The Proaction Group 9 box Workshop

Turn and Earn – an 80/20 approach to inventory and

customers

October, 2016

2

The One Thing

Today we will explore an established, reliable methodology to highlight and quantify opportunities to improve earnings and reduce inventory, after evaluating the effectiveness of current SKU, pricing strategy and customer management.

What is the One Thing you want to come away with from this workshop?

3

Initial Thought

4

Introduction

•Segmentation•Triangulation•Experience

5

Workshop Agenda• Introduction

• Discussion – To segment or not to segment. The 9 Boxes.

• Review 9-Box methodology

• Group Exercise

• Advanced Topics – Fully Leverage the Data– Slotting strategies– DC Optimization

• Conclusion

6

“9-Box” Analysis – Summary

• These 9 boxes profile inventory in segments based on volume and volatility

• ABC Volume Segmentation is calculated based on COGS

– A Items – First 80% of COGS– B Items – Next 15% of COGS– C Items – Final 5% of COGS

• Volatility Segmentation incorporates the standard deviation of weekly shipments• Low Volatility – Ratio of StDev of weekly shipments to

average weekly shipments < .7

• Medium – Ratio is between .71 and 1.0

• High – Ratio is above 1.0

ABC Data Low Medium High No Activity TotalsTotal Sales 23,351,261$ 5,188,637$ 3,960,070$ 32,499,968$ % of Sales 53% 12% 9% 74%Transactions 16,407 7,164 4,062 27,633 SKU's 29 16 14 59 GM $ 14,504,901$ 2,712,480$ 1,246,211$ 18,463,592$ Turn and Earn 206 194 77 179 Inventory $ 2,671,972$ 665,783$ 1,108,055$ 4,445,809$ Days of Inventory 118 81 134 111 Total Sales 2,972,038$ 2,594,164$ 1,854,826$ 7,421,028$ % of Sales 7% 6% 4% 17%Transactions 7,823 6,799 4,755 19,377 SKU's 44 21 18 83 GM $ 1,981,142$ 1,689,139$ 1,058,913$ 4,729,195$ Turn and Earn 123 125 44 84 Inventory $ 536,550$ 471,468$ 1,038,706$ 2,046,724$ Days of Inventory 145 90 206 147 Total Sales 1,316,522$ 1,815,299$ 979,552$ 4,111,373$ % of Sales 3% 4% 2% 9%Transactions 7,885 9,887 6,374 24,146 SKU's 243 167 89 499 GM $ 949,380$ 1,242,015$ 499,277$ 2,690,672$ Turn and Earn 39 72 158 68 Inventory $ 673,501$ 542,550$ 154,736$ 1,370,788$ Days of Inventory 354 196 165 238 Total Sales% of SalesTransactionsSKU's 1,733 1,733 GM $Inventory $ $ 370,206 370,206$ Days of Inventory

Total Sales 27,639,821$ 9,598,100$ 6,794,448$ 44,032,369$ % of Sales 63% 22% 15% 100%Transactions 32,115 23,850 15,191 71,156 SKU's 316 204 121 1,733 2,374 GM $ 17,435,423$ 5,643,634$ 2,804,402$ -$ 25,883,459$ Turn and Earn 166 138 72 130 Inventory $ 3,882,023$ 1,679,800$ 2,301,498$ 370,206$ 8,233,527$ Days of Inventory 205 122 168 165

No Sales in 2007 (90% of inventory $ in

new products)

$118,000 of this inventory had no balance on hand in 2006 and relates to new products with no sales through

September, 2007. $252,000 relates to inventory on hand in 2006 with no sales in 2007.

Volatility

A (Top 80% of COGS)

B (Next 15% of COGS)

C (Final 5% of COGS)

Low HighVolatility

Volume

High L

ow

• We profile each segment in terms of:– Total Sales– Number of transactions– Number of SKUs– Gross Margin– Inventory Investment ($)– Return on Inventory (Turn and Earn)– Days on Hand

7

“9-Box” – Differentiated Inventory Strategy Development

Make little and often Block scheduling Calculated safety stock Visual / demand triggers

L M HABCUsa

ge

Demand Volatility

Make / buy bigger batches Automate replenishment

triggers

Block scheduling for base demand

Minimize response time to demand triggers

Additional safety stock

SKU Rationalization Product substitution Pricing / terms Inventory disposition

options

8

“9-Box” – Analysis Logic

• Data taken from TTM (annualized for items with less than 1 year of history)

• Average demand and volatility are calculated excluding weeks in which there is no demand (0 demand weeks are not included in the calculation).

• “Transactions” summarizes the number of lines on which the part was included during the year.

• “Turn and Earn” is a measure of return on the investment in inventory. The formula used is:

– Inventory turns (based on COGS) * Gross Margin %– A turn and earn ratio of 120 is generally considered a minimum level for

distributors

• Operating Margin estimated by allocated $160.82 to each transaction. The intent is to spread COMPANY’s cost for Labor, Service and Burden over all orders.

9-Box Example: Finished Goods

Highlighting:

Full Company vs. Product Family

Full Company vs. Facility

Volatility AND Customer Segmentations

Pricing and Inventory Improvement Calculations

10

Inventory FG / Raw Breakdown

Developing the Summary

Show total Inventory and how it breaks down between FG, Raw, New products, dead products

11

9-Box Summary Notes• Analysis is based on 52 weeks of sales history data starting 7.1.2014

through 6.28.2015 and associated inventory values at the end of the period.

• Client business is highly seasonal driven by weather• Mixing fees for both internal and external mixing and vendor-direct

mixing are not included in the COGS data. NOTE: analysis showed impact at this time is negligible.

• Average demand and volatility are calculated excluding weeks in which there is no demand (0 demand weeks are not included in the calculation).

• “Lines” summarizes the number of lines on which the part was included during the year.

• “Turn and Earn” is a measure of return on the investment in inventory. The formula used is:

Inventory turns (based on COGS) * Gross Margin % A turn and earn ratio of 120 (based on Gross Margin) is generally considered a minimum

level for distributors.

Total Company 9-Boxes

• Good High return on Inventory

for “A” items Margins tend to increase

with lower volume items Realizing 80% of sales

on 16% of total items

• Opportunities 38% of Total Sales are

from high volume / high volatility items

Margin opportunity on high volatility / D-Volt items ref: next slide

13% of Total Sales are from D-volatility (i.e., less than 5 weeks of COGS) items

All B and C volume segments have poor return on inventory

9-Box Volume vs. Volatility – All Facilities / ProductsABC Data Low Medium High D <5wks Orders Totals

Sales 14,589,764$ 25,455,758$ 41,109,124$ 4,616,244$ 85,770,890$ % of Total Sales 14% 24% 38% 4% 80%COGS (10,540,162)$ (17,877,248)$ (29,064,138)$ (3,263,604)$ (60,745,152)$ Transactions 13,814 25,576 32,248 300 71,938 $ / Transaction 1,056$ 995$ 1,275$ 15,387$ 1,192$ SKUs 126 210 204 54 594 $ / SKU 115,792$ 121,218$ 201,515$ 85,486$ 144,395$ Gross Margin 4,049,604$ 7,578,510$ 12,044,992$ 1,352,640$ 25,025,746$ GM% 28% 30% 29% 29% 29%GM / Transaction 293$ 296$ 374$ 4,509$ 348$ GM / SKU 32,140$ 36,088$ 59,044$ 25,049$ 42,131$ Turn and Earn 143 105 136 550 131 Inventory $ 2,049,226$ 5,064,332$ 6,263,358$ 173,779$ 13,550,695$ Days of Inventory 71 103 79 19 81 Total Sales 3,306,880$ 4,085,328$ 3,625,748$ 5,351,236$ 16,369,192$ % of Sales 3% 4% 3% 4.99% 15%COGS (2,326,446)$ (2,649,944)$ (2,527,906)$ (3,818,462)$ (11,322,758)$ Transactions 5,392 9,668 7,390 1,224 23,674 $ / Transaction 613$ 423$ 491$ 4,372$ 691$ SKUs 188 212 198 362 960 $ / SKU 17,590$ 19,270$ 18,312$ 14,782$ 17,051$ Gross Margin 980,434$ 1,425,384$ 1,097,844$ 1,532,774$ 5,036,436$ GM% 30% 35% 30% 29% 31%GM / Transaction 182$ 147$ 149$ 1,252$ 213$ GM / SKU 5,215$ 6,724$ 5,545$ 4,234$ 5,246$ Turn and Earn 62 67 52 169 75 Inventory $ 1,109,228$ 1,389,047$ 1,474,867$ 648,933$ 4,622,075$ Days of Inventory 174 191 213 62 149 Total Sales 601,000$ 389,888$ 467,890$ 3,545,818$ 5,004,596$ % of Sales 1% 0% 0% 3.31% 5%COGS (404,730)$ (247,922)$ (250,652)$ (2,501,076)$ (3,404,380)$ Transactions 1,926 2,162 1,418 3,744 9,250 $ / Transaction 312$ 180.34$ 329.96$ 947.07$ 541.04$ SKUs 178 110 104 1,796 2,188 $ / SKU 3,376$ 3,544$ 4,499$ 1,974$ 2,287$ Gross Margin 196,270$ 141,966$ 217,240$ 1,044,742$ 1,600,218$ GM% 33% 36% 46% 29% 32%GM / Transaction 102$ 66$ 153$ 279$ 173$ GM / SKU 1,103$ 1,291$ 2,089$ 582$ 731$ Turn and Earn 33 30 16 33 30 Inventory $ 405,526$ 300,024$ 724,559$ 2,239,022$ 3,669,132$ Days of Inventory 366 442 1,055 327 393 Total Sales 18,497,644$ 29,930,974$ 45,202,762$ 13,514,525$ 107,145,905$ % of Sales 17% 28% 42% 13% 100%COGS (13,271,338)$ (20,775,114)$ (31,842,696)$ (9,583,142)$ (75,472,290)$ Transactions 21,132 37,406 41,056 5,274 104,868$ / Transaction 875$ 800$ 1,101$ 2,562$ 1,022$ SKUs 492 532 506 2,214 3,744 $ / SKU 37,597$ 56,261$ 89,334$ 6,104$ 28,618$ Gross Margin 5,226,308$ 9,145,860$ 13,360,076$ 3,932,610$ 31,664,854$ GM% 28% 31% 30% 29% 30%GM / Transaction 247$ 245$ 325$ 746$ 302$ GM / SKU 10,623$ 17,191$ 26,403$ 1,776$ 8,457$ Turn and Earn (GM) 105 94 111 91 102 Inventory $ 3,563,980$ 6,753,403$ 8,462,785$ 3,061,734$ 21,841,902$

6,785,990$ Days of Inventory 98 119 97 117 106

Inventory $$ Part not in Sales History

VOLATILITY

A (Top 80% of COGS)



• GoodSolid margins with

large customers and increase with smaller customers

65% of sales come from high volume / large customers (AA)

88% of sales comes from high volume / large customers (AA, AB, BA)

• Opportunities16% of total customers

make-up 80% of sales – excellent opportunity to create unique program offerings to these select customers

9-Box: Volume vs. Customer – All Facilities / ProductsABC Data Large Medium Small Totals

Total Sales 70,051,126$ 12,135,830$ 3,583,936$ 85,770,892$ % of Sales 65% 11% 3.3% 80%COGS (50,022,648)$ (8,261,654)$ (2,460,472)$ (60,745,148)$ # of Customers 666 1,022 2,246 3,936 Transactions 46,162 15,868 9,904 71,938 Sales / Transaction 1,518$ 765$ 362$ 1,192$ Gross Margin 20,028,478$ 3,874,176$ 1,123,464$ 25,025,744$ GM% 29% 32% 31% 29%GM / Transaction 434$ 244$ 113$ 348$ Turn and Earn (GM) 131 Inventory $ 13,550,695$ TURNSDays of Inventory 81 4.5Total Sales 13,081,690$ 2,526,346$ 761,158$ 16,369,194$ % of Sales 12% 2% 1% 15%COGS (9,100,708)$ (1,723,488)$ (498,254)$ (11,322,758)$ # of Customers 622 810 1,350 2,786 Transactions 14,468 5,364 3,838 23,674 Sales / Transaction 904$ 471$ 198$ 691$ Gross Margin 3,980,982$ 802,858$ 262,904$ 5,046,436$ GM% 30% 32% 35% 31%GM / Transaction 275$ 150$ 69$ 213$ Turn and Earn (GM) 76 Inventory $ 4,622,075$ TURNS

Days of Inventory 149 2.4Total Sales 3,110,600$ 1,409,326$ 484,672$ 5,004,598$ % of Sales 3% 1% 0% 5%COGS (2,104,658)$ (968,048)$ (331,272)$ (3,404,380)$ # of Customers 540 584 728 1,854 Transactions 5,268 2,478 1,498 9,250 Sales / Transaction 590$ 569$ 324$ 541$ Gross Margin 1,005,942$ 441,278$ 153,400$ 1,600,218$ GM% 32% 31% 32% 32%GM / Transaction 191$ 178$ 102$ 173$ Turn and Earn (GM) 30 Inventory $ 3,669,132$ TURNS

Days of Inventory 393 0.9Total Sales 86,245,870$ 16,071,502$ 4,829,766$ 107,147,138$ % of Sales 80% 15% 5% 100%COGS (61,228,014)$ (10,953,190)$ (3,289,998)$ (75,472,286)$ # of Customers 334 528 1,261 2,126 Transactions 65,904 23,710 15,240 104,868 Sales / Transaction 1,309$ 678$ 317$ 1,022$ Gross Margin 25,017,856$ 5,118,312$ 1,539,768$ 31,674,852$ GM% 29% 32% 32% 30%GM / Transaction 380$ 216$ 101$ 302$ Turn and Earn (GM) 78 Inventory $ $21,841,902

6,785,990$ 685Days of Inventory 138 INV SKUs w/o COGS


CUSTOMER

A (Top 80% of COGS)

$13,550,695


$4,622,075


$3,669,132

$21,841,902

Raw Material / Consumption 9-BoxNOTES

TOTAL "Consumed" Item #s: 1934• 1312 can be both consumed (RM) &

sold as FGs• 622 have no FG COGS (i.e., just

RM OR not sold in past year)• The 622 Items that have "just" RM

Consumption make up $ 5,220,298• of the $20,921,510 TOTAL Inventory

shown here (i.e., 25%)

OPPORTUNITY

• A total reduction of $9,953,457 • in ABC VOLT Raw Material INV by

meeting DOH targets• An additional $431,798 can be

safely reduced from the $5,730,748• D VOLT INV without impacting

service level (probably much higher, this is cursory review).

RESULTING TOTAL INVENTORY REDUCTION for 1934 “Consumed”

Item Numbers: $10,169,356

Less Than

ABC Data Low Medium High 5 Wks Consumption TotalsSKUs 36 54 74 32 196Usage (COST) (6,692,582)$ (7,176,715)$ (12,103,511)$ (2,855,813)$ (28,828,622)$ FG COGS (2,373,686)$ (3,721,010)$ (9,297,582)$ (553,366)$ (15,945,644)$ Inventory 1,524,632$ 5,486,170$ 3,126,676$ 880,514$ 11,017,992$ Pounds (LBS) (32,551,479) (6,574,024) (8,418,118) (2,635,540) (50,179,162) Days 61 184 53 94 90Target Days 30 30 30 - Reductions 779,459$ 4,590,467$ 1,367,682$ 6,737,608$ SKUs 44 54 84 104 286Usage (COST) (574,283)$ (645,378)$ (1,044,389)$ (1,136,482)$ (3,400,531)$ FG COGS (2,252,712)$ (1,216,200)$ (3,079,476)$ (6,413,722)$ (12,962,110)$ Inventory 337,688$ 865,122$ 1,021,774$ 609,143$ 2,833,727$ Pounds (LBS) (2,588,077) (600,752) (1,703,623) (1,440,353) (6,332,805) Days 44 170 90 29 63Target Days 30 45 45 - 120 Reductions 105,332$ 635,612$ 513,352$ 1,254,297$ SKUs 150 116 74 1110 1,450Usage (COST) (216,731)$ (238,338)$ (159,823)$ (1,111,209)$ (1,726,102)$ FG COGS (2,828,376)$ (2,174,598)$ (1,394,690)$ (11,454,800)$ (17,852,464)$ Inventory 1,298,788$ 948,178$ 581,734$ 4,241,087$ 7,069,787$ Pounds (LBS) (1,207,673) (319,616) (280,175) (1,192,235) (2,999,699) Days 156 143 137 123 132Target Days 60 60 60 - 180 Reductions 858,779$ 753,081$ 349,693$ 1,961,552$ SKUs 230 224 232 1,248 1,934Usage (COST) (7,483,596)$ (8,060,431)$ (13,307,723)$ (5,103,504)$ (33,955,255)$ FG COGS (9,828,460)$ (10,832,818)$ (23,069,330)$ (18,975,254)$ (46,760,218)$ Inventory 3,161,108$ 7,299,470$ 4,730,184$ 5,730,749$ 20,921,510$ Pounds (LBS) (36,347,229) (7,494,393) (10,401,916) (5,268,178) (59,511,717)Days 67 141 47 87 95Target Days 120 135 135 - 390 Reductions 1,743,570$ 5,979,159$ 2,230,727$ 215,899$ 10,169,356$

TOTALS

VOLATILITY

A (Top 80% of USAGE)

B (Next 15% of USAGE)

C (Final 5% of USAGE)

Year-to-Year Volatility

50454035302520151051

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

Index

Data

COGS1COGS2

Variable

COGS by Week 1 - 52COGS 1 = 7.1.2014 - 6.30.2015COGS 2 = 7.1.2015 - 6.30.2016

Data reflects little to no variability between years Spring Peak Season: Mid FEB to Mid MAY (12 Weeks) Fall Peak Season: 3rd Week JUL to End SEP (10 Weeks) Spring Season AVG COGS / Week is 1.8x Higher than Fall Peak Season

Fall Peak Season

Spring Peak

Season

17

9-Box Example – FG: Inventory Improvement Summary - Full Company

• Company has over $18 million in Inventory. Recalculating based on Segmented Analysis shows they need $9 million.

Current Days A B C Current Inv A B CA 71 103 79 A 2,049,226$ 5,064,332$ 6,263,358$ B 174 191 213 B 1,109,228$ 1,389,047$ 1,474,867$ C 366 442 1,055 C 405,526$ 300,024$ 724,559$

18,780,168$

Target Days A B C Target Inv A B CA 30 45 60 A 866,315$ 2,204,044$ 4,777,667$ B 60 75 90 B 382,429$ 544,509$ 623,319$ C 120 140 180 C 133,062$ 95,093$ 123,609$

9,750,048$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 41 58 19 A 1,182,911$ 2,860,287$ 1,485,692$ B 114 116 123 B 726,799$ 844,538$ 851,548$ C 246 302 875 C 272,464$ 204,931$ 600,950$

9,030,120$

Current State

Proposed State

Net Change

Facility 9-Boxes

Division A 9-Box: Volume & Volatility Notes:All Segments with the exception of AC and BD have low or poor T&E Ratios which is most likely attributable to high inventory levels.

Margins look good with exception of BA which only represents 1% of total sales.

A rather large number of A volume SKUs (372 of 1002) make up 87% of sales.

A Volume SKUs receive 6.4x more sales versus B SKUs and 38x more sales than C SKUs.

There is risk with 33% of total sales in the AC Segment. Scheduling and / Inventory Strategy should be reviewed to reduce OOS situations.

See "INV Plan" tab for an opportunity to reduce inventory by $1,313,316.This opportunity DOES NOT include the $245,036 of inventory w/o sales in past year (does NOT factor in consumption data).

There are is a sizeable amount of new(?) SKUs (2,212 of ) with less than 5 weeks of orders making up 23% of total sales. REF "D Volatility" column.

ABC Data Low Medium High D <5wks Orders TotalsSales 937,497$ 6,887,659$ 6,186,254$ -$ 14,011,409$ Sales% of Total Sales 6% 43% 38% 0% 87% 87%COGS (625,844)$ (4,837,604)$ (4,175,236)$ -$ (9,638,683)$ Trans %Transactions 1,426 7,522 7,638 - 16,586 72%$ / Transaction 657$ 916$ 810$ #DIV/0! 845$ SKU %SKUs 56 162 154 - 372 37%$ / SKU 16,741$ 42,516$ 40,170$ #DIV/0! 37,665$ % TOT GMGross Margin 311,653$ 2,050,055$ 2,011,018$ -$ 4,372,726$ 86%GM% 33% 30% 33% #DIV/0! 31% AVG INV / SKUGM / Transaction 219$ 273$ 263$ #DIV/0! 264$ $6,560GM / SKU 5,565$ 12,655$ 13,059$ #DIV/0! 11,755$ Turn and Earn (GM) 74 117 146 #DIV/0! 123 Inventory $ 282,064$ 1,231,771$ 926,607$ -$ 2,440,441$ TURNSDays of Inventory (45) 165 93 81 #DIV/0! 92 3.9Total Sales 194,106$ 713,600$ 693,997$ 165,311$ 1,767,015$ Sales% of Sales 1% 4% 4% 1.03% 11% 11%COGS (142,324)$ (465,936)$ (455,787)$ (115,284)$ (1,179,331)$ % TRANSTransactions 658 2,324 2,018 90 5,090 22%$ / Transaction 295$ 307$ 344$ 1,837$ 347$ % SKUsSKUs 40 116 128 16 300 30%$ / SKU 4,853$ 6,152$ 5,422$ 10,332$ 5,890$ % TOT GMGross Margin 51,782$ 247,665$ 238,210$ 50,027$ 587,684$ 12%GM% 27% 35% 34% 30% 33% AVG INV / SKUGM / Transaction 79$ 107$ 118$ 556$ 115$ $1,459GM / SKU 1,295$ 2,135$ 1,861$ 3,127$ 1,959$ Turn and Earn (GM) 59 90 89 179 90 Inventory $ 64,005$ 178,831$ 175,329$ 19,507$ 437,672$ TURNSDays of Inventory (90) 164 140 140 62 135 2.7Total Sales 72,419$ 65,157$ 55,358$ 131,079$ 324,012$ Sales %% of Sales 0% 0% 0% 0.81% 2% 2%COGS (47,959)$ (38,657)$ (38,646)$ (88,844)$ (214,106)$ % TRANSTransactions 320 400 328 354 1,402 6%$ / Transaction 226$ 162.89$ 168.77$ 370.28$ 231.11$ % SKUsSKUs 40 62 50 176 328 33%$ / SKU 1,810$ 1,051$ 1,107$ 745$ 988$ % TOT GMGross Margin 24,460$ 26,500$ 16,712$ 42,235$ 109,906$ 2%GM% 34% 41% 30% 32% 34% AVG INV / SKUGM / Transaction 76$ 66$ 51$ 119$ 78$ $618GM / SKU 611$ 427$ 334$ 240$ 335$ Turn and Earn (GM) 70 51 73 22 36 Inventory $ 23,271$ 30,883$ 15,926$ 132,581$ 202,661$ TURNSDays of Inventory (180) 177 292 150 545 345 1.1Total Sales 1,204,021$ 7,666,416$ 6,935,609$ 298,844$ 16,104,890$ % of Sales 7% 48% 43% 2% 100%COGS (816,127)$ (5,342,196)$ (4,669,668)$ (204,129)$ (11,032,120)$ Transactions 2,404 10,246 9,984 450 23,084$ / Transaction 501$ 748$ 695$ 664$ 698$ SKUs 136 340 332 194 1,002 $ / SKU 8,853$ 22,548$ 20,890$ 1,540$ 16,073$ Gross Margin 387,895$ 2,324,220$ 2,265,940$ 94,716$ 5,072,771$ GM% 32% 30% 33% 32% 31%GM / Transaction 161$ 227$ 227$ 210$ 220$ GM / SKU 2,852$ 6,836$ 6,825$ 488$ 5,063$ Turn and Earn (GM) 71 112 136 43 113 TOTAL INVInventory $ 369,339$ 1,441,485$ 1,117,863$ 152,088$ 3,080,774$ 3,325,811$

245,036$ 308Days of Inventory 165 98 87 272 102 INV SKUs w/o COGS


VOLATILITY

A (Top 80% of COGS)



Division A 9-Box: Volume & Customer

Notes:Margins look good for all Segments: increasing with smaller customers andincreasing with smaller volume SKUs. Exception with the CA Segment.

B and C Volume SKUs have too much inventory. See V&V 9-Box for possible scenarios to improve.

400 of 1590 (25%) of Large Customers (A) make-up 76% of Sales - like other DCs, opportunity to create unique program offerings to these customers.

AA: High Volume SKUs / Large Customers make up 67% of Sales.

764 of 99239%

ABC Data Large Medium Small No / Neg Sales TotalsTotal Sales 10,724,292$ 2,384,733$ 902,385$ -$ 14,011,409$ % of Sales 67% 15% 5.6% 0.00% 87% v 80%COGS (7,368,050)$ (1,654,990)$ (615,643)$ -$ (9,638,683)$ 87%# of Customers 200 189 405 1 795 Transactions 10,856 3,206 2,524 - 16,586 Sales / Transaction 988$ 744$ 358$ #DIV/0! 845$ Gross Margin 3,356,241$ 729,743$ 286,742$ -$ 4,372,726$ GM% 31% 31% 32% #DIV/0! 31%GM / Transaction 309$ 228$ 114$ #DIV/0! 264$ Turn and Earn (GM) 123 Inventory $ 2,440,441$ TURNSDays of Inventory 92 3.9Total Sales 1,311,474$ 274,811$ 180,730$ -$ 1,767,015$ % of Sales 8% 2% 1% 0.00% 11%COGS (873,581)$ (185,193)$ (120,280)$ (276)$ (1,179,331)$ # of Customers 200 189 405 1 795 Transactions 3,290 868 930 2 5,090 Sales / Transaction 399$ 317$ 194$ -$ 347$ Gross Margin 437,893$ 89,618$ 60,450$ (276)$ 587,684$ GM% 33% 33% 33% #DIV/0! 33%GM / Transaction 133$ 103$ 65$ (138)$ 115$ Turn and Earn (GM) 90 Inventory $ 437,672$ TURNSDays of Inventory 135 2.7Total Sales 183,465$ 61,776$ 78,771$ -$ 324,012$ % of Sales 1% 0% 0% 0.00% 2%COGS (117,206)$ (42,250)$ (54,247)$ (402)$ (214,106)$ # of Customers 200 189 405 1 795 Transactions 812 224 360 6 1,402 Sales / Transaction 226$ 276$ 219$ -$ 231$ Gross Margin 66,259$ 19,525$ 24,524$ (402)$ 109,906$ GM% 36% 32% 31% #DIV/0! 34%GM / Transaction 82$ 87$ 68$ (67)$ 78$ Turn and Earn (GM) 36 Inventory $ 202,661$ TURNSDays of Inventory 345 1.1Total Sales 12,221,685$ 2,721,319$ 1,161,886$ -$ 16,104,890$ 764% of Sales 76% 17% 7% 0% 100% 580COGS (8,358,838)$ (1,882,433)$ (790,170)$ (679)$ (11,032,120)$ 580 of 1984# of Customers 200 189 405 2 796 29%Transactions 14,964 4,298 3,814 8 23,084 Sales / Transaction 817$ 633$ 305$ -$ 698$ Gross Margin 3,862,847$ 838,886$ 371,716$ (679)$ 5,072,771$ GM% 32% 31% 32% #DIV/0! 31%GM / Transaction 258$ 195$ 97$ (85)$ 220$ Turn and Earn (GM) 104 TOTAL INVInventory $ $3,080,774 3,325,811$

245,036$ 308Days of Inventory 110 INV SKUs w/o COGS

CUSTOMER

A (Top 80% of COGS)

$2,440,441


$437,672


$202,661

$3,080,774Inventory $$ Part not in Sales History

21

Division A 9-Box: Inventory Target Calculation Summary

Current Days A B C Current Inv A B C

A 165 93 81 A 282,064$ 1,231,771$ 926,607$ B 164 140 140 B 64,005$ 178,831$ 175,329$ C 177 292 150 C 23,271$ 30,883$ 15,926$

2,928,686$

Target Days A B C Target Inv A B CA 30 45 60 A 51,439$ 596,417$ 686,340$ B 60 75 90 B 23,396$ 95,740$ 112,386$ C 120 140 180 C 15,767$ 14,827$ 19,058$

1,615,371$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 135 48 21 A 230,624$ 635,354$ 240,267$ B 104 65 50 B 40,609$ 83,090$ 62,943$ C 57 152 (30) C 7,503$ 16,056$ (3,132)$

1,313,315$

Notes:This analysis calculates the current days of sales in inventory by Volume and Volatility Segment. The Proposed State highlighted in Yellow shows the target inventory levels by segment. The Net Change section calculates the increase or decrease in inventory by segment based on the target levels.

Current State

Proposed State

Net Change

22

Division A 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 33% 30% 33% A 937,497$ 6,887,659$ 6,186,254$ B 27% 35% 34% B 194,106$ 713,600$ 693,997$ C 34% 41% 30% C 72,419$ 65,157$ 55,358$

15,806,046$

Targeted Margin A B C

Resultant Sales A B C

A 33% 34% 35% A 937,497$ 7,196,154$ 6,355,465$ B 34% 35% 36% B 208,792$ 713,600$ 703,588$ C 34% 41% 42% C 72,419$ 65,157$ 61,896$

16,314,568$

Increased Margin Pts

A B C Increased Sales

A B C

A 0% 4% 3% A -$ 308,495$ 169,212$ B 8% 0% 1% B 14,686$ -$ 9,591$ C 0% 0% 12% C -$ -$ 6,538$ Increase In Sales

508,522$ 3%

Notes:

Current State

Proposed State

Net Change

This analysis calculates the marginal sales / EBITDA that would come from ensuring that smaller customers and SKU's have at least the same margin as A customers / A SKU's.

Division B 9-Box: Volume & VolatilityNotes:84% of sales come from A volume SKUs w/ 37% in the high volatility segment. As with the overall 9-Box - careful planning and inventory management is needed to avoid out-of-stock (oos) events for both AB and AC segments.

A Volume SKUs receive 5x more sales versus B SKUs and 16.5x more sales than C SKUs.

All 9 segments have poor T/Es which clearly is a result of high INV in all segments.

Margins look good: improving with lower volume SKUs and increasing Volatility.

As mentioned above, all segments have large amounts of inventory days on hand.See "INV Plan" tab for an opportunity to reduce inventory by $1,642,959.

This opportunity DOES NOT include the $383,970 of inventory for the 428 SKUs without sales in the past year. Data does not factor consumption for RM.

ABC Data Low Medium High D <5wks Orders TotalsSales 1,563,196$ 2,796,838$ 3,441,654$ -$ 7,801,688$ Sales% of Total Sales 17% 30% 37% 0% 84% 84%COGS (1,099,897)$ (1,908,918)$ (2,384,668)$ -$ (5,393,483)$ Trans %Transactions 1,774 2,914 3,290 - 7,978 74%$ / Transaction 881$ 960$ 1,046$ #DIV/0! 978$ SKU %SKUs 44 134 142 - 320 42%$ / SKU 35,527$ 20,872$ 24,237$ #DIV/0! 24,380$ % TOT GMGross Margin 463,299$ 887,920$ 1,056,986$ -$ 2,408,205$ 83%GM% 30% 32% 31% #DIV/0! 31% AVG INV / SKUGM / Transaction 261$ 305$ 321$ #DIV/0! 302$ $6,262GM / SKU 10,530$ 6,626$ 7,444$ #DIV/0! 7,526$ Turn and Earn (GM) 94 65 100 #DIV/0! 83 Inventory $ 346,632$ 926,012$ 731,286$ -$ 2,003,930$ TURNSDays of Inventory (45) 115 177 112 #DIV/0! 136 2.7Total Sales 270,848$ 432,866$ 325,463$ 166,794$ 1,195,972$ Sales% of Sales 3% 5% 3% 1.79% 13% 13%COGS (189,140)$ (293,575)$ (211,885)$ (116,730)$ (811,330)$ % TRANSTransactions 336 1,098 576 60 2,070 19%$ / Transaction 806$ 394$ 565$ 2,780$ 578$ % SKUsSKUs 44 108 68 20 240 31%$ / SKU 6,156$ 4,008$ 4,786$ 8,340$ 4,983$ % TOT GMGross Margin 81,708$ 139,292$ 113,578$ 50,064$ 384,642$ 13%GM% 30% 32% 35% 30% 32% AVG INV / SKUGM / Transaction 243$ 127$ 197$ 834$ 186$ $2,001GM / SKU 1,857$ 1,290$ 1,670$ 2,503$ 1,603$ Turn and Earn (GM) 34 49 76 169 54 Inventory $ 169,682$ 192,893$ 97,031$ 20,746$ 480,351$ TURNSDays of Inventory (90) 327 240 167 65 216 1.7Total Sales 76,674$ 40,663$ 47,351$ 145,457$ 310,145$ Sales %% of Sales 1% 0% 1% 1.56% 3% 3%COGS (52,412)$ (27,694)$ (26,089)$ (101,274)$ (207,469)$ % TRANSTransactions 230 150 94 208 682 6%$ / Transaction 333$ 271.09$ 503.74$ 699.31$ 454.76$ % SKUsSKUs 38 40 18 114 210 27%$ / SKU 2,018$ 1,017$ 2,631$ 1,276$ 1,477$ % TOT GMGross Margin 24,261$ 12,969$ 21,262$ 44,183$ 102,676$ 4%GM% 32% 32% 45% 30% 33% AVG INV / SKUGM / Transaction 105$ 86$ 226$ 212$ 151$ $1,337GM / SKU 638$ 324$ 1,181$ 388$ 489$ Turn and Earn (GM) 90 45 27 15 24 Inventory $ 18,432$ 19,768$ 43,355$ 199,216$ 280,770$ TURNSDays of Inventory (180) 128 261 607 718 494 0.7Total Sales 1,910,718$ 3,270,368$ 3,814,469$ 312,251$ 9,307,806$ % of Sales 21% 35% 41% 3% 100%COGS (1,341,450)$ (2,230,187)$ (2,622,642)$ (218,004)$ (6,412,283)$ Transactions 2,340 4,162 3,960 268 10,730$ / Transaction 817$ 786$ 963$ 1,165$ 867$ SKUs 126 282 228 134 770 $ / SKU 15,164$ 11,597$ 16,730$ 2,330$ 12,088$ Gross Margin 569,268$ 1,040,181$ 1,191,827$ 94,247$ 2,895,523$ GM% 30% 32% 31% 30% 31%GM / Transaction 243$ 250$ 301$ 352$ 270$ GM / SKU 4,518$ 3,689$ 5,227$ 703$ 3,760$ Turn and Earn (GM) 75 62 94 30 72 TOTAL INVInventory $ 534,746$ 1,138,672$ 871,671$ 219,963$ 2,765,051$ 3,149,021$



VOLATILITY

A (Top 80% of COGS)



Division B 9-Box: Volume & Customer

Notes:All ABC Volume SKUs have low T/E ratios - see below for inventory opportunities.

64% of Total Sales are High Volume / Large Customers (110 Large Cust) - AA Segment.Theses same (A) Large Customers also comprise 10% of the B Volume and 2% ofC Volume SKUs.76% of all sales come from 220 customers

Like in the V&C 9-Box, all segments have too much inventory. See V&V 9-Box forpossible scenarios to improve.

ABC Data Large Medium Small No / Neg Sales TotalsTotal Sales 5,971,179$ 1,408,003$ 422,507$ -$ 7,801,688$ % of Sales 64% 15% 4.5% 0.00% 84%COGS (4,149,410)$ (965,550)$ (278,523)$ -$ (5,393,483)$ # of Customers 220 194 326 - 740 Transactions 5,232 1,700 1,046 - 7,978 Sales / Transaction 1,141$ 828$ 404$ #DIV/0! 978$ Gross Margin 1,821,769$ 442,452$ 143,984$ -$ 2,408,205$ GM% 31% 31% 34% #DIV/0! 31%GM / Transaction 348$ 260$ 138$ #DIV/0! 302$ Turn and Earn (GM) 83 Inventory $ 2,003,930$ TURNSDays of Inventory 136 2.7Total Sales 950,221$ 173,881$ 71,869$ -$ 1,195,972$ % of Sales 10% 2% 1% 0.00% 13%COGS (643,089)$ (120,967)$ (47,275)$ -$ (811,330)$ # of Customers 220 194 326 - 740 Transactions 1,274 424 372 0 2,070 Sales / Transaction 746$ 410$ 193$ #DIV/0! 578$ Gross Margin 307,133$ 52,914$ 24,595$ -$ 384,642$ GM% 32% 30% 34% #DIV/0! 32%GM / Transaction 241$ 125$ 66$ #DIV/0! 186$ Turn and Earn (GM) 54 Inventory $ 480,351$ TURNSDays of Inventory 216 1.7Total Sales 171,333$ 65,877$ 72,935$ -$ 310,145$ % of Sales 2% 1% 1% 0.00% 3%COGS (112,804)$ (45,974)$ (48,691)$ -$ (207,469)$ # of Customers 220 194 326 - 740 Transactions 350 148 184 - 682 Sales / Transaction 490$ 445$ 396$ #DIV/0! 455$ Gross Margin 58,530$ 19,902$ 24,244$ -$ 102,676$ GM% 34% 30% 33% #DIV/0! 33%GM / Transaction 167$ 134$ 132$ #DIV/0! 151$ Turn and Earn (GM) 24 Inventory $ 280,770$ TURNSDays of Inventory 494 0.7Total Sales 7,092,733$ 1,647,761$ 567,312$ -$ 9,307,806$ % of Sales 76% 18% 6% 0% 100%COGS (4,905,302)$ (1,132,492)$ (374,489)$ -$ (6,412,283)$ # of Customers 220 194 326 - 740 Transactions 6,856 2,272 1,602 - 10,730 Sales / Transaction 1,035$ 725$ 354$ #DIV/0! 867$ Gross Margin 2,187,431$ 515,269$ 192,823$ -$ 2,895,523$ GM% 31% 31% 34% #DIV/0! 31%GM / Transaction 319$ 227$ 120$ #DIV/0! 270$ Turn and Earn (GM) 63 TOTAL INVInventory $ $2,765,051 3,149,021$


CUSTOMER

A (Top 80% of COGS)

$2,003,930


$480,351


$280,770


25

Division B 9-Box: Inventory Target Calculation Summary

A B CA 74% 75% 46%B 82% 69% 46%C 7% 46% 70%

REDUCING CURRENT INVENTORY BY:

A B C

A 26% 25% 54%B 18% 31% 54%C 93% 54% 30%

RESULTING INVENTORY


A 115 177 112 A 346,632$ 926,012$ 731,286$ B 327 240 167 B 169,682$ 192,893$ 97,031$ C 128 261 607 C 18,432$ 19,768$ 43,355$

2,545,088$


902,129$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 85 132 52 A 256,230$ 690,665$ 339,285$ B 267 165 77 B 138,590$ 132,569$ 44,785$ C 8 121 427 C 1,200$ 9,145$ 30,489$

1,642,959$


Current State

Proposed State

Net Change

26

Division B 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 30% 32% 31% A 1,563,196$ 2,796,838$ 3,441,654$ B 30% 32% 35% B 270,848$ 432,866$ 325,463$ C 32% 32% 45% C 76,674$ 40,663$ 47,351$

8,995,554$



A 30% 33% 35% A 1,563,196$ 2,831,875$ 3,589,247$ B 31% 34% 36% B 272,123$ 440,749$ 329,051$ C 32% 36% 45% C 76,674$ 42,333$ 47,351$

9,192,598$



A B C

A 0% 1% 4% A -$ 35,036$ 147,593$ B 0% 2% 1% B 1,274$ 7,883$ 3,588$ C 0% 4% 0% C -$ 1,669$ -$ Increase In Sales

197,044$ 2%

Notes:

Current State

Proposed State

Net Change


Division C 9-Box: Volume & VolatilityNotes:72% of Total Sales and 70% of Total GM come from 296 A Volume SKUs.The AC Segment (High Volume / High Volatility) represents 29% of all sales from just 128 AC SKUs.

A Volume SKUs receive 2.6x more sales versus B SKUs and 10x more sales than C SKUs.

7 of 9 segments have unacceptable T/Es and similar to Division D's, Division C's margins appear to be good, but rather chaotic.REF “XX Pricing Plan" tab for opportunity to improve margin.

Most segments (exceptions AC & CC) have large amounts of inventory days on hand.See "INV Plan" tab for an opportunity to reduce inventory by $477,098 (43% of total).This opportunity DOES NOT include the $81,050 of inventory for the 104 SKUs without sales in the past year nor the $60,036 in D-Volatility inventory. Data does not factor consumption for RM.

BD and CD Segments represent 7% of sales and 168 SKUs. These SKUs with less than 5 weeks of COGs during the year coupled with C Volatility SKUs represent 40% of sales - from high volatility or rarely ordered SKUs. Planning and inventory management of these SKUs is very important and should be further explored.

ABC Data Low Medium High D <5wks Orders TotalsSales 1,043,977$ 1,808,738$ 1,893,740$ -$ 4,746,455$ Sales% of Total Sales 16% 27% 29% 0% 72% 72%COGS (734,922)$ (1,311,753)$ (1,397,926)$ -$ (3,444,600)$ Trans %Transactions 1,698 2,738 2,346 - 6,782 68%$ / Transaction 615$ 661$ 807$ #DIV/0! 700$ SKU %SKUs 48 120 128 - 296 37%$ / SKU 21,750$ 15,073$ 14,795$ #DIV/0! 16,035$ % TOT GMGross Margin 309,056$ 496,985$ 495,814$ -$ 1,301,855$ 70%GM% 30% 27% 26% #DIV/0! 27% AVG INV / SKUGM / Transaction 182$ 182$ 211$ #DIV/0! 192$ $2,492GM / SKU 6,439$ 4,142$ 3,874$ #DIV/0! 4,398$ Turn and Earn (GM) 111 104 188 #DIV/0! 128 Inventory $ 195,662$ 347,537$ 194,498$ -$ 737,698$ TURNSDays of Inventory (45) 97 97 51 #DIV/0! 78 4.7Total Sales 508,954$ 503,997$ 281,786$ 173,221$ 1,467,958$ Sales% of Sales 8% 8% 4% 3% 22% 22%COGS (370,383)$ (328,708)$ (204,188)$ (125,863)$ (1,029,142)$ % TRANSTransactions 630 1,164 490 52 2,336 24%$ / Transaction 808$ 433$ 575$ 3,331$ 628$ % SKUsSKUs 54 98 72 18 242 30%$ / SKU 9,425$ 5,143$ 3,914$ 9,623$ 6,066$ % TOT GMGross Margin 138,571$ 175,289$ 77,598$ 47,358$ 438,816$ 24%GM% 27% 35% 28% 27% 30% AVG INV / SKUGM / Transaction 220$ 151$ 158$ 911$ 188$ $1,391GM / SKU 2,566$ 1,789$ 1,078$ 2,631$ 1,813$ Turn and Earn (GM) 76 133 56 190 91 Inventory $ 132,570$ 85,793$ 100,182$ 18,080$ 336,626$ TURNSDays of Inventory (90) 131 95 179 52 119 3.1Total Sales 90,047$ 36,544$ 13,547$ 274,141$ 414,280$ Sales %% of Sales 1% 1% 0% 4% 6% 6%COGS (61,237)$ (24,265)$ (9,341)$ (193,912)$ (288,756)$ % TRANSTransactions 294 152 94 264 804 8%$ / Transaction 306$ 240.42$ 144.12$ 1,038$ 515.27$ % SKUsSKUs 46 30 32 150 258 32%$ / SKU 1,958$ 1,218$ 423$ 1,828$ 1,606$ % TOT GMGross Margin 28,810$ 12,280$ 4,206$ 80,229$ 125,524$ 7%GM% 32% 34% 31% 29% 30% AVG INV / SKUGM / Transaction 98$ 81$ 45$ 304$ 156$ $374GM / SKU 626$ 409$ 131$ 535$ 487$ Turn and Earn (GM) 65 49 75 123 91 Inventory $ 29,960$ 16,575$ 3,880$ 45,955$ 96,371$ TURNSDays of Inventory (180) 179 249 152 87 122 3.0Total Sales 1,642,978$ 2,349,280$ 2,189,073$ 447,362$ 6,628,693$ % of Sales 25% 35% 33% 7% 100%COGS (1,166,542)$ (1,664,726)$ (1,611,456)$ (319,775)$ (4,762,498)$ Transactions 2,622 4,054 2,930 316 9,922$ / Transaction 627$ 579$ 747$ 1,416$ 668$ SKUs 148 248 232 168 796 $ / SKU 11,101$ 9,473$ 9,436$ 2,663$ 8,328$ Gross Margin 476,436$ 684,554$ 577,617$ 127,587$ 1,866,195$ GM% 29% 29% 26% 29% 28%GM / Transaction 182$ 169$ 197$ 404$ 188$ GM / SKU 3,219$ 2,760$ 2,490$ 759$ 2,344$ Turn and Earn (GM) 94 108 142 142 115 TOTAL INVInventory $ 358,193$ 449,905$ 298,561$ 64,036$ 1,170,694$ $1,251,744



VOLATILITY

A (Top 80% of COGS)



Division C 9-Box: Volume & Customer

Notes:Margins look good for all Segments with some slight opportunity for CB and CC Segments that should be further explored.REF “XX Pricing Plan" for one option to explore in order to increase margin.

B and C Volume SKUs have poor T/E ratios - See V&V 9-Box NOTES for possiblescenarios to improve inventory levels.

62% of Total Sales come from the 122 Large Customers (A) - definitely an opportunity to create unique program offerings to these customers.

ABC Data Large Medium Small TotalsTotal Sales 2,869,872$ 1,415,116$ 461,468$ 4,746,455$ % of Sales 43% 21% 7% 72%COGS (2,110,088)$ (1,010,465)$ (324,047)$ (3,444,600)$ # of Customers 122 170 278 570 Transactions 3,420 2,076 1,286 6,782 Sales / Transaction 839$ 682$ 359$ 700$ Gross Margin 759,784$ 404,650$ 137,421$ 1,301,855$ GM% 26% 29% 30% 27%GM / Transaction 222$ 195$ 107$ 192$ Turn and Earn (GM) 128 Inventory $ 737,698$ TURNSDays of Inventory 78 4.7Total Sales 1,079,210$ 306,728$ 82,020$ 1,467,958$ % of Sales 16% 5% 1% 22%COGS (760,613)$ (211,683)$ (56,846)$ (1,029,142)$ # of Customers 122 170 278 570 Transactions 1,366 606 364 2,336 Sales / Transaction 790$ 506$ 225$ 628$ Gross Margin 318,597$ 95,044$ 25,174$ 438,816$ GM% 30% 31% 31% 30%GM / Transaction 233$ 157$ 69$ 188$ Turn and Earn (GM) 91 Inventory $ 336,626$ TURNSDays of Inventory 119 3.1Total Sales 178,813$ 204,277$ 31,190$ 414,280$ % of Sales 3% 3% 0% 6%COGS (125,242)$ (142,376)$ (21,137)$ (288,756)$ # of Customers 122 170 278 570 Transactions 430 250 124 804 Sales / Transaction 416$ 817$ 252$ 515$ Gross Margin 53,571$ 61,901$ 10,053$ 125,524$ GM% 30% 30% 32% 30%GM / Transaction 125$ 248$ 81$ 156$ Turn and Earn (GM) 91 Inventory $ 96,371$ TURNSDays of Inventory 122 3.0Total Sales 4,127,895$ 1,926,120$ 574,678$ 6,628,693$ % of Sales 62% 29% 9% 100%COGS (2,995,943)$ (1,364,525)$ (402,030)$ (4,762,498)$ # of Customers 122 170 278 570 Sales / Customer 33,835$ 11,330$ 2,067$ 11,629$ Transactions 5,216 2,932 1,774 9,922 Sales / Transaction 791$ 657$ 324$ 668$ Gross Margin 1,131,952$ 561,596$ 172,648$ 1,866,195$ GM% 27% 29% 30% 28%GM / Transaction 217$ 192$ 97$ 188$ Turn and Earn (GM) 107 TOTAL INVInventory $ $1,170,694 $1,251,744


CUSTOMER

A (Top 80% of COGS)

$737,698


$336,626


$96,371


29

Division C 9-Box: Inventory Target Calculation Summary


A 97 97 51 A 195,662$ 347,537$ 194,498$ B 131 95 179 B 132,570$ 85,793$ 100,182$ C 249 249 152 C 29,960$ 16,575$ 3,880$

1,106,658$


623,847$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 67 52 (0) A 135,258$ 185,815$ (828)$ B 71 20 89 B 71,685$ 18,250$ 49,834$ C 129 109 (0) C 15,540$ 7,268$ (10)$

482,812$


Current State

Proposed State

Net Change

30

Division C 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 30% 27% 26% A 1,043,977$ 1,808,738$ 1,893,740$ B 27% 35% 28% B 508,954$ 503,997$ 281,786$ C 32% 34% 31% C 90,047$ 36,544$ 13,547$

6,181,331$



A 30% 31% 32% A 1,043,977$ 1,865,293$ 1,996,417$ B 31% 35% 36% B 526,142$ 503,997$ 305,011$ C 37% 38% 39% C 94,555$ 38,152$ 14,625$

6,388,169$



A B C

A 0% 3% 5% A -$ 56,555$ 102,678$ B 3% 0% 8% B 17,188$ -$ 23,225$ C 5% 4% 8% C 4,508$ 1,607$ 1,078$ Increase In Sales

206,838$ 3%

Notes:

Current State

Proposed State

Net Change


Notes:79% of Total Sales and 77% of Total GM come from 370 A Volume SKUs.The AA Segment (High Volume / Low Volatility) represents 30% of all sales from just 66 AA SKUs.

A Volume SKUs receive 4.4x more sales versus B SKUs and 13.7x more sales than C SKUs.

8 of 9 segments have poor T/Es and unlike many of the other DC's, Division D's Margins are not as high and they appear to be rather chaotic in nature.REF "MD Pricing Plan" tab for opportunity to improve margin.

All segments have large amounts of inventory days on hand.See "INV Plan" tab for an opportunity to reduce inventory by $1,004,588.This opportunity DOES NOT include the $792,090 of inventory for the 478 SKUswithout sales in the past year. Data does not factor consumption for RM.

BD and CD Segments represent 6% of sales and 266 SKUs. These SKUs with less than 5 weeks of COGs during the year coupled with C Volatility SKUs represent 37% of sales - from high volatility or rarely ordered SKUs. Planning and inventorymanagement of these SKUs is very important and should be further explored.

Division D 9-Box: Volume & VolatilityABC Data Low Medium High D <5wks Orders Totals

Sales 2,180,710$ 1,705,675$ 1,884,361$ -$ 5,770,746$ Sales% of Total Sales 30% 23% 26% 0% 79% 79%COGS ######### ######### ######### -$ (4,108,697)$ Trans %Transactions 2,536 2,196 2,936 - 7,668 64%$ / Transaction 860$ 777$ 642$ #DIV/0! 753$ SKU %SKUs 66 162 142 - 370 33%$ / SKU 33,041$ 10,529$ 13,270$ #DIV/0! 15,597$ % TOT GMGross Margin 643,714$ 473,255$ 545,080$ -$ 1,662,049$ 77%GM% 30% 28% 29% #DIV/0! 29% AVG INV / SKUGM / Transaction 254$ 216$ 186$ #DIV/0! 217$ $3,360GM / SKU 9,753$ 2,921$ 3,839$ #DIV/0! 4,492$ Turn and Earn (GM) 145 89 71 #DIV/0! 95 Inventory $ 312,730$ 382,598$ 548,045$ -$ 1,243,373$ TURNSDays of Inventory (45) 74 113 149 #DIV/0! 110 3.3Total Sales 316,053$ 292,725$ 324,486$ 139,759$ 1,073,023$ Sales% of Sales 4% 4% 4% 2% 15% 15%COGS (224,056)$ (174,181)$ (229,638)$ (102,518)$ (730,393)$ % TRANSTransactions 806 1,106 1,026 50 2,988 25%

$ / Transaction 392$ 265$ 316$ 2,795$ 359$ % SKUsSKUs 60 112 104 26 302 27%$ / SKU 5,268$ 2,614$ 3,120$ 5,375$ 3,553$ % TOT GMGross Margin 91,997$ 118,544$ 94,848$ 37,240$ 342,629$ 16%GM% 29% 40% 29% 27% 32% AVG INV / SKUGM / Transaction 114$ 107$ 92$ 745$ 115$ $1,135GM / SKU 1,533$ 1,058$ 912$ 1,432$ 1,135$ Turn and Earn (GM) 72 81 51 84 68 Inventory $ 90,940$ 87,027$ 132,325$ 32,415$ 342,708$ TURNSDays of Inventory (90) 148 182 210 115 171 2.1Total Sales 61,877$ 53,785$ 44,828$ 336,535$ 497,025$ Sales %% of Sales 1% 1% 1% 5% 7% 7%COGS (45,028)$ (34,390)$ (31,391)$ (234,858)$ (345,667)$ % TRANSTransactions 232 398 176 520 1,326 11%$ / Transaction 267$ 135.14$ 254.70$ 647.18$ 374.83$ % SKUsSKUs 46 58 52 280 436 39%$ / SKU 1,345$ 927$ 862$ 1,202$ 1,140$ % TOT GMGross Margin 16,849$ 19,395$ 13,437$ 101,676$ 151,358$ 7%GM% 27% 36% 30% 30% 30% AVG INV / SKUGM / Transaction 73$ 49$ 76$ 196$ 114$ $587GM / SKU 366$ 334$ 258$ 363$ 347$ Turn and Earn (GM) 17 81 28 53 41 Inventory $ 73,280$ 15,309$ 33,481$ 133,930$ 255,999$ TURNSDays of Inventory (180) 594 162 389 208 270 1.4Total Sales 2,558,641$ 2,052,185$ 2,253,674$ 476,293$ 7,340,793$ % of Sales 35% 28% 31% 6% 100%COGS ######### ######### ######### (337,376)$ (5,184,757)$ Transactions 3,574 3,700 4,138 570 11,982$ / Transaction 716$ 555$ 545$ 836$ 613$ SKUs 172 332 298 306 1,108 $ / SKU 14,876$ 6,181$ 7,563$ 1,557$ 6,625$ Gross Margin 752,560$ 611,194$ 653,365$ 138,917$ 2,156,036$ GM% 29% 30% 29% 29% 29%GM / Transaction 211$ 165$ 158$ 244$ 180$ GM / SKU 4,375$ 1,841$ 2,193$ 454$ 1,946$ Turn and Earn (GM) 111 88 65 59 83 TOTAL INVInventory $ 476,949$ 484,934$ 713,850$ 166,345$ 1,842,080$ $2,634,169



VOLATILITY

A (Top 80% of COGS)



Division D 9-Box: Volume & Customer

Notes:Margins look good for A and B Volume Segments. C volume margins should be further explored as there appears to be some opportunity to improve margins on lower volume SKUs and smaller customers.

All segments have too much inventory and this is reflected in poor T/E ratios.See V&V 9-Box for possible scenarios to improve.

70% of Total Sales come from the 586 Large Customers (A) - definitely an opportunity to create unique program offerings to these customers.Sales per transaction from Large customers are 1.6x higher vs MED (B) Customers and 3x more sales per transaction versus Small (C) Customers

ABC Data Large Medium Small TotalsTotal Sales 4,214,600$ 1,098,569$ 457,577$ 5,770,746$ % of Sales 57% 15% 6% 79% v 80%COGS (3,071,367)$ (737,808)$ (299,523)$ (4,108,697)$ 79%# of Customers 284 252 346 882 Transactions 4,282 2,010 1,376 7,668 Sales / Transaction 984$ 547$ 333$ 753$ Gross Margin 1,143,233$ 360,762$ 158,054$ 1,662,049$ GM% 27% 33% 35% 29%GM / Transaction 267$ 179$ 115$ 217$ Turn and Earn (GM) 95 Inventory $ 1,243,373$ TURNSDays of Inventory 110 3.3Total Sales 688,278$ 288,142$ 96,603$ 1,073,023$ % of Sales 9% 4% 1% 15%COGS (473,802)$ (195,171)$ (61,420)$ (730,393)$ # of Customers 284 252 346 882 Transactions 1,548 816 624 2,988 Sales / Transaction 445$ 353$ 155$ 359$ Gross Margin 214,476$ 92,970$ 35,183$ 342,629$ GM% 31% 32% 36% 32%GM / Transaction 139$ 114$ 56$ 115$ Turn and Earn (GM) 68 Inventory $ 342,708$ TURNSDays of Inventory 171 2.1Total Sales 256,888$ 208,266$ 31,871$ 497,025$ % of Sales 3% 3% 0% 7%COGS (181,329)$ (142,671)$ (21,667)$ (345,667)$ # of Customers 284 252 346 882 Transactions 720 414 192 1,326 Sales / Transaction 357$ 503$ 166$ 375$ Gross Margin 75,559$ 65,595$ 10,204$ 151,358$ GM% 29% 31% 32% 30%GM / Transaction 105$ 158$ 53$ 114$ Turn and Earn (GM) 41 Inventory $ 255,999$ TURNSDays of Inventory 270 1.4Total Sales 5,159,766$ 1,594,977$ 586,051$ 7,340,793$ % of Sales 70% 22% 8% 100%COGS (3,726,497)$ (1,075,650)$ (382,610)$ (5,184,757)$ # of Customers 284 252 346 882 Transactions 6,550 3,240 2,192 11,982 Sales / Transaction 788$ 492$ 267$ 613$ Gross Margin 1,433,268$ 519,327$ 203,440$ 2,156,036$ GM% 28% 33% 35% 29%GM / Transaction 219$ 160$ 93$ 180$ Turn and Earn (GM) 58 TOTAL INVInventory $ $1,842,080 2,634,169$


CUSTOMER

A (Top 80% of COGS)

$1,243,373


$342,708


$255,999


33

Division D 9-Box: Inventory Target Calculation Summary


A 74 113 149 A 312,730$ 382,598$ 548,045$ B 148 182 210 B 90,940$ 87,027$ 132,325$ C 594 162 389 C 73,280$ 15,309$ 33,481$

1,675,734$


671,146$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 44 68 89 A 186,401$ 230,656$ 327,889$ B 88 107 120 B 54,109$ 51,237$ 75,702$ C 474 22 209 C 58,476$ 2,118$ 18,000$

1,004,588$


Current State

Proposed State

Net Change

34

Division D 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 30% 28% 29% A 2,180,710$ 1,705,675$ 1,884,361$ B 29% 40% 29% B 316,053$ 292,725$ 324,486$ C 27% 36% 30% C 61,877$ 53,785$ 44,828$

6,864,500$



A 30% 31% 32% A 2,180,710$ 1,752,967$ 1,933,204$ B 31% 40% 41% B 320,511$ 292,725$ 364,289$ C 41% 42% 43% C 70,398$ 56,980$ 50,666$

7,022,450$



A B C

A 0% 3% 3% A -$ 47,292$ 48,843$ B 1% 0% 12% B 4,458$ -$ 39,803$ C 14% 6% 13% C 8,521$ 3,194$ 5,839$ Increase In Sales

157,950$ 2%

Notes:

Current State

Proposed State

Net Change


Division E 9-Box: Volume & VolatilityNotes:50% of sales come from one segment: AB, high volume and volatility. As with the overall 9-Box - careful planning and inventory management is needed to avoid out-of-stock (oos) events.

A Volume SKUs receive 5x more sales versus B SKUs and 16x more sales than C SKUs.

5 of 9 segments have poor T/E Ratios

Margins look good: improving with lower volume SKUs and increasing Volatility.

Inventory levels are high for both B and C Volume SKUs. See "INV Plan" tab for an opportunity to reduce inventory by $690,342.This opportunity DOES NOT include the $430,274 of inventory for the 986 SKUs without sales in the past year. Data does not factor consumption for RM.

ABC Data Low Medium High D <5wks Orders TotalsSales 1,259,832$ 1,884,916$ 5,197,023$ 52,884$ 8,394,655$ Sales% of Total Sales 12% 18% 50% 1% 80% 80%COGS (847,979)$ (1,337,412)$ (3,456,595)$ (52,509)$ (5,694,495)$ Trans %Transactions 942 2,264 4,180 26 7,412 69%$ / Transaction 1,337$ 833$ 1,243$ 2,034$ 1,133$ SKU %SKUs 64 132 138 2 336 34%$ / SKU 19,685$ 14,280$ 37,660$ 26,442$ 24,984$ % TOT GMGross Margin 411,853$ 547,504$ 1,740,428$ 375$ 2,700,160$ 81%GM% 33% 29% 33% 1% 32% AVG INV / SKUGM / Transaction 437$ 242$ 416$ 14$ 364$ $3,175GM / SKU 6,435$ 4,148$ 12,612$ 187$ 8,036$ Turn and Earn (GM) 122 105 247 #DIV/0! 172 Inventory $ 227,575$ 370,805$ 468,481$ -$ 1,066,860$ TURNSDays of Inventory (45) 98 101 49 #DIV/0! 68 5.3Total Sales 380,984$ 366,318$ 546,057$ 239,880$ 1,533,240$ Sales% of Sales 4% 3% 5% 2.29% 15% 15%COGS (251,422)$ (248,021)$ (401,736)$ (178,089)$ (1,079,267)$ % TRANSTransactions 424 800 882 86 2,192 21%$ / Transaction 899$ 458$ 619$ 2,789$ 699$ % SKUsSKUs 48 114 120 28 310 32%$ / SKU 7,937$ 3,213$ 4,550$ 8,567$ 4,946$ % TOT GMGross Margin 129,563$ 118,298$ 144,321$ 61,792$ 453,973$ 14%GM% 34% 32% 26% 26% 30% AVG INV / SKUGM / Transaction 306$ 148$ 164$ 719$ 207$ $1,604GM / SKU 2,699$ 1,038$ 1,203$ 2,207$ 1,464$ Turn and Earn (GM) 105 54 42 256 64 Inventory $ 81,464$ 147,847$ 250,174$ 17,901$ 497,386$ TURNSDays of Inventory (90) 118 218 227 37 168 2.2Total Sales 37,250$ 66,886$ 104,802$ 329,523$ 538,461$ Sales %% of Sales 0% 1% 1% 3.15% 5% 5%COGS (23,612)$ (42,940)$ (69,837)$ (230,694)$ (367,084)$ % TRANSTransactions 124 242 236 464 1,066 10%$ / Transaction 300$ 276.39$ 444.08$ 710.18$ 505.12$ % SKUsSKUs 26 52 42 218 338 34%$ / SKU 1,433$ 1,286$ 2,495$ 1,512$ 1,593$ % TOT GMGross Margin 13,638$ 23,945$ 34,965$ 98,829$ 171,377$ 5%GM% 37% 36% 33% 30% 32% AVG INV / SKUGM / Transaction 110$ 99$ 148$ 213$ 161$ $1,061GM / SKU 525$ 460$ 832$ 453$ 507$ Turn and Earn (GM) 41 33 18 43 33 Inventory $ 20,881$ 46,059$ 129,871$ 161,781$ 358,593$ TURNSDays of Inventory (180) 323 392 679 256 357 1.0Total Sales 1,678,067$ 2,318,120$ 5,847,882$ 622,288$ 10,466,356$ % of Sales 16% 22% 56% 6% 100%COGS (1,123,013)$ (1,628,373)$ (3,928,168)$ (461,292)$ (7,140,846)$ Transactions 1,490 3,306 5,298 576 10,670$ / Transaction 1,126$ 701$ 1,104$ 1,080$ 981$ SKUs 138 298 300 248 984 $ / SKU 12,160$ 7,779$ 19,493$ 2,509$ 10,637$ Gross Margin 555,054$ 689,747$ 1,919,714$ 160,996$ 3,325,510$ GM% 33% 30% 33% 26% 32%GM / Transaction 373$ 209$ 362$ 280$ 312$ GM / SKU 4,022$ 2,315$ 6,399$ 649$ 3,380$ Turn and Earn (GM) 113 86 152 66 118 TOTAL INVInventory $ 329,921$ 564,711$ 848,526$ 179,682$ 1,922,839$ $2,137,976



VOLATILITY

A (Top 80% of COGS)



Division E 9-Box: Volume & CustomerNotes:Margins are a concern with Small Customers (representing 39% of TOT CUST):

The company is experiencing significantly lower margins on A and C Volume items with small customers relative to their medium and large customers.

Along these same lines:64% of Total Sales are High Volume / Large Customers (150) - AA Segment. These same (A) Large Customers also comprise 11% of the B Volume and 3% of C Volume SKUs.

Bottom line - 70% of customers comprise 20% of sales and the company is receiving lower margins from these customers.

B and C Volume SKUs have too much inventory. See V&V 9-Box for possible scenarios to improve.

A Volume segments have an acceptable T/E Ratio while the B and C volume segments have poor T/E ratios - again, most likely attributable to highinventory levels.

ABC Data Large Medium Small TotalsTotal Sales 6,740,527$ 1,272,526$ 381,603$ 8,394,655$ % of Sales 64% 12% 3.6% 80%COGS (4,553,430)$ (844,364)$ (296,701)$ (5,694,495)$ # of Customers 300 248 352 900 Transactions 4,876 1,490 1,046 7,412 Sales / Transaction 1,382$ 854$ 365$ 1,133$ Gross Margin 2,187,097$ 428,162$ 84,901$ 2,700,160$ GM% 32% 34% 22% 32%GM / Transaction 449$ 287$ 81$ 364$ Turn and Earn (GM) 172 Inventory $ 1,066,860$ TURNSDays of Inventory 68 5.3Total Sales 1,125,474$ 308,760$ 99,006$ 1,533,240$ % of Sales 11% 3% 1% 15%COGS (804,058)$ (215,839)$ (59,370)$ (1,079,267)$ # of Customers 300 248 352 900 Transactions 1,294 492 406 2,192 Sales / Transaction 870$ 628$ 244$ 699$ Gross Margin 321,416$ 92,921$ 39,636$ 453,973$ GM% 29% 30% 40% 30%GM / Transaction 248$ 189$ 98$ 207$ Turn and Earn (GM) 64 Inventory $ 497,386$ TURNSDays of Inventory 168 2.2Total Sales 360,041$ 143,264$ 35,156$ 538,461$ % of Sales 3% 1% 0% 5%COGS (247,856)$ (94,377)$ (24,851)$ (367,084)$ # of Customers 300 248 352 900 Transactions 610 304 152 1,066 Sales / Transaction 590$ 471$ 231$ 505$ Gross Margin 112,185$ 48,887$ 10,305$ 171,377$ GM% 31% 34% 29% 32%GM / Transaction 184$ 161$ 68$ 161$ Turn and Earn (GM) 33 Inventory $ 358,593$ TURNSDays of Inventory 357 1.0Total Sales 8,226,041$ 1,724,550$ 515,765$ 10,466,356$ % of Sales 79% 16% 5% 100%COGS (5,605,343)$ (1,154,580)$ (380,923)$ (7,140,846)$ # of Customers 300 248 352 900 Transactions 6,780 2,286 1,604 10,670 Sales / Transaction 1,213$ 754$ 322$ 981$ Gross Margin 2,620,699$ 569,970$ 134,842$ 3,325,510$ GM% 32% 33% 26% 32%GM / Transaction 387$ 249$ 84$ 312$ Turn and Earn (GM) 106 TOTAL INVInventory $ $1,922,839 2,137,976$


CUSTOMER

A (Top 80% of COGS)

$1,066,860


$497,386


$358,593


37

Division E 9-Box: Inventory Target Calculation Summary


A 98 101 49 A 227,575$ 370,805$ 468,481$ B 118 218 227 B 81,464$ 147,847$ 250,174$ C 323 392 679 C 20,881$ 46,059$ 129,871$

1,743,157$


1,052,815$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 68 56 (11) A 157,878$ 205,918$ (99,727)$ B 58 143 137 B 40,135$ 96,884$ 151,115$ C 203 252 499 C 13,119$ 29,589$ 95,431$

690,342$


Current State

Proposed State

Net Change

38

Division E 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 33% 29% 33% A 1,259,832$ 1,884,916$ 5,197,023$ B 34% 32% 26% B 380,984$ 366,318$ 546,057$ C 37% 36% 30% C 37,250$ 66,886$ 104,802$

9,844,069$



A 33% 34% 35% A 1,259,832$ 1,972,460$ 5,259,498$ B 34% 35% 36% B 379,779$ 376,232$ 601,976$ C 37% 38% 39% C 37,250$ 68,357$ 114,243$

10,069,629$



A B C

A 0% 5% 1% A -$ 87,545$ 62,475$ B 0% 3% 10% B (1,205)$ 9,914$ 55,919$ C 0% 2% 9% C -$ 1,471$ 9,441$ Increase In Sales

225,561$ 2%

Notes:

Current State

Proposed State

Net Change


All Other DCs 9-Box: Volume & Volatility (includes Vendor Direct Ship, Location F, Consignment, Location G and Location H)

Notes:It should be noted that SHIP-DIRECT from Vendors makes up:96% of TOTAL Sales and COGS; 93% of Gross Margin; and 72% of Transactions and Inventory. Given the majority of this 9-Box is related to Direct Ships from vendors, all inventory assessment, T/E and Days of Inventory are somewhat not applicable.

89% of Total Sales are from A Volume SKUs.The AC (High Volume / High Volatility) and AD (High Volume / <5 Wks of Orders) segments represents 60% of Total Sales - a thorough review of the planning and inventory management of the direct ship business is highly recommended.

Margins for this "site" are the lowest in the company. It is highly recommended that further analysis been conducted regarding the Direct Ship Business.

Although inventory from sales was not assessed, it should be noted that there is a significant amount of inventory ($641,058) for 358 SKUs not having any sales in the past year. NOTE: Data does not factor consumption for raw material SKUs.

ABC Data Low Medium High D <5wks Orders TotalsSales 2,729,285$ 1,715,689$ 8,758,979$ 697,316$ 13,901,269$ Sales% of Total Sales 17% 11% 56% 4% 89% 89%COGS (2,379,206)$ (1,194,010)$ (6,976,035)$ (532,895)$ (11,082,147)$ Trans %Transactions 642 694 2,262 42 3,640 80%$ / Transaction 4,251$ 2,472$ 3,872$ 16,603$ 3,819$ SKU %SKUs 52 100 120 12 284 38%$ / SKU 52,486$ 17,157$ 72,991$ 58,110$ 48,948$ % TOT GMGross Margin 350,079$ 521,678$ 1,782,943$ 164,421$ 2,819,122$ 87%GM% 13% 30% 20% 24% 20% AVG INV / SKUGM / Transaction 545$ 752$ 788$ 3,915$ 774$ $526GM / SKU 6,732$ 5,217$ 14,858$ 13,702$ 9,926$ Turn and Earn (GM) 836 927 1,927 #DIV/0! 1,505 Inventory $ 36,514$ 39,152$ 73,695$ -$ 149,361$ TURNSDays of Inventory (45) 6 12 4 #DIV/0! 5 74.2Total Sales 149,490$ 188,790$ 305,514$ 831,291$ 1,475,085$ Sales% of Sales 1% 1% 2% 5% 9% 9%COGS (142,718)$ (125,090)$ (229,769)$ (606,362)$ (1,103,939)$ % TRANSTransactions 90 120 202 118 530 12%$ / Transaction 1,661$ 1,573$ 1,512$ 7,045$ 2,783$ % SKUsSKUs 32 48 58 62 200 27%$ / SKU 4,672$ 3,933$ 5,267$ 13,408$ 7,375$ % TOT GMGross Margin 6,772$ 63,700$ 75,746$ 224,929$ 371,146$ 11%GM% 5% 34% 25% 27% 25% AVG INV / SKUGM / Transaction 75$ 531$ 375$ 1,906$ 700$ $179GM / SKU 212$ 1,327$ 1,306$ 3,628$ 1,856$ Turn and Earn (GM) 38 422 1,185 4,013 776 Inventory $ 16,917$ 9,999$ 4,809$ 4,089$ 35,814$ TURNSDays of Inventory (90) 43 29 8 2 12 30.8Total Sales -$ 10,271$ 21,363$ 275,723$ 307,357$ Sales %% of Sales 0% 0% 0% 2% 2% 2%COGS -$ (7,641)$ (14,324)$ (229,967)$ (251,931)$ % TRANSTransactions - 58 32 304 394 9%$ / Transaction #DIV/0! 177.09$ 667.60$ 906.98$ 780.09$ % SKUsSKUs - 18 22 218 258 35%$ / SKU #DIV/0! 571$ 971$ 1,265$ 1,191$ % TOT GMGross Margin -$ 2,630$ 7,039$ 45,756$ 55,425$ 2%GM% #DIV/0! 26% 33% 17% 18% AVG INV / SKUGM / Transaction #DIV/0! 45$ 220$ 151$ 141$ $260GM / SKU #DIV/0! 146$ 320$ 210$ 215$ Turn and Earn (GM) #DIV/0! 65 #DIV/0! 60 68 Inventory $ -$ 2,992$ -$ 64,010$ 67,002$ TURNSDays of Inventory (180) #DIV/0! 143 #DIV/0! 102 97 3.8Total Sales 2,878,775$ 1,914,750$ 9,085,856$ 1,804,329$ 15,683,710$ % of Sales 18% 12% 58% 12% 100%COGS (2,521,924)$ (1,326,741)$ (7,220,128)$ (1,369,224)$ (12,438,017)$ Transactions 732 872 2,496 464 4,564$ / Transaction 3,933$ 2,196$ 3,640$ 3,889$ 3,436$ SKUs 84 166 200 292 742 $ / SKU 34,271$ 11,535$ 45,429$ 6,179$ 21,137$ Gross Margin 356,851$ 588,008$ 1,865,728$ 435,106$ 3,245,693$ GM% 12% 31% 21% 24% 21%GM / Transaction 488$ 674$ 747$ 938$ 711$ GM / SKU 4,248$ 3,542$ 9,329$ 1,490$ 4,374$ Turn and Earn (GM) 585 781 1,889 485 1,021 TOTAL INVInventory $ 53,432$ 52,143$ 78,503$ 68,099$ 252,177$ 893,235$



VOLATILITY

A (Top 80% of COGS)



All Other DCs 9-Box: Volume & CustomerNotes:It should be noted that SHIP-DIRECT from Vendors makes up: 96% of TOTAL Sales and COGS; 93% of Gross Margin; and 72% of Transactions and Inventory. Given the majority of this 9-Box is related to Direct Ships from vendors, all inventory assessment, T/E and Days of Inventory are somewhat not applicable.

Margins for this "site" are the lowest in the company. It is highly recommended that further analysis been conducted regarding the Direct Ship Business.92% of Total Sales come from 374 "A" or Large Customers, with a low margin (20%) relative to other "Sites.“

REF "All Others Pricing Plan" for one option to explore in order to increase margin.

(includes Vendor Direct Ship, Location F, Consignment, Location G and Location H)

ABC Data Large Medium Small TotalsTotal Sales 12,962,073$ 831,831$ 107,364$ 13,901,269$ % of Sales 83% 5% 1% 89% v 80%COGS (10,378,603)$ (610,543)$ (93,000)$ (11,082,147)$ 89%# of Customers 374 182 90 646 Transactions 2,862 634 144 3,640 Sales / Transaction 4,529$ 1,312$ 746$ 3,819$ Gross Margin 2,583,470$ 221,288$ 14,364$ 2,819,122$ GM% 20% 27% 13% 20%GM / Transaction 903$ 349$ 100$ 774$ Turn and Earn (GM) 1,505 Inventory $ 149,361$ TURNSDays of Inventory 5 74.2Total Sales 1,288,391$ 178,888$ 7,806$ 1,475,085$ % of Sales 8% 1% 0% 9%COGS (963,826)$ (129,449)$ (10,663)$ (1,103,939)$ # of Customers 374 182 90 646 Transactions 410 96 24 530 Sales / Transaction 3,142$ 1,863$ 325$ 2,783$ Gross Margin 324,565$ 49,439$ (2,857)$ 371,146$ GM% 25% 28% -37% 25%GM / Transaction 792$ 515$ (119)$ 700$ Turn and Earn (GM) 776 Inventory $ 35,814$ TURNSDays of Inventory 12 30.8Total Sales 202,501$ 75,766$ 29,090$ 307,357$ % of Sales 1% 0% 0% 2%COGS (158,501)$ (71,795)$ (21,635)$ (251,931)$ # of Customers 374 182 90 646 Transactions 214 156 24 394 Sales / Transaction 946$ 486$ 1,212$ 780$ Gross Margin 44,000$ 3,970$ 7,455$ 55,425$ GM% 22% 5% 26% 18%GM / Transaction 206$ 25$ 311$ 141$ Turn and Earn (GM) 68 Inventory $ 67,002$ TURNSDays of Inventory 97 3.8Total Sales 14,452,966$ 1,086,484$ 144,260$ 15,683,710$ % of Sales 92% 7% 1% 100%COGS (11,500,931)$ (811,788)$ (125,298)$ (12,438,017)$ # of Customers 290 318 382 992 Transactions 3,486 886 192 4,564 Sales / Transaction 4,146$ 1,226$ 751$ 3,436$ Gross Margin 2,952,035$ 274,697$ 18,962$ 3,245,693$ GM% 20% 25% 13% 21%GM / Transaction 847$ 310$ 99$ 711$ Turn and Earn (GM) 288 TOTAL INVInventory $ $252,177 893,235$


CUSTOMER

A (Top 80% of COGS)

$149,361


$35,814


$67,002

$252,177Inventory $$ Part not in Sales History

41

All Other DCs 9-Box: Inventory Target Calculation Summary (includes Vendor Direct Ship, Location F,

Consignment, Location G and Location H)Not Applicable for this "BU"


A 6 12 4 A 36,514$ 39,152$ 73,695$ B 43 29 8 B 16,917$ 9,999$ 4,809$ C #DIV/0! 143 #DIV/0! C -$ 2,992$ -$

184,078$

Target Days A B C Target Inv A B CA 30 45 60 A 195,551$ 147,207$ 1,146,746$ B 60 75 90 B 23,461$ 25,703$ 56,655$ C 120 140 180 C 2,931$

1,598,253$

Days Reduced A B C

Resulting Inv

ReductionA B C

A (24) (33) (56) A (159,037)$ (108,055)$ (1,073,051)$ B (17) (46) (82) B (6,543)$ (15,705)$ (51,846)$ C 3 C 61$

(1,414,175)$


Current State

Proposed State

Net Change

42

All Other DCs 9-Box: Target Pricing Calculation Summary(includes Vendor Direct Ship, Location F,

Consignment, Location G and Location H)

Current Margin

A B C Current Sales

A B C

A 13% 30% 20% A 2,729,285$ 1,715,689$ 8,758,979$ B 5% 34% 25% B 149,490$ 188,790$ 305,514$ C #DIV/0! 26% 33% C -$ 10,271$ 21,363$

13,879,381$



A 28% 30% 31% A 3,143,406$ 1,708,717$ 9,691,319$ B 29% 34% 35% B 186,070$ 188,790$ 335,908$ C #DIV/0! 35% 36% C - 11,236$ 22,015$

15,287,460$



A B C

A 15% 0% 11% A 414,121$ (6,972)$ 932,340$ B 24% 0% 10% B 36,580$ -$ 30,394$ C #DIV/0! 9% 3% C - 965$ 652$ Increase In Sales

1,408,079$ 10%

Notes:

Current State

Proposed State

Net Change


Product Family 9-Boxes

Product Group U 9-Box: Volume & VolatilityNotes:All Segments with the exception of AC and AD have low or poor T&E Ratios which is most likely attributable to high inventory levels.

Margins are chaotic and seem to lack policy or standardization. See “U Pricing Plan“ tab for recommendation as to how to increase sales by up to: $2,909,760

There is tremendous risk with this product line (U) having over 58% of Total salesin High (C) Volatility (43%) & D-Volt SKUs (15%) - those only ordered 4 or less x / year.Careful supply and demand planning should occur to reduce out-of-stock situations while avoiding unnecessary built up after the FALL Peak Season.

See "INV Plan" tab for an opportunity to reduce inventory by $3,317,896.This opportunity DOES NOT include the $4,194,746 of inventory w/o sales in past year nor does it include the D - Volt inventory of $1,132,892 below.

ABC Data Low Medium High D <5wks Orders TotalsSales 3,537,509$ 13,845,533$ 19,003,336$ 2,973,146$ 39,359,524$ Sales% of Total Sales 8% 30% 41% 6% 85% 85%COGS (2,226,608)$ (9,739,650)$ ########## (2,091,727)$ (27,261,834)$ Trans %Transactions 2,438 10,818 14,648 80 27,984 82%$ / Transaction 1,451$ 1,280$ 1,297$ 37,164$ 1,407$ SKU %SKUs 28 102 100 24 254 25%$ / SKU 126,340$ 135,741$ 190,033$ 123,881$ 154,959$ % TOT GMGross Margin 1,310,901$ 4,105,883$ 5,799,487$ 881,419$ 12,097,689$ 84%GM% 37% 30% 31% 30% 31% AVG INV / SKUGM / Transaction 538$ 380$ 396$ 11,018$ 432$ $22,118GM / SKU 46,818$ 40,254$ 57,995$ 36,726$ 47,629$ Turn and Earn 112 107 185 30,174 149 Inventory $ 737,900$ 2,701,293$ 2,176,646$ 2,055$ 5,617,894$ TURNSDays of Inventory 121 101 60 0 75 4.9Total Sales 451,905$ 1,474,895$ 1,100,421$ 2,695,775$ 5,722,995$ Sales% of Sales 1% 3% 2% 6% 12% 12%COGS (295,666)$ (903,721)$ (757,328)$ (1,907,745)$ (3,864,459)$ % TRANSTransactions 470 2,208 1,570 484 4,732 14%$ / Transaction 962$ 668$ 701$ 5,570$ 1,209$ % SKUsSKUs 26 68 54 164 312 31%$ / SKU 17,381$ 21,690$ 20,378$ 16,438$ 18,343$ % TOT GMGross Margin 156,239$ 571,174$ 343,093$ 788,030$ 1,858,536$ 13%GM% 35% 39% 31% 29% 32% AVG INV / SKUGM / Transaction 332$ 259$ 219$ 1,628$ 393$ $5,882GM / SKU 6,009$ 8,400$ 6,354$ 4,805$ 5,957$ Turn and Earn 60 57 44 108 68 Inventory $ 171,403$ 615,308$ 531,391$ 517,105$ 1,835,207$ TURNSDays of Inventory 212 249 256 99 173 2.1Total Sales 100,210$ 111,708$ 69,391$ 1,143,106$ 1,424,414$ Sales %% of Sales 0% 0% 0% 2% 3% 3%COGS (60,349)$ (60,382)$ (41,229)$ (779,241)$ (941,202)$ % TRANSTransactions 256 390 178 732 1,556 5%$ / Transaction 391$ 286.43$ 389.84$ 1,561.62$ 915.43$ % SKUsSKUs 20 26 16 392 454 45%$ / SKU 5,011$ 4,296$ 4,337$ 2,916$ 3,137$ % TOT GMGross Margin 39,861$ 51,325$ 28,161$ 363,865$ 483,212$ 3%GM% 40% 46% 41% 32% 34% AVG INV / SKUGM / Transaction 156$ 132$ 158$ 497$ 311$ $1,665GM / SKU 1,993$ 1,974$ 1,760$ 928$ 1,064$ Turn and Earn 56 55 34 40 42 Inventory $ 42,636$ 50,290$ 49,180$ 613,733$ 755,838$ TURNSDays of Inventory 258 304 435 287 293 1.2Total Sales 4,089,625$ 15,432,135$ 20,173,148$ 6,812,026$ 46,506,934$ % of Sales 9% 33% 43% 15% 100%COGS (2,582,623)$ (10,703,753)$ ########## (4,778,713)$ (32,067,496)$ Transactions 3,164 13,416 16,396 1,296 34,272$ / Transaction 1,293$ 1,150$ 1,230$ 5,256$ 1,357$ SKUs 74 196 170 580 1,020 $ / SKU 55,265$ 78,735$ 118,666$ 11,745$ 45,595$ Gross Margin 1,507,002$ 4,728,382$ 6,170,741$ 2,033,313$ 14,439,438$ GM% 37% 31% 31% 30% 31%GM / Transaction 476$ 352$ 376$ 1,569$ 421$ GM / SKU 20,365$ 24,124$ 36,298$ 3,506$ 14,156$ Turn and Earn (GM) 100 97 155 126 121 TOTAL INVInventory $ 951,939$ 3,366,891$ 2,757,217$ 1,132,893$ 8,208,940$ 12,403,686$

4,194,746$ 420Days of Inventory 135 115 72 87 93 INV SKUs w/o COGS


VOLATILITY

A (Top 80% of COGS)



Product Group U 9-Box: Volume & Customer

Notes:Margins appear chaotic and don't seem to illustrate a policy recognizing higher volume and / or larger customers. REF V&V 9-Box for opportunities to increase sales.

B and C Volume SKUs have too much inventory. See V&V 9-Box for possible scenarios to reduce inventory.

596 of 2,814 (21%) of Large Customers (A) make-up 84% of Sales – Nice opportunity to create unique program offerings to these customers.AA: High Volume SKUs / Large Customers make up 71% of Sales.

ABC Data Large Medium Small TotalsTotal Sales 33,155,007$ 5,251,188$ 953,328$ 39,359,524$ % of Sales 71% 11% 2% 85% v 80%COGS (23,089,735)$ (3,501,903)$ (670,196)$ (27,261,834)$ # of Customers 294 345 366 1,005 Transactions 20,280 5,746 1,958 27,984 Sales / Transaction 1,635$ 914$ 487$ 1,407$ Gross Margin 10,065,272$ 1,749,285$ 283,132$ 12,097,689$ GM% 30% 33% 30% 31%GM / Transaction 496$ 304$ 145$ 432$ Turn and Earn 149 Inventory $ 5,617,894$ TURNSDays of Inventory 75 4.9Total Sales 4,991,787$ 628,890$ 102,319$ 5,722,995$ % of Sales 11% 1% 0% 12%COGS (3,401,485)$ (399,730)$ (62,968)$ (3,864,459)$ # of Customers 243 183 114 541 Transactions 3,478 934 318 4,732 Sales / Transaction 1,435$ 673$ 322$ 1,209$ Gross Margin 1,590,302$ 229,160$ 39,351$ 1,858,536$ GM% 32% 36% 38% 32%GM / Transaction 457$ 245$ 124$ 393$ Turn and Earn 68 Inventory $ 1,835,207$ TURNSDays of Inventory 173 2.1Total Sales 1,106,881$ 264,222$ 53,311$ 1,424,414$ % of Sales 2% 1% 0% 3%COGS (729,335)$ (177,017)$ (34,650)$ (941,202)$ # of Customers 163 81 47 292 Transactions 1,120 332 102 1,556 Sales / Transaction 988$ 796$ 523$ 915$ Gross Margin 377,546$ 87,205$ 18,661$ 483,212$ GM% 34% 33% 35% 34%GM / Transaction 337$ 263$ 183$ 311$ Turn and Earn 42 Inventory $ 755,838$ TURNSDays of Inventory 293 1.2Total Sales 39,253,675$ 6,144,300$ 1,108,958$ 46,506,934$ % of Sales 84% 13% 2% 100%COGS (27,220,556)$ (4,078,650)$ (767,814)$ (32,067,496)$ # of Customers 596 724 818 2,140 Transactions 24,878 7,012 2,378 34,272 Sales / Transaction 1,578$ 876$ 466$ 1,357$ Gross Margin 12,033,120$ 2,065,650$ 341,144$ 14,439,438$ GM% 31% 34% 31% 31%GM / Transaction 484$ 295$ 143$ 421$ Turn and Earn (GM) 80 TOTAL INVInventory $ $8,208,940 12,403,686$

4,194,746$ 420Days of Inventory 141 INV SKUs w/o COGS


$755,838


CUSTOMER

A (Top 80% of COGS)

$5,617,894


$1,835,207

46

Product Group U 9-Box: Inventory Target Calculation Summary


A 121 101 60 A 737,900$ 2,701,293$ 2,176,646$ B 212 249 256 B 171,403$ 615,308$ 531,391$ C 258 304 435 C 42,636$ 50,290$ 49,180$

7,076,047$

Target Days A B C Target Inv A B CA 30 45 60 A 183,009$ 1,200,779$ 2,170,496$ B 60 75 90 B 48,603$ 185,696$ 186,738$ C 120 140 180 C 19,841$ 23,160$ 20,332$

4,038,654$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 91 56 0 A 554,891$ 1,500,515$ 6,150$ B 152 174 166 B 122,800$ 429,612$ 344,653$ C 138 164 255 C 22,795$ 27,130$ 28,847$

3,037,393$


Current State

Proposed State

Net Change

47

Product Group U 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 37% 30% 31% A 3,537,509$ 13,845,533$ 19,003,336$ B 35% 39% 31% B 451,905$ 1,474,895$ 1,100,421$ C 40% 46% 41% C 100,210$ 111,708$ 69,391$

39,694,907$



A 37% 38% 39% A 3,537,509$ 15,008,869$ 20,626,017$ B 38% 39% 40% B 467,648$ 1,479,773$ 1,198,126$ C 41% 46% 47% C 101,213$ 111,708$ 73,806$

42,604,667$



A B C

A 0% 8% 9% A -$ 1,163,336$ 1,622,680$ B 3% 0% 9% B 15,743$ 4,878$ 97,705$ C 1% 0% 6% C 1,002$ -$ 4,415$ Increase In Sales

2,909,760$ 7%

Notes:

Current State

Proposed State

Net Change


Product Group V 9-Box: Volume & Volatility

Notes:All Segments with the exception of AD and BD have low or poor T&E Ratios.

Margins are chaotic and seem to lack policy or standardization. See “V Pricing Plan“ tab for recommendation as to how to increase sales by 2%.

There is tremendous risk with this product line (V) having over 70% of sales in High Volatility (59%) and with D-Volt SKUs - those only ordered 4 or less x / year.Careful supply and demand planning should occur to reduce out-of-stock situations while avoiding unnecessary built up after the very high volume FALL Season for COVER.

See "INV Plan" tab for an opportunity to reduce inventory by $2,292,622.This opportunity DOES NOT include the $238,432 of inventory w/o sales in past year nor does it include any of the $499,926 in D-Volatility inventory.

A Items - 9x more sales versus B items; A Items 76x more sales v C Items

ABC Data Low Medium High D <5wks Orders TotalsSales 645,013$ 3,488,870$ 9,189,606$ 902,939$ 14,226,428$ Sales% of Total Sales 4% 22% 57% 6% 88% 88%COGS (456,904)$ (2,266,975)$ (6,108,153)$ (577,362)$ (9,409,394)$ Trans %Transactions 168 2,496 8,992 44 11,700 86%$ / Transaction 3,839$ 1,398$ 1,022$ 20,521$ 1,216$ SKU %SKUs 8 24 34 14 80 31%$ / SKU 80,627$ 145,370$ 270,283$ 64,496$ 177,830$ % TOT GMGross Margin 188,109$ 1,221,895$ 3,081,453$ 325,577$ 4,817,035$ 88%GM% 29% 35% 34% 36% 34% AVG INV / SKUGM / Transaction 1,120$ 490$ 343$ 7,399$ 412$ $41,340GM / SKU 23,514$ 50,912$ 90,631$ 23,255$ 60,213$ Turn and Earn 115 109 89 124 96 Inventory $ 115,767$ 730,994$ 2,293,194$ 167,229$ 3,307,184$ TURNSDays of Inventory 92 118 137 106 128 2.8Total Sales 341,900$ 302,343$ 299,390$ 715,199$ 1,658,833$ Sales% of Sales 2% 2% 2% 4% 10% 10%COGS (221,702)$ (194,229)$ (201,412)$ (459,822)$ (1,077,165)$ % TRANSTransactions 362 454 688 114 1,618 12%$ / Transaction 944$ 666$ 435$ 6,274$ 1,025$ % SKUsSKUs 18 14 14 38 84 32%$ / SKU 18,994$ 21,596$ 21,385$ 18,821$ 19,748$ % TOT GMGross Margin 120,198$ 108,115$ 97,979$ 255,377$ 581,668$ 11%GM% 35% 36% 33% 36% 35% AVG INV / SKUGM / Transaction 332$ 238$ 142$ 2,240$ 359$ $5,554GM / SKU 6,678$ 7,722$ 6,998$ 6,720$ 6,925$ Turn and Earn 38 56 51 1,628 81 Inventory $ 202,834$ 123,979$ 129,638$ 10,083$ 466,534$ TURNSDays of Inventory 334 233 235 8 158 2.3Total Sales 17,971$ 12,238$ 14,311$ 178,871$ 223,391$ Sales %% of Sales 0% 0% 0% 1% 1% 1%COGS (15,131)$ (8,987)$ (10,079)$ (131,389)$ (165,586)$ % TRANSTransactions 40 48 42 220 350 3%$ / Transaction 449$ 254.95$ 340.75$ 813$ 638$ % SKUsSKUs 4 4 4 84 96 37%$ / SKU 4,493$ 3,059$ 3,578$ 2,129$ 2,327$ % TOT GMGross Margin 2,840$ 3,251$ 4,232$ 47,482$ 57,805$ 1%GM% 16% 27% 30% 27% 26% AVG INV / SKUGM / Transaction 71$ 68$ 101$ 216$ 165$ $4,785GM / SKU 710$ 813$ 1,058$ 565$ 602$ Turn and Earn 21 2 6 12 9 Inventory $ 11,516$ 97,821$ 47,413$ 302,614$ 459,364$ TURNSDays of Inventory 278 3,973 1,717 841 1,013 0.4Total Sales 1,004,884$ 3,803,452$ 9,503,307$ 1,797,009$ 16,108,652$ % of Sales 6% 24% 59% 11% 100%COGS (693,737)$ (2,470,191)$ (6,319,643)$ (1,168,574)$ (10,652,145)$ Transactions 570 2,998 9,722 378 13,668$ / Transaction 1,763$ 1,269$ 978$ 4,754$ 1,179$ SKUs 30 42 52 136 260 $ / SKU 33,496$ 90,558$ 182,756$ 13,213$ 61,956$ Gross Margin 311,147$ 1,333,260$ 3,183,664$ 628,436$ 5,456,507$ GM% 31% 35% 34% 35% 34%GM / Transaction 546$ 445$ 327$ 1,663$ 399$ GM / SKU 10,372$ 31,744$ 61,224$ 4,621$ 20,987$ Turn and Earn (GM) 65 91 86 85 85 TOTAL INVInventory $ 330,118$ 952,793$ 2,470,245$ 479,926$ 4,233,082$ 4,471,604$



VOLATILITY

A (Top 80% of COGS)



Product Group V 9-Box: Volume & CustomerNotes:All ABC Volume SKUs have poor T/E Ratios.

Margins appear chaotic and don't seem to illustrate a policy recognizing higher volume and / or larger customers. REF V&V 9-Box for opportunities to increase sales.

B and C Volume SKUs have too much inventory. See V&V 9-Box for possible scenarios to reduce inventory.

506 (A) Large Customers of 1442 Total PG V Customers make-up 85% of Sales - Nice opportunity to create unique program offerings to these customers.AA: High Volume SKUs / Large Customers make up 75% of Sales.

Small Customers (434) make up only 2% of sales yet comprise 7% of total transactions - $204 in GM per transaction.

ABC Data Large Medium Small TotalsTotal Sales 12,018,518$ 1,954,091$ 253,818$ 14,226,428$ % of Sales 75% 12% 2% 88% v 80%COGS (7,934,578)$ (1,306,364)$ (168,451)$ (9,409,394)$ 88%# of Customers 242 237 189 668 Transactions 8,700 2,188 812 11,700 Sales / Transaction 1,381$ 893$ 313$ 1,216$ Gross Margin 4,083,940$ 647,728$ 85,367$ 4,817,035$ GM% 34% 33% 34% 34%GM / Transaction 469$ 296$ 105$ 412$ Turn and Earn 96 Inventory $ 3,307,184$ TURNSDays of Inventory 128 2.8Total Sales 1,476,499$ 138,663$ 43,671$ 1,658,833$ % of Sales 9% 1% 0% 10%COGS (949,906)$ (97,582)$ (29,676)$ (1,077,165)$ # of Customers 140 74 54 268 Transactions 1,214 244 160 1,618 Sales / Transaction 1,216$ 568$ 273$ 1,025$ Gross Margin 526,593$ 41,081$ 13,994$ 581,668$ GM% 36% 30% 32% 35%GM / Transaction 434$ 168$ 87$ 359$ Turn and Earn 81 Inventory $ 466,534$ TURNSDays of Inventory 158 2.3Total Sales 163,660$ 52,417$ 7,314$ 223,391$ % of Sales 1% 0% 0% 1%COGS (120,849)$ (39,688)$ (5,049)$ (165,586)$ # of Customers 48 25 7 80 Transactions 232 96 22 350 Sales / Transaction 705$ 546$ 332$ 638$ Gross Margin 42,811$ 12,729$ 2,265$ 57,805$ GM% 26% 24% 31% 26%GM / Transaction 185$ 133$ 103$ 165$ Turn and Earn 9 Inventory $ 459,364$ TURNSDays of Inventory 1,013 0.4Total Sales 13,658,677$ 2,145,172$ 304,803$ 16,108,652$ % of Sales 85% 13% 2% 100%COGS (9,005,333)$ (1,443,635)$ (203,177)$ (10,652,145)$ # of Customers 506 502 434 1,442 Transactions 10,146 2,528 994 13,668 Sales / Transaction 1,346$ 849$ 307$ 1,179$ Gross Margin 4,653,344$ 701,537$ 101,626$ 5,456,507$ GM% 34% 33% 33% 34%GM / Transaction 459$ 278$ 102$ 399$ Turn and Earn (GM) 81 TOTAL INVInventory $ $4,233,082 4,471,604$


CUSTOMER

A (Top 80% of COGS)

$3,307,184


$466,534


$459,364


50

Product Group V 9-Box: Inventory Target Calculation Summary


A 92 118 137 A 115,767$ 730,994$ 2,293,194$ B 334 233 235 B 202,834$ 123,979$ 129,638$ C 278 3,973 1,717 C 11,516$ 97,821$ 47,413$

3,753,156$

Target Days A B C Target Inv A B CA 30 45 60 A 37,554$ 279,490$ 1,004,080$ B 60 75 90 B 36,444$ 39,910$ 49,663$ C 120 140 180 C 4,975$ 3,447$ 4,970$

1,460,533$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 62 73 77 A 78,214$ 451,504$ 1,289,114$ B 274 158 145 B 166,390$ 84,069$ 79,975$ C 158 3,833 1,537 C 6,541$ 94,374$ 42,443$

2,292,623$


Current State

Proposed State

Net Change

51

Product Group V 9-Box: Target Pricing Calculation Summary

Current Margin

A B C D Current Sales

A B C D

A 29% 35% 34% 36% A 645,013$ 3,488,870$ 9,189,606$ 902,939$ B 35% 36% 33% 36% B 341,900$ 302,343$ 299,390$ 715,199$ C 16% 27% 30% 27% C 17,971$ 12,238$ 14,311$ 178,871$

16,108,652$

Targeted Margin

A B C D Resultant Sales

A B C D

A 29% 35% 36% 37% A 645,013$ 3,488,870$ 9,418,492$ 911,654$ B 35% 36% 37% 38% B 341,900$ 303,543$ 312,653$ 732,712$ C 36% 37% 38% 39% C 21,628$ 13,534$ 15,540$ 201,428$

16,406,968$


A B C D Increased Sales

A B C D

A 0% 0% 2% 1% A -$ -$ 228,886$ 8,715$ B 0% 0% 4% 2% B -$ 1,200$ 13,262$ 17,513$ C 20% 11% 9% 13% C 3,658$ 1,297$ 1,228$ 22,557$ Increase In Sales

298,316$ 2%

Notes:

Current State

Proposed State

Net Change


Product Group W 9-Box: Volume & VolatilityNotes:All Segments with the exception of AA (+D-Volt: AD, BD) have low or poor T&E Ratios.

Margins are chaotic and seem to lack policy or standardization. See “W Pricing Plan“ tab for recommendation as to how to increase sales by 2%.

Unlike other Product Groups, W does not have as high % sales from High Volatility (17%) and D-Volt (15%) SKUs - those only ordered 4 or less x / year.Although not as high, with 32% of sales coming from these two segments there's still a need for careful supply and demand planning should occur to reduce out-of-stock situations while avoiding unnecessary built up after the FALL Season for W.

See "INV Plan" tab for an opportunity to reduce inventory by $5,127,436.This opportunity DOES NOT include the $466,920 of inventory w/o sales in past year nor does it include any of the $621,580 in D-Volatility inventory.

A Items - 6.6x more sales versus B items; A Items 46.6x more sales v C Items

ABC Data Low Medium High D <5wks Orders TotalsSales 6,873,741$ 5,577,379$ 2,927,775$ 514,682$ 15,893,576$ Sales% of Total Sales 30% 24% 13% 2% 70% 70%COGS (4,966,776)$ (3,937,403)$ (2,231,057)$ (402,442)$ (11,537,679)$ Trans %Transactions 8,394 7,614 2,854 54 18,916 66%$ / Transaction 819$ 733$ 1,026$ 9,531$ 840$ SKU %SKUs 60 52 30 12 154 11%$ / SKU 114,562$ 107,257$ 97,593$ 42,890$ 103,205$ % TOT GMGross Margin 1,906,964$ 1,639,975$ 696,719$ 112,239$ 4,355,897$ 68%GM% 28% 29% 24% 22% 27% AVG INV / SKUGM / Transaction 227$ 215$ 244$ 2,079$ 230$ $23,232GM / SKU 31,783$ 31,538$ 23,224$ 9,353$ 28,285$ Turn and Earn 135 98 39 77,066 88 Inventory $ 1,019,577$ 1,184,285$ 1,373,810$ 114$ 3,577,786$ TURNSDays of Inventory 75 110 225 0 113 3.2Total Sales 1,803,296$ 929,957$ 825,432$ 1,283,341$ 4,842,025$ Sales% of Sales 8% 4% 4% 6% 21% 21%COGS (1,317,618)$ (618,836)$ (572,448)$ (950,508)$ (3,459,411)$ % TRANSTransactions 1,236 2,712 1,922 364 6,234 22%$ / Transaction 1,459$ 343$ 429$ 3,526$ 777$ % SKUsSKUs 106 50 44 108 308 22%$ / SKU 17,012$ 18,599$ 18,760$ 11,883$ 15,721$ % TOT GMGross Margin 485,678$ 311,121$ 252,983$ 332,833$ 1,382,615$ 22%GM% 27% 33% 31% 26% 29% AVG INV / SKUGM / Transaction 393$ 115$ 132$ 914$ 222$ $4,395GM / SKU 4,582$ 6,222$ 5,750$ 3,082$ 4,489$ Turn and Earn 66 67 41 308 73 Inventory $ 535,291$ 309,454$ 428,683$ 80,138$ 1,353,566$ TURNSDays of Inventory 148 183 273 31 143 2.6Total Sales 320,342$ 118,889$ 90,511$ 1,545,454$ 2,075,195$ Sales %% of Sales 1% 1% 0% 7% 9% 9%COGS (209,531)$ (80,368)$ (63,799)$ (1,079,116)$ (1,432,814)$ % TRANSTransactions 1,000 586 258 1,630 3,474 12%$ / Transaction 320$ 202.88$ 350.82$ 948.13$ 597.35$ % SKUsSKUs 98 32 22 784 936 67%$ / SKU 3,269$ 3,715$ 4,114$ 1,971$ 2,217$ % TOT GMGross Margin 110,810$ 38,521$ 26,712$ 466,338$ 642,381$ 10%GM% 35% 32% 30% 30% 31% AVG INV / SKUGM / Transaction 111$ 66$ 104$ 286$ 185$ $1,397GM / SKU 1,131$ 1,204$ 1,214$ 595$ 686$ Turn and Earn 30 44 4 60 34 Inventory $ 241,546$ 58,716$ 465,989$ 541,328$ 1,307,578$ TURNSDays of Inventory 421 267 2,666 183 333 1.1Total Sales 8,997,378$ 6,626,225$ 3,843,718$ 3,343,476$ 22,810,797$ % of Sales 39% 29% 17% 15% 100%COGS (6,493,926)$ (4,636,608)$ (2,867,304)$ (2,432,066)$ (16,429,903)$ Transactions 10,630 10,912 5,034 2,048 28,624$ / Transaction 846$ 607$ 764$ 1,633$ 797$ SKUs 264 134 96 904 1,398 $ / SKU 34,081$ 49,449$ 40,039$ 3,699$ 16,317$ Gross Margin 2,503,452$ 1,989,617$ 976,414$ 911,410$ 6,380,894$ GM% 28% 30% 25% 27% 28%GM / Transaction 236$ 182$ 194$ 445$ 223$ GM / SKU 9,483$ 14,848$ 10,171$ 1,008$ 4,564$ Turn and Earn (GM) 101 90 32 107 74 TOTAL INVInventory $ 1,796,414$ 1,552,455$ 2,268,482$ 621,580$ 6,238,930$ 6,705,850$



VOLATILITY

A (Top 80% of COGS)



Product Group W 9-Box: Volume & Customer

Notes:All ABC Volume SKUs have poor T/E Ratios.

With the exception of Segment AC, Customer Margins look good with increasing margins with smaller customers and lower volume SKUs.

All Volume Segments have too much inventory. See V&V 9-Box for possible scenarios to reduce inventory.

550 (A) Large Customers of 2,988 Total PG W Customers make-up 70% of Sales -Nice opportunity to create unique program offerings to these customers.

57% of Total PG W Customers are considered Small and make up 10% of Sales.These many Small customers have a GM / Transaction of $220 - less than half of the GM / Transaction ($556) for Large Customers.

ABC Data Large Medium Small TotalsTotal Sales 10,960,022$ 3,245,012$ 1,688,542$ 15,893,576$ % of Sales 48% 14% 7% 70% v 80%COGS (8,185,356)$ (2,218,727)$ (1,133,221)$ (11,537,679)$ # of Customers 520 682 1,504 2,708 Transactions 9,128 5,132 4,652 18,916 Sales / Transaction 1,201$ 632$ 363$ 840$ Gross Margin 2,774,666$ 1,026,284$ 555,321$ 4,355,897$ GM% 25% 32% 33% 27%GM / Transaction 304$ 200$ 119$ 230$ Turn and Earn 88 Inventory $ 3,577,786$ TURNSDays of Inventory 113 3.2Total Sales 3,890,590$ 708,269$ 243,167$ 4,842,025$ % of Sales 17% 3% 1% 21%COGS (2,812,706)$ (491,753)$ (154,952)$ (3,459,411)$ # of Customers 370 352 522 1,244 Transactions 3,674 1,320 1,240 6,234 Sales / Transaction 1,059$ 537$ 196$ 777$ Gross Margin 1,077,885$ 216,515$ 88,215$ 1,382,615$ GM% 28% 31% 36% 29%GM / Transaction 293$ 164$ 71$ 222$ Turn and Earn 73 Inventory $ 1,353,566$ TURNSDays of Inventory 143 2.6Total Sales 1,121,275$ 670,698$ 283,223$ 2,075,195$ % of Sales 5% 3% 1% 9%COGS (782,701)$ (455,202)$ (194,911)$ (1,432,814)$ # of Customers 312 234 320 866 Transactions 1,782 956 736 3,474 Sales / Transaction 629$ 702$ 385$ 597$ Gross Margin 338,573$ 215,496$ 88,312$ 642,381$ GM% 30% 32% 31% 31%GM / Transaction 190$ 225$ 120$ 185$ Turn and Earn 34 Inventory $ 1,307,578$ TURNSDays of Inventory 333 1.1Total Sales 15,971,887$ 4,623,978$ 2,214,932$ 22,810,797$ % of Sales 70% 20% 10% 100%COGS (11,780,763)$ (3,165,682)$ (1,483,084)$ (16,429,903)$ # of Customers 550 742 1,694 2,988 Transactions 14,584 7,408 6,628 28,624 Sales / Transaction 1,095$ 624$ 334$ 797$ Gross Margin 4,191,124$ 1,458,296$ 731,848$ 6,380,894$ GM% 26% 32% 33% 28%GM / Transaction 287$ 197$ 110$ 223$ Turn and Earn (GM) 69 TOTAL INVInventory $ $6,238,930 6,705,850$



$1,307,578


CUSTOMER

A (Top 80% of COGS)

$3,577,786


$1,353,566

54

Product Group W 9-Box: Inventory Target Calculation Summary


A 75 110 225 A 1,019,577$ 1,184,285$ 1,373,810$ B 148 183 273 B 1,803,296$ 929,957$ 825,432$ C 421 267 2,666 C 241,546$ 58,716$ 465,989$

7,902,607$


2,775,172$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 45 65 165 A 611,349$ 698,851$ 1,007,061$ B 88 108 183 B 1,073,628$ 547,828$ 553,643$ C 301 127 2,486 C 172,659$ 27,889$ 434,526$

5,127,435$


Current State

Proposed State

Net Change

55

Product Group W 9-Box: Target Pricing Calculation Summary

Current Margin


A B C D

A 28% 29% 24% 22% A 6,873,741$ 5,577,379$ 2,927,775$ 514,682$ B 27% 33% 31% 26% B 1,803,296$ 929,957$ 825,432$ 1,283,341$ C 35% 32% 30% 30% C 320,342$ 118,889$ 90,511$ 1,545,454$

22,810,797$

Targeted Margin


A B C D

A 28% 29% 30% 31% A 6,873,741$ 5,577,379$ 3,121,219$ 564,073$ B 29% 33% 34% 35% B 1,835,935$ 929,957$ 856,854$ 1,405,521$ C 35% 36% 37% 38% C 320,342$ 122,682$ 96,918$ 1,660,071$

23,364,690$



A B C D

A 0% 0% 7% 10% A -$ -$ 193,443$ 49,392$ B 2% 0% 4% 10% B 32,639$ -$ 31,422$ 122,180$ C 0% 3% 7% 7% C -$ 3,793$ 6,407$ 114,617$ Increase In Sales

553,893$ 2%

Notes:

Current State

Proposed State

Net Change


Product Group X 9-Box: Volume & VolatilityNotes:Excellent T/E Ratios for All A Volm Product Group X Segments - AA, AB, AC (and AD).

Margins are chaotic and seem to lack policy or standardization. See “X Pricing Plan"tab for recommendation as to how to increase PG X sales by up to 8%.

Like most other Product Groups, a large % of PG X Sales (85%) come from High Volatility (79%) and D-Volt (6%) SKUs - those only ordered less than 5x per year.Careful supply and demand planning should occur to reduce out-of-stock situations and to avoid unnecessary built up after the FALL Season for PG X.

See "INV Plan" tab for an opportunity to reduce inventory by $397,100.This opportunity does not include the $176926 of inventory w/o sales in past year nor does it include any of the $213,582 in D-Volatility inventory.


ABC Data Low Medium High D <5wks Orders TotalsSales 355,820$ 99,660$ 6,518,452$ 103,464$ 7,077,396$ Sales% of Total Sales 4% 1% 74% 1% 80% 80%COGS (277,545)$ (65,058)$ (4,864,871)$ (82,221)$ (5,289,695)$ Trans %Transactions 116 302 2,500 200 3,118 30%$ / Transaction 3,067$ 330$ 2,607$ 517$ 2,270$ SKU %SKUs 4 2 10 2 18 5%$ / SKU 88,955$ 49,830$ 651,845$ 51,732$ 393,189$ % TOT GMGross Margin 78,275$ 34,602$ 1,653,581$ 21,243$ 1,787,702$ 73%GM% 22% 35% 25% 21% 25% AVG INV / SKUGM / Transaction 675$ 115$ 661$ 106$ 573$ $7,847GM / SKU 19,569$ 17,301$ 165,358$ 10,622$ 99,317$ Turn and Earn 293 561 1,076 1,005 946 Inventory $ 20,864$ 4,027$ 114,669$ 1,680$ 141,240$ TURNSDays of Inventory 27 23 9 7 10 37.5Total Sales 216,389$ 541,225$ 391,020$ 186,112$ 1,334,746$ Sales% of Sales 2% 6% 4% 2% 15% 15%COGS (146,325)$ (298,057)$ (263,911)$ (127,628)$ (835,921)$ % TRANSTransactions 1,298 2,480 1,262 172 5,212 51%$ / Transaction 167$ 218$ 310$ 1,082$ 256$ % SKUsSKUs 10 26 22 8 66 17%$ / SKU 21,639$ 20,816$ 17,774$ 23,264$ 20,223$ % TOT GMGross Margin 70,064$ 243,168$ 127,109$ 58,483$ 498,825$ 20%GM% 32% 45% 33% 31% 37% AVG INV / SKUGM / Transaction 54$ 98$ 101$ 340$ 96$ $6,530GM / SKU 7,006$ 9,353$ 5,778$ 7,310$ 7,558$ Turn and Earn 90 71 47 438 72 Inventory $ 52,482$ 188,224$ 181,097$ 9,153$ 430,956$ TURNSDays of Inventory 131 230 250 26 188 1.9Total Sales 54,156$ 60,509$ 90,005$ 245,005$ 449,675$ Sales %% of Sales 1% 1% 1% 3% 5% 5%COGS (37,922)$ (36,308)$ (55,068)$ (169,177)$ (298,474)$ % TRANSTransactions 204 342 412 936 1,894 19%$ / Transaction 265$ 176.93$ 218.46$ 261.76$ 237.42$ % SKUsSKUs 18 18 28 246 310 79%$ / SKU 3,009$ 3,362$ 3,214$ 996$ 1,451$ % TOT GMGross Margin 16,234$ 24,201$ 34,937$ 75,829$ 151,201$ 6%GM% 30% 40% 39% 31% 34% AVG INV / SKUGM / Transaction 80$ 71$ 85$ 81$ 80$ $1,232GM / SKU 902$ 1,344$ 1,248$ 308$ 488$ Turn and Earn 53 33 19 26 26 Inventory $ 21,320$ 44,502$ 113,397$ 202,748$ 381,968$ TURNSDays of Inventory 205 447 752 437 467 0.8Total Sales 626,365$ 701,395$ 6,999,476$ 534,582$ 8,861,818$ % of Sales 7% 8% 79% 6% 100%COGS (461,792)$ (399,423)$ (5,183,849)$ (379,026)$ (6,424,091)$ Transactions 1,618 3,124 4,174 1,308 10,224$ / Transaction 387$ 225$ 1,677$ 409$ 867$ SKUs 32 46 60 256 394 $ / SKU 19,574$ 15,248$ 116,658$ 2,088$ 22,492$ Gross Margin 164,573$ 301,971$ 1,815,627$ 155,555$ 2,437,727$ GM% 26% 43% 26% 29% 28%GM / Transaction 102$ 97$ 435$ 119$ 238$ GM / SKU 5,143$ 6,565$ 30,260$ 608$ 6,187$ Turn and Earn (GM) 128 73 329 52 185 TOTAL INVInventory $ 94,666$ 236,753$ 409,164$ 213,581$ 954,164$ 1,131,091$



VOLATILITY

A (Top 80% of COGS)



Product Group X 9-Box: Volume & CustomerNotes:Solid T/E Ratio from High Volume SKUs; Poor T/E from BC Volume SKUs.

With the exception of Segment AC, Customer Margins look good with increasing margins with smaller customers and lower volume SKUs.

BC Volume Segments have too much inventory. See V&V 9-Box for possible scenarios to reduce inventory.

36% of PG X Customers are considered Large (A) and comprise 88% of Sales - Nice opportunity to create unique program offerings to these customers.

ABC Data Large Medium Small No / Neg Sales TotalsTotal Sales 6,523,720$ 473,134$ 80,543$ -$ 7,077,396$ % of Sales 74% 5% 1% 0% 80% v 80%COGS (4,886,724)$ (343,391)$ (59,580)$ -$ (5,289,695)$ # of Customers 175 123 46 - 344 Transactions 2,384 504 130 - 3,018 Sales / Transaction 2,736$ 939$ 620$ #DIV/0! 2,345$ Gross Margin 1,636,996$ 129,743$ 20,963$ -$ 1,787,702$ GM% 25% 27% 26% #DIV/0! 25%GM / Transaction 687$ 257$ 161$ #DIV/0! 592$ Turn and Earn 946 Inventory $ 141,240$ TURNSDays of Inventory 10 37.5Total Sales 993,792$ 250,708$ 90,246$ -$ 1,334,746$ % of Sales 11% 3% 1% 0% 15%COGS (639,526)$ (145,565)$ (50,799)$ (32)$ (835,921)$ # of Customers 209 182 144 1 536 Transactions 3,318 1,178 628 1 5,125 Sales / Transaction 300$ 213$ 144$ -$ 260$ Gross Margin 354,267$ 105,143$ 39,447$ (32)$ 498,825$ GM% 36% 42% 44% #DIV/0! 37%GM / Transaction 107$ 89$ 63$ (32)$ 97$ Turn and Earn 72 Inventory $ 430,956$ TURNSDays of Inventory 188 1.9Total Sales 273,239$ 144,419$ 32,017$ -$ 449,675$ % of Sales 3% 2% 0% 0% 5%COGS (189,241)$ (92,443)$ (16,791)$ -$ (298,474)$ # of Customers 117 83 55 - 255 Transactions 856 404 166 - 1,426 Sales / Transaction 319$ 357$ 193$ #DIV/0! 315$ Gross Margin 83,999$ 51,976$ 15,226$ -$ 151,201$ GM% 31% 36% 48% #DIV/0! 34%GM / Transaction 98$ 129$ 92$ #DIV/0! 106$ Turn and Earn 26 Inventory $ 381,968$ TURNSDays of Inventory 467 0.8Total Sales 7,790,751$ 868,261$ 202,806$ -$ 8,861,818$ % of Sales 88% 10% 2% 0% 100%COGS (5,715,490)$ (581,400)$ (127,169)$ (32)$ (6,424,091)$ # of Customers 508 494 400 2 1,404 Transactions 6,558 2,086 924 1 9,569 Sales / Transaction 1,188$ 416$ 219$ -$ 926$ Gross Margin 2,075,261$ 286,862$ 75,636$ (32)$ 2,437,727$ GM% 27% 33% 37% #DIV/0! 28%GM / Transaction 316$ 138$ 82$ (32)$ 255$ Turn and Earn (GM) 156 TOTAL INVInventory $ $954,164 1,131,091$


CUSTOMER

A (Top 80% of COGS)

$141,240


$430,956


$381,968


58

Product Group X 9-Box: Inventory Target Calculation Summary


A 27 23 9 A 20,864$ 4,027$ 114,669$ B 131 230 250 B 52,482$ 188,224$ 181,097$ C 205 447 752 C 21,320$ 44,502$ 113,397$

740,583$


343,483$

Days Reduced A B C

Resulting Inv

ReductionA B C

A - - - A -$ -$ -$ B 71 155 160 B 28,429$ 126,979$ 116,023$ C 85 307 572 C 8,853$ 30,575$ 86,241$

397,100$


Current State

Proposed State

Net Change

59

Product Group X 9-Box: Target Pricing Calculation Summary

Current Margin


A B C D

A 22% 35% 25% 21% A 355,820$ 99,660$ 6,518,452$ 103,464$ B 32% 45% 33% 31% B 216,389$ 541,225$ 391,020$ 186,112$ C 30% 40% 39% 31% C 54,156$ 60,509$ 90,005$ 245,005$

8,861,818$

Targeted Margin


A B C D

A 22% 35% 36% 36% A 355,820$ 99,660$ 7,193,269$ 119,179$ B 32% 45% 46% 46% B 216,389$ 541,225$ 443,503$ 213,108$ C 33% 46% 47% 47% C 55,999$ 64,099$ 97,306$ 284,155$

9,683,713$



A B C D

A 0% 0% 10% 15% A -$ -$ 674,817$ 15,714$ B 0% 0% 13% 15% B -$ -$ 52,483$ 26,996$ C 3% 6% 8% 16% C 1,843$ 3,590$ 7,301$ 39,150$ Increase In Sales

821,895$ 9%

Notes:

Current State

Proposed State

Net Change


Product Group Y 9-Box: Volume & VolatilityNotes:Excellent T/E Ratios for most A Volm Product Group Y Segments - AA, AC (and AD).

Margins are chaotic and seem to lack policy or standardization. See “Y Pricing Plan“ tab for recommendation as to how to increase PG Y sales by up to 4%.

Unlike other Product Groups (except PG W), PG Y does not have as high % sales from High Volatility (30%) and D-Volt (7%) SKUs - those only ordered 4 or less x / year.Although not as high, with 37% of total sales from C and D VOLT SKUs there's still a need for careful supply and demand planning should occur to reduce out-of-stock situations and avoid unnecessary built up after the FALL Peak Season for PG Y.

See "INV Plan" tab for an opportunity to reduce inventory by $171,452.This opportunity does not include the $177,036 of inventory w/o sales in past year nor does it include any of the $123,470 in D-Volatility inventory.

A Items - 7.4x more sales versus B items; A Items 47x more sales v C Items

ABC Data Low Medium High D <5wks Orders TotalsSales 2,821,272$ 1,938,827$ 2,143,948$ 122,014$ 7,026,062$ Sales% of Total Sales 30% 20% 23% 1% 74% 74%COGS (2,371,836)$ (1,486,921)$ (1,665,148)$ (109,851)$ (5,633,756)$ Trans %Transactions 2,474 3,412 886 22 6,794 51%$ / Transaction 1,140$ 568$ 2,420$ 5,546$ 1,034$ SKU %SKUs 20 22 20 2 64 15%$ / SKU 141,064$ 88,129$ 107,197$ 61,007$ 109,782$ % TOT GMGross Margin 449,437$ 451,907$ 478,800$ 12,163$ 1,392,306$ 66%GM% 16% 23% 22% 10% 20% AVG INV / SKUGM / Transaction 182$ 132$ 540$ 553$ 205$ $9,968GM / SKU 22,472$ 20,541$ 23,940$ 6,081$ 21,755$ Turn and Earn 341 108 183 405 175 Inventory $ 110,868$ 321,496$ 202,915$ 2,702$ 637,980$ TURNSDays of Inventory 17 79 44 9 41 8.8Total Sales 432,146$ 583,109$ 594,656$ 300,065$ 1,909,976$ Sales% of Sales 5% 6% 6% 3% 20% 20%COGS (283,719)$ (443,352)$ (441,074)$ (246,264)$ (1,414,409)$ % TRANSTransactions 1,980 1,318 1,308 86 4,692 35%$ / Transaction 218$ 442$ 455$ 3,489$ 407$ % SKUsSKUs 22 36 42 28 128 30%$ / SKU 19,643$ 16,197$ 14,158$ 10,717$ 14,922$ % TOT GMGross Margin 148,426$ 139,757$ 153,582$ 53,801$ 495,566$ 24%GM% 34% 24% 26% 18% 26% AVG INV / SKUGM / Transaction 75$ 106$ 117$ 626$ 106$ $3,049GM / SKU 6,747$ 3,882$ 3,657$ 1,921$ 3,872$ Turn and Earn 80 88 87 254 94 Inventory $ 121,162$ 120,717$ 130,973$ 17,356$ 390,208$ TURNSDays of Inventory 156 99 108 26 101 3.6Total Sales 78,469$ 68,045$ 150,717$ 242,723$ 539,954$ Sales %% of Sales 1% 1% 2% 3% 6% 6%COGS (58,114)$ (48,073)$ (41,801)$ (178,495)$ (326,483)$ % TRANSTransactions 346 702 428 364 1,840 14%$ / Transaction 227$ 96.93$ 352.14$ 666.82$ 293.45$ % SKUsSKUs 32 22 24 154 232 54%$ / SKU 2,452$ 3,093$ 6,280$ 1,576$ 2,327$ % TOT GMGross Margin 20,355$ 19,972$ 108,916$ 64,228$ 213,472$ 10%GM% 26% 29% 72% 26% 40% AVG INV / SKUGM / Transaction 59$ 28$ 254$ 176$ 116$ $963GM / SKU 636$ 908$ 4,538$ 417$ 920$ Turn and Earn 27 57 75 46 58 Inventory $ 54,952$ 24,662$ 40,350$ 103,412$ 223,376$ TURNSDays of Inventory 345 187 352 211 250 1.5Total Sales 3,331,887$ 2,589,981$ 2,889,322$ 667,256$ 9,478,446$ % of Sales 35% 27% 30% 7% 100%COGS (2,713,669)$ (1,978,345)$ (2,148,023)$ (534,610)$ (7,374,648)$ Transactions 4,800 5,432 2,622 478 13,332$ / Transaction 694$ 477$ 1,102$ 1,396$ 711$ SKUs 74 80 86 186 426 $ / SKU 45,026$ 32,375$ 33,597$ 3,587$ 22,250$ Gross Margin 618,218$ 611,636$ 741,298$ 132,646$ 2,103,798$ GM% 19% 24% 26% 20% 22%GM / Transaction 129$ 113$ 283$ 278$ 158$ GM / SKU 8,354$ 7,645$ 8,620$ 713$ 4,938$ Turn and Earn (GM) 175 100 147 86 131 TOTAL INVInventory $ 286,982$ 466,875$ 374,237$ 123,470$ 1,251,564$ 1,428,600$



VOLATILITY

A (Top 80% of COGS)



Product Group Y 9-Box: Volume & CustomerNotes:Solid T/E Ratio from High Volume SKUs; Poor T/E from B & C Volume SKUs.

With the exception of the C Volume SKUs, Customer Margins look good withincreasing margins with smaller customers and lower volume SKUs.

B and C Volume Segments have too much inventory. See V&V 9-Box for possible scenarios to reduce inventory.

21% of PG Y Customers are considered Large (A) and make-up 73% of Sales - Nice opportunity to create unique program offerings to these customers.

54% of PG Y Customers are considered Small (C) and make-up 9% of Sales.These many small customers have a GM / Transaction of $138 - over 3 times less than Large customers.

ABC Data Large Medium Small No / Neg Sales TotalsTotal Sales 5,612,551$ 885,327$ 528,184$ -$ 7,026,062$ % of Sales 59% 9% 6% 0% 74%COGS (4,601,888)$ (658,790)$ (373,077)$ -$ (5,633,756)$ 76%# of Customers 133 160 371 - 664 Transactions 3,234 1,576 1,984 - 6,794 Sales / Transaction 1,735$ 562$ 266$ #DIV/0! 1,034$ Gross Margin 1,010,663$ 226,536$ 155,107$ -$ 1,392,306$ GM% 18% 26% 29% #DIV/0! 20%GM / Transaction 313$ 144$ 78$ #DIV/0! 205$ Turn and Earn 175 Inventory $ 637,980$ TURNSDays of Inventory 41 8.8Total Sales 1,035,646$ 629,298$ 245,032$ -$ 1,909,976$ % of Sales 11% 7% 3% 0% 20%COGS (787,111)$ (459,474)$ (167,824)$ -$ (1,414,409)$ # of Customers 126 113 262 - 501 Transactions 1,944 1,404 1,344 0 4,692 Sales / Transaction 533$ 448$ 182$ #DIV/0! 407$ Gross Margin 248,535$ 169,824$ 77,208$ -$ 495,566$ GM% 24% 27% 32% #DIV/0! 26%GM / Transaction 128$ 121$ 57$ #DIV/0! 106$ Turn and Earn 94 Inventory $ 390,208$ TURNSDays of Inventory 101 3.6Total Sales 304,026$ 164,069$ 71,859$ -$ 539,954$ % of Sales 3% 2% 1% 0% 6%COGS (164,895)$ (109,541)$ (51,845)$ (202)$ (326,483)$ # of Customers 119 90 118 1 328 Transactions 954 490 392 2 1,838 Sales / Transaction 319$ 335$ 183$ -$ 294$ Gross Margin 139,132$ 54,528$ 20,014$ (202)$ 213,472$ GM% 46% 33% 28% #DIV/0! 40%GM / Transaction 146$ 111$ 51$ (101)$ 116$ Turn and Earn 58 Inventory $ 223,376$ TURNSDays of Inventory 250 1.5Total Sales 6,954,678$ 1,678,694$ 845,075$ -$ 9,478,446$ % of Sales 73% 18% 9% 0% 100%COGS (5,553,894)$ (1,227,805)$ (592,746)$ (202)$ (7,374,648)$ # of Customers 382 458 972 2 1,814 Transactions 6,138 3,470 3,720 2 13,330 Sales / Transaction 1,133$ 484$ 227$ -$ 711$ Gross Margin 1,400,783$ 450,889$ 252,329$ (202)$ 2,103,798$ GM% 20% 27% 30% #DIV/0! 22%GM / Transaction 228$ 130$ 68$ (101)$ 158$ Turn and Earn (GM) 115 TOTAL INVInventory $ $1,251,564 1,428,600$



$223,376


CUSTOMER

A (Top 80% of COGS)

$637,980


$390,208

62

Product Group Y 9-Box: Inventory Target Calculation Summary


A 17 79 44 A 110,868$ 321,496$ 202,915$ B 156 99 108 B 121,162$ 120,717$ 130,973$ C 345 187 352 C 54,952$ 24,662$ 40,350$

1,128,094$


956,643$

Days Reduced A B C

Resulting Inv

ReductionA B C

A (13) 34 (16) A (84,078)$ 138,177$ (70,808)$ B 96 24 18 B 74,523$ 29,618$ 22,215$ C 225 47 172 C 35,846$ 6,223$ 19,735$

171,451$


Current State

Proposed State

Net Change

63

Product Group Y 9-Box: Target Pricing Calculation Summary

Current Margin


A B C D

A 16% 23% 22% 10% A 2,821,272$ 1,938,827$ 2,143,948$ 122,014$ B 34% 24% 26% 18% B 432,146$ 583,109$ 594,656$ 300,065$ C 26% 29% 72% 26% C 78,469$ 68,045$ 150,717$ 242,723$

9,475,992$

Targeted Margin


A B C D

A 20% 23% 24% 25% A 2,934,123$ 1,938,827$ 2,186,305$ 140,731$ B 34% 35% 36% 37% B 432,146$ 649,459$ 657,210$ 358,328$ C 35% 36% 72% 38% C 85,850$ 72,805$ 150,717$ 271,571$

9,878,071$



A B C D

A 4% 0% 2% 15% A 112,851$ -$ 42,356$ 18,717$ B 0% 11% 11% 19% B -$ 66,351$ 62,553$ 58,263$ C 9% 7% 0% 12% C 7,381$ 4,760$ -$ 28,847$ Increase In Sales

402,078$ 4%

Notes:

Current State

Proposed State

Net Change


Product Group Z 9-Box: Volume & VolatilityNotes:Excellent T/E Ratios for the following Product Group Z Segments - AA, AC, BA, BB, and CC.

Margins are chaotic and seem to lack policy or standardization. See “Z Pricing Plan“ tab for recommendation as to how to increase PG Z sales by up to 8%.

Like most other Product Groups, a large % of PG Z Sales (63%) come from High Volatility (55%) and D-Volt (8%) SKUs - those only ordered less than 5x per year.Careful supply and demand planning should occur to reduce out-of-stock situations and to avoid unnecessary built up after the FALL Season for PG Z.

Although inventory looks good, there are some slight improvements that can be made.See "INV Plan" tab for an opportunity to reduce inventory by $54,674.This opportunity does not include the $65,084 of inventory w/o sales in past year nor does it include any of the $101,388 in D-Volatility inventory.


ABC Data Low Medium High D <5wks Orders TotalsSales 356,410$ 505,489$ 1,326,007$ -$ 2,187,906$ Sales% of Total Sales 11% 16% 41% 0% 67% 67%COGS (240,493)$ (381,240)$ (991,056)$ -$ (1,612,789)$ Trans %Transactions 224 934 2,368 - 3,526 67%$ / Transaction 1,591$ 541$ 560$ #DIV/0! 621$ SKU %SKUs 6 8 10 - 24 14%$ / SKU 59,402$ 63,186$ 132,601$ #DIV/0! 91,163$ % TOT GMGross Margin 115,918$ 124,249$ 334,951$ -$ 575,117$ 67%GM% 33% 25% 25% #DIV/0! 26% AVG INV / SKUGM / Transaction 517$ 133$ 141$ #DIV/0! 163$ $11,192GM / SKU 19,320$ 15,531$ 33,495$ #DIV/0! 23,963$ Turn and Earn 177 77 245 #DIV/0! 158 Inventory $ 44,250$ 122,237$ 102,124$ -$ 268,610$ TURNSDays of Inventory 67 117 38 #DIV/0! 61 6.0Total Sales 23,798$ 253,799$ 414,830$ 160,460$ 852,887$ Sales% of Sales 1% 8% 13% 5% 26% 26%COGS (18,289)$ (191,749)$ (291,733)$ (114,445)$ (616,215)$ % TRANSTransactions 20 496 640 82 1,238 24%$ / Transaction 1,190$ 512$ 648$ 1,957$ 689$ % SKUsSKUs 2 18 22 14 56 33%$ / SKU 11,899$ 14,100$ 18,856$ 11,461$ 15,230$ % TOT GMGross Margin 5,509$ 62,050$ 123,097$ 46,015$ 236,672$ 28%GM% 23% 24% 30% 29% 28% AVG INV / SKUGM / Transaction 275$ 125$ 192$ 561$ 191$ $2,063GM / SKU 2,755$ 3,447$ 5,595$ 3,287$ 4,226$ Turn and Earn 827 149 118 310 148 Inventory $ 512$ 31,365$ 73,086$ 10,573$ 115,536$ TURNSDays of Inventory 10 60 91 34 68 5.3Total Sales 29,853$ 12,189$ 52,956$ 114,346$ 209,344$ Sales %% of Sales 1% 0% 2% 4% 6% 6%COGS (23,683)$ (8,851)$ (38,675)$ (91,373)$ (162,582)$ % TRANSTransactions 80 76 100 206 462 9%$ / Transaction 373$ 160.38$ 529.56$ 555.08$ 453.12$ % SKUsSKUs 6 6 10 66 88 52%$ / SKU 4,975$ 2,031$ 5,296$ 1,733$ 2,379$ % TOT GMGross Margin 6,170$ 3,337$ 14,282$ 22,974$ 46,762$ 5%GM% 21% 27% 27% 20% 22% AVG INV / SKUGM / Transaction 77$ 44$ 143$ 112$ 101$ $1,661GM / SKU 1,028$ 556$ 1,428$ 348$ 531$ Turn and Earn 15 18 127 20 25 Inventory $ 33,556$ 13,593$ 8,231$ 90,815$ 146,194$ TURNSDays of Inventory 517 561 78 363 328 1.1Total Sales 410,061$ 771,476$ 1,793,793$ 274,806$ 3,250,137$ % of Sales 13% 24% 55% 8% 100%COGS (282,465)$ (581,840)$ (1,321,463)$ (205,817)$ (2,391,586)$ Transactions 324 1,506 3,108 288 5,226$ / Transaction 1,266$ 512$ 577$ 954$ 622$ SKUs 14 32 42 80 168 $ / SKU 29,290$ 24,109$ 42,709$ 3,435$ 19,346$ Gross Margin 127,597$ 189,636$ 472,330$ 68,989$ 858,551$ GM% 31% 25% 26% 25% 26%GM / Transaction 394$ 126$ 152$ 240$ 164$ GM / SKU 9,114$ 5,926$ 11,246$ 862$ 5,110$ Turn and Earn (GM) 112 86 190 51 119 TOTAL INVInventory $ 78,317$ 167,194$ 183,440$ 101,388$ 530,339$ 595,424$



VOLATILITY

A (Top 80% of COGS)



Product Group Z 9-Box: Volume & CustomerNotes:Excellent T/E Ratios for A and B Volume SKUs.

With the exception of Segment BC, Customer Margins look good with increasing margins with smaller customers and lower volume SKUs.

C Volume Segments have too much inventory. See V&V 9-Box for possible scenarios to reduce inventory.

37% of PG Z Customers are considered Large (A) and comprise 79% of Sales - Nice opportunity to create unique program offerings to these customers.

30% of PG Z Customers are considered Small (C) and make-up 5% of Sales.These small customers have a GM / Transaction of $142 - 2.6x that of Large (A)customers.

ABC Data Large Medium Small No / Neg Sales TotalsTotal Sales 1,781,308$ 327,078$ 79,520$ -$ 2,187,906$ % of Sales 55% 10% 2% 0% 67%COGS (1,324,366)$ (232,478)$ (55,945)$ -$ (1,612,789)$ 67%# of Customers 398 318 248 - 964 Transactions 2,436 722 368 - 3,526 Sales / Transaction 731$ 453$ 216$ #DIV/0! 621$ Gross Margin 456,942$ 94,601$ 23,574$ -$ 575,117$ GM% 26% 29% 30% #DIV/0! 26%GM / Transaction 188$ 131$ 64$ #DIV/0! 163$ Turn and Earn 158 Inventory $ 268,610$ TURNSDays of Inventory 61 6.0Total Sales 671,181$ 148,177$ 33,529$ -$ 852,887$ % of Sales 21% 5% 1% 0% 26%COGS (486,958)$ (104,839)$ (24,418)$ -$ (616,215)$ # of Customers 284 140 116 - 540 Transactions 828 264 146 0 1,238 Sales / Transaction 811$ 561$ 230$ #DIV/0! 689$ Gross Margin 184,223$ 43,338$ 9,111$ -$ 236,672$ GM% 27% 29% 27% #DIV/0! 28%GM / Transaction 222$ 164$ 62$ #DIV/0! 191$ Turn and Earn 148 Inventory $ 115,536$ TURNSDays of Inventory 68 5.3Total Sales 126,676$ 48,861$ 33,807$ -$ 209,344$ % of Sales 4% 2% 1% 0% 6%COGS (101,213)$ (36,575)$ (24,794)$ -$ (162,582)$ # of Customers 122 54 54 - 230 Transactions 302 84 76 - 462 Sales / Transaction 419$ 582$ 445$ #DIV/0! 453$ Gross Margin 25,463$ 12,286$ 9,013$ -$ 46,762$ GM% 20% 25% 27% #DIV/0! 22%GM / Transaction 84$ 146$ 119$ #DIV/0! 101$ Turn and Earn 25 Inventory $ 146,194$ TURNSDays of Inventory 328 1.1Total Sales 2,579,164$ 524,116$ 146,856$ -$ 3,250,137$ % of Sales 79% 16% 5% 0% 100%COGS (1,912,537)$ (373,891)$ (105,157)$ -$ (2,391,586)$ # of Customers 448 388 362 - 1,198 Transactions 3,566 1,070 590 - 5,226 Sales / Transaction 723$ 490$ 249$ #DIV/0! 622$ Gross Margin 666,628$ 150,225$ 41,698$ -$ 858,551$ GM% 26% 29% 28% #DIV/0! 26%GM / Transaction 187$ 140$ 71$ #DIV/0! 164$ Turn and Earn (GM) 106 TOTAL INVInventory $ $530,339 595,424$


CUSTOMER

A (Top 80% of COGS)

$268,610


$115,536


$146,194


66

Product Group Z 9-Box: Inventory Target Calculation Summary


A 67 117 38 A 44,250$ 122,237$ 102,124$ B 10 60 91 B 512$ 31,365$ 73,086$ C 517 561 78 C 33,556$ 13,593$ 8,231$

428,952$


374,277$

Days Reduced A B C

Resulting Inv

ReductionA B C

A 37 72 (22) A 24,483$ 75,234$ (60,790)$ B (50) (15) 1 B (2,495)$ (8,035)$ 1,152$ C 397 421 (102) C 25,770$ 10,198$ (10,842)$

54,675$


Current State

Proposed State

Net Change

67

Product Group Z 9-Box: Target Pricing Calculation Summary

Current Margin

A B C Current Sales

A B C

A 33% 25% 25% A 356,410$ 505,489$ 1,326,007$ B 23% 24% 30% B 23,798$ 253,799$ 414,830$ C 21% 27% 27% C 29,853$ 12,189$ 52,956$

2,975,331$



A 33% 34% 35% A 356,410$ 550,699$ 1,448,841$ B 34% 35% 36% B 26,267$ 279,369$ 439,095$ C 35% 36% 37% C 33,989$ 13,181$ 58,017$

3,205,869$



A B C

A 0% 9% 9% A -$ 45,210$ 122,835$ B 10% 10% 6% B 2,469$ 25,571$ 24,265$ C 14% 8% 10% C 4,136$ 993$ 5,060$ Increase In Sales

230,538$ 8%

Notes:

Current State

Proposed State

Net Change


Overall vs. Product Family

The Sum of the Parts is Greater than the Whole

69

9-Box Example – Pricing Improvement Summary - Full Company

• $1,250,000 in Additional EBITDA through Pricing Controls

Current Margin


A B CD

A 28% 30% 29% 29% A 7,294,882$ 12,727,879$ 20,554,562$ 2,308,122$ B 30% 35% 30% 29% B 1,653,440$ 2,042,664$ 1,812,874$ 2,675,618$ C 33% 36% 46% 29% C 300,500$ 194,944$ 233,945$ 1,772,909$

53,572,339$

Targeted Margin A B C D

Resultant Sales A B C D

A 28% 30% 32% 32% A 7,294,882$ 12,727,879$ 21,109,526$ 2,370,401$ B 32% 35% 36% 36% B 1,692,324$ 2,042,664$ 1,916,587$ 2,872,453$ C 33% 36% 46% 46% C 301,530$ 194,944$ 233,945$ 2,066,076$

54,823,211$



A B C D

A 0% 0% 3% 3% A -$ -$ 554,964$ 62,279$ B 2% 0% 6% 7% B 38,884$ -$ 103,713$ 196,835$ C 0% 0% 0% 17% C 1,030$ -$ -$ 293,167$

1,250,872$

Target Pricing Calculation Summary - Volume vs. VolatilityCurrent State

Proposed State

Net Change

70

Product Group Target Pricing Summary – Volume vs. Volatility

Product Group Current Revenue Proposed Revenue Increased EBITDA Price Inc. %U 3,385,337$ 3,624,665$ 239,328$ 7.07%V 1,224,385$ 1,244,556$ 20,171$ 1.65%W 3,419,455$ 3,465,404$ 45,949$ 1.34%X 300,307$ 315,429$ 15,122$ 5.04%Y 1,261,884$ 1,348,575$ 86,690$ 6.87%Z 535,533$ 582,230$ 46,697$ 8.72%

TOTAL 10,126,903$ 10,580,859$ 453,957$ 4.48%

Product Group Current Revenue Proposed Revenue Increased EBITDA Price Inc. %U 19,847,454$ 21,302,334$ 1,454,880$ 7.33%V 8,054,326$ 8,203,484$ 149,158$ 1.85%W 11,405,398$ 11,682,345$ 276,947$ 2.43%X 1,487,665$ 1,602,934$ 115,269$ 7.75%Y 4,737,996$ 4,939,035$ 201,039$ 4.24%Z 4,430,909$ 4,841,857$ 410,948$ 9.27%

TOTAL 49,963,748$ 52,571,989$ 2,608,241$ 5.22%

Volume & Volatility Pricing Strategy Impact - with "A" Customers

Volume & Volatility Pricing Strategy Impact - Excludes "A" Customers

71

Develop raw matprocurementstrategy

Inventory Reduction Timeline

1-3 months 3-6 months 1-2 years Ongoing

Identify SKUsfor write-downor rapid sale

Institute regular productionreview

Stop producingzero-deviationSKUs

Sell off or writedown unusedraw mat

Train sales org toprovide data fordemand visibility

Pare down zero-deviation SKUs

Renegotiatevendor contracts

Hold entire orgaccountable fornew productiondecisions

Regularly identifynew SKUs formake to order

Refine/optimize vendor strategy

Regular inventorystrategy reviewsw/ exec team

72

Exercise

• Background• Instructions

– Break into Teams of 2-3– Open Thumb Drives (Contain 9-Box Data)– Review 9-Box Data – Develop Presentation to the Group– You have 45 minutes

• Topics to Address in Your Presentation– How much inventory do they need? – What does the data tell you about how they manage:

• Inventory• SKU’s (or items)• Customers• Pricing

– What did you learn about this company?– What improvements can we estimate / quantify?– What would you do next?

73

Group Presentations

• You will have 15 minutes to present• Points will be awarded for:

– Flair (15 piece minimum)– Shameless Praise for Facilitators– Use of Ohio State logos– Data Driven Insights

Advanced Topics

Consumption Data / Raw Material Analysis

Pallet position calculations

Slotting Methodology

Raw Material / Consumption 9-Box

76

9-Box Example – Raw Material / Consumption

OPPORTUNITY• A total reduction of

$4,976,728 in ABC VOLT Raw Material INV by meeting DOH targets

• An additional $215,899 can be safely reduced from the $2,865,374 D VOLT INV without impacting service level

• RESULTING TOTAL INVENTORY

REDUCTION for 967 “Consumed” Item

Numbers:

$5,192,627

Less Than

Low Medium High 5 Wks Consumption Totals18 27 37 16 98

(3,346,291)$ (3,588,358)$ (6,051,756)$ (1,427,907)$ (14,414,311)$ (1,186,843)$ (1,860,505)$ (4,648,791)$ (276,683)$ (7,972,822)$

762,316$ 2,743,085$ 1,563,338$ 440,257$ 5,508,996$ (4,068,935) (3,287,012) (4,209,059) (1,317,770) (12,882,776)

61 184 53 94 9030 30 30 -

389,730$ 2,295,233$ 683,841$ 3,368,804$ 22 27 42 52 143

(287,141)$ (322,689)$ (522,194)$ (568,241)$ (1,700,266)$ (1,126,356)$ (608,100)$ (1,539,738)$ (3,206,861)$ (6,481,055)$

168,844$ 432,561$ 510,887$ 304,572$ 1,416,864$ (323,510) (300,376) (851,812) (720,177) (2,195,874)

44 170 90 29 6330 45 45 - 120

52,666$ 317,806$ 256,676$ 627,148$ 75 58 37 555 725

(108,366)$ (119,169)$ (79,912)$ (555,605)$ (863,051)$ (1,414,188)$ (1,087,299)$ (697,345)$ (5,727,400)$ (8,926,232)$

649,394$ 474,089$ 290,867$ 2,120,544$ 3,534,894$ (150,959) (159,808) (140,087) (596,117) (1,046,972)

156 143 137 123 13260 60 60 - 180

429,389$ 376,540$ 174,846$ 980,776$ 115 112 116 624 967

(3,741,798)$ (4,030,216)$ (6,653,862)$ (2,551,752)$ (16,977,627)$ (3,727,387)$ (3,555,904)$ (6,885,874)$ (9,210,944)$ (23,380,109)$ 1,580,554$ 3,649,735$ 2,365,092$ 2,865,374$ 10,460,755$

(4,543,404) (3,747,196) (5,200,958) (2,634,089) (16,125,647)77 176 64 89 95

120 135 135 - 390 871,785$ 2,989,580$ 1,115,364$ 215,899$ 5,192,627$

VOLATILITY

77

Pallet Position Calculations

Pallet Positions Needed:On-Hand Quantity / Pallet QuantityWarehouse Capacity:Occupied Positions / Total Available Positions

375 4 4 337 297 4 4 257 217 4 4 177 137 4 4 97 57 4 4 17

374 4 4 336 296 4 4 256 216 4 4 176 136 4 4 96 56 4 4 16 CL Identified Need Extra positions

"Extra" Slot Positions

373 4 4 335 295 4 4 255 215 4 4 175 135 4 4 95 55 4 4 15 A 632 629 3 Aisle 69 Pallet 256 Locations BCD

372 4 4 334 294 4 4 254 214 4 4 174 134 4 4 94 54 4 4 14 B 308 307 1 69 263 D

371 4 4 333 293 4 4 253 213 4 4 173 133 4 4 93 53 4 4 13 C 208 207 1 69 268 D

370 4 4 332 292 4 4 252 212 4 4 172 132 4 4 92 52 4 4 12 D 436 437 -1 use 69 268 D

Pallet Positions "Color Key"

320 4 4 280 240 4 4 200 160 4 4 120 80 4 4 40

319 4 4 279 239 4 4 199 159 4 4 119 79 4 4 39

396 4 4 358 318 4 4 278 238 4 4 198 158 4 4 118 78 4 4 38

395 4 4 357 317 4 4 277 237 4 4 197 157 4 4 117 77 4 4 37

394 4 4 356 316 4 4 276 236 4 4 196 156 4 4 116 76 4 4 36

393 4 4 355 315 4 4 275 235 4 4 195 155 4 4 115 75 4 4 35

392 4 4 354 314 4 4 274 234 4 4 194 154 4 4 114 74 4 4 34

391 4 4 353 313 4 4 273 233 4 4 193 153 4 4 113 73 4 4 33

390 4 4 352 312 4 4 272 232 4 4 192 152 4 4 112 72 4 4 32

389 4 4 351 311 4 4 271 231 4 4 191 151 4 4 111 71 4 4 31

388 4 4 350 310 4 4 270 230 4 4 190 150 4 4 110 70 4 4 30

387 4 4 349 309 4 4 269 229 4 4 189 149 4 4 109 69 4 4 29

386 4 4 348 308 4 4 268 228 4 4 188 148 4 4 108 68 4 4 28

385 4 4 347 307 4 4 267 227 4 4 187 147 4 4 107 67 4 4 27

384 4 4 346 306 4 4 266 226 4 4 186 146 4 4 106 66 4 4 26

383 4 4 345 305 4 4 265 225 4 4 185 145 4 4 105 65 4 4 25

382 4 4 344 304 4 4 264 224 4 4 184 144 4 4 104 64 4 4 24

381 4 4 343 303 4 4 263 223 4 4 183 143 4 4 103 63 4 4 23

380 4 4 342 302 4 4 262 222 4 4 182 142 4 4 102 62 4 4 22

379 4 4 341 301 4 4 261 221 4 4 181 141 4 4 101 61 4 4 21

378 4 4 340 300 4 4 260 220 4 4 180 140 4 4 100 60 4 4 20

377 4 4 339 299 4 4 259 219 4 4 179 139 4 4 99 59 4 4 19

376 4 4 338 298 4 4 258 218 4 4 178 138 4 4 98 58 4 4 18

375 4 4 337 297 4 4 257 217 4 4 177 137 4 4 97 57 4 4 17

374 4 4 336 296 4 4 256 216 4 4 176 136 4 4 96 56 4 4 16

373 4 4 335 295 4 4 255 215 4 4 175 135 4 4 95 55 4 4 15

372 4 4 334 294 4 4 254 214 4 4 174 134 4 4 94 54 4 4 14

371 4 4 333 293 4 4 253 213 4 4 173 133 4 4 93 53 4 4 13

370 4 4 332 292 4 4 252 212 4 4 172 132 4 4 92 52 4 4 12

369 4 4 331 291 4 4 251 211 4 4 171 131 4 4 91 51 4 4 11

368 4 4 330 290 4 4 250 210 4 4 170 130 4 4 90 50 4 4 10

367 4 4 329 289 4 4 249 209 4 4 169 129 4 4 89 49 4 4 9

366 4 4 328 288 4 4 248 208 4 4 168 128 4 4 88 48 4 4 8

365 4 4 327 287 4 4 247 207 4 4 167 127 4 4 87 47 4 4 7

364 4 4 326 286 4 4 246 206 4 4 166 126 4 4 86 46 4 4 6

363 4 4 325 285 4 4 245 205 4 4 165 125 4 4 85 45 4 4 5

362 4 4 324 284 4 4 244 204 4 4 164 124 4 4 84 44 4 4 4

361 4 4 323 283 4 4 243 203 4 4 163 123 4 4 83 43 4 4 3

360 4 4 322 282 4 4 242 202 4 4 162 122 4 4 82 42 4 4 2

359 4 4 321 281 4 4 241 201 4 4 161 121 4 4 81 41 4 4 1

Slotting Strategy

SHIPPING DOCKS

A ZONE

B ZONE

C ZONE

D ZONE

79

Conclusion

• How did we do?• What is the One Thing you will take with you from this

workshop?

Date post:	21-Feb-2017
Category:	Leadership & Management
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The Proaction Group 9 box Workshop

Leadership & Management