Moving Your Supply Chain Beyond Traditional Distribution and Fulfillment Centers Bruce Tompkins Partner, Tompkins International May 13, 2015

What is a Traditional Furniture Distribution Center / Fulfillment Center? Reality of Today’s Marketplace Supply Chain Transformation Path to Distribution Transformation ConclusionsOpportunities for Furniture Distribution Session Overview International Conference of Furniture Transportation and Logistics 2:00 3:00 Copyright 2015 Tompkins International

03 What is a Traditional Furniture DC / FC? International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  Size Range?  Configuration?  Material Handling Equipment and Automation?  Technology Employed?  Practices and Processes – Slotting, Cycle Counting?

Reality of Today’s Marketplace International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  Customer Expectations  Evolution: Who Is The Boss?  Retailer: YGGIWIS (Your Gonna Get It When I Say)  Customer: IWI –WWIWI-OYTMTP (I Want It When And Where I Want It, Once You Tell Me The Price)  Speed of Delivery  Leaders In Setting Customer Expectations – Walmart/ Alibaba/Amazon  E-Commerce (online sales and shopping) 04

01 05 Reality of Today’s Marketplace International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  Global Expansion (ex. selling in China)  Growing US Market  US Furniture Factory Orders in 2014: +6.5%  US Furniture Factory Shipments in 2014: +6.0%  US Furniture Sales to 2019: +15.5%  Transformation of US Supply Chains and Distribution Facilities

01 06 Supply Chain Transformation International Conference of Furniture Transportation and Logistics Pursuing Cost Reduction in a Single Supply Chain Process. Pursuing Holistic Supply Chain Cost Reduction. Pursuing a Supply Chain Transformation Plan by Department. Pursuing a Holistic Supply Chain Transformation. Integrated, Aligned, and Coherent Strategic, Aligned Plans Incoherent, Fragmented Pursuits Incremental change: When done right it is a process of Continuous Improvement and Increased Profitability. Transformational change: When successful leads to Monumental Improvement and Competitive Advantage. LowHighDegree of Change Copyright 2015 Tompkins International

Opportunities for Furniture Distribution International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  Omnichannel  Personalized Experience  Demand Visibility  Organizational Structure That Supports Above 3 Bullet Points  Technology That Supports Above 3 Bullet Points

Path to Distribution Transformation International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  For Each Characteristic We Must Identify The Required Supply Chain Transformational Change By Filling The Gap Between Our Current State and Our Ideal Future State  Characteristics  Omnichannel Status:  Seamless Experiences  Seamless Inventory  Seamless Data  Seamless Logistics (Network, Inventory, Transportation, Distribution )  Personalization Status:  IWI WWIWI OYTMTP  Reasonably Fast/Responsive

Path to Distribution Transformation International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  Visibility Status:  Demand Driven: Pull to Store Sales Floor  Consumer Sale to Raw Materials  Organizational Structure Status  Technology Status

Conclusions International Conference of Furniture Transportation and Logistics Copyright 2015 Tompkins International  There are real and significant changes occurring in the distribution environment for the furniture industry  The DC of years ago is slowly becoming less functional to meet the needs of customers  Distribution must be transformed to keep pace with customers and competitors  True transformation requires a strategic, aligned plan and a high tolerance for change  Operations Strategy – Structure – Implementation

01 11 Contact Information Contact Us Global Switchboard: Toll Free: Fax: Bruce Tompkins or Mail Contact Web Site Worldwide Headquarters – NC Tompkins International 6870 Perry Creek Road Raleigh, NC Copyright 2015 Tompkins International Tompkins International. Your Supply Chain. The Right Way.

Leadership Forum – San Antonio To learn more about the Leadership Forum visit our website:  Meet colleagues and exchange ideas at a special kick-off event on Monday, August 31.  Attend keynote and general sessions on current hot topics.  Learn about new practices and ideas in education sessions on operations strategies, the future of supply chains, network design processes, demand-driven supply chains, and much more.  Gain insights from presentations by top supply chain professionals. Copyright 2015 Tompkins International

01 13 Visit to Know Us Copyright 2015 Tompkins International Follow Us on Social Media twitter.com/jimtompkinsfacebook.com/TompkinsInternationalwww.linkedin.com/company/tompkins- international plus.google.com/+TompkinsInternational Tompkins International. Your Supply Chain. The Right Way.