1) C&S Wholesale Grocers uses a multiple tier forecasting approach to optimize and automate its rapid replenishment procurement. This involves enterprise-level collaboration with manufacturers, forecast-driven economic order quantities, and daily forecast realignment. 2) This approach helps solve challenges around product availability, operational costs, and forecast accuracy for rapid replenishment. It has led to improved vendor fill rates, reduced supply chain costs, and more stable inventories. 3) C&S aims to expand this approach to all rapid replenishment vendors and drive further supply chain improvements through forecast-driven processes.

1. Optimizing and Automating Rapid Replenishment 3/27/2008 Eric Winn Director Demand Planning, ES3 Supply Chain/Rapid Replenishment Procurement, & Procurement Analytics C&S Wholesale Grocers

5. What have we accomplished? Organization: People and Productivity Target: Maximize Efficiency in Core Activities to Help Build a Premier Supply Chain Organization Process: Rationalization and Standardization Technology: Automation and Accuracy In 2006-2007, C&S was focused internally on reducing cost while improving the quality of its supply chain and procurement operations… Drive organizational changes… … and process changes… … and “change the game” with technology enablement in the form of demand management with Oracle-Demantra

10. Multiple Tier Forecasting Approach 20-WEEK FORECAST TWO YEARS HISTORY 8-week Demand Expectation Collaboration w/Vendors at Brand Group Level 30-day Annualized EOQ Forecast by Sku Daily Forecast Re-Alignment Causal(s): Very Recent Demand vs. Original “Curve” 20-week Forecast by Sku Causal(s): 2 Years of Baseline (5) and Promotional (7) Factors The multiple tier approach leverages sophisticated multiple variable/causal-based forecasting with an overlaid simplified re-alignment process by sku, along with a dynamic 30-day EOQ and brand group collaboration with manufacturers

12. Current State Benefits and Future State Vision Enterprise-level collaboration with manufacturers Forecast-driven EOQ Daily forecast re-alignment and dynamic forward-looking safety stock Vendors on program have improved fill-rates by up to 700 basis pts Significant reductions in supply chain costs Stable inventories with improved in-stock levels Expand program to all rapid replenishment vendors and drive lead time reductions to enable greater participation Drive other supply chain improvements via the forecast-driven process (i.e. slotting, transportation planning, etc.) Strike balance between re-alignment-driven order point and forecast-driven safety stock and order quantities TODAY  NEXT PHASE PLAN