1. INDUSTRY ASSOCIATIONS

2. Efficient Foodservice Response September 24, 1998 Presented by: Co-Chairs, Canadian EFR Steering Committee Peter McLaughlin, President, Clover Group Gord Wilson,General Manager, Nabisco Out of Home Peter McLaughlin, President, Clover Group Gord Wilson,General Manager, Nabisco Out of Home Channels Division

3. EFR Completes the Food Supply Chain Puzzle Efficient Consumer Response Quick Response CONSUMERS Efficient Foodservice Response

4. Canadian EFR Vision To facilitate a more competitive, demand-driven foodservice supply chain, by encouraging adoption of recommended Best Practices for industry-wide processesTo facilitate a more competitive, demand-driven foodservice supply chain, by encouraging adoption of recommended Best Practices for industry-wide processes

5. EFR Motivators (Why do we need it?) Foodservice Supply Chain Eroding Profit Margins Time Poor, Value Conscious Consumer Channel Blurring Lack of Basic Capabilities Non- Traditional Competition New Technology Enablers Adversarial Relationships Synergy with ECR, timing is right! OperatorLabor

6. Why should we do EFR? 1996 KPMG supply chain review concluded:1996 KPMG supply chain review concluded: –52 days of inventory in the supply chain –Supply chain technology not well used –Potential savings: $400 million (Canada) 1997 U.S. study -- $14 billion annual savings1997 U.S. study -- $14 billion annual savings

7. Process in Canada - Steering Committee comprised of manufacturers, distributors, operators, brokers- Steering Committee comprised of manufacturers, distributors, operators, brokers - 4 “project” committees each co-chaired by manufacturer & distributor- 4 “project” committees each co-chaired by manufacturer & distributor - EFR Steering Committee aligned with ECR Steering Committee;- EFR Steering Committee aligned with ECR Steering Committee; - share learnings, avoid duplication, share resources - 4 sponsoring associations (secretariats & resource support)- 4 sponsoring associations (secretariats & resource support) - Co-operative alliance with U.S. EFR initiative- Co-operative alliance with U.S. EFR initiative EFR ECR Product ID Bar Code Electronic Commerce Supply Chain Demand Forecasting Education/Communication FCPMC CCGD CFBA ECCC U.S. EFR

8. Principles …. Agenda based on common enablers pertinent to all companies, irrespective of size or sector.Agenda based on common enablers pertinent to all companies, irrespective of size or sector. Companies to “pilot” recommendations to identify implementation issues and critical success factors.Companies to “pilot” recommendations to identify implementation issues and critical success factors. Participating companies to set an example by implementing EFR recommendations.Participating companies to set an example by implementing EFR recommendations.

9. What are we doing? 4 EFR Committees 4 EFR Committees 1.Product Identification/Barcodes 1.Product Identification/Barcodes 2.Electronic Commerce 2.Electronic Commerce 3.Supply Chain Demand 3.Supply Chain Demand Forecasting Forecasting 4. Communications and Education 4. Communications and Education

10. Three project committees to:Three project committees to: –assess situation in foodservice industry through surveys, etc. (form hypotheses, assumptions) –conduct pilots and/or studies to determine “business case”, critical success factors, barriers to implementation –publish “best practice” recommendations in report to industry –scorecard and benchmark What are we doing?

11. Product Identification/ Barcodes Objective: Objective: To implement and use standard product identification codes as per industry (ECCC) standards and guidelines, including barcodes on SKUs, cases and pallets.To implement and use standard product identification codes as per industry (ECCC) standards and guidelines, including barcodes on SKUs, cases and pallets. Guiding Principle: Guiding Principle: Use accurate and timely information in a computer-based system to support effective marketing, production and logistics decisions.Use accurate and timely information in a computer-based system to support effective marketing, production and logistics decisions.

12. Product Identification/ Barcodes Action: Action: 1. Reviewed standards and ECR best practices 1. Reviewed standards and ECR best practices 2. Mapped out business requirements to identify 2. Mapped out business requirements to identify gaps for foodservice gaps for foodservice 3. Surveyed industry (April) to understand level of 3. Surveyed industry (April) to understand level of barcode activity and implementation readiness barcode activity and implementation readiness 4. Established recommended industry 4. Established recommended industry implementation timeline implementation timeline 5. Publishing “Barcoding Basics” report 5. Publishing “Barcoding Basics” report

13. Recommendation: Recommendation: –UPC and SCC-14 numbers assigned to all products and cases, price lists updated, by October 31, 1998 –All cases marked with scannable barcodes by October 31, 1999 –Major distributors to sign-off and send letter to suppliers requesting compliance Endorsed by EFR Steering Committee, FCPMC Foodservice members, CFBAEndorsed by EFR Steering Committee, FCPMC Foodservice members, CFBA Product Identification/ Barcodes

14. Electronic Commerce Objective: Objective: To integrate Electronic Commerce (EDI) into common business practices, from the order through to reconciliation.To integrate Electronic Commerce (EDI) into common business practices, from the order through to reconciliation.

15. Electronic Commerce Action: Action: 1. Survey of foodservice manufacturers, operators and distributors conducted. Information session for distributors held (April); 2. Pilots/projects underway: - Lipton/SERCA; Lynch/Gordon; Cara/Summit/Nabisco Business case (based on ABC analysis) being developed for each; Business case (based on ABC analysis) being developed for each; 3. Technical analysis of applicability of VICS 4010 to foodservice being done foodservice being done

16. Supply Chain Demand Forecasting Objective: Objective: To develop communication and information sharing guidelines (bar coding, EDI, demand data sharing, etc.) that facilitate trading partner planning processes and results in the reduction of waste/cost throughout the supply chain.To develop communication and information sharing guidelines (bar coding, EDI, demand data sharing, etc.) that facilitate trading partner planning processes and results in the reduction of waste/cost throughout the supply chain.

17. Action: Action: 1. Extensive list of issues affecting the ability to effectively forecast developed: 1. Extensive list of issues affecting the ability to effectively forecast developed: 2. Three separate Manufacturer/Distributor pilots established to test hypotheses regarding key issues of SCDF effect on inventory levels and communication; 2. Three separate Manufacturer/Distributor pilots established to test hypotheses regarding key issues of SCDF effect on inventory levels and communication; 3. Study conducted to identify operators’ perspectives regarding EFR, technology, and SCDF-related issues 3. Study conducted to identify operators’ perspectives regarding EFR, technology, and SCDF-related issues Supply Chain Demand Forecasting

18. Education & Communications Objectives: Objectives: To communicate progress and promote participation in EFR initiatives to all participants in the foodservice supply chain through trade media and associations.To communicate progress and promote participation in EFR initiatives to all participants in the foodservice supply chain through trade media and associations.

19. Action: Action: 1. Extensive mailing list 5,000+ of key audiences developed (operators, distributors, manufacturers, media, associations,etc.) 1. Extensive mailing list 5,000+ of key audiences developed (operators, distributors, manufacturers, media, associations,etc.) 2. Associations actively spreading news (newsletters, events, press releases): CRFA to support communicating 2. Associations actively spreading news (newsletters, events, press releases): CRFA to support communicating 3. Updates given at industry conferences/events: 3. Updates given at industry conferences/events: - September 24 session at ECR Conference - September 24 session at ECR Conference - February 15 EFR Conference - February 15 EFR Conference 4. Series of fax bulletins initiated 4. Series of fax bulletins initiated 5. Presence on Web (through ECR) 5. Presence on Web (through ECR) Education & Communications

20. Summary Work in progress--12 - 18 month timeframe to complete recommendationsWork in progress--12 - 18 month timeframe to complete recommendations Regular progress reports through associations, foodservice eventsRegular progress reports through associations, foodservice events Quarterly Steering Committee meetingsQuarterly Steering Committee meetings Seek more operator involvement on all four committeesSeek more operator involvement on all four committees

21. Conclusion “The future just ain’t what it used to be” Yogi Berra