longer make sense today. I challenge you to examine yourself and ask your teams and employees to do the same. Are you looking for ways to perform better? With the number of people we have, there should be no shortage of ideas and improvements for our Agency. Let’s move forward in quickly implementing those that make sense and avoid the thought that “we’re doing the best we can with what we have.” I’m a believer that there is always room for improvement and we must embrace innovative ideas and processes that take us a step further.
From time to time, leaders need to reach out to other to discuss ideas and activities that are going on in the various areas. Collaboration should be a daily activity, even without a formal invite. It is surprising what can be solved with a fresh, objective viewpoint. We are operating in a time when we must look to all of our partners and stakeholders to collaborate on improvements to our processes.
“Excellence is not a skill.
It is an attitude.”
“Innovation is the ability to see change as an opportunity – not a threat”

4. Leadership Philosophy
     
Leadership Philosophy
Performance Management
Outcome Focused
Accountability
Decisions Based on Empirical Evidence
Not Business as Usual
I believe the best way to achieve meaningful performance improvement is to focus on outcomes.
As you will see later, we will move toward assigning sustainment programs/major functions to our Senior Executive Service members. They will focus on outcomes and RESULTS. This is an unprecedented level of accountability.
Furthermore, we must continue to make fact-based decisions that lead us to our desired outcomes.
And as we move forward, it will not be business as usual.
We will push ourselves to reach stretch goals which may seem unreachable in the beginning. But we will never make significant strides if we don’t challenge ourselves to reach something we never thought possible. Four months ago Japan was devastated by unimaginable tragedy with the earthquake, tsunami, and subsequent nuclear disaster. During that time of re-building, a women’s soccer team was pushing themselves toward a World Cup. No one gave them a shot – so much distraction – so many other priorities – but then, they steadfastly picked off on opponent after another – and in the end – World Cup Champions.
That is what I mean – DeCA must strive for its World Cup. We will win some and lose some on the journey, but we must focus on the ultimate goal. And we will meet those goals!
Stretch Goals Will Take Us to the Next Level 4

5. Value of the Commissary Benefit
Quality of Life
Savings totaled $2.69B in FY 2010
Ancillary Support: industry contributions to installations, give-aways, scholarship program totaling $244M
Military-Related Employment: 62.5% of DeCA workforce
Industry also employees military family members
Military Readiness
Peace of Mind: focus on mission vs. family/sense of community
Recruitment: family member advocacy
Financial Readiness of military families
Cost Avoidance
Defense Transportation System: a leading peacetime shipper of military goods overseas
Cost of Living Allowance: reduced for commissary presence
Emergency Support
Historically we have measured the value of the commissary benefit by the savings provided patrons. However, the commissary provides many other benefits to the Department of Defense. There are many facets of value that comprise the commissary benefit which fall into three categories—Quality of Life, Military Readiness, and Cost Avoidance.
It enhances readiness by enabling troops to focus on mission while deployed. Improves retention by providing a “sense of community” for military personnel and their families. Provides a safe, secure shopping environment, both in overseas and stateside locations. Provides American products worldwide while ensuring food safety.
Following are some examples of these factors.
Quality of Life
Savings – 31.5 percent savings provides a saving of $4,400 per year for an average family of four. Savings alone provides an unbeatable “2 to 1” return on investment ($1.27 billion appropriation returned over $2.69 billion in benefits
There is a lot of ancillary support provided by commissary vendors in the form of charitable contributions, Giveaways, Scholarships, Shopping sprees, Gift cards and activities such as welcome home or sending off activities at installations – totaling $244M.
Military Related Employment is a large factor in valuing the commissary benefit.
DeCA employment of spouses and children
While we don’t have the actual numbers, our vendors and bagger employment is at or above the 62.5% mark.
-- In addition, industry employs military family members -- one large broker reports 50 to 60 percent of its work force.
Cost Avoidance
Defense Transportation System – Some underestimate our contribution to maintaining the Department’s infrastructure, particularly the Defense Transportation System. Many do not realize that AAFES and DeCA are the number one and two peacetime shippers of military goods overseas. Providing this peacetime shipping capacity enables the Department a wartime readiness surge capacity at more reasonable rates.
Commissary in computing Cost of Living Allowance (COLA) – The existence of a commissary is considered in computing Cost of Living Allowance (COLA)
Emergency Support: The tragedy in Japan and the commissaries levels of support there have made it clear that a significant value of the commissary system is our ability to provide support during emergencies of every magnitude. 5 5

6. Military Related Employment
Military Spouses – 4,197 or 27.06%
Dependents – 1,967 or 12.68%
Sponsors:
Retirees – 1,648 or 10.63%
Guard and Reserve – 271 or 1.75%
Other Veterans – 1,610 or 10.38%
*Population – DeCA U.S. Civilian Employees – 15,510
Total 62.5%
DeCA is proud to say that our workforce is part of the military community it serves.
This chart displays the numbers and percentages of military family and military related employment.
When you add all these figures up over 60 percent of our U.S. civilian workforce fall into one of these categories. . 6 6 6 6 6

7. Ability One/Small Business Program
- Impacts over 2000 NIB & NISH employees
- NISH - $100M Services
- NIB - National Industries for the Blind - $31M Supplies & Resale
6th Largest Supporter behind Services & DLA
Small Business Program
FY 10 DoD Wide Achievement – 20.94%
DeCA Achievement – 46%
$553M to Small Business Concerns
Along with our direct employment, DeCA supports the employment of people with disabilities through our contracts with Ability One.
AbilityOne Program - Formerly referred to as the Javits-Wagner-O'Day (JWOD) Act 1971 (41 USC 46-48c). Sets procedures for Govt purchases from the disabled. Appointed two Central Non-profit Agencies (NIB and NISH) to provide assistance to the Not for Profit Agencies (NPAs), who employ disabled individuals, under government contracts.
NISH – formerly known as the National Industries for the Severely Handicapped.
$100M represents the dollar value of more than 100 contracts for shelf stocking, RSHA, and custodial operations at various commissaries (CONUS, AK, PR, and HI). Approximately 2,000 disabled individuals are employed and working within our commissaries by virtue of these contracts.
Ms./Mr Provide an overview of DeCA’s
DeCA also gives strong support to Small Business.
DeCA is dedicated to creating and sustaining an environment where small businesses concerns can compete effectively in supporting commissary acquisitions for equipment, supplies and services. The Agency’s objective is to place a fair proportion of its contracting dollars with small business concerns, including other socio economic categories (small disadvantaged, Hubzone, women owned service disabled veteran owned, veteran owed small business).
DeCA total contract awards for FY10 were $6.2B, of which $1.2B was eligible for small business concerns. Of this $552.7M was awarded to small business concerns.
Eligible Dollars: resale products – contracts for items like beef, pork, services for deli bakery operations, eggs, fresh fruits and vegetables;
operational and administrative efforts include contracts for paper bags, maintenance on meat wrapping equipment, shelving, shelf stocking/custodial services, armored car services, landscaping, meat choppers, etc.
Not included in the Small Business Program are dollars in support of the Ability One Programs (NISH and NIB Work Centers) under the Javits-Wagner-O’Day Program and Brand Name Resale.
Produce is a commodity which generates over $404 million in sales per year. Those contracts for produce within the 50 States constitute over 87% of those sales ($355M) – and all of these contracts are set-aside exclusively for small business concerns. Although fresh produce comes from different parts of world – depending on the season - we have found that during certain times of the year, we can acquire many products locally which provides good support to the local communities. 7 7 7

8. Customer Service at All Time High!
Commissary Customer Service Survey (CCSS)
Patron Satisfaction
4.72 (out of 5.0)
American Customer Satisfaction Index (ACSI)
ACSI Supermarket Industry Average: 75
DeCA’s ACSI: 80
Our consolidated efforts have proven effective in our service to our patrons.
The Commissary Customer Service Survey or CCSS is our internal customer satisfaction survey. The survey asks customers to rate their commissary’s performance in 15 areas. The FY 2011 annual customer service survey was conducted for 10 consecutive days beginning July 12, Over 20,000 patrons filled out the surveys to rate DeCA’s performance. The CCSS represents all DeCA commissary patrons (i.e., active duty, retirees, dependents and other eligible shoppers). The 2011 survey resulted in an overall score of 4.72, the highest score achieved to date. Steady improvements have been made in customer satisfaction.
The American Customer Satisfaction Index was conducted in Nov/Dec 2010.
The ASCI is an external survey funded by USD(P&R). DeCA once again exceeded the industry average of 75. DeCA’s ACSI exceeded many participating commercial supermarket chains including: Super Valu, Kroger, Winn-Dixie, Safeway, and Walmart Stores (Supermarket).
Customer Service at All Time High! 8 8 8

9. Guard & Reserve On-Site Sales
FY 2011
Events: 128
Sales: $7.05 Million
Savings: $3.26 Million
Patrons served: 53,922
Recognizing the importance of the Guard and Reserve components of our military……
In 2008, DeCA started taking the benefit to our Guard and Reserve members and families who were not situated in close proximity to a commissary. These sales have been very successful, serving more than 238K patrons since the program started.
We are experiencing another great year having held 103 events since October 2010 towards our FY2011 goal of 150 on-site sales.
We believe these sales bring great value to our members of the Guard and Reserve community.
Providing the Benefit On-Site to Our Guard & Reserve 9 9

10. Commissary Gift Card Program
Turn key gift card program
Rolled out program June 29, 2011
Available in two denominations
$25.00 and $50.00
Purchase at store or via Internet
In store sales through 9/15: $431,050
Internet sales through 9/15: $189,775
Total Sales: $620,825
Replaced paper voucher program
Redeemable through August 2016
The DeCA Gift Card Program gives us the opportunity to increase customer satisfaction by offering a program similar to those offered by other retailers, increase sales, and gives higher visibility of the commissary benefit to our patrons. Gift cards are popular with parents who want to give their children in the military a gift they will truly use.
Gift Card program kicked off June 29 at the Ft. Bliss commissary grand opening.
Replaces in-house paper voucher program, although outstanding paper vouchers will continue to be accepted for redemption through August Through 30 June 2011, we issued 247,549 gift vouchers totaling $6,188,725 and redeemed 200,248 gift vouchers totaling $5,006,200.
The new gift card has been well received; the added benefit of being able to purchase them online is a big benefit for people who could not access a commissary to obtain them for their friends and family. We have activated 18,116 gift cards totaling $620,825 through store and internet sales from 29 June through 15 September.
Additionally, our gift card service provider, SVM, has agreed to match DeCA Gift Card donations to USA Cares, up to $50,000 (for a combined total donation of $100,000). USA Cares exists to help bear the burdens of service by providing post-9/11 military families with financial and advocacy support in their time of need. Assistance is provided to all branches of service, all components, all ranks while protecting the privacy and dignity of those military families and veterans who request help. As of August 9, donations for 615 gift cards totaling $27,000 have been received; with the SVM match, this is 1,230 cards for $54,000. SVM’s goal was to reach $100,000 by Labor Day, since it did not it extended their program through the end of the year. 10 10 10 10 10

11. Commissary Rewards Card
Benefits:
Generates additional savings via digital coupons
Reduces packing and shipping
Reduces redemption errors
Moving forward:
To participate, Industry must partner
directly with Inmar, Inc.
Program deployment FY2012
Program name – “Commissary Rewards Card”
DeCA has selected Inmar, Inc as the exclusive provider of digital coupons to commissary customers. Negotiations for a final agreement are on-going.
INMAR will serve as the program manager of all digital coupons, which will be delivered to our patrons through their on-line web site. Patrons will load (virtually) selected coupons onto their Commissary Rewards Card.
Commissary shoppers will obtain a Commissary Rewards Card at any commissary location, then register on-line to participate in the program. An internet link established on < , will link the patron to the INMAR web page. Once the reward card has been registered, the patron will have access to all coupons available.
Industry partners interested in participating in this program will work directly through INMAR.
NTT 11-45, Loyalty/Digital Coupon, signed February 25, 2011
NTT , Loyalty Card/Digital Coupon, dated September 8, 2011
NTT , Loyalty Card/Digital Coupon, dated September 8, 2011 11

12. DeCA’s Environmental Policy
DeCA is committed to:
Pollution Prevention
Compliance with Legal and Other Requirements
Continual Improvement
Environmental Leadership
Awards
2010 Federal Electronics Challenge Bronze Level Award
2010 Federal Energy and Water Management Award
DeCA is committed to doing what is best for our patrons, personnel, and the environment. An Environmental Management System (EMS) is a continual cycle of improvement that establishes and evaluates processes and actions an organization undertakes to meet its business and environmental goals.
The aim of the EMS is to support environmental protection, pollution prevention, and occupational safety and health in balance with business objectives.
DeCA has many Significant Environmental Impacts on which DeCA’s EMS focuses: Waste Minimization, Energy & Water Conservation, Green Procurement, Integrated Pest Management, Sustainable Design, Hazardous Materials Management, Refrigerant Management, Electronic Stewardship, and Green House Gas Reduction.

13. New/Renovated Stores Opening in 2011/2012
NAS-JRB, New Orleans, LA
Eglin AFB, FL
Mr. Jeu: This slide show examples of some the great new facilities we have recently opened or will open in the coming year.
NAS, JRB, New Orleans (Belle Chase), La. – GRAND OPENING FEBRUARY 8, Total project cost: $19.5M; New Facility: 48,041 SF (sales area 24,503) part of shopping complex with exchange. This new store, constructed jointly with a NEXCOM exchange was opened on February 8. It is a modern state-of-the-art shopping facility that will be environmentally friendly and energy efficient.
Eglin AFB, Fla. – RE-OPENED FEBRUARY 9, Total project cost: $22.3M; Renovated Facility: 105,573 SF (sales area 56,988). This Add/Alter project added and renovated almost 6,300 SF and was re-opened on February 9, Additional square footage was added to the front end and back of the existing commissary building. New administration offices will be constructed, as well as new bakery/deli, operational storage areas, new dairy cooler, frozen food freezer, poultry storage, meat processing areas, produce processing and produce storage.
**Fort Bliss, Texas – GRAND OPENING JUNE 29, Total project cost: $26.1M; New facility: 113,827 SF (sales area 60,765). This new store is a modern state-of-the-art shopping facility with a large deli and bakery, hot foods, sushi to go and self-checkouts. The store will be environmentally friendly and energy efficient. The project is being funded under the Base Realignment and Closure program.
**Fort Riley, Kansas – GRAND OPENING SPRING 2012 Total Project Cost: $24.0M; Renovated Facility: Square footage increased from 62,067 to 108,178 SF (Sales Area up by 74% to 58,980SF). The project provides new refrigeration systems, display cases, including monitoring and controls, expanded sales/checkout area, and relocated backroom food processing areas. Also included is upgrade of all interior Décor and finishes, HVAC system replacement, repairs, and site improvements. MILCON funded due to re-stationing.
Moody AFB, Ga. – GRAND REOPENING NOVEMBER Total project cost: $15.6M; Renovated facility: 65,470 SF (sales area 34,127). The project includes major additions and alterations to existing commissary for expanded sales area, bakery deli, updated decor, new refrigeration system and controls and display cases, force protection provisions, site improvements related to expansion.
Fort Campbell, Kentucky – GRAND OPENING JANUARY Total project cost: $29.6M; New facility: 121,871 SF (Sales Area 63,134). This will be a modern state-of-the-art shopping facility that will be environmentally friendly and energy efficient.
Surcharge funded
Opened February 8, 2011
Surcharge funded
Re-Opened February 9, 2011
Fort Bliss, TX
Moody AFB, GA
BRAC funded
Opened June 29, 2011
Surcharge funded
November 2011
Fort Campbell, KY
Fort Riley, KS
Surcharge funded
January 2012
MILCON funded
Spring 2012 13 13

14. Above-Store Restructuring
Why restructure?
Secretary Gates’ memorandums directing reduction of overhead costs
Directed budget reductions
Known duplication of work activities above store level
Impact of Global Transformation to serviced population
Continued impact of automation and growing complexity on mission
I am sure most of your have heard of DeCA’s proposed above-store restructuring.
The Secretary of Defense has directed a series of initiatives designed to reduce duplication, overhead, and excess, and instill a culture of savings and cost accountability across the Department of Defense. In response to these initiatives, as well as anticipated budget reductions, we conducted a study on how to meet these requirements. To begin our review we considered input from previous organizational studies/reorganizations and input from senior leadership.
We also established one absolute parameter: any restructuring to improve span of control must ultimately result in preservation of the commissary benefit and will not result in shifting or additional workload at store level.

15. Defense Commissary Agency
GENERAL COUNSEL**
CSM/SEA
WASHINGTON OFFICE
INSPECTOR GENERAL/
SECURITY
*DIRECTOR/
CHIEF EXECUTIVE OFFICER
INTERNAL AUDIT
EEO
*CHIEF OPERATING OFFICER/
DEPUTY DIRECTOR
*EXECUTIVE DIRECTOR
STORE OPERATIONS GROUP
*EXECUTIVE DIRECTOR
SALES, MARKETING & POLICY GROUP
*EXECUTIVE DIRECTOR
LOGISTICS AND ENGINEERING GROUP
*EXECUTIVE DIRECTOR
BUSINESS ENTERPRISE GROUP
Our new structure provides a more corporate structure – one which can provide agile decision making.
STORE SUPPORT
DIRECTORATE
REQUIREMENTS & STRATEGIC INTEGRATION DIRECTORATE
OPERATIONS AND
POLICY
DIRECTORATE
ENGINEERING DIRECTORATE
WEST
AREA
7 ZONES
68 STORES
CORPORATE COMMUNICATION
DIRECTORATE
SALES
DIRECTORATE
ACQUISITION
MANAGEMENT DIRECTORATE
PACIFIC
AREA
4 ZONES
43 STORES
CORPORATE PLANNING DIRECTORATE
HEALTH AND
SAFETY
DIRECTORATE
LOGISTICS DIRECTORATE
EAST
AREA
6 ZONES
60 STORES
RESOURCE MANAGEMENT
DIRECTORATE
RESALE
CONTRACTING DIRECTORATE
CDCs/CMPP
CENTRAL
AREA
5 ZONES
38 STORES
HUMAN RESOURCES DIRECTORATE
EUROPE
AREA
4 ZONES
40 STORES
IINFORMATION
TECHNOLOGY
DIRECTORATE
* Denotes SES position
**DeCA General Counsel is part of the Defense Legal Services Agency
October

16. Feds Feed Families Background: DeCA Participation:
     
Feds Feed Families
Background:
- DeCA participated with DoD in the OPM sponsored 2011 Feds Feed Families Campaign from 1 Jun to 31 Aug
- Children and families across the US were in great need of donated food due to food bank stocks being depleted by the economic downturn and natural disasters
DeCA Participation:
Commissaries in 46 states and one territory (PR) collected donations on their installation.
- DeCA Total : 723,337 lbs (37% of DoD Collections)
- DoD Goal: 733,800 lbs
- Total DoD Donations: 1,970,741 lbs
In the next few slides, I would like to cover some of the tremendous successes we have experience through our partnership.
This spring, DeCA was contacted about participating in the Feds Feed Families program. The Feds Feed Families program is a campaign for federal employees to donate food and household items to local food banks. Historically this program was confined to the National Capital Region.
This year the DoD wanted to take the program nationwide. And they enlisted DeCA’s help to do so.
Over 723,000 pounds of food and household items were collected through DeCA commissaries and donated to local food banks around the country.
As you can see 37 percent of all DoD collections came through DeCA Commissaries.
Almost 2 million pounds – proving that we can make a difference.
I am so proud of the efforts of DeCA store personnel who supported this program and our industry partners who also gave so generously to this worthy cause.
I expect this program to continue in the future. 16 16

17. Scholarships for Military Children
     
Scholarships for Military Children
Program is funded by donations made by DeCA business partners
Fisher House Foundation, Inc. administers the program
Program is in its 11th year
Total Recipients – 6,069
Total Scholarship Grants Awarded- $9,316,000
This year was another banner year for the Scholarships for Military Children program scholarships were awarded totaling just over $1 million.
Your continued support of this program is appreciated, by our recipients, their parents, and myself.
Academic Year
# of Recipients
Total Scholarship Grants Awarded
600
$900,000
625
$937,500
645
$967,500
670
$1,005,000 17 17

18. Industry Support Resale/Industry Mergers
     
Industry Support
Resale/Industry Mergers
It is obvious that we can make great things happen when we work with a cooperative spirit. 18 18

19. Industry Partners Thank you! Partnerships – Win/Win
     
Industry Partners
Thank you!
Partnerships – Win/Win
Welcome Suggestions
So as we go forward, I want us all to take great pride in our amazing accomplishments. As we move through these times of challenges and scrutiny, we can know that we have had great successes – working together with a common goal. I want to personally thank all of you who have made the commissary benefit one of the most valued benefits in our military.
We all serve the greatest patrons in the world – patrons who deserve our very best every time.
We also have a great deal at stake. Our cooperation and collaboration can help us to grow the Commissary business and in turn grow your business. We are in a position where win-wins are a must.
So – as DeCA continues to look for innovative solutions – we ask that you bring your ideas forth to help us continue to strengthen the benefit. 19 19

20. Defense Commissary Agency Your Commissary - It's Worth the Trip!
Thanks for all you do every day to make your commissary “worth the trip!”
Defense Commissary Agency
Your Commissary - It's Worth the Trip! 20