Enhancing Value & Profitability with the Recommended Supply Chain Scorecard

1. Enhancing Value & Profitability with the RecommendedSupply Chain Scorecard NAED 99th Annual Meeting Washington, DC May 6, 2007

2. Disclaimer This presentation is designed to facilitate a dialogue among individual distributors and the manufacturers that supply products to them for the purposes of making the supply chain evaluation process more efficient and reducing the costs for all parties involved. It is not intended to express any views regarding individual distributors’ or manufacturers’ business decisions. All distributors and manufacturers will continue to make their own independent decisions regarding all matters affecting competition. Information outside the scope of the designated categories (e.g., manufacturer pricing and payment terms, promotional allowances, etc.) has been omitted from this document. However, individual distributors are free to discuss these subjects in separate dealings with individual manufacturers.

3. Out of Scope • Measures of Pricing & Payment Terms • Measures of Gross Margin & Profitability • Measures of Rebates & Promotional Allowances

4. In Scope • Measures that… • Drive Process Efficiencies • Improve Performance • Reduce Costs for all Parties Involved, including the Buying Public

5. Today’s Agenda • Tools Developed • “Typical” Booth Session • Booth Sessions “Reinvented” • United Electric Supply & Schneider Electric • United Electric Supply & SYLVANIA • “Ask the Experts” Open Forum • What You Can Do

6. Tools Developed  Common Language • Resolves on-going friction 2 Scorecards…

7. “Typical” Booth Session Tom Cloud, Chairman & CEO Bill Snyder, Vice President Channel Development

8. Booth Session “Reinvented” Tom Cloud, Chairman & CEO Bill Snyder, Vice President Channel Development

9. Evaluating a Manufacturer • Lead Time • Overstock Inventory • Inventory Turnover

10. Lead Time • The time elapsed in calendar days between when an electronic order is issued, or a manual order is accepted, to the receipt of material.

11. Overstock Inventory • The amount of inventory in excess of a specified number of days supply • Recommended Best Practice is to consider more than 90 days supply overstock.

12. InventoryTurnover • Cost of Goods Sold through stock divided by Average Inventory • Definition from PAR Report

13. Evaluating a Distributor • Online Usage • P.O. Accuracy • Emergency/ Expedited Orders • Freight Efficiency

14. Online Usage • Measures usage of product availability, order tracking, training, graphics, Material Data Safety Sheets (MDSS), and Returns Goods Authorizations (RGAs) Requests.

15. P. O. Accuracy • The number of line items ordered 100% correctly as a percentage of total line items ordered.

16. Emergency Orders • Orders requiring special handling, i.e., requested in less than normal/historical lead times, a negotiated delivery date, or shipment via air freight.

17. Freight Efficiency • The number of orders that do not meet manufacturer minimum order requirements and the distributor pays a surcharge or the freight as a % of total orders.

18. Second Booth Session Tom Cloud, Chairman & CEO Mark Corcoran, Vice President Industrial/Commercial Sales

19. Evaluating a Manufacturer • Electronic Capabilities • Initial Fill Rate • Average Shipments/Order

20. Electronic Capabilities S Y L V A N I A Purchase Order thru Payment Cycle Exchanging with Sylvania? Capable of Exchanging? WEBSITE Price / Sales Catalog (832) to IDW2 YES YES Purchase Order (850) YES YES Purchase Order Acknowledgment (855) YES NO Purchase Order Change (860) YES NO P.O. Change Response (865) Future YES Advance Shipment Notification (856) YES SOON INVOICE (810) YES SOON Remittance Advice (820) YES YESProduct Activity Data (852) for VMIYES U N I T E D Currently Exchanging

21. Electronic Capabilities S Y L V A N I A Price Approval thru Claims Cycle Exchanging with Sylvania? Capable of Exchanging? U N I T E D NO Price Authorization/SPA (845) YES SOON Request Product Transfer Account YES Adjustment (844) NO Response to Product Transfer Account (849) YES

22. INITIAL Fill Rate • Stock line items received complete on first receiptas a % of stock line items ordered.

23. AVERAGE Shipments/Order • The number of shipments required to complete an order.

24. Evaluating a Distributor • Electronic Orders • Emergency/ Expedited Orders • Freight Efficiency

25. Electronic Orders • Purchase Orders received via Electronic Data Interchange (EDI), Flat File, Vendor Managed Inventory (VMI), and/or Online entry.

26. Emergency Orders • Orders requiring special handling, i.e., requested in less than normal/historical lead times, a negotiated delivery date, or shipment via air freight.

27. Freight Efficiency • The number of orders that do not meet manufacturer minimum order requirements and the distributor pays a surcharge or the freight as a % of total orders.

28. “Ask the Experts” Tom Cloud, Chairman & CEO Mark Corcoran, Vice President Industrial/Commercial Sales Bill Snyder, Vice President Channel Development

29. What You Can Do • Use the Scorecards • AD, EDN/Equity, and IMARK Group Support • Software Vendors Support • Activant/Prophet 21 Release 11.5, 06/2007 • Infor Release 6.0, Q1/2 2008 • Intuit Eclipse Release 8.09, 08/2007 • SAP includes configuration capability • Take Costs Out of the Channel • Improve Performance to Customers Declare Your Support Today!

30. Thank You Have a great day!