Collaborative Supply ChainDiscussion of Opportunities & Challenges

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Agenda

• Brenda Hambleton• Chief Strategy Officer

ES3’s Shared Supply Network

• Walt Lentz (via video)• Ahold, SVP Supply ChainGiant’s D2S Experience

• Joe Hurley• Giant Eagle, VP Supply Chain

Giant Eagle’s Consolidation Experience

• Sandy Scott• ConAgra, Sr. Director of Warehousing

ConAgra’s D2S & Consolidation Experience

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ES3

ES3 is a third-party logistics provider focused on the consumer packaged goods (CPG) industry

ES3 is a leading provider of collaborative warehousing ES3 services all classes of trade for the CPG industry with

facilities across the US ES3 manages one of the country’s largest CPG transportation

networks providing inbound services as well as outbound services to retail distribution centers and stores

ES3 develops and delivers innovative, automated solutions

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Future Value Chain 2020

Building Strategies for the New Decade

The Consumer Goods Forum: 400+ manufacturer and retailer participants

Capgemni, HP, Microsoft

www.futurevaluechain.com

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Future Value Chain 2020

4 Objectives Essential for CPG Success

SUSTAINABILITY

HEALTH & WELLBEING

TECH-ENABLED CONSUMERS

SHARED SUPPLY CHAIN

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Why Shared Supply Chain is a Big Deal?

Savings

Service

Sustainability

30%

50%

4%

Future Value Chain 2020ES3 Supply Network Now

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Shared Supply Network Requires Collaboration

Collaboration requires balance Balance is achieved through:

Shared governance of value creation

Equitable sharing of savings Common goals

A neutral third-party provides the structure, systems, and security that enables collaboration

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Collaborative Warehousing Benefits

Elimination of a distribution center and leg of transportation saves more than 30% of supply chain costs

Savings of $0.54 to $0.781 are shared with partners

1 Based on A. T. Kearney analysis, July, 2010 and The GMA 2008 Logistics Survey

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Collaborative Warehousing Benefits

Smaller economic order quantity

Faster order delivery cycle

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Collaborative Warehousing Benefits

ES3’s facility is about 35% more efficient than a conventional facility

Elimination of a retail distribution center and transportation leg bring carbon savings to more than 50%

Consumer gets fresher product

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ES3’s Collaborative Solutions

Traditional 3PL Services

• Full service to the entire NE

• Activity-based pricing

• Solutions for all channels

Consolidation• Reduces

transportation costs

• Provides 24 hour service

• Improves fill rates to stores by ~4%

D2S• Reduces costs• Eliminates OS&D• Improves

assortment & speed to shelf

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ES3’s Collaborative Solutions

All Northeast retailers across all channels

Single Manufacturer D2SSMConsolidation

Retailer Experiencewith D2S (Direct-toStore)

Walt Lentz

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Ahold USA – ES3 Services by Banner

Single-manufacturer truckloads from ES3 manufacturers

Daily delivery of multi-manufacturer truckloads through ES3’s Consolidation program

Cross-dock of pallets selected for stores

50% of stores serviced by ES3’s D2S program

100% of stores serviced by ES3’s D2S program

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Walt Lentz Video

Retailer Experiencewith Consolidation Joe Hurley

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Giant Eagle - Overview

Manufacturer Experiencewith D2S & Consolidation

Sandy Scott

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ConAgra- Overview