1. Classic Markets, Corp. Supply Chain by: Stephanie Garner Eric Brubaker Robert Wilson Neal Belcher Tara Godfrey

2. Binney & Smith Parent company of Crayola Founded in 1885 First box of crayons produced in1903 Production to date of crayons has exceeded 100 billion Also owns Hallmark, Portfolio, Silly Putty and Revell-Monogram.

3. Products by Crayola Crayons Markers Clay Chalk Paint Colored Pencils Play-Doh Water Colors Stickers Silly Putty School Kits Stamps

4. Warehouse Classic Markets, Corp Supply Chain for Classic Markets, Corp Information Flow Product Flow

5. Step 1: Crayola Factory How Crayons are Made STEP 1:Wax & Pigment Crayola Crayons are made from two basic ingredients: paraffin wax and pigment. Heated tanks store the wax. Pre-measured pigments are added to the wax and mixed. STEP 2: Flat Bed Molding The paraffin wax and powdered pigment mixture are poured into the crayon molds, filling the molds from the tip up. The wax mixture is cooled using a water cooling system. STEP 3: Quality Assurance Each Crayola® Crayon is inspected. Molded crayons that do not pass inspection are remelted and remolded. Quality crayons are fed into a cylinder.

6. How Crayons are Made cont’d STEP 4: Labeling Labels are then fed onto the rotating cylinder while a white roller presses the label against the glue and the label wraps around the crayon twice for strength. STEP 5: Packaging Crayola® Crayons are packaged in different size boxes and packages.

7. All Crayola products are produced at the Crayola Factory in Easton, Pennsylvania. Since the individual products i.e. crayons, markers, etc are packaged at the factory the products are shipped to the warehouse pre-packaged and remain at the warehouse until needed. The Crayola warehouse that CMC uses is also located in Pennsylvania so transportation from the factory to the warehouse is by full truckload quantities. From the warehouse to CMC is less than truckload quantities of mixed products. The lead time for orders placed by CMC is 1-2 weeks. Crayola Factory Facts Warehouse Classic Markets, Corp

8. Step 2: The Crayola Warehouse The Crayola warehouse ships to large retailers, such as Wal-Mart, Sam’s Club, Target, etc. The warehouse also ships directly to schools when the schools deplete their reserves of Crayola products. The warehouse also ships to companies, such as Sysco, Warehouse Classic Markets, Corp

9. Step 3: Classic Markets, Corp CMC supplies to Small Restaurant chains Nationwide, such as Tony Roma’s, Spaghetti Factory, Garfield’s, etc. CMC acts as a Representative for Crayola to school districts nationwide. CMC sends samples to the schools that Crayola does not have an account with. CMC also acts as a Representative for food service supply companies such as Sysco. Warehouse Classic Markets, Corp

10. Classic Markets Office The CMC location consists of three offices, one conference room, a waiting room, the copy room, the main inventory storage room, and the paint storage room. The main inventory storage room is approximately 12,000 sq ft and is at capacity 85% of the time. When the capacity is reached all excess inventory is stored in the main office. The staff consists of Carolyn Stiffler (the owner), one full time employee,and one part time employee

11. Classic Markets Office A display case in the office shows off all the products Crayola offers or has offered in the past, including promotional paraphernalia and specialty products no longer in production.

12. CMC Inventory Storage Crayon, Silly Putty, and Promotional Kits storage Est ROP: Crayons 8ct = 200, 16ct = 100, 64ct = 15 boxes Silly Putty = 1/2 dozen eggs Promotional Kits = 10

13. CMC Inventory Storage cont’d Colored Pencils, Modeling clay, Scissors, and Markers storage. Est ROP - Pencils = 60 boxes Clay = 5 buckets Scissors= 10 pairs Markers= 100 boxes

14. Paint Storage Room The different kinds of paint Crayola produces requires its own storage room

15. Freight Facts & Figures Freight Methods: Crayola uses a contracted ground carrier. CMC uses UPS ground shipping Freight charge from Crayola to CMC paid for by Binney & Smith Freight charge from CMC to customers is paid for by the customer using standard commercial UPS rates and takes between 3-5 days Companies for which CMC is the Master Representative have a $500 minimum order amount.

16. Throughput Crayola produces 3 billion crayons,540 million colored pencils, 425 million markers, 90 million chalks, 6 million silly putty eggs, and 1.5 million jars of paint per year. CMC moves 1,000,000+ units per year (a unit is a packaged product, not an individual item.) That’s less than 1% of total volume for Crayola

17. CMC Distinguished Service Award In 1999 Classic Markets, Corp received the Distinguished Service Award for outstanding customer service out of all Crayola distributors and representatives in the United States

18. Crayola Trivia Did you ever wonder how many crayons a kid will use before age ten? Do you know the most popular crayon color?