BG Thurgood Commander & CEO

1. AAFES UPDATE Defense Commissary AGENCY A Winning Partnership Team! BG Thurgood Commander & CEO

2. Overview

3. The significant problems we face cannot be solved at the same level of thinking we were at when we created them. Einstein

4. The last wave of productivity gains came from knocking down departmental walls within companies, getting multiple departments to work together as one. The next wave is upon us, and it is about knocking down company walls - getting multiple companies to work together as one. It is the same kind of thing, only much bigger. Michael Hammer

5. The Pessimist see difficulties in every opportunity. The Optimistsees opportunity in every difficulty. Churchill 5 16 November 2014

8. It’s Your Exchange! It’s Not Your Father’s PX Anymore! Today Yesterday • 70% Troops on Base • No Wal-Mart • 100 Retail Shopping Choices • Families an afterthought • Fulfillment….”Fish in the Boat” • 70% Troops off Base • 6 Wal-Mart Stores • 1000 Retail Shopping Choices • Families at the forefront • Marketing…..”Find the Fish” Fort Hood 1970’s vs 2000’s 8

9. Trends in Retail Changing marketplace

10. Lifestyle Centers • Enhance Quality of Life • Offers Great Collaboration with MWR, DeCA and the Installation • Develop Sense of Place • Support Military Families with increase Dividends

13. Thinking about our business models will create new and different opportunities Suppliers Our scale can be advantageous

14. Collaborative Efforts Will Fundamentally Change the Performance Curve…..Together Traditional Ideas 35% The Future Years Transformational Ideas 65% • Customer Visibility • Re-Rationalization • Full enterprise Integration • Dynamic Optimization • Automation • Supplier Integration • New Metrics The Interim Years The Early Years • Functional Optimization • Manual processes • Traditional Performance Metrics • Continuous Improvement • Leverage some synergies • Do Better within Box • Buy as “one off” • Optimize team function • Focus on basics Dynamic Enterprise Integration – Remove Box Improve Regional Box Do – BetterWithin Box Functional Local Team Cross -Functional Regional Team Enterprise-wide Collaboration

15. New business models needed…a new paradigm V Full Network Connectivity IV Value Chain Collaboration III Partner Collaboration II Corporate Excellence I Enterprise Integration Functional/ Processes Intra- Enterprise Inter- Enterprise Total Business System External Our own thinking and functional walls stop us Source: SC Management Review, Dec 2004

16. Enterprise wide collaboration drives us towards higher levels of value add activities V Full Network Connectivity IV Value Chain Collaboration III Partner Collaboration II Corporate Excellence Functional/ Processes I Enterprise Integration Inter- Enterprise Total Business System External This is a BIG IDEA!!! Source: SC Management Review, Dec 2004

17. At The End of The Day LEADERS MAKE A DIFFERENCE

18. Cooperative Efforts Supply Chain Gift Cards • Objective: Partner across the supply chain to lower costs by increasing volume or gaining process efficiencies. • Current or Potential Partners: NEXCOM, MCX, Army MWR, Air Force Services, DECA. • Objective: Improve Customer Service by cross accepting gift cards. • Current or Potential Partners: NEXCOM, MCX and DECA. • Completed w/ NEXCOM & MCX in Nov 07 Enterprise Architecture Indirect Procurement • Objective: Conduct baseline analysis of the operation, technical and systems architectures, to develop a road map for future operations. • Current or Potential Partners: NEXCOM and MCX. • Objective: Leverage combined spend on commodity items to lower costs. • Current or Potential Partners: NEXCOM, MCX, Army MWR, Air Force Services.

19. Going Green Initiatives • Energy Savings Products • Reusable Bags • Waste Stream Review • Food Energy Management Systems • New Vending Machines

20. Collaborative Efforts • “Bringing the Benefit To You” initiative • 43 off-site Joint Reserve and National Guard events projected in 2008 • AAFES Commodity and Region support • Bi-Annual DeCA Truck Load Events • Everyday in small ways at the local level….THANKS! A Winning Partnership Team!

21. At the End of The Day….. Leaders Make A Difference

22. We all make choices….We all leave a legacy We Are Here!!! Where We Are Going!! GREATNESS MEDIOCRITY Two roads diverged in a wood. And I, I took the one less traveled by. And that has made all the difference. Frost

23. Trim Tab Leadership…..You Make the Difference The small rudder that turns the big rudder that turns the ship

25. CHARACTER + RESULTS = EFFECTIVE LEADERSHIP On the wall of the basement of the United States Capital in Washington, a base-relief depicts a Greek warrior engaged in moral combat with a snake. The artist captures the moment when the man raises his sword to strike the deathblow. Across the tableau is one word: Courage Artistically, physical courage is easy to depict. Moral courage is another matter. Moral courage requires a taking a cold, hard look at the world and then acting, accepting the consequences, and knowing that the greatest good will ultimately be served. Moral courage demands sacrifice, the subordination self-interest to the interests of others. To be morally or intellectually courageous requires a basic sense of honesty and integrity coupled with the will to act decisively on those principles. Moral character is of great matter in a leader and will inevitably affect the substance of his performance. Courage, character, and performance cannot be separated.

26. Delighting Our Customers… …Improving Their Benefits