Supply Chain Update June 19, 2008. 2 Supply Chain Update For Campbell Sales Organization Supply...

Supply Chain UpdateJune 19, 2008

2Supply Chain Update For Campbell Sales Organization

Supply Chain UpdateAgenda

1. Customer Service

2. Customer Pickup Program

3. Distribution Network Review

4. Sysco RDC’s

5. Project 380

6. Questions & Answers

3

Customer Service

Case Fill:

We are at or above our F’08 Service goals!

Order Fill:

We are at or above our F’08 Service goals!

Supply Chain Update For Campbell Sales Organization

4

Customer Pickup Program

1. Customer Pickup Program…Allows our customers to pickup their orders from our plants and warehouses using their own truck equipment or truck equipment from a certified trucking company with whom they have a contract.

2. Campbell cannot legally give a customer a pickup allowance that exceeds their actual cost to deliver to any given customer.

3. Customer Pickup allowances are calculated as follows:

4. Line haul Rate ($/Truck) + Fuel Surcharge ($/Truck) + Unload Allowance ($/Truck) = Total $/Truck Divided By TL Minimum Weight (43,000 Lbs for Dry or 39,000 Lbs for Frozen or Refrigerated)


5

Customer Pickup Program

Customer Pickup Allowance Calculation

Dry Grocery

Napoleon, OH to St. Louis, MO

Line Haul = $700

Fuel Surcharge = $308

Unload Allowance= $105

Total = $1,113

Minimum TL Wt = 430 Cwt

Pickup Allowance = $2.59/Cwt

University Park, IL to St. Louis, MO

Line Haul = $1,475

Fuel Surcharge = $207

Unload Allowance= $135

Total = $1,817

Minimum TL Wt = 390 Cwt

Pickup Allowance = $4.66/Cwt

Frozen/Refrigerated

Examples:

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Everett, WA

Denver, PA

Willard, OH

Marshall, MI

Paris, TX

Richmond, UT

Phoenix, AZ

Dallas, TX

Ft. Gibson, OK

Omaha, NE

Fairmont, MN

Lakeland, FL

Aiken, SC

Richmond, IN

Downers Grove, IL

Dickson, TN

Napoleon, OH

Douglas, GA

Listowel, ON

Bloomfield, CT

Dry Grocery Product Manufacturing LocationFrozen Product Manufacturing LocationRefrigerated Product Manufacturing Location

Mississauga, ON (2)Toronto, ON (3)Tillsonburg, ON

Kitchener, ON

Downingtown, PANew Holland, PAPhiladelphia, PA

Holland, MI

Alma, GA

Medina, NY

Reading, PA

* Not including Nieppe, France (Pepperidge Pirouettes)

Dumont, NJ

Solon, OH

Valdosta, GA

Campbell North America Foodservice

Manufacturing Locations 38*


7

Campbell Soup Co. (Plant DC)Sacramento, CA

TMT Warehouse Napoleon, OH

Campbell North America FoodserviceCurrent U.S. Dry Grocery Distribution Network

= TMT Napoleon Service Area= Sacramento Service Area

= Campbell FoodService Dry Grocery DC


8

Versacold WarehouseModesto, CA

Continental Refrigerated ServicesUniversity Park, IL

Campbell North America FoodserviceCurrent U.S. Frozen Distribution Network

= Campbell FoodService Frozen DC

= University Park, IL Service Area= Modesto, CA Service Area


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RDC - Creating an Efficient Link Between Suppliers & OpCos

• Redistribution is the process of aggregating demand for products across Operating Companies and determining the lowest possible cost flow path for the product

SupplierManufacturing/Distribution

SupplierManufacturing/Distribution

SYSCORedistribution Center(s)

SYSCORedistribution Center(s) SYSCO NE OpCosSYSCO NE OpCos

Reduction in the number of orders (from a centralized source) Reduction in the number of ship-to destinations for suppliers Reduction in the number of invoices and payments Reduction in safety stock Increase in the number of full truckload/rail shipments Increase in the number of pallet quantity orders

Through consolidationof orders, we expect …Through consolidationof orders, we expect …

ManufacturerManufacturer




Direct or RDC Based on Cost

Customer Service

Inventory

Cost of Goods Sold

OpCoOpCo

OpCoOpCo

OpCoOpCo

OpCoOpCo

RDC


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Sysco RDC Project

Alachua, FL

Salt Lake City, UT

Atlanta, GA

Front Royal, VA

Hamlet, IN

Dallas, TX


Open and operational

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What is Project 380?

Combining Refrigerated (38 ) + Frozen (0 ) = 380

Project 380 is the planned distribution consolidation of NAFS U.S. refrigerated products into the NAFS U.S. frozen distribution system

Project 380


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Shared synergies from the physical DC footprint will also drive alignment from a process and organizational standpoint

Demand Planning

Supply Planning

Deployment

• NAFS Supply Chain Organizational Optimization

• Backhaul Allowances – Shared Foodservice customers currently operate under 2 distinctly different policies between StockPot and AFH

• Order Leadtimes – Aligning to AFH order to delivery processes will reduce StockPot leadtimes by an average of 50%...but this comes with significant complexities from a Planning perspective and risks to aged finished goods loss

NAFS Supply Chain

NAFS Supply Chain

NAFS Supply Chain


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Project 380 also integrates with, or directly enables, other NAFS initiatives

Project Enabler Integration Points/Project 380 Considerations

One Voice • A common DC footprint will enable the infrastructure to support this project

Project Harmony • Supports process synergies vs. unique configuration

NAFS Alignment • Organizational synergies,


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A basic premise of Project 380 is to transition non-Safeway distribution network to DC’s currently being used on the frozen foodservice side of the NAFS business

Proposed New - Versacold

Modesto, CA

# of Customers - 76 (18 currently picking up frozen)

Volume – 8.7MM Lbs

# of SKU’s – 279 SKU’s

Proposed New - CRS

University Park, IL – Chicagoland area

# of Customers – 224 (68 currently picking up frozen)

Volume – 17.3MM Lbs

# of SKU’s – 341 SKU’s

Current State - Bellingham Cold Storage (BCS)

Bellingham, WA – Approximately 60 miles north of Everett, WA

Current DC for all non-Safeway channels – 403 SKU’s, 6M orders and 26MM lbs annually


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Even for the West Coast, order to delivery leadtime reductions are significant

Future State Example

Everett to Philadelphia, PA – 15 days

CRS to Philadelphia, PA – 8 days

Reduction of 7 days (46% reduction) Future State Example

Everett to San Francisco, CA - 10 days

Versacold to San Francisco, CA - 4 days

Reduction of 6 days (60% reduction)

Current state order to delivery timelines range from a low to 8 calendar days to a high of 16 days for East Coast, less than truckload deliveries.

Future State Example

Everett to Portland, OR - 9 days

Versacold to Portland, OR - 7 days

Reduction of 2 days (20% reduction)


16

Questions?


Supply Chain Update June 19, 2008. 2 Supply Chain Update For Campbell Sales Organization Supply...

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