Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

WEBVAN.COM(NASDAQ: WBVN)

The Last Mile of E-Commerce

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

FAST FACTSOperations first began in San Francisco in 1999

Now open for business in Chicago, San Francisco, Sacramento, and Atlanta

Atlanta Specifics

• Operations began in Atlanta May 2000

• Employs over 600 individuals

• Competition includes Kozmo, Peapod, and Streamline

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

WEBVAN BUSINESS MODEL•The “Last Mile” of e-commerce

•A more convenient, efficient, and cost-effective way to get products to consumers

•What everyone really wants to know: Is it a proven model?

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

PRESSROOM New business means constant change…

•“Webvan.com Gives Customers Added Value with Ashford.com Partnership”

• “Webvan Unveils New Redesigned Webstore, New Logo, and Branding Strategy”

•“Webvan and HomeGrocer Agree to Merge”

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

SUPPLY CHAINBusiness lies between wholesaler or vendor and consumer

Food and Merchandise (the product) flows “down” supply chain to end consumer

Customer data (order information) flows “up” supply chain to Distribution Center

Manufacturer / Wholesaler relationship is independent of Webvan operations

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

WEBSTORE

• Order is relayed electronically to distribution center for processing

• Placed order triggers product flow down supply chain

Order initiated by consumer on-line

• Consumer selects delivery window, compiles product list, and submits order

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

STOCKING UPForecasts by Exponential Smoothing

• Demand history in San Francisco

• Vast amounts of customer “hit” data

• “Special Times” - e.g. Thanksgiving - how do they do it?

• Aggregate forecasts are drilled down to product level

Electronic Data Interchange (EDI)

• Purchase Orders automatically submitted electronically to most wholesalers / vendors when nearing reorder point

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

WHOLESALERWholesaler establishes product line from multiple

manufactures (Webvan has little control over this relationship)

Supply Breakdown:

• 80% of sales volume handled by Fleming (NYSE: FLM) Wholesales

• 20% of sales volume supplied vendor-direct

Aggregate product list at wholesaler includes:

•Milk/Dairy, Meats, Poultry, General Wholesale, Beverage, Produce, Baked Goods

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

RECEIVINGProduct shipment cost “paid by supplier”

Incoming shipments arrive in vendor vans, semi-trucks, or independent carriers to one of 18 loading docks

Most wholesalers / vendors have standing delivery times on a daily or weekly basis

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer Atlanta Distribution Center (DC)

• Location: Suwanee, GA

• Peak hours of operation: 12 am-6 am (order packing)

• Facility Size: 350,000 sq. ft.

• Interesting Details:- 50,000+ SKU’s- Facility is the equivalent of 18-20 “standard”grocery stores in volume (sales dollars)

DISTRIBUTION CENTER

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer Operational Details:

• Automated order processing system

• Approximately 4.5 miles of conveyor

• Barcode scanning system for tote routing

Tote Identification:

• Yellow- Dry Goods

• Green- Chilled Goods

• Blue- Frozen Goods

DC (continued…)

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

MOVEMENT TO STATIONS9 stations serving Metro Atlanta

• Alpharetta• Atlanta (Airport)• Atlanta (Downtown)• Marietta• Norcross• Roswell• Suwanee (also DC)• Tucker• Woodstock

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

Each Station is within 1-1.5 hrs of DC

Products travel securely in refrigerated semi-trucks

Standing delivery times to station result in LTL shipments when demand is low

MOVEMENT TO STATIONS

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

STATIONSPull system (JIT)

• No inventory stored in totes• Products packed to order

Totes transferred from large semi-trucks to small courier vans

Peak hours of operation: 5-7am and 1-3pm

Chattahoochee StationFloor Plan

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

FINAL DELIVERY10-12 courier vans service each station covering 20-30 square miles total

Deliveries scheduled from 7-2pm and 3-10pm

Optimized route printouts assigned to each courier

Courier van has a refrigerated section

Labor costs = 40% of total transportation costs

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer

IN-HOME SERVICE

1st time customers receive Webvan introduction and promotional incentives

Credit Card Transaction device built into handheld Palm Pilot

Wholesaler / Vendor

Consumer

Station

Distribution Center

Manufacturer