SUPPLY CHAIN NETWORK OPTIMIZATION

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RightChain™ Nodes Supply Chain Network Optimization Edward H. Frazelle, Ph.D. President and CEO RightChain Incorporated

Section 1 PriceSmart vs Domestic Warehouse Club Supply Chain Configurations RightChain™ Nodes Client Customers

Instigators for Supply Chain Network Reconfiguration Back in the day, supply chain network optimization was a once-in-a few years project developing supply chain designs with five to ten-year lifespans. Over time, the instigators, pace, and stakes of change make supply chain network optimization a business-critical on-going process and competitive differentiator. Instigating forces for change in supply chain network configuration fall into x major categories including (1) demographics, consumerism, and retailing; (2) material and product changes; (3) key rates and indices; (4) business growth and decline; (5) supply chain security, safety, and compliance; (6) transportation marketplace; (7) supply chain infrastructure; (8) origin-destination and trade lane upheaval; (9) supply chain operating philosophy

NEW PRODUCTS and PRODUCT CONFIGURATIONS a. Changing cube, weight, value mix b. Packaging modifications

ORIGIN DESTINATION LANE UPHEAVAL a. Shifting Supplier Locations b. Shifting Customer Locations

2. 3. 4. 5.

NEW COMPETITORS

INFRASTRUCTURE a.

BUSINESS GROWTH AND DECLINE SERVICE POLICY CHANGES

Road, Rail, Port, and Airspace Congestion, Capacity and Availability

SUPPLY CHAIN SECURITY, SAFETY AND COMPLIANCE a. Security Requirements b. Reconfigured Free Trade Agreements c. Wars d. Pandemics e. Natural Disasters f. Green

b. c. d. e.

Container Availability

Warehouse Space Availability Labor Quality and Availability New Modes of Transportation

New Carriers

DEPLOYMENT ANALYTICS AND PHILOSOPHIES

RATES a.

10. CONSUMERISM AND RETAILING a.

Shifting Labor Rates Shifting Occupancy Costs

Shifting Retail Formats and Channels

b. c. d. e.

b. c.

E-Commerce, Last Mile

Interest Rates Exchange Rates Cost of Fuel Transport Rates

Fluctuating Demographics and Buying Patterns

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Instigators of Supply Chain Network Reconfiguration and Optimization Supply Chain Network Optimization Principles and Tradeoffs Supply Chain Network Optimization Methodology Supply Chain Network Optimization Case Examples • Carrier, Disney, Oxxo, Al-Shaya, adidas, Nutrisystem, BP, Dell, PriceSmart, Ingham’s, Target Australia RightChain™ Nodes User Guide

Contents

Supply Chain Network Optimization Formulation

CONSTRAINTS • Response Times to Delivery Locations • Customer Service Coverage • Facility Throughput Constraints • Facility Storage Constraints • Risk of Disruption • Fixed Locations

OBJECTIVE FUNCTION Minimize Total Supply Chain Costs • Inbound Transportation Costs • Outbound Transportation Costs • Warehousing Costs • Occupancy Costs • Labor Costs • Inventory Carrying Costs • Lost Sales Cost • Real Estate Costs

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Contents Inventory and the Number of Stocking Locations in a Network

Transport Time & Distance vs. the Number of DCs

(1) Bloomington, IN

(2) Ashland, KY / Palmdale, CA

(3) Allentown, PA / Palmdale, CA / McKenzie, TN

305 miles

111 miles

56 miles

Cost Tradeoffs in Supply Chain Networks

Contents

Total Logistics Costs vs Service Times

Contents

RightChain™ Nodes Methodology

4. Develop network optimization model.

2. Develop current network performance baseline.

3. Develop network configuration scenarios.

1. Develop network optimization database.

5. Evaluate network scenarios.

9. Finalize network reconfiguration business case(s)

7. Evaluate refined scenarios.

6. Refine network scenarios.

8. Practicalize network recommendations.

10. Make “go – no go” decision and implementation plan.

Supply Chain Scenario Development and Specification

Logistics Flows

Logistics Levels

Logistics Levels The Number of Levels of Logistics (e.g. Central, Regional, Local)

Source Direct Direct Store Delivery

Global Hemispheric Continental Regional Trading Bloc Country Megapolis Urban

Logistics Deployment The Algorithms and Timing for Inventory Deployment Including At Origin, In Transit, and At DC The flow path from origin to destination including direct and/or any combination of steps.

Cross Docking Zone Skipping

Inbound Consolidation Outbound Consolidation Traditional Warehousing Distributor/3PL

RightChain™ Scenario Specifications

Logistics

Flows

Logistics Locations Specific Logistics

Existing Locations Carrier Locations Urban v Suburban v Rural Logistics Hubs Ocean Ports Airports Rail Hubs Trucking Terminals Major Cities

Logistics

Locations

Make to Stock vs MTO Finished Goods vs Spares Made vs Sourced Domestic vs International Fast vs Med vs Slow Movers Low vs Med vs High Value Low vs Med vs High Weight Low vs Med vs High Cube Small v Med v Large Orders Low v Med v High Criticality

Locations Including Cites, States, Countries, Postal Codes, Ports, etc.

Logistics Deployment

Urban Strike Points Real Estate Friendly

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RightChain™ Nodes Optimization Methodology

RightChain™ Insights

Supply Chain Order Data

Supply Chain Network Scenarios

Supply Chain Master Data

Supply Chain Performance Baseline

RightChain™ Nodes

Supply Chain Project Data

RightChain™ Scoreboard

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Section 1 PriceSmart vs Domestic Warehouse Club Supply Chain Configurations RightChain™ Transportation Transportation Optimization as a Service

Optimization and analytics for logistics networks, lanes, flows, modes, loads, and fleets.

Section 1 PriceSmart vs Domestic Warehouse Club Supply Chain Configurations RightChain™ Nodes Supply Chain Network Optimization

Global, Regional, Continental, and Local Supply Chain Network Optimization and Scenario Simulation

Carrier Founded in 1915 by Willis Carrier, Carrier is a world leader in HVAC, Refrigeration, and Fire & Security solutions. Formerly a business unit within United Technologies, Carrier is now a publicly traded entity with annual revenues on the order of $20 Billion, employment on the order of 50,000 employees, and service in more than 150 countries. RightChain™ has supported Carrier with inventory optimization, supply chain network and flow optimization, and DC operations optimization in their commercial, residential, refrigeration, fire and security, and HVAC service parts businesses in the United States, Mexico, and Europe.

RightChain™ I Supply Chains. Solved.

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Carrier Corporation Service Parts Supply Chain Network Optimization

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Carrier Corporation Component Part Supply Chain Network Scenarios

Next Day

Same Day Order Cutoff Time

Location(s)

Order Cutoff Time

Inventory ($M)

Carrying Cost ($M)

Total

No. of

Logistics

Scenario

Locations

Transport

Inventory

Cost ($M)

Operator(s) KENCO $23.0 FDX+ $23.3 UPS+ $21.9

1 Day Truck % $100 39.2% 82.5% 1p $100 28.0% 81.2% 12a $100 52.2% 82.9% 12a $121 53.4% 99.6% 12a $121 41.5% 96.9% 1a $121 65.6% 100% 1a $137 77.0% 100% 2a $150 85.3% 100% 2a $162 95.5% 100% 3a 2 Day Truck %

A 1 B 1 C 1 D 2

Chattanooga

$20.0 $20.0 $20.0 $24.2 $24.2 $24.2 $27.4 $30.0 $32.4

$43.0 $43.3 $41.9 $38.8 $39.2 $38.6 $39.4 $39.5 $39.7

Memphis Air Hub Louisville Air Hub

12p 12p 12p

Chattanooga, Reno KENCO+ $15.3

2 2

Memphis, Reno Louisville, Reno

FDX+ $17.0 UPS+ $14.4 UPS+ $12.0

1p 1p 2p 2p 3p

G 3 H 4

LVL, DAL, REN

SCR, CHI, MOB, REN TBD $9.5

5 SCR, CHI, ATL, REN, DAL

TBD $7.3

(1) Scenario definitions are rough cut and do not yet include deployment alternatives. (2) Costs and inventory levels are notional. (3) Order cutoff times are notional. (4) Transition costs to new 3PL/locations are not included.

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Carrier Corporation Component Part Supply Chain Network Scenarios

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Carrier Corporation Manufacturing Supply Chain Network Optimization

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Carrier Corporation Manufacturing Supply Chain Network Optimization

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Carrier Manufacturing Supply Chain Scenarios Greenfield vs. Existing Facilities Optimization

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Disney Parks and Resorts Merchandise, Food, Costumes, Parts

RightChain™ has worked with Disney Parks and Resorts for nearly 20 years. Each of Disney’s major commodities including merchandise, food, service parts, and costumes flow through the RightChain™ model. The model is used throughout Disney Parks and Resorts including Walt Disney World, Disneyland, Disneyland Paris, and Hong Kong Disney. RightChain™ has supported Disney Merchandise with global supply chain strategy, inventory strategy, warehouse design, outsourcing strategy, and supply chain information systems requirements. In addition, through live and on-line training and mentoring, RightChain™ has helped develop the Disney supply chain team into one of the world’s highest performing supply chain organizations.

RightChain™ I Supply Chains. Solved.

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RightChain™ Nodes Disney Global Supply Chain Optimization

Disney is one of the world’s most recognized brands. Their parks, Walt Disney World, Disneyland, Disneyland Paris, Tokyo Disney, and Hong Kong Disney are the world’s most popular vacation destinations and also home to some of the highest volume retail locations on the planet. RightChain has assisted Disney in many supply chain initiatives with this particular one being the global supply chain optimization of merchandise from source to store including the optimization of flow paths, transportation modes, load plan optimization. The result is one of the world’s most efficient global supply chains.

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Oxxo Oxxo, headquartered in Monterrey, Mexico, is the largest retailer in the Spanish speaking world. Oxxo is part of the FEMSA group of companies where they operate more than 20,000 stores and pharmacies throughout Mexico and South America. RightChain™ has supported Oxxo with a variety of supply chain solution, consulting and education programs including supply chain performance analysis, supply chain network optimization, SKU optimization, inventory optimization, DC automation design, and MHE requirements, selection, and contracting.

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RightChain™ Nodes Oxxo Mexico Network Optimization With more than 20,000 stores in Mexico, Colombia, and Chile, Oxxo is the largest retailer in the Spanish speaking world. RightChain has supported Oxxo with supply chain strategy and optimization software and services over many years. This particular engagement required the short and long-term optimization of the number and size of their Mexico DCs and warehouses as well as the re-alignment of their store service from the newly configured supply chain network. The result was a 14% reduction in total logistics cost and 24 hour reduction in store replenishment cycle time.

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RightChain™ Nodes National and Mexico City Network Optimization

PROFILE • 20,000+ Stores and Growing Rapidly • $10+ Billion Annual Sales CHALLENGE National and Mexico City supply chain network, inventory and store delivery optimization RESULTS • 19% lower inventory • 2.5 points higher fill rate • 17% lower supply chain costs

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Alshaya With over 4,000 stores, Alshaya is one of the largest retail operators in Europe, the Middle East and Africa. The Alshaya group represents many of the world’s most famous brands including American Eagle, Bath & Body Works, Cheesecake Factory, Clinique, Foot Locker, H&M, Pottery Barn, Solaris, Starbucks, Vision Express, and Williams Sonoma. RightChain’s supply chain engagement with Alshaya included a comprehensive supply chain practices and financial assessment, supply chain network optimization, and supply chain automation plan.

RightChain™ I Supply Chains. Solved.

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RightChain™ Nodes | Alshaya Scenario Optimizations EMEA Supply Chain Network Optimization

Port Hubs Scenario

National Hubs Scenario

Category Hubs Scenario

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RightChain™ Nodes Global Flow Path Optimization | Hub Scenarios

Inbound Consolidation with Double Hubs Mix Freight to Minimize Transportation Costs or Pre-Allocate and Deploy/Hold Containers on Arrival

Origin Consolidation with Single Mega-Hub Mix Freight to Minimize Transportation Costs or Pre-Allocate and Deploy/Hold Containers on Arrival

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RightChain™ Retail | Alshaya Global Flow Path Optimization | Ship Direct and Region DCs

Origin Ship Direct with Single Mega-Hub Optimize mode upon shipment ready Size lots to minimize total logistics costs

Inbound Consolidation with Region DCs Mix Freight to Minimize Transportation Costs or Pre-Allocate and Deploy/Hold Containers on Arrival

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RightChain™ Retail | Alshaya Supply Chain Optimization Business Case

Min Case

Mod Case

Max Case

Optimizations

Impacts

$2,700,000

$4,650,000

$6,600,000

Labor, Occupancy

Facility Logistics Origin Logistics Regional Logistics Delivery Logistics TOTAL I

Slotting Optimization, Facing Optimization Layout Optimization, Staff Optimization

$1,543,000

$5,835,000

$3,807,000

Freight

Logistics Load Optimization, Transport Mode Optimization Logistics Lane Optimization Carrier/Terms Optimization

$3,850,000

$6,250,000

$8,700,000

Freight, Clearance, Duties

$2,130,000

$2,840,000

$3,550,000

15% to 25% of Fleet Expenses

Delivery Frequency Optimization Transport Fleet/Route Optimization

OPTIMIZATION AUTOMATION IBP

$10,223,000 $19,575,000 $22,657,000

$3,700,000

$4,200,000

$4,700,000

Labor, Occupancy Cycle Time

Information Handling Automation Material Handling Automation

Interleaving, Productivity Incentives, Accuracy Incentives, Dock/Yard Management Pallet ASRS, GTM Picking, Automated Sort, Vision Systems, Weigh Checking

$7,300,000

$8,450,000

$9,600,000

Labor, Occupancy Cycle Time

$21,233,000 $32,225,000 $36,957,000

TOTAL II

$60,000,000

$90,000,000

$120,000,000

Inventory Carrying Cost

20%, 30%, and 40% of total supply chain inventory at 30% ICR

Chain Plan Optimization Inventory Deployment Optimization

$20,000,000

$30,000,000

$40,000,000

Lost Sales Cost

20% to 40% of Lost Sales Cost Recovery

$101,233,500 $152,225,000 $196,957,000

TOTAL III

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adidas adidas is one of the world’s most recognized sports footwear, apparel, and equipment brands. It is the largest sportswear manufacturer in Europe, and the second largest in the world. The company was started by Adolf Dassler in his mother's house; he was joined by his elder brother Rudolf in 1924. In 1949, following a breakdown in the relationship between the brothers, Adolf created Adidas, and Rudolf established Puma. In 1952, following the 1952 Summer Olympics, Adidas acquired its signature 3-stripe logo from the Finnish athletic footwear brand Karhu Sports, for the equivalent of 1600 euros. Current annual revenues are on the order of $25 million USD. Current employment is on the order of 60,000 associates.

RightChain™ I Supply Chains. Solved.

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RightChain™ Retail | Sporting Apparel Retailer DC Location Optimization

PROFILE • 450+ global stores • $20+ billion annual sales CHALLENGE US supply chain network strategy and optimization for wholesale, retail and e-commerce. RESULTS • 8% lower logistics cost • 7 pts higher next-day delivery • 11% lower inventory

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Wholesale Network Scenario Evaluations

Direct Network Scenario Evaluations

Non-Direct Network Scenario Evaluations

Etail Network Scenario Evaluations

Multi-Channel Network Scenario Evaluations

RightChain™ Retail| Global Sportswear Scenarios of Scenarios Optimization

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Nutrisystem Nutrisystem, headquartered in Horsham, PA (Philadelphia), is a publicly traded, direct-to-consumer, weight management products and services provider with annual sales of $401 million. The company is the 17 th largest e-commerce company in the United States. The company offers a systematic weight loss program based on portion-controlled prepared meals. Each monthly meal plan (order) is shipped in a box approximately 5 cubic feet in size and weighing 35 pounds on average. Each outbound box normally contains around 130 small packages ranging from 1” x 6” x 4” (about the size of a small book) to small packets. Packages are arranged within the box by meal type (i.e. breakfast, lunch, dinner, snacks). RightChain™ has supported Nutrisystem with a variety of supply chain strategy programs including supply chain performance analysis, supply chain network optimization, SKU optimization, inventory optimization, DC automation design, and 3PL requirements, selection, and contracting.

RightChain™ I Supply Chains. Solved.

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RightChain™ Nodes Nutrisystem Supply Chain Optimization

Nutrisystem is one of the world’s largest providers of weight loss management products and services and is one of the largest direct-to-consumer shippers in the United States. Nutrisystem has engaged RightChain to optimize various aspects of their supply chain with this example being the optimization of the combined inbound and outbound supply chain networks. The result was a radical consolidation of logistics flows and distribution centers yielding a 16% reduction in total supply chain costs and and 29% inventory reduction.

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RightChain™ Transportation BP Fabrics and Fibers Regional Supply Chain Optimization

BP is one of the world’s largest oil, gas and chemical companies. One of their derivatives is used in the mass production of carpet backing. With a large percentage of the nations carpet produced in Dalton, Georgia and with BP’s carpet backing production plants located in south Georgia, BP retained RightChain to develop an optimized regional logistics strategy for rolls of carpet backing including its network design, routes, schedules, load plans, fleet sizing and management, and cross dock configurations. The design reduced BP’s supply chain cost by 17% and inventory by 23%.

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RightChain™ Nodes Dell Europe Spares Logistics Network Optimization

Dell, is a multinational computer technology company that develops, sells, repairs, and supports computers and related products and services. The company is one of the world’s largest technology companies employing more than 145,000 globally. Dell’s customer service is world renowned. Offering leading edge service and best price requires a service support network second to none in its efficiency and effectiveness. RightChain had the privilege to develop just such an optimized service supply chain network for Dell on the European continent.

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Ingham’s Urban Network Optimization

Ingham’s was founded as a family business in 1918 by Walter Ingham in Liverpool, New South Wales. After their father’s death in 1953, Walter’s sons, Bob and Jack Ingham, expanded the business through a combination of organic growth and acquisitions, to become the largest integrated poultry producer across Australia and New Zealand. Ingham’s has an unrivalled network of processing and distribution facilities across Australia and New Zealand enabling a rapid response to customer demand and efficient management of production volumes. RightChain™ Nodes was employed to optimize Ingham’s logistics in Melbourne, Australia.

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PriceSmart vs. Costco Supply Chain Network Maps and Flows

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Target Australia In conjunction with TMX, RightChain.nodes was employed as a part of Target/Kmart Australia’s supply chain transportation.

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Pound Miles

Outbound Transport Cost

Warehousing Cost

Total Logistics Cost

Next Day Coverage

Scenario Location(s)

DC1 = Bridgeview (20.5%) DC2 = Fordyce (29.5%) DC3 = Florence (21.2%) DC4 = Glenview (7.8%) DC5 = Latta (20.9%)

0: Base

$5,813,000

31,700,000 $3,170,000

$2,643,000

86.8%

$7,256,000 $6,481,000

52,908,000 $5,291,000

$1,965,000

65.4%

DC1 = Evansville, IN (100.0%)

DC1 = Louisville, KY (84.9%) DC2 = Santa Fe, NM (15.1%) DC1 = Columbus, OH (57.9%) DC2 = Memphis, TN (35.1%) DC3 = Sparks, NV (7.0%) DC1 = Winchester (23.9%) DC2 = Bolingbrook (38.8%) DC3 = Jackson (30.2%) DC4 = Sparks (7.0%) DC1 = Harrisburg (16.4%) DC2 = Conyers (21.1%) DC3 = Bolingbrook (36.6%)

43,400,000 $4,340,000

$2,141,000

69.6%

III

$5,577,000

33,577,000 $3,358,000

$2,219,000

86.9%

$5,055,000

26,709,000 $2,671,000

$2,384,000

92.6%

$4,735,000

21,683,000 $2,168,000

$2,567,000

96.1%

DC4 = Dallas (19.1%) DC5 = Sparks (7.0%)

Best vs Baseline 10,017,00 31.6%

$1,002,000 31.6%

$678,000 25.7%

$1,078,000 18.5%

9.3%

CPG Supply Chain Network Scenario Evaluation

The minimum cost supply chain network would yield annual savings of $678k and increase next day coverage by 9.3 percentage points. At an estimated reconfiguration cost of $1.1M, the payback on the reconfiguration would be 1.6 years.

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RightChain™ Nodes CPG Supply Chain Network Scenarios Summary Evaluation

RightChain™ | Supply Chains. Solved.

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Scenario 0: Current Network Locations: DC1 = Bridgeview (20.5%), DC2 = Fordyce (29.5%), DC3 = Florence (21.2%), DC4 = Glenview (7.8%), DC5 = Latta (20.9%) Costs: Transportation = $3,174,000, Warehousing = $2,643,000, Logistics = $5,817,000 Service: Same Day (27.1%), Next Day (86.8%), Two Day (94.6%)

RightChain™ | Supply Chains. Solved.

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Scenario III: 3 DC Greenfield Supply Chain Network Optimization Locations: DC1 = Columbus, OH (57.9%), DC2 = Memphis, TN (35.1%), DC3 = Sparks, NV (7.0%) Costs: Transportation = $3,357,246, Warehousing = $3,811,121, Logistics = $7,168,367 Service: Same Day (6.4%), Next Day (86.9%), Two Day (100.0%)

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RightChain™ Nodes | Network Flow Optimization Scenario: Scenario Cost Summary

Network Flow Optimization Costs Production Cost

Transportation Cost

Handling Cost

$357M

$280,005,190

$57,859,592

$18,888,748.91

Minimize Production Cost, No Distance Limits, No Capacity Limits (1130 customers)

$332M

$280,143,500

$36,631,799

$15,071,404.73

Optimized Add Dallas and Vegas, No Chino, No Distance Limits, No Capacity Limits (1130 customers)

$331M

$280,143,500

$36,168,299

$15,138,668.11

Optimized Add Dallas, No Distance Limits, No Capacity Limits (1130 customers)

$332M

$280,142,285

$36,717,745

$15,120,959.68

Optimized Baseline, No Distance Limits, No Capacity Limits (1130 customers)

$50,000,000.00

$100,000,000.00

$150,000,000.00

$200,000,000.00

$250,000,000.00

$300,000,000.00

$350,000,000.00

$400,000,000.00

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RightChain™ Nodes | Network Flow Optimization | Sourcing Solution Scenario: Minimize Production Costs | Network Optimization Map

RightChain™ | Supply Chains. Solved.

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RightChain™ Nodes | Network Flow Optimization | DC Solution Scenario: Minimize Production Costs | Network Flow Optimization Map

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RightChain™ Nodes | Network Flow Optimization | Sourcing Solution Scenario: Minimize Production Costs | Network Optimization Configuration

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RightChain™ Nodes | Network Flow Optimization | DC Solution Scenario: Minimize Production Costs | Optimal DC to Customer Flows

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RightChain™ Nodes | Network Flow Optimization | DC Solution Scenario: Minimize Production Costs | Optimal DC to Customer Flows

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RightChain.ai Data File Input RightChain.ai accepts multi-sheet Excel (.xlsx or .csv) files as input data files for upload. Files may be loaded from local or cloud sources. A data “preview” will appear once the file upload is complete. Please click the “Load” button at the bottom of the “Preview” screen to officially upload the data.

If there are multiple sheets within the data file, please select the appropriate “sheet” within the file for upload to RightChain.ai. Click the “LOAD” button at the bottom of the PREVIEW screen to finalize the data load.

RightChain.ai accepts multi-sheet Excel (.xlsx or .csv) files as valid input data files for upload. Files may be uploaded from local (e.g. your laptop) or from previously saved RightChain.ai files.

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RightChain.ai Data Mapping Once uploaded, RightChain.ai will work to match each column of data to a prescribed data type including “Number”, “Dimension”, “Date”, “Date&Time”, “Boolean”, and “Geographic”. Though mostly accurate, please double check and correct if needed the assignment of each data column to its correct data type. Any corrections may be made via the provided drop-down menu.

RightChain.ai data columns are translated directly from the Excel file data columns.

1 2 3

Any data type corrections may be made via the “drop-down” menu provided in the row below name of the data field.

1 Original Excel field names. 2 RightChain.ai field names. 3 RightChain.ai data type.

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MOVE between RightChain.ai modules within the RightChain.ai suite you are currently working within.

The RightChain.ai suite you are currently working within; RightChain™ Inventory, RightChain™ Transportation, or RightChain™ Warehousing.

RightChain.ai Data Interaction

LOAD file(s).

“SAVE” button.

User’s directory of their folders and files.

“Save As” button.

NAME of input data file.

REFRESH input data.

DOWNLOAD input data template (for the selected input data set).

DOWNLOAD the input data.

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RightChain™ Nodes Solution Map The RightChain™ Nodes Solution Map displays (1) the map of origins and/or destinations that comprise the optimization; (2) the optimal network locations based on the user’s selected number of locations; (3) the portion of locations servable within same-day, next day, and two-day service windows; and (4) the solution cost (in this case expressed in total pound-miles).

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RightChain™ SOLUTION PAGES RightChain™ SOLUTION PAGES are comprised of eight major sectors. Sector 1 is the Platform Bar allowing users to (a) move between RightChain.ai platforms, (b) displaying their username/icon, and (c) allowing users to “sign out” of the platform. Sector 2 allows users to move between (d) SOLUTION PAGES (all caps) and (e) Data Input Pages. Sector 3 includes the name of the current suite employed by the user (f), allows users to move between applications within the suite (g), and store, load, name, and save files (h). Sector 4 allows the user to define optimization scenarios utilizing Input Filters (h), Optimization Parameters (i), and Plot Controls (j). Sector 5 is the SOLUTION SECTOR. Sector 6 is a menu of solution presentation perspectives. Sector 7 is the solution visualization. Sector 8 provides optimization statistics for the solution at hand.

1 Platform Level/Menu 2 Optimization/Input Selectors 3 Suite/Solution Menu 4 Optimization Scenario Specs 5 Optimization Solution Space 6 Optimization Solution Menu 7 Optimization Visualization 8 Optimization Statistics

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Month 1

Month 2

Month 3

Wk1

Wk2

Wk3

Wk4

Wk5

Wk6

Wk7

Wk8

Wk9

Wk10

Wk11

Wk12

RightChain ο Transportation Database

RightChain ο Shipping

RightChain ο Loads

Populate and execute RightChain ο Lanes RightChain ο Lanes

Develop RCT integration plans with S&OP RightChain ο Planning

Populate and execute RightChain ο Shipping

Populate and execute RightChain ο Loads

Populate RightChain ο Transportation database.

Deliverables Timeline

RightChain ο Transportation Assessment

RightChain ο Fleets

Populate and execute RightChain ο Nodes RightChain ο Nodes

Populate and execute RightChain ο Insights. RightChain ο Insights

Summarize and train all warehouse optimization recommendations. Connect RightChain ο Transportation to pertinent systems. RightChain ο Transportation

Populate and execute RightChain ο Fleets

Assess and baseline current transportation performance, practices and systems.

Continuous Transportation Optimization

1. Transportation optimization database design and development. 2. Current transportation performance benchmarking. 3. Deep origin, destination, lane, shipment, carrier, and load analytics, statistics, patterns, anomalies, and visualizations. 4. Lane level optimization recommendations for elimination, consolidation, modal, and/or frequency transformation 5. Optimization recommendations for the number, location, role and size of all supply chain related facilities. Optimization recommendations for material flow paths and patterns.

7. Optimization recommendations for fleet size and configuration. 8. Optimization recommendations for lane, shipment, and SKU mode mix vis a vis truck, rail, ocean, air, etc. 9. Optimization recommendations for daily and weekly shipping maximizing the use of least expensive modes and routes. 10. Summary business case including implementation plan for RightChain™ Transportation optimization recommendations. 11. Annual subscription to RightChain™ Transportation for up to x users. 12. Weekly RightChain™ Transportation training for up to x students.

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Month 1

Month 2

Month 3

Wk1

Wk2

Wk3

Wk4

Wk5

Wk6

Wk7

Wk8

Wk9

Wk10

Wk11

Wk12

RightChain ο Transportation Database

RightChain ο Shipping

RightChain ο Nodes

Populate and execute RightChain ο Lanes RightChain ο Lanes

Develop RCT integration plans with S&OP RightChain ο Planning

Populate and execute RightChain ο Shipping

Populate and execute RightChain ο Nodes

Populate RightChain ο Transportation database.

Deliverables Timeline

RightChain ο Transportation Baseline

RightChain ο Finance

Develop description for candidate supply chain scenarios. RightChain ο Scenarios

Populate and execute RightChain ο Insights. RightChain ο Insights

Summarize and train all warehouse optimization recommendations. Connect RightChain ο Transportation to pertinent systems. RightChain ο Transportation

Populate and execute RightChain ο Finance

Baseline current transportation performance, practices and systems.

Continuous Transportation Optimization

7. Optimization recommendations for lane, shipment, and SKU mode mix vis a vis truck, rail, ocean, air, etc. 8. Summary business case including implementation plan for RightChain™ Nodes optimization recommendations. 9. Annual subscription to RightChain™ Nodes for up to 5 users. 10. 2x Monthly RightChain™ Nodes training for up to 5 students.

RightChain™ | Supply Chains. Solved.

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Month 1

Month 2

Month 3

Wk1

Wk2

Wk3

Wk4

Wk5

Wk6

Wk7

Wk8

Wk9

Wk10

Wk11

Wk12

RightChain ο Planning

RightChain ο Transportation Database

Develop and present business case and implementation plan(s). RightChain ο Finance

Populate and execute RightChain ο Lanes RightChain ο Lanes

Populate and execute RightChain ο Nodes with supply chain scenarios. RightChain ο Nodes

Develop implementation plan for recommended supply chain scenario(s).

Populate RightChain ο Transportation database.

Deliverables Timeline

RightChain ο Transportation Baseline

RightChain ο Modes

Develop description for candidate supply chain scenarios. RightChain ο Scenarios

Populate and execute RightChain ο Insights. RightChain ο Insights

Summarize and train all transportation optimization recommendations. Connect RightChain ο Transportation to pertinent systems. RightChain ο Transportation

Populate RightChain ο Modes to optimize mode mix.

Baseline current transportation performance, practices and systems.

Continuous Transportation Optimization

1. Transportation optimization database design and development. 2. Current transportation performance benchmarking and baselining. 3. Deep origin, destination, lane, shipment, carrier, and load analytics, statistics, patterns, anomalies, and visualizations. 4. Lane level optimization recommendations for elimination, consolidation, modal, and/or frequency transformation 5. Optimization recommendations for the number, location, role and size of all supply chain related facilities. Optimization recommendations for material flow paths and patterns.

RightChain™ | Supply Chains. Solved.

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RightChain™ Nodes: What’s Included 1. TRANSPORTATION DATABASE . Transportation optimization database design and development. Continuous and on-demand. 2. TRANSPORTATION BENCHMARKING ASSESSMENT . Transportation practices and performance assessment. Annual updates. 3. ADVANCED TRANSPORTATION ANALYTICS . Deep origin, destination, lane, shipment, carrier, and load analytics, statistics, patterns, anomalies, predictions, and visualizations. Monthly updates. 4. NETWORK OPTIMIZATION . Optimization recommendations for the number, location, role, and size of all supply chain related facilities. On demand updates. 5. FLOW PATH OPTIMIZATION . Optimization recommendations for logistics flows between all origin-destination pairs. On demand updates. 6. MODE MIX OPTIMIZATION . Optimization recommendations for lane, shipment, and SKU mode mix vis a vis truck, rail, ocean, air, etc. On demand updates. 7. TMS/4PL SUPPORT . TMS/4PL recommendations, requirements, business case development, RFPs, evaluation, selection, negotiation, contracting, implementation, and relationship support for TMS/4PL evaluation 8. TRANSPORTATION BUSINESS CASE . Summary business case and implementation plan for TMS, 4PL, and/or RightChain™ Transportation optimization recommendations for low, medium, and high levels of investment, automation, and reconfiguration requirements. 9. CONTINUOUS TRANSPORTATION OPTIMIZATION . API connectivity to RightChain.ai/transportation for continuous transportation optimization and analytics for items #1 through #9 above. 10. RIGHTCHAIN.AI SUBSCRIPTION . 12 month subscription to RightChain™ Transportation for up to 10 users. 11. TRANSPORTATION EDUCATION and TRANSPORTATION . 2x monthly training on RightChain Transportation for up to 5 users and on-demand access to RightChain.institute/transportation. 12. DEDICATED ELITE SUPPLY CHAIN PROFESSIONAL SERVICES SUPPORT. Dedicated account manager and solutions team.

RightChain™ | Supply Chains. Solved.

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Section 1 PriceSmart vs Domestic Warehouse Club Supply Chain Configurations RightChain™ Transportation For more information... RightChain.com

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