1. Copyright © 2001-2004 Six Sigma Academy International LLC All Rights Reserved Project Identification And Selection Pg 0 Pathway #1 (Step 6): Gather Available Data And Populate The CT Flow Down Strategic Goal Business Drivers Drivers Drill Down Project (s) Shrink Inventory Cost of Goods SG&A Slips, Trips, and Falls Other Deli Workman’s Compensation Front End Cuts Wages Travel Benefits 44% 24.8% 26.5% 1.9% Strains/ Sprains 79.3% 11.5% 7.3% Workman’s Compensation impacts a large amount of the SG&A Expenses Project focus could link to many aspects of Workman’s Compensation Slips, Trips, and Falls in the Front End of the stores could impact a significant amount of Workman’s Compensation expenses … Produce Bakery Operating Income … … 19.3% 10.2% 2.1% 12.8% 9.6% 6.1% 100%

2. Copyright © 2001-2004 Six Sigma Academy International LLC All Rights Reserved Project Identification And Selection Pg 1 Customer Experience CT Flow Down Strategic Goal Business Drivers Drivers Drill Down Project (s) Scan Accuracy In-stock Time in line NoF’s Number of Items Transaction Time Price Checks Wrong Price Bagger Ratio 25% 65% 10% 20% No UPC 75% 5% … Tender Time EVB Customer Experience … … 70%15% 5% 100% Drill Down Special Requests New Item Set-up New Item Set-up 5% Discontinued Items 70% 25% ACBP Process Backlog 30% Vendor Error 40% 30%

3. Copyright © 2001-2004 Six Sigma Academy International LLC All Rights Reserved Project Identification And Selection Pg 2 Manage Labor Costs CT Flow Down Strategic Goal Business Drivers Drivers Drill Down Project (s) Direct Indirect Cashier Front End Produce Hours of Operation Average Hourly Rate Bagger Service Deli 85% 80% Productivity Labor Costs Bookkeeper … … 10% 12% Drill Down Overtime Regular 10% 90% Benefits 15% Front End Systems Customer Traffic Scope: 5 Stores, District 5 Project Goal: Reduce by 8% (to 2% of total) – current = 35 hours per week per store 50% 30% 20%

4. Copyright © 2001-2004 Six Sigma Academy International LLC All Rights Reserved Project Identification And Selection Pg 3 CAPX CT Flow Down Strategic Goal Business Drivers Drivers Drill Down Project (s) New Stores Site/Building Construction Invested Capital Sales Location Contractors Land Margin 7% 40% Materials CAPX Equipment 20% 100% 15% Days of Construction ROIC = 6.4% 50% 25% 12% Remodel Stores Other IT Distribution 1% 11% 5% 13.1% 40.7% 33.8% 5.5%6.9% Expenses 13% Other Inventory 15% 5% 25% 20% 30% 0.3 x 0.4 x 0.5 x 0.338 = 2.03% = $26.4 Million

5. Copyright © 2001-2004 Six Sigma Academy International LLC All Rights Reserved Project Identification And Selection Pg 4 Shrink CT Flow Down Damage Spoilage Paper Error Strategic Goal Business Drivers Drivers Drill Down Project (s) Theft Lack of Experience Over Order/ Produce Failure to Shelve High Turnover No Training No/Poor Tools Mispick Labor Pressure Shrink Comp. Impact Space 100% Drill Down Bakery Undocumented Markdown Poor Refrigeration Poor Initial Quality No Inventory/ MVAT Data Poor Training Poor Sign/Disp Transfers... 1 District Goal

6. Copyright © 2001-2004 Six Sigma Academy International LLC All Rights Reserved Project Identification And Selection Pg 5 SG&A CT Flow Down Strategic Goal Business Drivers Drivers Drill Down Project (s) Wages Unscheduled Overtime Premiums Shift Length Sales Projection Mandatory/ Scheduled Holiday 60% Staffing (FT/PT) SG&A Sunday 10% 30% 44% Attendance (Call-in) 7% Regular... 19.3% Schedule/Actual Variance