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Confidential Information

Standard Operating Procedure

Document Title:Standard Operating Procedure (SOP) for Discontinuation of a Principal

Partner/Vendor. “Inventory Write-off.”

Document #: 11032023 Document Revision: 00

Completed By: Approved By:

Effective date: ABC DAR#: ABC

PRINCIPAL PARTNER/VENDOR (NAME):

1.0 PURPOSE
This SOP outlines the process for discontinuing a Principal Partner/ Vendor, ensuring a smooth
transition and efficient handling of product discontinuation from our inventory.

2.0 STAKEHOLDERS
The decision to discontinue a Principal Partner/ vendor will be communicated by the Chief
Executive Officer, the Director of Supply Chain and Business Operations, the Vice President of
Business and Partnership Development, The Executive Vice President of Revenue,or The Director
of Marketing and Product Management.

3.0 RESPONSIBILITY
ThisSOP applies to all departments involved, including:

3.1Chief Accountant:Manages financial implications and reporting.

3.2Customer Care Manager: Ensures team is informed and handles inquiries.

3.3Claims Representatives: Handles claims and returns denials.

3.4Director of Marketing and Product Management:Oversees the communication plan.

3.5Associate Product Manager:Coordinates product discontinuations and

replacementstrategies.

3.6The Procurement and Inventory Manager:Handles inventory analysis and order reviews.
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3.7Programmer/Analyst: Updates website for product changes.

3.8Warehouse Managers:Manages the removal of stock.

4.0 INITIAL REVIEW

4.1 The Executive Vice President of Revenuereviews thePrincipal Partner/ Vendor contract for
termination rights and clauses.

4.2 The Vice President of Business and Partnership Development: Developstimeline for
discontinuation, considering contract obligationsand operational needs.

5.0 PROCEDURES BY DEPARTMENT

5.1 Marketing
5.1.1The Director of Marketing and Product Manager Develops and implements an internal and
external communication plan for the discontinuation of the Principal Partner/ Vendor.

5.1.2 The Director of Marketing and Product Manager Communicatesany replacements.

5.1.3The Director of Marketing and Product Manager and Vice President of Business and
Partnership Developmentdetermines if the remaining stock is to be written off or sold at
discounted pricing. Informs the Associate Product Manager.

5.2 Operations:
5.2.1The Procurement and Inventory Manager reviews the contract and negotiates stock
returns.

5.2.2The Procurement and Inventory Manager Conducts an inventory analysis for each location
identifying the items with quantities remaining in inventory and determining total value.
Provides the Associate Product Manager with the inventory report to proceed with the process
of completing the inventory adjustments. Provides the total value of the inventory write-off to
the Chief Accountant.

5.2.3 The Procurement and Inventory Manager directs the Purchaser in charge to review
thepurchase orders that are still pending status and gets in touch with the Principal Partner/
Vendor to confirm their status. If the order has not been shipped yet, requests for its
cancellation and confirmation. Once an update is received, inform the Procurement and
Inventory Manager and the Associate Product Manager regarding the order details. Based on the
status of the purchase order, a decision will be made on whether to proceed with completing
any pending sales request or to request the Customer Care Manager to cancel the sales order.

5.2.4The Purchaser in charge verifies if any items that are no longer available have been
requested to be included in the forecast. If so, they will get in touch with the Sales Director who
requested the forecast and suggests the replacement products, if applicable. If the Sales Director
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requires additional information, the Purchaser will direct them to contact the Associate Product
Manager.

5.3 Associate Product Manager:

5.3.1The Associate Product Managerin the Item list in Bizowie, discontinuesandsets items as
non-returnable. Selects a suitable replacementand adds it to the discontinued item.

5.3.2 The Associate Product Manager Creates a centralized file in SharePoint for documenting
the checklist from Appendix A section 7 and Section 6 and shares it with every department’s
Managers listed in Section 3.

5.3.3The Associate Product Manager Upon receivingthe inventory detail report from the
Procurement and Inventory Manager,processes the inventory adjustments, specifying the type
of adjustment required, such as inventory write-off/down, donation,or discontinuation. Notifies
the chief accountant of the type of adjustment that was made.

5.3.4 The Associate Product Manager After removing the inventory, instruct the Warehouse
Managers to remove discontinued items from the shelves and communicate the disposition of
the remaining inventory, including whether it should be disposed of or donated.

5.3.5The Associate Product Manager in the Item list in Bizowie, discard items,removes web
availability, and deletes all sales channels.

5.3.6The Associate Product Manager Inactivates thePrincipal Partner/ Vendorin the system with
a note detailing the effective date and reasons for the discontinuation.

5.4 Programmer/Analyst:
5.4.1 The Programmer removes discontinued items from the Payless site.

5.5 Warehouse
5.5.1The Warehouse Manager notifies the Associate Product Manager post disposal.

5.5.2The Warehouse Manager plans the warehouse space allocation if a replacement Principal
Partner/ Vendor is to be stocked.

5.6 Vendor Claim Specialist

5.6.1 The Procurement and Inventory Manager informs the Vendor Claims Specialist to Submit
all outstanding claims and finalize the collection of all outstanding claims.

5.7 Customer Care Return and Claim Specialist:

5.7.1 The Claim Specialist processes outstanding claims and rejects returns for discontinued
items.
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5.8 Customer Care Team

5.8.1The Customer Care Manager advises their team of discontinued Principal Partner/ Vendor
and items and how to handle inquiries.

5.8.2The Customer Care Representative provides replacement options for customers.

5.8.3 The Associate Product Manager notifies the Payless department of the changes.

5.9 Accounting
5.9.1 The Procurement and Inventory Manager provides the total value of the inventory write-
off to the Chief Accountant.

5.9.2 The Associate Product Manager informs the Chief Accountantof the type of inventory
adjustment that has been created.

5.9.3 The Chief Accountant advises the Accounts Payable Clerk to generate a report on
outstanding balances and due credits. Additionally, the Accounts Payable team
reconciles all invoices.
5.9.4The Accounts Payable Clerk Works with the Claim Specialists on the outstanding credits for
claims.Contacting the Principal Partner/ VendorAccounts Receivable department for statuses of
payment on outstanding credit invoices.

6.0 Documentation and Records

All steps in this SOP should be documented in SharePoint in the Principal Partner/ Vendor details
and record sheets to ensure traceability and accountability. The following records shall be
maintained:

6.1. The Executive Vice President of Revenue: Contract termination letters and notices.

6.2. The Procurement and Inventory Manager: Inventory adjustment records and discontinuation
records.

6.3The Chief Accountant: Financial reports detailing write-offs and reconciliations.

7.0 Appendix A

7.1 Steps to process the Discontinue a Principal Partner/ Vendorand

write-off the remaining stock:
PRINCIPAL PARTNER/VENDOR (NAME):

Check the box as the task is completed.

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□ 1. The Executive Vice President of Revenue reviews thePrincipal Partner/ Vendorcontract to

confirm the right to terminate and identifies any legal notice periods or termination clauses.

□ 2. The Vice President of Business and Partnership Development: Develops a timeline for
discontinuation, considering contract obligations, account reconciliation, and operational needs.

□ 3. The Director of Marketing and Product ManagerDevelops and implementsa communication

plan, both internally and externally regarding the discontinuation.

□ 4. The Director of Marketing and Product ManagerCommunicates replacement plans to all

departments if applicable.

□ 5. The Associate Product Manager updates the item statuses in Bizowieto discontinuedandsets
items as non-returnable.Selects suitable replacements, adding them to discontinued items.

□ 6. The Procurement and Inventory Managercontacts the Principal Partner/ Vendor to discuss
the possibility of returning the remaining stock.

□ 7. The Procurement and Inventory ManagerConducts an inventory analysis, determines the

total value of remaining items, provides this report to the Associate Product Manager for
inventory adjustments, and communicates the write-off value to the Chief Accountant.

□ 8. The Procurement and Inventory ManagerInstructs the Purchaser to review pending purchase
orders and contact the Principal Partner/ Vendor to confirm their statuses. Decisions on pending
sales requests or cancellations are based on order statuses.

□ 9. The Vendor Claims Specialist Processes outstanding claims and finalizes all outstanding
claims.

□ 10. The Customer Care Claim SpecialistProcesses outstanding claimsand finalizes all outstanding
claims.Rejects customer return requests for discontinued items.

□ 11. The Accounts Payable ClerkGenerates a report on outstanding balances and credits, and the
team reconciles all invoices.

□ 12. The Accounts Payable ClerkCollaborates with the ClaimSpecialists on outstanding

credits.Contacts the Principal Partner/ VendorAccounts Receivable for payment statuses.

□ 13. The Warehouse Manager removes discontinued items, manages the disposition of
remaining inventory (including disposal or donation), and reports completion to the Associate
Product Manager.

□ 14. The Associate Product ManagerProcesses inventory adjustments as required

(write-off/down, donation, or discontinuation) and informs the Chief Accountant of the
adjustment type.
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□ 15. The Associate Product Managerin the item list in Bizowie; discards, removes web
availability,and deletes all sales channels.

□ 16. The Programmer/AnalystRemoves discontinued items from the Payless site.

□ 17. The Customer Care Manageradvises the team on handling inquiries related to the
discontinued Principal Partner/ Vendor.

□ 18. The Associate Product ManagerDocuments the discontinuation details on items and dates in
system notes.

□ 19. The Associate Product ManagerInactivates the Principal Partner/ Vendor in the system
recording the effective date and reason for discontinuation.
Ensure all steps are followed in sequence and documented for compliance and
traceability.