Collaborative Supply Chain Discussion 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 Chain Giant’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

The Consumer Goods Forum: 400+ manufacturer and retailer participants Capgemni, HP, Microsoft www.futurevaluechain.com

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Future Value Chain 2020

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Why Shared Supply Chain is a Big Deal?

Savings

Service

Sustainability

30%

50%

4%

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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

Retailer Experience with 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 Experience with Consolidation Joe Hurley

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Giant Eagle - Overview

Manufacturer Experience with D2S & Consolidation

Sandy Scott

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ConAgra- Overview