at Bolthouse Farms Amanda Cebell Ruby Juarez Will Altmiller Asif Sohail

Bolthouse Farms (History) 1915 Michigan 1972 Bakersfield 1990 Baby Carrots 2003 Premium Beverages Salad Dressing 2007 Source: 2

Bolthouse Farms Mission: We are a market driven, fully integrated farming company. We are innovative in agricultural and packaging technology. Within the parameters of our Corporate Philosophy, our focus is to offer quality products at the lowest possible cost through a “state of the art” plant, quality raw material and the maintenance of trust and credibility with our customers, growers and employees. Products: Fresh Carrots Premium Beverages Yogurt and Vinegar Based Dressings 3

Pallets 4 Commonwealth Handling Equipment Pooling consumer goods, produce, meat, home improvement, beverage, raw materials, petro-chemical and automotive industries. Containers and pallets are not for sale. Rental price for pallets varies depending on contract agreement.

Step 1 of DMAIC - Define Pallet Tracking Issue: Over or Under-stated Inventory Levels No inventory maintained in the System Vendor (CHEP) Complaints Continuous Manual Adjustment Potential loss of pallets not reported 5

CHEPs Flow at Bolthouse 6

Step 2 of DMAIC - Measure Measurements and Goals for Improvement The variance b/w In and Out Currently 2000 (approx) pallets per week 500 pallets + or – per week is the goal Audit of Transfer/Customer Orders Less than 1% discrepancy b/w physically on rail car and what the transfer order shows Physical count Less than 0.5% variance b/w physical count and inventory level in the system. 7

Step 3 of DMAIC - Analyze 8

Step 3 of DMAIC – Analyze (cont….) 9 Check Sheet Week #Inbound PalletsOutbound PalletsVariancePercentage 126,86529,079-2, % 260,26756,1604, % 350,88045,5765, % 454,14145,3548, % 552,23949,5752, % 6107,45199,7177, % 763,50140,95622, % 866,42059,8866, % 9111,660119,418-7, % 1044,75442,6422, % 1146,38339,1327, % 1243,21242, % 1341,45440, % 1445,09942,3032, % 1547,10037,3899, % 1638,69443,347-4, % 1756,75744,46912, % 1860,72946,81513, % 1951,25842,6968, % 2052,09845,9636, % 2153,85643,06210, % 2249,03247,9251, % 2366,96048,63918, % 24159,819153,5466, %

Step 3 of DMAIC – Analyze (cont….) Weekly Percentage Variance 10

Step 4 of DMAIC – Improve I. Goals for Improvement 1. Reduce Current Average Variance from 10% to 3% 2. Minimize the Financial Impact. II. Alternatives: 1.New Software system implemented Con: too costly current system is already implemented. 2.RFID tag all pallets– too costly 3.Efficient Accountability (See Following Fish Bone Diagram) 1.Process Auditing 2.Using the Existing ERP System 3.Physicality Measures 4.Regular Reconciliation 11

Step 4 of DMAIC – Improve (cont….) 12

Step 5 of DMAIC – Control Continued Process Improvement: Monthly Reconciliation with CHEP Develop and Implement SOP: Staff Training Timeliness/ Inventorying Accountability Practices Annual SOP review and updating Control Charting 13

Conclusion Define: The tracking of CHEP Pallets at Bolthouse Farms Measure: The Variance between in/out Audit of Transfers/Customer Orders Physical Count Analyze: Data & Process Flow of Inventory Management Improve: Reduce Variance Minimize Financial Impact-Utilize Technology Control: Monthly reconciliation of CHEP Staff Training Accountability 14

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