Tornado Disaster Recovery: Assess, Restore, Rebuild

1. “Whoa – Tornado just hit my DC!” “Now what do I do???” Gerry Greenleaf Vice President – Distribution & Transportation & Lou DeLorenzo Regional Director of Distribution TPA Supply Chain Conference January 23, 2012

2. Setting the Stage Play Dunn Video

3. Recovery • Evaluate the Situation: • Associate Safety • Secure Facility • Assess the Damage • Create Assessment teams • Associate/HR • Facility • Product • Operations

4. Restoration - Phase 1 • Creation of a Steering Committee for Oversight/Coordination • Represent Key Areas: • Operations • Retail • Loss Prevention • Engineering • Creation of Insurance Processing team

5. Restoration - Phase 1 Development of Inventory Plans • Impacted Inventory @ DC • Inventory Review and Recovery • Inventory Disposition – Reclaim/Disposal/Usable • Inventory Accounting: • Insurance • USDA/FDA • State, County, Town • Create Inventory Rebuild Team

6. Restoration - Phase 1 Retail Service Plans: • Cascade impacted stores (270) to adjacent DC’s • Reallocation of Assets • People • Tractors/Trailers • Process for emergency orders to retail

8. Restoration - Phase 1 What Happened: • Within 24 hours, all impacted stores were being serviced • All emergency orders for impacted stores processed & delivered • All incoming PO’s diverted to supporting DCs • Service Levels declined slightly (app. 3-4% for first month after event)

9. Restoration - Phase 1 What Happened: • Inventory Build to replace loss product started • Usable Inventory (Grocery) at impacted DC redeployed to supporting DCs starting Day 3 • Temporary Facility security in place • Disposition of Non-usable product • Insurance Information (Inventory) verified

10. Restoration - Phase 1 What Happened: • Community/Governmental contacts established and integrate into plans • Impacted Associates communication process and support resources activated: • Over 150 associates deployed to other sites within Week 1 • Payroll and benefits continuation for impacted associates

11. Restoration - Phase 2 Getting Impacted DC back on-line • Creating action plans based on assessment teams reviews: • Associate/HR Sustainable communications process Coordination and planning to manage redeployed associates at supporting DCs to cover additional workload • Product Tight inventory and capacity coordination for supporting DCs

12. Restoration - Phase 2 Getting Impacted DC back on-line • Creating action plans based on assessment teams reviews: • Operations Supporting on-site clean-up and facility restoration Preparing for operations restoration (Grocery) • Facility Develop and Implement Grocery Facility Re-build Develop and Implement Office/Infrastructure Re-Build Develop and Implement Fresh Facility Re-Build

13. Restoration - Phase 2 What Happened • Grocery Operations – Created facility access/operations for 75% of building – resumed shipping operations by Week 4 • Created new design for infrastructure • Enhance entrance and security • Enhance associate spaces (locker room, break room, fitness/wellness facility, green spaces) • Enhanced offices

14. Restoration - Phase 2 What Happened • Fresh Operations: • Extensive rebuild project –required 9 months • New refrigeration system • New roof • New rack and layouts (designed for current needs) • Integrated a 57,000 sq. ft. fresh expansion into re-build plans • Successfully sustain Fresh distribution from supporting DC’s for 9 months

15. Keys to Success • Have a plan, continually review and update • Create steering committee with clear decision making authority • Leverage a project management mentality • Break down work into managable elements • Effort requires multiple work streams and resources

16. Keys to Success • Create key action teams with clear focus • Focus on recovery, restoration, people • Involve the entire company – you are not alone • Communicate, Communicate, Communicate!!

17. A New Beginning

18. Business Continuity Planning

19. Business Continuity • Objective • Protect customers from the impact of a supply chain disruption • Process • Define a repeatable plan of action to speed communication and decision making in the event of a supply chain disruption

20. Scenarios • Smucker Operation • Smucker is responsible for development and implementation of the disaster recovery plan • Outsourced Operation • Third party plays a major part in developing and implementing the site level disaster recovery plan

21. Risk Analysis Likelihood Of Event

22. Risk Analysis Business Impact

23. Risk Analysis Categories Site Local Key Suppliers External Suppliers

24. Events • Recent Smucker Supply Chain Disruptions • 2005 – New Orleans, LA – Hurricane Katrina • 2008 – Memphis, TN – Tornado • 2009 – Cincinnati, OH – Hurricane Ike • 2009 – University Park, IL – Tornado

25. New OrleansKatrina Impact onCoffee Production and Distribution

26. NOLA Hurricane Response Plan • Tied to 5 day cone of probability, stand down if out of cone for 24 hours • T-72, 48, 24, 12, 0 Checklists (from Phase I Evacuation) • Ride Out Team for Category 3 and below • On-site bunkers with supplies and tools for Ride Out Team • Close relationships with local and federal authorities • Pre-arranged recovery teams • Ongoing site hardening and post analysis improvements

27. Katrina • Overview • Gentilly operating within 3 weeks: • Location advantages – near NASA • Flood water did not enter the building • Able to add on-site housing, potable water and gain site access quickly through good planning and aggressive action • Lacombe had limited disruption • Silocaf sustained limited damage to building and inventory • Chef suffered minor flood damage

28. Gentilly After the Storm Interior Water Damage due to Roof Damage

29. Gentilly After the Storm Gentilly Village - 125 Trailers – sleeps 500+

30. Lacombe After the Storm Lacombe becomes operational HQ immediately following storm

31. Memphis Mixing Center

32. Memphis Tornado - 2008 • February 5th - 6 p.m. Tornado strikes Memphis Mixing Center • February 5th - 11 p.m. Emergency Response Team call to align information and next steps • February 6th - 6 a.m. Emergency Response Team meeting to identify core teams and affirm go forward plan for Communication, Order Management, Quality, Risk Management, etc. • February 6th – All orders moved from Memphis Mixing Center to ship from Cincinnati mixing center

33. Memphis Tornado - 2008 • February 6th-20th • Create new short term customer shipping territory from remaining mixing centers. • Business preparation to accommodate new location • February 25th – Go live with the short term Network • April 1st – Lease signed on replacement building • April 1st thru May 14th – Building preparation • May 14th – First inbound receipt in new facility • June 16th – First outbound shipment new West Memphis location

34. Mixing Center Regions – Pre-Memphis Tornado Washington Maine North Dakota Montana VT Oregon NH Mass. Wisconsin New York R.I. Idaho Minnesota Michigan South Dakota Conn Wyoming NJ Pennsylvania Breinigsville, PA Mixing Center Iowa Indiana Nebraska Ohio M D Illinois Del. Nevada Utah Cincinnati, OH Mixing Center W. Va Virginia Colorado Missouri Kansas Kentucky N. Carolina California Tennessee West Memphis, AR Mixing Center S. Carolina Oklahoma Arkansas Arizona New Mexico Fairburn, GA Mixing Center Alabama San Bernardino, CA Mixing Center Georgia Miss. Florida Louisiana Texas

38. Mixing Center Regions – Post-Memphis Tornado Washington Maine North Dakota Montana VT Oregon NH Mass. Wisconsin New York R.I. Idaho Minnesota Michigan South Dakota Conn Wyoming NJ Pennsylvania Breinigsville, PA Mixing Center Iowa Indiana Nebraska Ohio M D Illinois Del. Nevada Utah Cincinnati, OH Mixing Center W. Va Virginia Colorado Missouri Kansas Kentucky N. Carolina California Tennessee S. Carolina Oklahoma Arkansas Arizona New Mexico Fairburn, GA Mixing Center Alabama San Bernardino, CA Mixing Center Georgia Miss. Florida Louisiana Texas

39. Key Learnings • Immediate response is the key to minimizing disruption • Broad, cross-functional involvement ensures success • Strong relationships with customers and suppliers allow for understanding and support • Committed employees with deep business process understanding, working as a team, are able to deliver outstanding results in a time of crisis

40. Thank You!