1. Paul Winkler Industry Marketing Specialist Consumer Vertical Support Group J.D. Edwards Managing your Logistics Supply Chain Paul Winkler Industry Marketing Specialist Consumer Vertical Support Group J.D. Edwards

2. 2 Are You Feeling the Squeeze? Earnings per Share (EPS) Increasing Customer Demands

3. 3 Recent Consumer Packaged Goods Headlines Profits aren’t flowing like they used to at packaged goods companies. Can green ketchup and Tuna in a Pouch Save Heinz? - Fortune 9/18/00 pg 194 Profits aren’t flowing like they used to at packaged goods companies. Can green ketchup and Tuna in a Pouch Save Heinz? - Fortune 9/18/00 pg 194 Grupo Bimbo aims to boost Mexican biscuit market share - Reuters 13 Oct 2000 Grupo Bimbo aims to boost Mexican biscuit market share - Reuters 13 Oct 2000 “Sustainable high levels of sales and profit growth continued to elude many grocery manufacturers, retailers and wholesalers and Wall Street yawned at future projections for growth.” “Sustainable high levels of sales and profit growth continued to elude many grocery manufacturers, retailers and wholesalers and Wall Street yawned at future projections for growth.” - Grocery Manufacturers of America - Grocery Manufacturers of America Profits aren’t flowing like they used to at packaged goods companies. Can green ketchup and Tuna in a Pouch Save Heinz? - Fortune 9/18/00 pg 194 Profits aren’t flowing like they used to at packaged goods companies. Can green ketchup and Tuna in a Pouch Save Heinz? - Fortune 9/18/00 pg 194 Grupo Bimbo aims to boost Mexican biscuit market share - Reuters 13 Oct 2000 Grupo Bimbo aims to boost Mexican biscuit market share - Reuters 13 Oct 2000 “Sustainable high levels of sales and profit growth continued to elude many grocery manufacturers, retailers and wholesalers and Wall Street yawned at future projections for growth.” “Sustainable high levels of sales and profit growth continued to elude many grocery manufacturers, retailers and wholesalers and Wall Street yawned at future projections for growth.” - Grocery Manufacturers of America - Grocery Manufacturers of America

4. 4 So, what to do? 1. Supply Chain – EPS Connection Optimize Internally 2. Extend the Supply Chain – Collaboration 3. Internet Economy 4. Getting to “E”, studies, polls 1. Supply Chain – EPS Connection Optimize Internally 2. Extend the Supply Chain – Collaboration 3. Internet Economy 4. Getting to “E”, studies, polls

5. 5 Understand the Supply Chain – Financial Connection Executives know that using SCM is a technique to lower overall operating costs but….it can be also used to drive earnings. Executives know that using SCM is a technique to lower overall operating costs but….it can be also used to drive earnings. Over time, company valuation tends to be driven by Over time, company valuation tends to be driven by 1. Growth 2. Profitability 3. Capital Utilization Understand the Supply Chain – Financial Connection Executives know that using SCM is a technique to lower overall operating costs but….it can be also used to drive earnings. Executives know that using SCM is a technique to lower overall operating costs but….it can be also used to drive earnings. Over time, company valuation tends to be driven by Over time, company valuation tends to be driven by 1. Growth 2. Profitability 3. Capital Utilization How can you relieve the pressure?

6. 6 Supply Chain’s Potential Impact on Stock of Companies Revenue +1% = Stock Price +5% Operating Unit Expenses -1%= Stock price +6% Inventory Turns +20% = Stock Price +6% Day’s Sales Outstanding -5% = Stock Price +5% Fixed Asset Utilization +5% = Stock Price +3% Revenue +1% = Stock Price +5% Operating Unit Expenses -1%= Stock price +6% Inventory Turns +20% = Stock Price +6% Day’s Sales Outstanding -5% = Stock Price +5% Fixed Asset Utilization +5% = Stock Price +3% Average Company on S&P Industrials per S. Timme – Finlistics Solutions

7. 7 J.D. Edwards Value Performance Analysis

8. 8 Yesterday’s Business Model: The Introverted Organization Shop Floor Inventory ERP Distribution Finance

9. 9 Today’s Business Model: The Extroverted Enterprise Outsourcers Collaboration Suppliers Vendors Customers

10. 10 Increasing Competitive Advantage Collaboration Value Telephone Fax Telephone Fax EDI Forecasting EDI Forecasting Self Service VMI Procure- ment Self Service VMI Procure- ment Supply Chain Planning Design 3PL Contract MFG. Supply Chain Planning Design 3PL Contract MFG. Digital Market- places Source: Gartner Group

11. 11 Consumer Supply Chains -Today Supplier Retailer Consumer Manufacturer Distributor Broker Linear, sequential processing - each entity is limited by the entity before it with regard to knowledge of what is really going on!

12. 12 J. D. Edwards Consumer E- Solutions - Vision Every participant in the Value Chain has a view of the Consumer! “Consumer Centric world” Distributor Supplier Manufacturer Retailer Broker Consumer

13. 13 “New Economy” = Changes New business processes New business processes Trading communities Trading communities Inter-enterprise collaboration Inter-enterprise collaboration Personalized response and speed Personalized response and speed

14. 14 The New Bottom Line The new economy opportunity is enormous The new economy opportunity is enormous Participation in trading communities a requirement? Participation in trading communities a requirement? New technology foundation to support collaborative business processes required New technology foundation to support collaborative business processes required Speed Speed The new economy opportunity is enormous The new economy opportunity is enormous Participation in trading communities a requirement? Participation in trading communities a requirement? New technology foundation to support collaborative business processes required New technology foundation to support collaborative business processes required Speed Speed

15. 15 A CPG Perspective on the Internet Consumer Goods Technology Magazine 5 Most Important Market Forces : 2000 1. Pressure to reduce overall supply chain costs 47% 2. Pressure to compress total market cycle 40% 3. Greater buyer concentration & power 26% 4. Pressure to collaborate more effectively with partners 25% 5. Movement toward a more global marketplace 21% 6. Transform into an e-business (#8) 18% Consumer Goods Technology Magazine 5 Most Important Market Forces : 2000 1. Pressure to reduce overall supply chain costs 47% 2. Pressure to compress total market cycle 40% 3. Greater buyer concentration & power 26% 4. Pressure to collaborate more effectively with partners 25% 5. Movement toward a more global marketplace 21% 6. Transform into an e-business (#8) 18%

16. 16 A CPG Perspective on the Internet Consumer Goods Technology Magazine First 5 Focus Area in E-Marketplaces 1. MRO (maint,repair,office)/indirect e-procurement 28.2% 2. Transportation 26.9% 3. Company’s Own Exchange 21.4% 4. Supplier Vertical (e-chemicals etc.) 20.5% 5. Data Synchronization 20.5% Consumer Goods Technology Magazine First 5 Focus Area in E-Marketplaces 1. MRO (maint,repair,office)/indirect e-procurement 28.2% 2. Transportation 26.9% 3. Company’s Own Exchange 21.4% 4. Supplier Vertical (e-chemicals etc.) 20.5% 5. Data Synchronization 20.5%

17. 17 A CPG Perspective on the Internet Grocery manufacturers of America Survey Motivation to Increase e—business budgets 1. Increase efficiencies with trading partners 71% 2. Improve internal efficiencies 67% 3. Build brand awareness 64% 4. Increase sales with trading partners 60% 5. Increase Customer Relationship Management 60% 6. Protect market share 57% Grocery manufacturers of America Survey Motivation to Increase e—business budgets 1. Increase efficiencies with trading partners 71% 2. Improve internal efficiencies 67% 3. Build brand awareness 64% 4. Increase sales with trading partners 60% 5. Increase Customer Relationship Management 60% 6. Protect market share 57%

18. 18 One Last Word Old Economy versus New Economy

19. Thank you !! Paul_winkler@jdedwards.com