04/19/23 CGR/Oasis/Nature's Best 1

Tract Topic 3: Channel Structure and Strategies

Peter Crosby, Principal, CGR Management Consultants

John D. Harpst, Director of Materials, OASIS CORPORATION

Mark Smith, Vice President Operations, NATURE’S BEST

Tuesday, Oct 19, 1:30PM to 3:00PM (03E)Wednesday, Oct 20, 11:00AM to 12:30PM (03H)

Unique Strategies for Supply Chain Channel Mixes

04/19/23 CGR/Oasis/Nature's Best 2

Session Agenda

Introductions and Overview: Pete Crosby, Panel Moderator (0:00-0:15)

Oasis Corporation: John Harpst (0:15-0:35) Nature’s Best: Mark Smith (0:35-0:55) Open discussion with session attendees

and participants (0:55-1:10) Question and Answer session (1:10-1:30) Adjourn to next session (1:30)

04/19/23 CGR/Oasis/Nature's Best 3

Overview

Unique channel mix challenges E-commerce integration with

customers, suppliers, and intermedieries

Competitive challenges Explanation of E-commerce solution

strategies

04/19/23 CGR/Oasis/Nature's Best 4

Goal: Speed and cost to market

04/19/23 CGR/Oasis/Nature's Best 5

Examples of Successful EC Strategies

Wal-Mart’s use of EDI/cross docks McKesson’s use of pharmacy SOPS devices AHS use of hospital stores SOPS devices Toyota JIT inbound logistics with suppliers Ford’s accounts payable paperless match P&G’s Every Day Low Prices (EDLP) Dell’s C2B mail order PCs GE/GEISCO OEM&MRO parts reverse

auctions

04/19/23 CGR/Oasis/Nature's Best 6

Benefits of Successful SC Integration Inventories reduced 50% 20% reduction in supply chain costs as a

percentage of total revenues 40% increase in on-time deliveries Cumulative cycle time reduction of 27% 17% increase in revenues Out-of-stock incidents down 9 times 50% reduction in FG inventory by

postponing packaging/labeling until orders received

Source: MIT Center for Logistics Survey of 50 successful Supply Chain Re-engineering projects

04/19/23 CGR/Oasis/Nature's Best 7

Unique Strategies for Supply Chain Channel

MixesJohn D. Harpst

Director of MaterialsOASIS CORPORATION

265 North Hamilton RoadColumbus, Ohio 43213-0150

JHARPST@infinet.com

04/19/23 CGR/Oasis/Nature's Best 8

OASIS - Company Overview

World Leader in Production and Distribution of Water Dispensers to two distinct channels drinking fountains to construction companies bottled water coolers to bottled water companies

Worldwide production and distribution facilities serving “unique channel mixes”

04/19/23 CGR/Oasis/Nature's Best 9

Evolving Markets

Early 80’s Market Capital Decision Making

Model

Late 90’s Market Customer Awareness Model

04/19/23 CGR/Oasis/Nature's Best 10

Oasis’ Supply Chain CharacteristicsSuppliers Customers

Class A EDI/e-commerceKanban – Zero LeadtimeCatalogue Components

Utilize Forecasts

Electronic OrderingTruckload/High Volume

Catalogue Finished GoodsProvide Forecasts

Class B Rip ‘n Read EDINominal Lead-time

Nominal CustomizationLTL Deliveries

Fax OrdersReasonable Leadtimes

Nominal CustomizationLTL Orders

Class C Call-in & Mail OrderingCustom Components

Long Lead-times

Phone OrdersComplete Redesign

Immediate Need

04/19/23 CGR/Oasis/Nature's Best 11

Distribution Channels

Highest V O L

Cellular Manufacturing Facilities Cellular Repetitive Manufacturing Consignment Truckloads Kanban Truckloads Cellular Lot-for-Lot

U M E

Lowest

Distribution Warehouses Rep Stock Build to Order

04/19/23 CGR/Oasis/Nature's Best 12

Strategic Thrusts Options E-commerce integration to fit all channels

EDI over the net FAX Web based Corroboration

Supply chain bolt-ons to ERP WMS VMI

Manufacturing initiatives (cells, Kanbans, MES, TQM, empowerment)

Other options, such as inventory consignment

04/19/23 CGR/Oasis/Nature's Best 13

Nature’s Best

Unique Strategies for Supply Chain Channels

Mark C. SmithVice President, Distribution

Nature’s Best105 S.Puente St.

Brea, California 92821

04/19/23 CGR/Oasis/Nature's Best 14

Nature’s Best

Privately Owned. Established in 1969. Largest Health Food Distributor on the West Coast. 187,000 square foot facility. 20,000 SKU’s. Full Case and Single Unit Shipping. 2,000 deliveries per week. Private Fleet operating over 2 million miles annually. Delivery area of 7 western states, Hawaii, Alaska,

New Zealand, Australia, Philippines and Singapore.

04/19/23 CGR/Oasis/Nature's Best 15

NB’s Definition of EC

Telephone Fax Computer MIS handheld order units Any Electronic Business Transaction Original E-Commerce was catalog

sales

04/19/23 CGR/Oasis/Nature's Best 16

Present View of EC Three Basic Types

Fulfillment to Consumer Fulfillment to Retailer

independents (local SUO health food store)

regional retail chains (i.e., Walgreen’s, Safeway)

national specialty chains (GNC) mass merchandisers (Wal-mart; Costco)

Manufacturer to Fulfillment

04/19/23 CGR/Oasis/Nature's Best 17

Wholesaler View Point Web Sites are the same as a brick and

mortar store front. Direct selling to consumers is competing

with your own retail customers. E-Commerce or Web Site selling (e-

tailing) will cause the continuing life of the wholesaler/fulfillment centers.

Fulfillment will be the life blood of e-commerce. The box must get moved in reality not virtual reality.

04/19/23 CGR/Oasis/Nature's Best 18

NB’s Future Look at EC Fulfillment center.

Direct to retailers’ end user. Direct to retailers (“unique channel mixes”)

Manufacturer to Fulfillment. Automatic product replenishment orders created. Vendor Managed Inventory (VMI)

Free Flowing Information (web corroborative) Ability for manufacturer, brokers, fulfillment center,

retailers, consumers to access vital information, stock status, ingredients, delivery schedules, order status.

Creates a true partnership between consumer/retailer/fulfillment center/broker/manufacturer.