1. Sample Business Review ABC Company &

2. Agenda Common Goals Program Metrics –Reporting Snapshot –Product Usage –Service Levels –Ordering Metrics –Accounting Details Program Initiatives Action Plans What’s New at AOPD

3. Goals For This Review Process: –Review current procurement process and its effectiveness for total cost management in terms of product usage, service levels, ordering metrics and accounting details Programs: –Discuss the impact of new AOPD initiatives and programs available to you Opportunities: –Discuss your corporate goals and determine the ways in which we can help you attain these future action items

4. Total Sales –Total expenditure for 2000 was $167,422 Vs $163,197 for 1999, an increase of 2..58% Product Usage –48% were Contract items –52% were Non-Contract items –5% were Recycled products –22% were Miscellaneous products Service Levels –98.8% fill rate YTD –97.9% fill rate Last Year –Return Rate is below the AOPD average Ordering Metrics –Average Order Size is $112, up from last year which was $97 –47% of Orders are placed via SmartTel –31% of Orders are placed via EDI –22% of Orders are placed via Customer Service Accounting Details –Average length of time for accounts payable –Invoice details Reporting Snapshot

5. OBSERVATION: 52% of the ABC Company’s purchases were comprised of Non-Contract items. Product Usage Contract Vs Non-Contract Item Analysis

6. 1999 Total Purchases: $163,197.00 Product Usage OBSERVATION: Purchases from Paper Products in 1999 accounted for 19% of the ABC Company’s total items. Purchase Analysis

7. 2000 Total Purchases: $167,422.00 Product Usage OBSERVATION: Purchases from Paper Products in 2000 accounted for 23% of the ABC Company’s total items, an increase of 3% from 1999. Purchase Analysis

8. OPPORTUNITY Increase savings to ABC Company by moving high-usage, Non- Contract items to the Contract and deleting low usage Contract items ACTION PLAN s Review Non-Contract Product usage and pricing, and identify items to move to the Contract s Review Contract Product usage and identify items to remove from Contract s Move and delete approved items to Contract Product Usage Contract Vs Non-Contract Item Analysis

9. Product Usage Proposed Contract Changes

10. Slow-Moving or Inactive Proprietary Items Product Usage OBSERVATION The above listed items ordered less than 3x per month and are considered slow moving ACTION PLAN Identify specific action plan per item Increase awareness of product Remove from inventory Select in-stock alternate product

11. Product Usage Environmental and Diversity Products OBSERVATION Recycled products account for 8% of the ABC Company’s purchases during 2000. Total Recycled Sales = $8,127.29. OPPORTUNITY AOPD can support corporate Recycling and MWBE initiatives by assisting in increasing company-wide product purchases ACTION PLAN s AOPD to provide a listing of SKUs and descriptions of recycled and MWBE supplies offered, and evaluate opportunities to move items to contract s Schedule a Productivity Fair featuring key suppliers of these products  Communicate information on these products to end-users

12. Product Usage Recycled Toners OPPORTUNITY Transition current toner items to recycled toner cartridges, to provide increase in recycled product purchases and cost savings to the ABC Company. ACTION PLAN s Review product samples for Data Products and Electronic Labeling Technologies (ELT) toner cartridges. s Test samples at headquarter location s Review cost analysis s Introduce new toner program to end users, highlighting cost and environmental advantages

13. Service Levels OBSERVATION: In 1999, AOPD achieved a 97.9% fill rate verses 98.5% for 2000, a significant improvement.

14. Fill Rates Service Levels OPPORTUNITY Maintain the ABC Company’s high fill rates while continuing to improve towards the company goal of 100%. ACTION PLAN s Monitor Fill Rates and benchmark against current AOPD averages

15. Service Levels - Returns OBSERVATION: ABC Company shows a trend of a below average rate of return on all items.

16. Service Levels OPPORTUNITY Work to reduce the % of returns through process and product education ACTION PLAN s Communicate specific return procedures and appropriate return paperwork, to all the ABC Company locations s Increase knowledge of products to end users by holding on-site productivity fairs s On-going tracking and root cause analysis by AOPD Root Causes of Returns

17. Average Order Size Ordering Metrics OBSERVATION: Average order is a significant driver of profitability for both AOPD and our customers. By consolidating orders customers can save by reducing labor hours spent on the following: * Placing Orders * Distributing products to either stock room or associates * Receiving Orders* Paying Invoice

18. Ordering Metrics OPPORTUNITY The average order size has been identified as one of the key drivers in saving process costs for our customers ACTION PLAN s Significant savings can be realized and saved if orders are consolidated and are above $150 s Develop end-user communications plan that educates the ABC Company’s associates on the importance of consolidating orders and their role in the overall success of the AOPD Program Average Order Size

19. AOPD Ordering Processing Costs Phone 3.76 Fax 1.04 ECom 0.06 Ordering Metrics Ordering Methods OBSERVATION: The ABC Company places 22% of their orders via phone and fax. Shifting orders from customer service to online ordering procedures can reduce the customer cost for processing by 80% per order.

20. Ordering Metrics Ordering Methods OPPORTUNITY Moving Customer Service Orders to Electronic Commerce ordering procedures would save the ABC Company time and money. ACTION PLAN s Introduce AOPD E Commerce to Key Decision Makers at your Company highlighting end-user benefits and process savings s If approved, set Implementation Timeline

21. OBSERVATION Analysis of overall account receivable patterns shows that ABC Company is remitting payment in 13 days OPPORTUNITY Monthly billing and departmental breakdowns would give the ABC Company more information and control over purchasing procedures. ACTION PLAN s Continue to insure correct billing to maintain accounts payable time period s Schedule meeting with Accounts payable to discuss advantages of monthly billing and departmental breakdowns Accounting Details

22. SmartChoices OPPORTUNITY s Order from your Telephone, on the WEB, by Custom Requisition Form or by EDI s Decrease the cost for producing orders enabling AOPD to drive down contract prices ACTION PLAN s Set up meeting to demonstrate SmartChoices s Set Implementation Timeline Program Initiatives

23. National Account Coverage OPPORTUNITY s Consolidate all locations of the the ABC Company ’s supply purchases in order to streamline purchasing processes, consolidate payments and drive down costs through product unification. ACTION PLAN s Set up meeting with decision makers to introduce AOPD and set timeline for implementation. Program Initiatives

24. Summary of Action Plans

26. Summary of Potential Savings s Miscellaneous items to contract with new pricing s Modifications to Proprietary Items s Recycled Toner Program s Transitioning Fax orders to SmartNet (average number of orders/year x $.98) Total Potential Savings $ XX,XXX.XX

27. Awards What’s New at AOPD

28. Committed to Our Partnership with ABC Company