Reclamation Center “Future” Gary Regina Supply Chain Manager Kurt Welz Retail Donation Manager Charlie Makowski Director of Sales

Reclamation Center “Future” What is a Reclamation Center? – Central location for collection and processing of unsaleables product, Product Recalls or Items pulled from the primary distribution channel. – Can be owned by distributor or 3 rd Party. What is the purpose of a Reclamation Center? – A central collection point for returns established in the mid 1980’s to reduce labor costs – To control disposition of unsaleable product – To ensure proper issuance of billings and store credit – To provide a central location for product audits

Reclamation Center “Future”

With Today’s Technology, we will begin to see a much different picture. — More and More retailers are moving to a retail perpetual inventory and replenishment model that will demand real-time inventory adjustments and credits. — Causal Data is necessary to address the root cause of returns and the potential supply chain / merchandising improvements — Donations for perishable products are made at the retail stores to charitable organizations with proper controls… What will the future look like for Reclamation Center? — A retail solution that will aid in the reclamation process by reducing some of the centers sorts (Chutes) by allowing retail stores to select and sort by return type or damage type. allowing donations of perishables (Dairy and Frozen products) at store.

Reclamation Center “Future” The Future is an In-Store Model Features/Benefits — Store Personnel Scans Product on a Timely Basis Real Time Inventory Update Increases accuracy of Causal, i.e., Damage, Out of Date Identifies Potential Hazardous Product Increases accuracy of store disposition Identifies Authorized & Un-Authorized Reduces Shrink — Real Time Store Compliance Recall Reset — Box License Plates Provide Box Manifests Store Audits — Reduces Reclaim Center Scans by 50-60% — Deployable Anywhere Warehouse Retail Store

Reclamation Center “Future” What are some Disadvantages and what can we do to mitigate those potential concerns? Multiple Processors-Inconsistent Execution & Accuracy  Structured training and implementation process with on-going and continuous education programs. Store Disposal Costs  No additional disposal costs as all dry goods designated to be destroyed will be returned to the reclamation centers as normal  All Dairy and Frozen Food items will be donated to “Feeding America” Back Room Space  Retail stores already have a designated returns processing area so this will not use any more area then what they currently have and are using. Possible Abuse  With the use of a data warehouse reporting tools, most companies can build a triggered report that could identify potential abuse and address the issue as it takes place.

Reclamation Center “Future” Questions?& Answers!