Kraft Foods Internship Report Out 2009

1. Kraft Foods Internship Report Out 2009 Presented By: Carlos Miravite September 3, 2009 Ontario Mixing Center

2. Ontario Branch • Roughly 100,000 sq. ft • 556 customers • 40 employees • 3 lost time incidents • 7 recordable • Heaviest day for picking are Monday, Thursday, Friday • On a heavy day, volume can range from 15,000 – 20,000 units • On a light day, volume can range from 6,000 – 9,000 units • WUPH for the month of August was 136 • DUPH for the month of August was 84 • Kraft Foods • Founded in 1903 • 2nd largest food company • $42 billion revenue stream • 98,000 employees • 168 manufacturing and processing facilities • CEO Irene Rosenfield General Information

3. Worker Productivity – Recording Throw Rates • Among the warehouse employees who is throwing the most, who is throwing the least? • It is a marker of employee productivity defined by the number of cases thrown per hour. • Re-launching Pallet Incentive Program • Comparing July vs. August, are we sending more pallets out rather than bringing in? • Re-launching the program can there be a significant improvement from last month’s results? • Cart Retrieval Program • With the loss of carts, management along with sales, had to develop a way to strategically deploy carts and secure our assets. • A daily count of carts coming inbound was kept for approximately 10 days. • As of today, all loads are being palletized, as the issue of carts are withheld. Internship Quick Recap

4. Q3 Saturday Inventory – 6AM – 6PM • Within that week, numerous cycle counts were done to ensure inventory accuracy and accountability. • Using KWIC, line negative were cleared out, along with any remaining shipments. • With Tracy taking the lead, short code dated items were processed and moved to liquidation and donation. • As a result, the branch came up short in the amount of a -$523. • Branch to Branch Transfers • At one point there was a major spike in branch to branch transfers in one week. • Was inventory forecasted correctly to fulfill demand so that branches were not short or over on product? • Part of this process included processing the shipping manifest and bill of lading via KWIC. • Driver Ride Along • Andy – 16 hour day – 14 stops – approximately 4 hours behind schedule! • EZ • Murray Internship Quick Recap

5. Mixing Center – Kraft in conjunction with TLC • There are 7 mixing centers in the United States; Ontario being one of them. • Volume, on average is much greater than Ontario’s DSD. On a heavy day about 60,000 units are pushed compared to our 15,000 – 20,000 units. • Work shifts are comprised of 3 shifts per day, with a Saturday and Sunday; Ontario only has one shift, 5 days a week. • Ontario’s inventory is strictly cookies and crackers; on the other hand the mixing center holds thousands of SKUs ranging from all types from the Kraft Foods BU network. • The Kraft Foods mixing center management team is composed of Joie and her 5 person team. • Dave, Thomas, Anita, Cornell, and Isabella are in charge of dry and cold product, vehicle sizing, and site planning (SLP). • In conjunction with Kraft, the TLC team acts as a 3rd party logistics member; also with similar responsibilities. • There is also a refrigerated mixing center that strictly handles cold product such as hot dogs. Internship Quick Recap

6. A throw rate can be defined as a marker of employee productivity presented by number of cases thrown per hour. • My daily duty was to record throw rates and determine what will become the status quo for throwing. • I discovered that a good, yet average number of cases thrown ranges among the 1000s. • Top performer for the month of August was David Trovao; with Johnnie Ritchie not too far behind. Throw Rates – July vs. August

7. Following up the project first created by Fiona, I was in charge in re-launching the pallet incentive program amongst the drivers. • The goal was to reduce the cost of pallet spending, which was $3093 in the month of August. The estimated budget was $1045. The cost per pallet is $3.80. • July, net total resulted in a -233 pallets returned; with less than one pallet being brought back per route per driver. • August, although still in the negative, a significant improvement was seen as news of the program built steam. • There is still a lot of room for improvement. Pallet Incentive Program – July vs. August

8. And the winners are…

9. The loss of carts forced management to rethink a strategic deployment plan to ensure our assets were secure. • A 10-day record keeping program was put into place, in which Tracy and I kept a daily log on inbound carts. • To expand on the program, I was able to create specialized driver memos by examining sales teams and their territories. Drivers would not deliver carts to these stores as instructed by Fiona. • As a result, of the 2800 carts in inventory, only 391 carts remain. Cart Retrieval Program

10. The Biggest Loser Competition • Rules of the Competition • Weigh Ins must be in by Friday September 4, 2009 to be considered in the program • The person with the highest percentage of weight loss is declared the winner • “Winner Takes All” • Prize: $50 Gift Card Forget those cookies, crackers, and anything associated with junk food, the Kraft Foods Ontario branch will be incorporating a 3-month long weight loss program that takes after the popular television show. To promote health and safety, beginning Friday, September 4, 2009, drivers and employees have the opportunity to participate and begin the road to becoming healthier.

11. Strengths, Weakness, Opportunities, Threats Strengths Weaknesses Driver and warehouse call-offs, including overtime occurrences. Wholesale migration affects employee morale – low volume results in labor getting cut and employees being bumped down. Branch to branch transfers – a spike leads me to believe that inventory forecasting may not be observing the shortage or overages branches experience. Carts & Pallets – an expense that can be reduced if the assets are secure and accounted for. A young, new management team in Jeff, Fiona, and Tracy; intelligent group of people with great ideas that can help make Ontario one of the top branches in the West area. Strong, young warehouse crew and foreman; core group that understands what needs to get done to accomplish WUPH. Experienced and seasoned drivers that know their routes and trucks. Threats Opportunities Time loss incidents/accidents – proper training in safety and procedure can reduce the threat of large medical expenses. Wholesale migration – finding a solution to increase our volume; can San Diego be the answer? Carts & Pallets – can Ontario secure its assets by returning carts and pallets to reduce the cost in this bucket. Carts & Pallets – a good opportunity to save on expenses that can become redundant; keeping in line with the pallet incentive and deploying carts strategically can completely reduce the cost. Conveyor and pick line – the $120,000 investment in reconfiguring the lines can decrease work time by 6-8 hours, along with increasing productivity and improving on prep time. San Diego business – the possibility of their business can help morale along with branch rankings; talks of expanding the yard can demonstrate the potential Ontario has in handling more volume. Sustainability – finding ways to improve the idea of going green can help reduce costs of utilities, such as electricity.

12. Concluding Thoughts • My Goal • Was to learn the Kraft Food DSD network; how it works; what needs to be done; how to successfully service our customers each day. • Conclusion • A great 3-month learning experience in which I was able to accomplish my goal entering the internship. • A warehouse and driver community that are more than welcoming; helpful and wise. • Management team that has potential to do great things with a up and coming branch in Ontario. • Overall a great company to work for! The future is bright!

13. Thank You For the Opportunity!