Warehouse Best Practices for Rising Star Independent Distributors ($85 Million and Under)

2. Warehouse Best Practices for Rising Star Independent Distributors ($85 Million and Under) Sam Flannery, Vice President, Marketing

3. The Warehouse • The Warehouse has been the last area considered in cost management • It is your highest single cost factor • It can represent 58-60% or more of your cost of doing business

4. The Responsibilities of the 21st Century Warehouse • The Safety of the Work Place • The Development of Warehouse Personnel • Accuracy in All Functions • The Establishment and Communication of Reasonable Expectations in Job Performance • The Attainment of Productivity Standards • The On-Time Completion of All Warehouse Functions • Cost Management

5. The Science of Warehousing • Development of Methods: -Structure, Process & Discipline! -Productivity and Work Measurement -Thru Put - More Cases moved with fewer Employees - Inventory Management -Space and Equipment Utilization -Safety and Sanitation -Which results in Improved Customer Service

6. Start with the base issues… • Rack/Slot #’s - 10-101-1 not 101011 • Proper Slot & Pick Sequence • Organized, easily understood Selection Labels • How to Build a Proper Pallet • Training at All Levels • Eliminate Checker/Auditors • Reduce Staff Hours

7. Let’s Deal with Productivity Issues • More with the same or fewer people • Receive Product Faster • Put Away Product Faster • Replenish Product Faster • Faster and More Accurate Selection • Eliminate un-necessary tasks • Take advantage of your Capital expenditures! • Improved Thru-Put • How do we do this? TECHNOLOGY!

8. INBOUNDTECHNOLOGY

9. Receive Faster and More Accurately! • Utilize RF/Bar Code Reading & Voice technology • real time--eliminate all data entry! • Create Ways to Receive Faster • Reading item barcode brings up PO line, tie in generic bar-coded License Plate, confirm count, ready to put away. It’s that fast and simple. • Record and Track all dates; receiving, expiration, manufacture, and specific customer requirement dates. • Super PO for DOT type, multiple PO, orders & multi truck receiving. Get product off the dock faster, eliminate the major bottleneck at most warehouses.

10. Put Away Faster! • Handle multiple put-aways at the same time and in the most efficient slot sequence. • Directed Put Away, User-Directed Put Away or any combination of both. • Faster Put Away – From 10-12 per hour up to 35 per hour When you know where it’s at you can go get it!

11. Faster More Productive Replenishment! • Eliminate Head in the air & Fire drill Syndrome • Priority Replenishments based upon Average Sales • Priority Replenishments based upon Actual Demand • JIT Let downs during selection • If all of that fails, have process – “Runner’s Program”

12. OUTBOUNDTECHNOLOGY

13. Selection Issues Decrease Selection Errors by Order of 10! Typical 1 or more per 1,000. Go to 1-12,000 cases picked • Make Selectors Productive Faster • 5-10% faster pick (20/60/20 effect) • Training from weeks to days • Catch Weights are no longer a problem! Guide Selectors on Each Pass Eliminate the burden on Loaders with barcode load confirmation

14. Selection Issues • Improve Driver Performance w/ Detail Truck Map • Reduce Customer Calls Regarding Problems (by 1 for 12 ratio) …Resulting in a Dramatic increase in Customer Service and Improved Sales!

15. We Do This by Utilizing RF & Voice Technology! • Select using a variety of selection methods • labels, pick ticket, RF or Voice • Define the selection method by route • Each Route/Truck can have unique pallet build • Provide Driver Pallet Map with Customer/Item detail for faster, more accurate delivery • Track Employee Productivity with EPM Module • RF Bulk Pick • Utilize Fail Safe Runners Program • User, Item and Customer Item specific Voice Commands

16. WHY VOICE? • Create focused, directed work/task environment – fork lifts and horns! • Increase Productivity with true hands free tool. • Decrease training time from weeks to days with User Directed Voice Commands. • Eliminate item and customer/item specific errors w/custom voice commands. • If you can create a text file you can create a Voice Command – creativity is limitless. • Eliminate Catch Weight inaccuracy and productivity loss.

17. What Does This Mean for You? • Increased receiving accuracy • Insure code dating accuracy and FIFO Rotation. • Improved put away productivity from average of 7-9 per hour to 14-20 per hour on virtual put away and up to 35 per hour directed put away . • Faster replenishments - by over 100%. • Improved replenishment accuracy both from the correct overflow slot and to the correct pick slot. • TruckBuilder selection improves selection accuracy, saves loader time, improves delivery accuracy and makes delivery easier. • Practically eliminate error! (1 or more per 1,000 to 1 per 12,000) • BOTTOM LINE - IMPROVED CUSTOMER SERVICE LEVELS • - INCREASED PRODUCTIVITY • - LOWER COSTS

18. Detail Driver Pallet Map Truck Builder – Pallet Maps Customer Orders on Trailer. TruckBuilder provides a detailed pallet map showing the Summary of what is on each pallet. Truck Builder provides a detailed list of each item on a pallet.

19. Selection Label Template

20. Thank You! Dakota Series WAREHOUSE MANAGEMENT SYSTEM FOR FOOD DISTRIBUTION Sales 302-436-3230 sam@bfcassociates.com www.bfcsoftware.com