1. APPLIED LOGISTICS The Productivity Improvement Program for Warehousing and Transportation

2. APPLIED LOGISTICS The Productivity Improvement Program What constitutes a fair measurement? What constitutes a fair measurement? Do you have reasonable output expectations? Do you have reasonable output expectations? Can you identify and eliminate inefficient work activities? Can you identify and eliminate inefficient work activities? What’s the best way to perform a task? What’s the best way to perform a task? How can you create better and safer working conditions? How can you create better and safer working conditions?

3. APPLIED LOGISTICS The Productivity Improvement Program All questions that managers must address and be able to answer if their company is to remain profitable in today’s highly competitive business environment. The reason is simple: Productivity is directly related to Profitability.

4. APPLIED LOGISTICS The Productivity Improvement Program is designed to help our clients to significantly reduce their operating costs and achieve their financial objectives. is designed to help our clients to significantly reduce their operating costs and achieve their financial objectives. The objective of The Program is to maximize productivity through a more efficient utilization of physical resources and a better control of labor costs. The objective of The Program is to maximize productivity through a more efficient utilization of physical resources and a better control of labor costs.

5. APPLIED LOGISTICS The Program Optimization and Standardization of Existing Methods Optimization and Standardization of Existing Methods Implementation of Engineered Labor Standards Implementation of Engineered Labor Standards Installation of Proprietary Management Reporting Software Installation of Proprietary Management Reporting Software Employee Orientation and Communication Employee Orientation and Communication Supervisory Training and Development Supervisory Training and Development

6. APPLIED LOGISTICS The Methods Review Identify and establish the best and most effective way of performing work activities Identify and establish the best and most effective way of performing work activities Eliminate unproductive time Eliminate unproductive time Promote a more efficient utilization of available resources Promote a more efficient utilization of available resources Create safer and more attractive working conditions Create safer and more attractive working conditions Meetings with managers, supervisors, and floor operators Meetings with managers, supervisors, and floor operators

7. APPLIED LOGISTICS The Methods Review (continued) Breaks down each task into a number of very small work elements that can be accurately measured Breaks down each task into a number of very small work elements that can be accurately measured Standardizes these measurable elements Standardizes these measurable elements Ensures that workforce performs each task in the same, optimally efficient way Ensures that workforce performs each task in the same, optimally efficient way Generates work “Preferred Methods” Generates work “Preferred Methods” Improves product layout Improves product layout

8. APPLIED LOGISTICS The Methods Review (continued) Psychological aspect: Employees’ attitude toward the PRODUCTIVITY IMPROVEMENT PROGRAM is far more positive. Employees’ acceptance translates in greater program effectiveness.

9. APPLIED LOGISTICS The Methods Review (continued) Engineering Services: Maximizes the warehouse space utilization by providing the most efficient slot configuration for each line item stored in each section. This optimizes the order selection process while fulfilling retail store requirements.

10. APPLIED LOGISTICS The Methods Review (continued) Direct Benefits: Increased pick rate, improved order selector’s productivity, lower product damage, reduced replenishment, and improved store service level.

11. APPLIED LOGISTICS The Engineered Labor Standards Individually tailored Individually tailored No pre-determined time standards No pre-determined time standards No averages No averages Greater accuracy of standard time values Greater accuracy of standard time values Extremely detailed documentation Extremely detailed documentation Avoidable and unavoidable delays are recorded and documented Avoidable and unavoidable delays are recorded and documented

12. APPLIED LOGISTICS The Engineered Labor Standards (continued) Travel and pick time are accurately calculated Travel and pick time are accurately calculated Warehouse is electronically mapped Warehouse is electronically mapped Computer program stores all the elemental data related to all warehouse activities Computer program stores all the elemental data related to all warehouse activities Little or no maintenance Little or no maintenance

13. APPLIED LOGISTICS Fair, reasonable, and attainable Fair, reasonable, and attainable Accurate and statistically correct Accurate and statistically correct Based on optimum and safe working methods Based on optimum and safe working methods Easy to maintain Easy to maintain Greatly reduce labor costs Greatly reduce labor costs Improve assets and resources utilization Improve assets and resources utilization Require no capital expenditure Require no capital expenditure

14. APPLIED LOGISTICS Provide paybacks in months, not years Provide paybacks in months, not years Accept incentive programs Accept incentive programs Generate higher employees’ accountability Generate higher employees’ accountability Apply to all warehousing and distribution functions Apply to all warehousing and distribution functions

15. APPLIED LOGISTICS Management Reporting Software Accurately determines actual workload requirements for a specific time interval, delivery route, or any other critical function before production begins Accurately determines actual workload requirements for a specific time interval, delivery route, or any other critical function before production begins Instantly tracks shift progress in relation to time expended Instantly tracks shift progress in relation to time expended Monitors and measures the performance of each operator against the standards throughout the shift Monitors and measures the performance of each operator against the standards throughout the shift

16. APPLIED LOGISTICS Management Reporting Software (continued) Tracks productive time as well as time spent in non-standard and off-standard activities by reason Tracks productive time as well as time spent in non-standard and off-standard activities by reason Calculates and administers incentive programs targeted at increasing productivity Calculates and administers incentive programs targeted at increasing productivity Generates daily reports on several warehousing and transportation key- functions Generates daily reports on several warehousing and transportation key- functions

17. APPLIED LOGISTICS Management Reporting Software OLEC  OLEC  (On-Line Effectiveness Control System) (On-Line Effectiveness Control System) is a software program designed to provide managers with powerful means of scheduling manpower and controlling labor costs. In combination with our standards calculation module, OLEC  accomplishes all the major objectives of a Labor Management System.

18. APPLIED LOGISTICS Reduced labor costs Reduced labor costs Improved manpower scheduling and allocation Improved manpower scheduling and allocation More balanced workload distribution More balanced workload distribution Real-time visibility into labor productivity Real-time visibility into labor productivity Early identification of trends and problem areas Early identification of trends and problem areas More effective supervision More effective supervision

19. APPLIED LOGISTICS Communication with Employees Features employee orientation sessions Features employee orientation sessions Explains in detail the program objectives, the techniques being used, and the level of participation expected from everyone Explains in detail the program objectives, the techniques being used, and the level of participation expected from everyone Facilitates discussing employees’ own ideas with managers and engineers Facilitates discussing employees’ own ideas with managers and engineers Eliminates fear, doubts, and resistance to change Eliminates fear, doubts, and resistance to change

20. APPLIED LOGISTICS Communication with Employees (continued) Employees will support the PRODUCTIVITY IMPROVEMENT PROGRAM if they understand it and feel part of it. For the program to succeed, management must obtain full cooperation from every participant.

21. APPLIED LOGISTICS Supervisor Training Management must provide leadership for the program Management must provide leadership for the program Training sessions on leadership, motivation, manpower scheduling, and performance monitoring Training sessions on leadership, motivation, manpower scheduling, and performance monitoring Focus on providing supervision with a basic knowledge of industrial engineering fundamentals and techniques Focus on providing supervision with a basic knowledge of industrial engineering fundamentals and techniques “Train-the-trainer” approach “Train-the-trainer” approach

22. APPLIED LOGISTICS Supervisor Training (continued) Provides Managers and Supervisors with the know-how necessary to ensures the ongoing success of the PRODUCTIVITY IMPROVEMENT PROGRAM and of the standards implementation long after our engineers have left your facility.

23. APPLIED LOGISTICS The Productivity Improvement Program for Warehousing and Transportation This “win-win” combination of scientific work measurement, labor planning and control software, and a people-oriented approach, benefits both employees and management. At the same time, it greatly facilitates the job of union’s agents.

24. APPLIED LOGISTICS The Productivity Improvement Program for Warehousing and Transportation As a result of this approach and our commitment to accuracy and fairness, our Engineered Labor Standards are by far the most welcome among employees and trade unions anywhere.

25. APPLIED LOGISTICS The Productivity Improvement Program for Warehousing and Transportation The end-result is a more productive workplace and an improved working environment at all organizational levels. The idea is to “Work smarter, not harder”

26. APPLIED LOGISTICS APPLIED LOGISTICS Productivity Improvement Programs for Distribution A fundamental point of our business philosophy is the realization that our success and that one of our clients are inextricably connected.