1. RENO DeCA 2000 ALA Vendor Stocking Committees

2. What is Vendor Stocking Retail (Outside Gate) Commissary Answer: Product Which Vendor’s Pay to Stock in Commissaries, Which the Store Stocks Outside Gate.

3. How Did Vendor Stocking Get Started? Industry Started to Stock Categories Which Were Not Adequately Stocked by Commissaries in the Late 1960’s and Early 1970’s New Categories Authorized for Sale in Commissaries Required Vendor Stocking –Light Bulbs –Batteries –Gourmet

4. Scanned Package Volume % Sales By Subgroup (CONUS) *Empower IT 12 months Ending February 1999 CONUS

5. Vendor Stocked Categories

6. Vendor Stocking Has Served the Commissary System Well Over the Years But Times Have Changed!

7. Store Sales (7 Day a Week Operation) Vendor Stockers Do Not Like to Work Seven Days a Week. 45% to 50% of Weekly Sales (45% of ACV)

8. Economic Trends

9. Low Unemployment Has Created a Competitive Job Environment $8.00 Per Hour $10.00 Per Hour $9.00 Per Hour $8.00 Per Hour Significant Bonus

10. Many Stockers are Saying “No!” to Working in Commissaries

11. Defining The Vendor Stocking Problem ALA Report 1999 Don Goetz Richard Walker

12. Setting The Sample Base Region Directors Supplied Commissaries With Vendor Stocking Concerns –Determined random sampling of stores to visit and evaluate during April Created MBU/ALA Joint Evaluation Worksheets –Obtained CSO Input to Analyze FDS/DSD Categories, FDS Distributors and Vendor Stocker Issues –Obtained input from Vendor Stockers

13. ALA 1999 Vendor Stocking Report Opportunities –Identify Reasons for Inadequate Vendor Shelf Stocking Inadequate Weekend Vendor Stocking Top 25 Locations Where Problems Exist Determine Reasons for Turnover of Vendor Stockers –Interview Stockers –Interview Sales Representatives

14. ALA 1999 Vendor Stocking Report Findings

15. Vendor Stocking Analysis Store Classification 1=POOR 2=BELOW AVERAGE 3=AVERAGE 4=ABOVE AVERAGE 5=EXCELLENT CategoryR1 AverageR2 AverageR3 AverageDeCA Total FDS Without HBC 3.203.193.81 3.40 HBC Average Rating 2.562.463.51 2.84 Subtotal Refrigerated Overall3.203.253.91 3.45 DSD Average Rating 3.213.384.15 3.58 Subtotal CATEGORY RATING 3.093.123.853.35 TOTAL

16. Vendor Stocking Category Regional Analysis

17. Vendor Stocking Category Regional Analysis Continue

20. Vendor Stocker Evaluation DeCA Concerns Consistency Reliability Weekend Performance Turnover Responsibilities –Store Requirements –Accountability Training

21. Shelf Stocking Issues Industry/ Independent Contractor Concerns Store Ordering Quantities –Ordering Enough Cases to Fill Displays to Capacity –Ordering Extra Cases of Proven Seller Store Job Expectations –Cleaning –Ordering –Warehouse Maintenance –Display Removal Access to Product Seven Day Work Week

22. Vendor Stockers Hourly Rate Components I. # of Hours in Commissary II. # of Cases Stocked III. Rate Per Case

23. Vendor Stocking Compensation Package

24. Vendor Stocking Problem Inadequate Training Inconsistent Deliveries Seven Day Operation Difficulty in Accessing Product Inconsistent Ordering Same Pay

25. 2000 ALA Vendor Stocking Initiatives

26. Vendor Stocking Task Force Organizational Chart

27. Purpose of Executive Vendor Stocking Committee To Provide ALA & DeCA a Support for Recommendations to Improve Vendor Stocking Problems –Achievability Real Solutions –Financial Impact Broker Manufacturer Distributor DeCA –Criteria for Membership to Executive Committee Have Financial Responsibility for Military Within Company

28. Executive Vendor Stocking Committee Members

29. Recommended Solutions

30. Total US Vendor Stocked 12 Pack Cases

31. DeCA/Vendor Stocking Estimated Total Expenses US *DeCA Average **Industry Supplied

32. Vendor Stocking Solutions (Draft) DeCA Assumes Responsibility for Vendor Stocked Category Industry Uses DeCA Contractors (Potential $45 - 60,000,000 Incremental Cost To DeCA) (Potential $30,000,000 Incremental Cost To Industry)

33. Draft Vendor Stocking Solutions Currently the Financial Committee is Evaluating The Cost of Solutions –DeCA –Industry Target Date of Completion - May 30th

34. Draft Vendor Stocking Solutions (None or Limited Cost) More Flexible Authorized Stocking Hours Training Video (Coordinated With ALA) Better Working Environment Improved Ordering of Vendor Stocked Items Improved Accessibility to Vendor Stocked Inventory Better Hiring of Vendor Stockers –Job Fairs

35. More Flexible Stocking Hours Evaluate Vendor Stocking Hours –Needs of Commissary –Needs of Stocker –Needs of Patrons Create When Possible a Better Working Environment

36. Training Video Coordinated with ALA Responsibilities Policies Importance of Job Payment Method Tools

37. Improved Ordering of Vendor Stocked Items Problem That Exists Mostly on Weekends. Industry Needs to Ensure Stockers are Stocking on Weekends. DeCA Needs to Ensure Product is Ordered Properly

38. Better Hiring of Vendor Stockers Job Fairs Career People Families

39. Improved Accessibility to Vendor Stocked Inventory Organize Backroom Freezer –Shelving on Perimeter Separate Area in Backroom for HBC Inventory. If area secured Need DeCA Personnel With Key Available. Use of Carts When FDS Merchandise Separated.

40. Draft To Summarize Vendor Stocking Has Been a Part of The Commissary System for Over 30 Years. The Seven-Day Commissary Operations & Low Unemployment Necessitates Change. DeCA & ALA are Evaluating Several Solutions. Significant Progress in Solving Problems Can Be Made by DeCA & Industry at Commissary Level.