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Kotra, Los Angeles March 15, 2012

ABG North Asia

Busan Hub Center (BHC)

ANA Operations

Jul. 2011

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Contents 1. Location

2. Organization

3. Facilities

5. Responsibilities

4. Inventory Flow

6. Responsibility 6. Responsibility 6. Postponement

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1. Location

Why

Busan?

Eastern Gateway

to Russia

FTZ ZONE

BENEFIT

3rd BIGGEST PORT IN THE WORLD

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AKL

1. Location II

OFFICE ABG

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Busan Warehouse

Nutrilite

Warehouse

Ada

Warehouse

North Asia

Markets Korea

Japan

Thailand

Malaysia

Taiwan

Hong Kong

Singapore

Indonesia

Philippines

South Asia

Markets Australia

New Zealand

1. Asia Network

Mutual use, Postponement, and Brite Stock SKUS shipped through Busan

Market Specific SKUs shipped direct to North Asia markets

SKUs shipped direct to South Asia Markets

Legend

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F. Management

Distribution Analyst

2. Organization

ABG Operations

F.M Assistant ABG Coordinator NTBU Coordinator

/ ERDC

Manager

Allocation Planner

Planning Coordinator

Allocation Planner

IMS / All. Planner

RDC planning

OS&D Cleck

DPS Coordinator

H.D Coordinator

WHSE Coordinator

Rework Coordinator

T & O

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BIDC : 171 Staff

. In/Out bound . DPS . Postponement . Kit Assembly

202

Staff

2. Org. Man Power

NTBU (ERDC) : 10 Staff

ANA-WHSE Operations : 21 Staff

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3. Facilities

6 Level High Racking System - VNA Truck

RF (Radio Frequency) System

Pick to Light (Digital Picking)

System for AKL Home Delivery

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Desc. BIDC

Portion

Land 28%

ANA

28,919 ㎡ 103,680 ㎡

Warehouse 44% 21,673 ㎡

49,488 ㎡

Area

3. Facilities - Area

%

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Desc. Capacity

Pallet Rack (Aerosol : 790)

Reefer Container

13,681 pallets

2 containers

3. Facilities – Rack Capacity

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Pick to Light

(DPS)

85,000 Each / Day

12,000 Box / Day

2 lines

3. Facilities – Order Fulfillment

Postponement H.C Product (90,000/week)

N&W Product (34,000/week)

Durables (8,000/week)

1 line

1 line

1 line

Desc. Capacity Remark

3. Busan Nutrition GMP Labeling

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3. BUSAN QA LABS & OFFICES

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Amway

Korea

ABG

4. Inventory Flow - ABG

Other

Affiliates

Postponement

Busan

Hub

Center

Rack-

as safety stock

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4. Inventory Flow: Amway Korea

VMI Stores

IBO

VDS

Local

ABG

BHC

Home delivery

DPS Line

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4. Inventory Reduction Calculation Risk pooling is the concept that demand variability reduces as we aggr

egate demand

Across Customers

Across Products

Across Time Periods

Example is (3) SKU’s with similar demand patterns with 99% in-stock service level

Customer 1

Customer 2

Customer 3

Expected Value = 100 Std Dev = 30

Expected Value = 100 Std Dev = 30

Expected Value = 100 Std Dev = 30

Combined Distribution

Expected Value = 300 Std Dev = 51.9

99% In-stoc

k = 190

Avg dem

and = 10

0

99% In-stock = 456 units

Avg dem

and = 30

0

3 SKU’s X 190 units per SKU = 570 units of Inventory = 456 units of Inventory

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5. Responsibilities

BHC

Warehousing

Rework & Postponement

DPS & AP Replenishment

ABG In & Outbound

Inventory Management

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Hand Ass’y Month Daily

Kitting (Giftset)

Over Labeling

(Tamper seal included)

150,048

359,694

13,240

30,831

5. Rework & Postponement

ABG-Postponement Month Daily

Home Care

Durables

N & W Product

457,691 (378,000)

37,821 (37,800)

57,338 (136,000)

21,795 (18,000)

1,801 (1,800)

2,730 (6,800)

Unit : ea

Unit: ea (Capacity)

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Desc. Monthly Avg.

4. Inbound

Container

AIR

5,448

149

5. Inbound

Unit : Pallet

ABG

Daily Avg.

259

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Dept. Monthly Avg. Daily Avg.

Container

AIR

AKL

4,111

54

2,312

196

2.5

110

5. Outbound

Unit : pallet

ABG

Category