Projects Sandman and Heritage

Supplier Milestones
Overview
September 2010
 Supplier Milestones
Agenda

• Supplier Milestone Development Strategy

• Supplier Scope
• Supplier Impact Profile (Criteria - H/M/L)
• Generic Action Steps & Time Estimates
• Supplier Milestone Plans
• Potential Threats
• Status Management
 Supplier Milestones
Development Strategy

• Transition Timeline Information Source

– Long Range Plan (MRP) – Limited value (Sales Forecast)
– High-Level (Projects) EU Plans – Primary Source for
Milestone Plan
– Raw Material Plan – Manual (Excel) BOM and Supplier
explosion
– Production Plan (MRP) – Actual Replenishment by Plants
• Build Impact Scenerio’s
– Buyers
– Suppliers
– RM Categories
– RM Items
– Capacity Analysis
• Current
• Future (3+ Year Horizon)
 Supplier Milestones
Development Strategy

• Common Transition Buckets

– Criteria
– Generic Action Steps
– Generic Estimated Time Requirement
– Assumptions
• Map Impact and Transition Buckets to Major Milestones
• Implement + Monitor
• Lockstep with Sourcing Change Communication Process
Flow
– Supply Chain Planning, Finance, Mfg. Operations, etc..
• Value Chain Improvement/Optimization
 Supplier Milestones
Scope

Impact Heritage Sandman

Finished Goods 152 81

Transitions/Flights 17 /9 7

Raw Materials 416 152

Ingredients 125 4
Packaging 279 148

Suppliers 65 24
Ingredients 43 2
Packaging 22 22

- Direct Material Suppliers – 4 Common to both Heritage & Sandman

- Indirects - Engaged via Engineering Timeline
 Supplier Milestones
Heritage - Scope

Flight Date FG Transition Locations FG’s Suppliers

1 July 2010 32 oz Grape from Memphis Mem to Orr 2 7

2 Sept 2010 12 oz from Memphis Mem to Rip 7 13

12.75 – 18 oz to Memphis Orr to Mem 23 30
32 oz Straw Jam to Memphis Orr to Mem 1 7
Dutch Girl Apple Butter Disc. Discontinued 1 7

3 Nov. 2010 12 oz To Ripon Orr to Rip 20 11

4 Feb. 2011 2lb Club Twin Pack Orr to Mem 2 10

5 May 2011 Apple Butter to Ripon Orr to Rip 5 8

Mary Ellen Disc. Discontinued 16 9
SCO ICT from Memphis Mem to Rip 6 22

6 Jan. 2013 12 oz Glass from Memphis Mem to Orr 7 28

32 oz Glass from Memphis Mem to Orr 3 9
Plastic from Memphis Mem to Orr 32 32
12.75 – 18 oz back to Orrville Mem to Orr 23 30

7 May 2013 Hungry Jack (Syrup) to CH to Orr 13 7(?)

Orrville

8 July 2013 Aluminum Cups from Memphis Mem to Orr 13 16

9 Sept 2013 PC Items from Memphis Mem to Orr 2 8

 Supplier Milestones
Sandman - Scope

Flight Date FG Transition Locations FG’s Suppliers

1 Dec. 2010 Convert 100% inst. Powder KC to NOLA 2 5

Outsource Decaf & Singles

2 Feb. 2011 R&G to NOLA Sherm. To CM 3 6

3 Sept. 2011 Lacombe capacity Added KC to NOLA 11 7

4 Oct. 2011 Resealable line up KC to NOLA 30 6

5 Jan. 2012 New FFS Line up KC to NOLA 4 6

6 June 2012 Line 15 up KC to NOLA 15 9

7 Volume Vackets KC to NOLA 16 9

F10 up
 Supplier Milestones
Impact Profile Criteria

• Major Supplier
– Functional/Supply Criticality (e.g. LCP, StG)

• High Impact
– Supplier Change Required (New/Existing)
– New Supplier Mfg Site
– New RM and/or RM Spec Change (for JMS)
– Obsolescence – Unique and/or High volume/$
– New (JMS) Manufacturing Equipment
– Supplier Mfg Site – Employee or Closure Risk

• Medium
– Existing Supplier Mfg Site => New JMS Site
– Existing (JMS) RM => New JMS Site
– Obsolescence – Non-Unique High volume/$
– RM Handling Changes (i.e. Bulk vs. Bag)

• Low
– Existing Supplier & RM => JMS Site (Volume shift only)
 Supplier Milestones
Heritage - Impact

Flight Date FG Transition High Med Low

1 July 2010 32 oz Grape from Memphis 2 2 4

2 Sept 2010 12 oz from Memphis 2 12 20

12.75 – 18 oz to Memphis
32 oz Straw Jam to Memphis
Dutch Girl Apple Butter Disc.

3 Nov. 2010 12 oz To Ripon 2 3 7

4 Feb. 2011 2lb Club Twin Pack 3 4 4

5 May 2011 Apple Butter to Ripon 5 9 14

Mary Ellen Disc.
SCO ICT from Memphis

6 Jan. 2013 12 oz Glass from Memphis 14 17 27

32 oz Glass from Memphis
Plastic from Memphis
12.75 – 18 oz back to Orrville

7 May 2013 Hungry Jack (Syrup) to 5 (?) 2 (?) ?

Orrville

8 July 2013 Aluminum Cups from Memphis 7 2 5

9 Sept 2013 PC Items from Memphis 6 2 1

 Supplier Milestones
Sandman - Impact

Flight Date FG Transition High Med Low

1 Dec. 2010 Convert 100% inst. Powder 2 - 3

Outsource Decaf & Singles

2 Feb. 2011 R&G to NOLA 3 1 2

3 Sept. 2011 Lacombe capacity Added 2 1 4

4 Oct. 2011 Resealable line up 3 2 1

5 Jan. 2012 New FFS Line up 2 1 3

6 June 2012 Line 15 up 3 5 1

7 Volume Vackets - - 9
F10 up
 Supplier Milestones
Action Steps & Est. Time Requirement

• Major Supplier
– Supplier Specific (LCP, StG, Kelco, Danisco, IP)

• High Impact (6 Months)

– Relationship & Communication
– Joint Planning
– Contract Terms – Negotiate/Amend
– RM Qualifications
– Vendor Site Audits
– SLEA (Site Level Execution Agreements - Replenishment)
– Item Set-up

• Medium (3 Months)
– Communication
– Joint Planning
– RM Qualification – Site Level
– SLEA (Site Level Execution Agreements - Replenishment)
– Item Set-up

• Low (2 Months)
– Communication
– Potential Problem Analysis
 Sandman Project
LCP – Supplier Milestones
Convert to 100% Inst. Lacombe capacity added. Vackets and F10 up.
New FFS line up.
powder and outsourcing
of Decaf and Singles. R&G line up in NOLA. Resealable line up.
Line 15 up.

FY10 FY11 FY12 FY13

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

KC Shutdown and
Transition Plan. Payment
to LCP
for Line
relocation Key Assumptions
NOLA
Initial Notification Line
Start-up
Transition
Terms
Negotiated

KC Line
Shutdown
(Dec 2010)

Line CQV’d and

Full Production
Capable
 Sandman Project
Int. Paper – Supplier Milestones
Convert to 100% Inst. Lacombe capacity added. Vackets and F10 up.
New FFS line up.
powder and outsourcing
of Decaf and Singles. R&G line up in NOLA. Resealable line up.
Line 15 up.

FY10 FY11 FY12 FY13

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Confirm Specs for Dec.

Items

Confirm
viability
Initial Notification and Bid CQV – Transition
to IP, Bennett, with IP from Bennett and
and Smurfit Confirm unique Smurfit to IP
Stone RM’s and
volumes
transitioning Transition or create
to IP cutting dies and Key Assumptions:
print plates
Transition to IP will have
significant impact to
Bennett Pkg.
No Graphic changes- no
eAGLe projects
 Heritage Project
St. Gobain – Supplier Milestones
Flight 3 Flight 5 Flight 7
Flight 8 Flight 9
Flight 4
Flight 1 Flight 2 Flight 6

FY10 FY11 FY12 FY13

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Continuous Transition

Contract Expires
Glass Line
Shutdown in
Memphis

Initial Notification

Key Assumptions
 Heritage Project
Cargill – Supplier Milestones
Flight 3 Flight 5
Flight 7
Flight 8 Flight 9
Flight 1 Flight 2 Flight 4
Flight 6

FY10 FY11 FY12 FY13

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Continuous Transition
Memphis Cargill to
shut down?

Initial Notification

Key Assumptions
 Supplier Milestones
Potential Threats

• Collateral Impact
– LCP – Kansas City Plant Closing
– Cargill – Potential Memphis Plant Closing, Corn Swt.
– Bennett Pkg. – Potential Close Plant/Business
• Acquisitions
– Bemis – Alcan
– Graham – LCP
– St Gobain – For Sale
• Supplier Health
– Smurfit (Minimize and Transition to Alt. Suppliers)
– Constar (Transition ICT Bottles to Ball)
 Supplier Milestones
Management

• Responsibilities
– Linda Kreiger – Heritage/Sandman Purchasing
Business Process Lead
– Kevin Mular – Heritage Purchasing Lead
– Acacia Holcombe – Sandman Purchasing Lead
– Buyers – Category and Supplier Planning
• Status
– PIT – Scorecard (Red/Yellow/Green)
– Major Issues - Report to Leadership
 Supplier Milestones

• Questions?

• Thank You