Supply Chain Report Card

1. Introducing the… Supply Chain Report Card Jeff Brittain Director, Supplier Relations Cindy Borre Marjorie Frett Director, Customer Operations Channel Business Process Mgr. April 24, 2006

2. Disclaimer This compilation is designed to facilitate a dialogue among individual distributors and the manufacturers that supply products to them for the purposes of making the supply chain evaluation process more efficient and reducing the costs for all parties involved. It is not intended to express any views regarding individual distributors’ or manufacturers’ business decisions. All distributors and manufacturers will continue to make their own independent decisions regarding all matters affecting competition. Information outside the scope of the designated categories (e.g., manufacturer pricing and payment terms, promotional allowances, etc.) has been omitted from this document. However, individual distributors are free to discuss these subjects in separate dealings with individual manufacturers.

3. Out of Scope • Measures of Pricing & Payment Terms • Measures of Gross Margin & Profitability • Measures of Rebates & Promotional Allowances

4. In Scope • Measures that… • Drive Process Efficiencies • Improve Performance • Reduce Costs for all Parties Involved including the buying public

5. Agenda • Task Forces’ Goals • Tools Developed • Recommended Industry Vocabulary • Recommended Best Practices • Report Cards • Distributors Evaluate Manufacturers • Manufacturers Evaluate Distributors • Implementation Plan • Answers to Your Questions

6. Distributor Members • Border States Electric Supply, Barry Nelson • Electric Supply of Tampa, George Adams, Jr. • Graybar Electric Supply, Steve Smith • McNaughton-McKay, Jeff Brittain • Minnesota Electric Supply, Steve Peterson • Standard Electric Supply, Pat Lawler • United Electric Supply, Donna Shamblin • Werner Electric Supply, Jill Hoffman-Grall • Western Extralite, Joe Lechner & Sharon Todd • Affiliated Distributors, David Oldfather

7. Manufacturer Members • Advance Transformer, Dale Pivarunas • Coleman Cable, Greg MacDonald • Eaton Corporation, Kevin Hestead & Brad Nanna • Ideal Industries, Troit Freeland • Intermatic, Inc, Cindy Borre • OSRAM-SYLVANIA, Jim Sullivan & John Wilson • Milbank Manufacturing, Bruce Bittner* • Rockwell Automation, David R. Hagemeier • Square D/Schneider Electric, Marjorie Frett • Thomas & Betts, David Dean *Formerly of Panduit Corporation, now with Milbank Manufacturing

8. Task Forces’ Goals • Make processes more efficient • Improve performance to take costs out of the channel • Lower the costs of doing business together • Deliver more value to end-customers

9. Channel’s Purpose Respond to End-Customers Distributor Manufacturer End-Customer

10. Tools Developed

11. Common Language • 66 Definitions • EDI transactions in “layman’s” terms • Need Input from the ENTIRE Industry

12. Best Practices • Report Card Instruction Manual • Need Input from the ENTIRE Industry

13. What You Can Do! • Review the Tools • Recommended Industry Vocabulary • Recommended Best Practices • Circulate THROUGHOUT Your Company • Talk to the stakeholders • Operations, IT, Sales, Marketing • Decide how you can use these tools to improve service levels to your customers • Provide Feedback by June 30, 2006

14. The Report Card • Measures 3 General Areas • Key Efficiency Drivers • Performance Measures • Management Measures

15. & Distributors Measure Manufacturers Manufacturers Measure Distributors Industry Affiliations • IDEA Participation • Components--- 1. Membership in IDEA 2. Provision/utilization of product & pricing data in IDW 3. Provision/utilization of enriched/catalog data in IDW.

16. Measure Electronic Purchase Orders EDI & Flat File Number of P.O.'s Number of line items % Purchases Use EDIPro 850 Purchase Order Transaction Set Measure Electronic Invoices EDI & Flat File Number of line items % $$$ Invoiced Use EDIPro 810 Invoice Transaction Set Electronic Communications Distributors Measure Manufacturers Manufacturers Measure Distributors

17. & Distributors Measure Manufacturers Manufacturers Measure Distributors Online • Measure online capabilities & usage • Product availability • Order tracking • Training offered • Graphics (Logos etc.) • Material Data Safety Sheets (MDSS) • Return Goods Authorization (RGA) Requests.

18. Measure the number of calendar days in advance of the price increase effective date notification of the price increase is provided Provide 90 Days Notification Price Change Notification Distributors Measure Manufacturers

19. Measure the # of calendar days in advance of the price increase effective date specific pricing updates are provided Use IDW or EDIPro for updates 832 Price/Sales Catalog 845 Price Authorization Acknowledgement Provide Update Pricing 60 Days in Advance of Effective Date Price Change Updates Distributors Measure Manufacturers

20. Measure the number of Line Items ordered 100% correctly as a percentage of total Line Items ordered Use EDIPro 850 Purchase Order Transaction Set P.O. Accuracy Manufacturers Measure Distributors

21. Calendar or Business Days? Manufacturers adjust lead times to reflect calendar days Lead Time

22. Order Issuance or Acceptance Date? It Depends… Issue Date for Electronic Orders Acceptance Date for Manual Orders Lead Time

23. Measure the time elapsed in calendar days between when an electronic order is issued or a manual order is accepted to the receipt of material Lead Time Distributors Measure Manufacturers

24. Measure stock line items received complete on first receipt as a percentage of stock line items ordered First Receipt is the 1st Packing List Initial Fill Rate Distributors Measure Manufacturers

25. Measure the # of shipments required to complete a P.O. Each packing list is a separate receipt for the distributor Average Shipments/Order Distributors Measure Manufacturers

26. Measures the number of Lines received complete by the requested date based on normal/historical lead times, or a negotiated delivery date, as a % of the total lines ordered On-Time Delivery Distributors Measure Manufacturers

27. Measure the number of line items received 100% correctly divided by the total line items received Shipping Quality & Accuracy Distributors Measure Manufacturers

28. & Distributors Measure Manufacturers Manufacturers Measure Distributors SPA Sales % • Sales @ distributor cost subject to Special Pricing Authorizations (SPAs) from this vendor divided by total sales @ cost from this vendor

29. Report Cards Feedback by June 30, 2006

30. Implementation • Documentation on NAED Website • www.naed.org • Defined Standards • Supply Chain Report Card • Monthly Webinars Calls • 2nd Monday of Every Month • 4pm ET/3pm CT/2pm MT/1pm PT • Beginning August 14, 2006

31. What You Can Do! • Review the Report Cards • Circulate THROUGHOUT Your Company • Provide Feedback by June 30, 2006 • customerservice@naed.org • Put the Scorecards into use • Select Measures • Select Vendors • Establish Mutual Expectations • Baseline Data • Review Face-to-Face at least 2X a Year • NAED B2B Sessions • Marketing Group Meetings

32. Next Steps • Finalize Recommended Best Practices • Implement with Software Vendors • Develop a Template for Subjective Measures by November 2006