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September 24, 1998 Presented by: Bill McEwan, President & CMO, The Great Atlantic &

September 24, 1998 Presented by: Bill McEwan, President & CMO, The Great Atlantic & Pacific Company of Canada, Limited. Unexplained Deductions. Taking the “Unexplained” Out Of Deductions. Deductions Are Not Necessarily A Problem

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September 24, 1998 Presented by: Bill McEwan, President & CMO, The Great Atlantic &

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  1. September 24, 1998 Presented by: Bill McEwan, President & CMO, The Great Atlantic & Pacific Company of Canada, Limited Unexplained Deductions

  2. Taking the “Unexplained” Out Of Deductions • Deductions Are Not Necessarily A Problem • This Is A Business Process Issue • Result - Costly Non-Productive Activities

  3. Deduction Descriptions • Unexplained - Inadequate Or No Documentation • Unresolved - Valid Deductions, Agreed By Both Trading Partners, But Not Adequately Documented or Communicated • Unauthorized • - Not Agreed To By Supplier And Distributor - “Random Act Of Violence”

  4. Results Of 1996 Survey • Canadian Grocery Distributors Process 1.4 Million Deductions Annually • Represents $1.8 Billion Dollars • 90 Percent Of Deductions Are Valid • Cost The Industry $30 Million To Resolve Them - $27 Million - Suppliers’ Costs - $ 3 Million - Distributors’ Costs

  5. Unexplained Deductions Efficient Deductions Process Trading Relationship A D Trading Relationship B C Trading Relationship C B A Trading Relationship D

  6. Deduction Responsibility…not just DistributorSupplier Accounting 78Accounting …must include Merchandising 78 Marketing Procurement 78 Sales Warehousing 78 Logistics Operations 78 Field Sales …and more

  7. The Problem Can Be Solved Implementing The Committee’s Recommendations, including… • Detailed Best Practices For Processing Deductions & Reducing Unexplained Deductions • Revised Standard Forms • Recommendations For The Implementation Of EDI Transaction Sets With Respect To Deductions • Revised Deductions Guidelines

  8. Three Critical Imperatives • Communicate • Communicate • Communicate

  9. Recommended Next Steps • Attend The ECR Deductions Committee Break Out Session At 2:30 P.M. This Afternoon • Buy The New ECR Publication “Taking The Unexplained Out Of Deductions”

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