AmeriCare Royal

Imagining Supply Chains in 2030
Brett Barnello
Chief Supply Chain Officer
AmerCare Royal
GLOBAL SUMMIT

8/22/2022 ©2021 AmerCareRoyal 2
Wednesday, Sept. 7th, 2022
Supply Chain Insights

Objective & Topics
Objective:
Showcase ACR: Project Rubik – a network design effort that leveraged both simulation and optimization to
develop a comprehensive supply chain strategy.
Topics:
AmerCareRoyal – History and Overview
A Case for the Engagement – Rubik: Network Design
Strategy Development
Implementation - Making Our Network Design and Strategy a Reality
The Value Proposition and Preliminary Results
Questions and Discussion
3

Company History & Overview
A true ‘one-stop-shop’ solution…
Broad range of disposable
foodservice packaging,
gloves, PPE and supplies
Eco-friendly
BPI certified compostable
Foodservice products
Customizable breadth of
disposable supplies for
Canadian foodservice
Made-in-the-US packaging
for foodservice, food
processing and retail
Global sourcing,
manufacturing and
transportation solutions
Ross and Wallace Paper
Domestically
manufactured paper bags,
sacks and roll products
AmerCareRoyal is a seamless resource for over 6,000 disposable supplies
used in foodservice, janitorial, sanitation, education, hospitality and healthcare.

Our Customers and How We Serve
Channels
Customers
DISTRIBUTION (46%) NATIONAL ACCOUNTS (29%) 511 Foodservice Canada (10%)
Validation
Across the board the 511 team is
extraordinary, and we can always count on
each of them to assist and provide support
where it's needed in each of our categories.
The quality of the product we purchase from
511 is top-notch. Most importantly, the team is
top-notch!
Category Director,
National Distributor
Direct CONTAINERS (15%)
“AmerCareRoyal is always quick to
respond. They do what’s needed to
satisfy our customers. No matter
who I contact they listen to me. If
they can’t help they get someone
on the line instead of passing me
around”
Procurement Manager,
Virtual Distributor
“Relative to some of the foodservice supply
industry’s bigger players, ACR blows them
away with their ability to be nimble. They were
able to find and get products into production
quicker and they were also able to make
needed modifications quicker than others.”
VP of Supply Chain,
Firehouse Subs
“We considered ACR because of
their value proposition. Price was
taken into consideration, but they
are also very comprehensive in
terms of actual product offerings.”
Category Manager,
Major Broadline Distributor

AmerCareRoyal – Eight Companies in Eight years
HCI Equity Partners - backs AmerCare with vision to create a
national disposables supplier with the broadest product offering
JMRI - expanded product line; strategic Southwest presense.
Royal Paper - Exton, PA based supplier of paper products and
disposable items for the foodservice industry.
AmerCareRoyal – formed creating a leading national supplier of
diverse foodservice disposables.
The Ocala Group - provided direct shipment and international
supply chain capabilities.
511 Foodservice - provided beachhead in the Canadian market,.
PrimeWare - eco-friendly product offering and established West
Coast presence.
McNairn Packaging – added domestic manufacturing
Ross & Wallace - expanded domestic mfg - paper bags & rolls.
2014
2016
2016
2016
2017
2017
2018
2019
2021
Number of Products 6,000 SKUS
# Ship to Locations ~2,000
# Customers ~1,000
# of Vendors ~ 250
Growth / Vol. (‘19 – ’21) ~8% CAGR

A Case for the Engagement
Rubik: Network Design - Deliver a positive customer experience through an
efficient logistics network that supports our customer service goals at a value.

Rubik – A Case for the Engagement…
Operational challenges were evident and significant opportunities existed across key areas
Lower service levels (case fill rate) and increased number of order splits (multiple DCs) impacting customer experience
High cost to serve – inbound, network transfers and outbound transportation; DC storage and handling operating costs
Inefficient use of inventory / working capital – wrong product; wrong place
Lack of standardization - ordering and operating policies, replenishment guidelines, and purchasing policies
Opportunity to develop people (capabilities), make process improvements (IBP) and enhance systems (Planning / TMS)
Lack of overall knowledge about our supply chain network - true cost drivers and service implications not well known

Strategy Development

Rubik Project Structure and Approach Evolved…
Workstream Lead
Service Strategy Andrew Kurpiel / Rob
Freeman
Customer Service Audry Willingham
Demand Mapping Andrew Kurpiel /
Debbie Seyfried
Product Portfolio Chris Rowe
Logistics: Warehouse
and Outbound
Transportation
Brad Clinard
Inbound
Transportation
Adam Milberg / Lisa
Taylor
Quick Wins Sean Quinlan / Steve
Dorn
Customer Service
Strategy
(Channel, Customer,
Product)
Order Fulfillment
Lead-times
Product Availability
Product Portfolio
Fill Rates
Order
Line
Order Fulfillment
Policies
Fulfillment
Location(s)
“static vs dynamic”
“splits”
Backorders
Order Cut Offs
Supply Chain
Strategy
Inventory
Deployment
Locations/ Echelon
Levels
Skus stocked by
location
Stocking Levels
(Cycle/Safety)
Replenishment
Review Policies/
Order Frequencies
Sources
Flow Paths
Modes
Order Allocation
Customer
Delivery
Service
Territories
Flow Paths
Modes
DOM Logic
Customer
Inventory
Allocations
Customers
Competitors
ACR Business
Objectives
Quick Wins – Focal Customers (Nat Accts; Distribution; Corp)
1b
1a
1
2
3
4
5
6
7
X
Areas
of
Focus

Handling:
Shipping,
$7,859,390
Warehouse
Fixed,
$7,290,762
Handling:
Receiving,
$3,903,576
Vendor
Import:Transport
, $14,297,814
Vendor
Import: Taxes
& Duties,
$9,676,813
Domestic
Inbound:TL,
$663,496
Domestic
Inbound:LTL,
$169,648
Customer
Delivery:LTL,
$12,528,569
Customer
Delivery:TL,
$5,109,879
Vendor Inbound,
$24,807,772, 33%
Warehousing,
$19,053,728, 26%
Customer Delivery,
$17,638,448, 24%
Inventory Carrying,
$9,708,585, 13%
Stock Transfers,
$2,753,523, 4%
0
20
40
60
80
100
120
140
160
Number
of
Affinity
Groups
% of Overall Orders Group is In
Occurancy of Affinity Groups in Orders
Comprehensive Baseline
Customer Requirements Customer Demand Network Costs Customer Delivery
Daily Inventory & Capacity Vendor Import Vendor Domestic Stock Transfers
Costs Cases $/Case Costs Cases $/Case Costs Cases $/Case Costs Cases $/Case Costs Cases $/Case
Vendor Inbound $7,324,253 2,979,321 $2.46 $8,897,681 3,756,071 $2.37 $6,225,501 2,354,542 $2.64 $2,360,337 937,920 $2.52 $24,807,772 10,027,854 $2.47 34%
Import
(1)
$6,808,413 2,452,629 $2.78 $8,695,707 3,649,991 $2.38 $6,134,915 2,189,607 $2.80 $2,335,592 925,680 $2.52 $23,974,627 9,217,907 $2.60 32%
Total Transportation $4,103,476 2,452,629 $1.67 $4,698,141 3,649,991 $1.29 $4,192,424 2,189,607 $1.91 $1,303,774 925,680 $1.41 $14,297,814 9,217,907 $1.55 19%
Duties and Fees $2,704,937 2,452,629 $1.10 $3,997,566 3,649,991 $1.10 $1,942,492 2,189,607 $0.89 $1,031,818 925,680 $1.11 $9,676,813 9,217,907 $1.05 13%
Domestic $515,840 526,692 $0.98 $201,975 106,080 $1.90 $90,585 164,935 $0.55 $24,745 12,240 $2.02 $833,145 809,947 $1.03 1%
TL Freight $410,465 437,751 $0.94 $175,112 93,968 $1.86 $62,602 147,886 $0.42 $15,317 8,536 $1.79 $663,496 688,141 $0.96 1%
LTL Freight $105,375 88,941 $1.18 $26,863 12,112 $2.22 $27,983 17,049 $1.64 $9,428 3,704 $2.55 $169,648 121,806 $1.39 0%
Warehousing $5,616,086 3,937,708 $1.43 $5,084,849 4,386,594 $1.16 $5,436,644 3,481,437 $1.56 $2,916,149 1,506,437 $1.94 $19,053,728 13,312,176 $1.43 26%
Handling $3,738,701 3,937,708 $0.95 $2,481,002 4,386,594 $0.57 $2,627,114 3,481,437 $0.75 $2,916,149 1,506,437 $1.94 $11,762,966 13,312,176 $0.88 16%
Receiving $1,003,233 3,435,729 $0.29 $980,786 4,301,695 $0.23 $773,471 2,929,815 $0.26 $1,146,086 975,392 $1.18 $3,903,576 11,642,631 $0.34 5%
Vendor Inbound $869,962 2,979,321 $0.29 $856,384 3,756,071 $0.23 $621,599 2,354,542 $0.26 $1,102,056 937,920 $1.18 $3,450,001 10,027,854 $0.34 5%
Stock Transfers In $85,384 292,412 $0.29 $44,284 194,229 $0.23 $84,347 319,498 $0.26 $32,785 27,902 $1.18 $246,801 834,041 $0.30 0%
Projects In $47,887 163,996 $0.29 $80,118 351,395 $0.23 $67,525 255,775 $0.26 $11,245 9,570 $1.18 $206,774 780,736 $0.26 0%
Shipping $2,735,468 3,937,708 $0.44 $1,500,215 4,386,594 $0.34 $1,853,643 3,481,437 $0.40 $1,770,063 1,506,437 $1.18 $7,859,390 13,312,176 $0.59 11%
Stock Transfers Out $146,653 334,825 $0.44 $23,571 68,920 $0.34 $39,309 99,265 $0.40 $388,961 331,031 $1.18 $598,494 834,041 $0.72 1%
Projects Out $1,242,295 528,636 $2.35 $0 - $2.35 $571,257 243,088 $2.35 $10,589 9,012 $1.18 $1,824,141 780,736 $2.34 2%
Customer Delivery $1,346,520 3,074,247 $0.44 $1,476,645 4,317,674 $0.34 $1,243,077 3,139,084 $0.40 $1,370,513 1,166,394 $1.18 $5,436,755 11,697,399 $0.46 7%
Fixed Cost $1,877,385 $2,603,847 $2,809,530 $7,290,762 10%
Stock Transfers
(2)
$947,510 863,461 $1.10 $117,516 68,920 $1.71 $182,460 342,353 $0.53 $1,506,038 340,043 $4.43 $2,753,523 1,614,777 $1.71 4%
Xfer $314,682 247,210 $1.27 $50,668 31,864 $1.59 $84,623 35,189 $2.40 $1,473,850 331,031 $4.45 $1,923,824 645,294 $2.98 3%
MEIO/Xfer $61,043 49,830 $1.23 $65,738 35,170 $1.87 $6,447 8,096 $0.80 $133,229 93,096 $1.43 0%
MEIO $19,304 37,785 $0.51 $1,109 1,886 $0.59 $19,344 55,980 $0.35 $39,756 95,651 $0.42 0%
Projects $552,481 528,636 $1.05 $72,045 243,088 $0.30 $32,188 9,012 $3.57 $656,714 780,736 $0.84 1%
Customer Delivery $5,021,461 2,452,914 $2.05 $6,128,598 3,911,441 $1.57 $4,292,727 2,620,787 $1.64 $2,195,662 1,125,360 $1.95 $17,638,448 10,110,502 $1.74 24%
LTL Freight $4,155,001 1,772,780 $2.34 $3,698,891 2,278,864 $1.62 $3,133,769 1,801,830 $1.74 $1,540,908 718,649 $2.14 $12,528,569 6,572,123 $1.91 17%
TL Freight $866,460 680,134 $1.27 $2,429,708 1,632,577 $1.49 $1,158,957 818,957 $1.42 $654,754 406,711 $1.61 $5,109,879 3,538,379 $1.44 7%
Customer Pickup 621,333 406,233 518,297 41,034 1,586,897
inventory Carrying
(3)
$2,256,595 4,422,357 $0.51 $3,614,050 5,326,253 $0.68 $2,473,394 3,861,974 $0.64 $1,364,546 1,770,899 $0.77 $9,708,585 15,381,482 $0.63 13%
Vendor Inbound $439,883 2,979,321 $0.15 $982,415 3,756,071 $0.26 $353,856 2,354,542 $0.15 $140,681 937,920 $0.15 $1,916,835 10,027,854 $0.19 3%
Import $434,722 2,452,629 $0.18 $980,293 3,649,991 $0.27 $352,284 2,189,607 $0.16 $140,382 925,680 $0.15 $1,907,681 9,217,907 $0.21 3%
Domestic $5,161 526,692 $0.01 $2,122 106,080 $0.02 $1,572 164,935 $0.01 $299 12,240 $0.02 $9,154 809,947 $0.01 0%
DC On Hand(4)
$1,816,712 1,443,036 $1.26 $2,631,635 1,570,182 $1.68 $2,119,538 1,507,432 $1.41 $1,223,865 832,979 $1.47 $7,791,750 5,353,628 $1.46 11%
Network Total(5)
$21,165,905 3,074,247 $6.88 $23,842,694 4,317,674 $5.52 $18,610,725 3,139,084 $5.93 $10,342,732 1,166,394 $8.87 $73,962,056 11,697,399 $6.32
29% 32% 25% 14%
Exton Charleston Ft.Worth/Dallas Flex Network Total
SKUs Cases
% of SKUs % of Cases
LOW LOW MEDIUM MEDIUM HIGH High
22 2,053,595 175 4,921,727 165 2,216,923 362 9,192,245
1.0% 17.7% 8.2% 42.3% 7.7% 19.1% 17.0% 79.1%
0 0 63 328,378 193 832,833 256 1,161,211
0.0% 0.0% 3.0% 2.8% 9.0% 7.2% 12.0% 10.0%
1 86,226 71 165,090 1,443 1,021,921 1,515 1,273,237
0.0% 0.7% 3.3% 1.4% 67.7% 8.8% 71.0% 11.0%
23 2,139,821 309 5,415,195 1,801 4,071,677 2,133 11,626,693
1.1% 18.4% 14.5% 46.6% 84.4% 35.0% 100% 100%
Weekly Variability (COV)
LOW
(<0.5)
MEDIUM
(<=0.5 - > 1.0)
HIGH
(>1.0)
Velocity
in
Velocity
Group
(Annual
Cases)
FAST
(80%)
INTERMEDIATE
(<80%- >=90%)
SLOW
(<90% - 100%)
Monthly by Groups
Variability/
Velocity
Segmentation
Affinity Analysis
Ship Tos
By Category
$/case, By Category By Facility
Vendor Inbound
35%
Warehousing
26%
Customer
Delivery
24%
inventory
Carrying
11%
Stock Transfers
4%
Exton
Vendor Inbound
37%
Warehousing
21%
Customer
Delivery
26%
inventory
Carrying
15%
Stock Transfers
1%
Charleston
Vendor Inbound
34%
Warehousing
29%
Customer
Delivery
23%
inventory
Carrying
13%
Stock Transfers
1%
Ft Worth/Dallas
Vendor Inbound
23%
Warehousing
28%
Customer
Delivery
21%
inventory
Carrying
13%
Stock Transfers
15%
Flex
21%
5%
6%
2%
79%
95%
94%
98%
Exton (Core)
Charleston (Core)
Ft. Worth/Dallas (Core)
Flex (Core)
Pickup vs. Shipped Shipments by Core DC
Exton Charleston Ft.Worth/Dallas Flex
TL 680,134 1,632,577 818,957 406,711
LTL 1,772,780 2,278,864 1,801,830 718,649
72%
58%
69% 64%
28%
42%
31% 36%
Customer Delivery Mode Mix (10.1 M Cases)
Shipments Out of Region
Mode Mix Pickup vs Delivered
Shipment Size Profiles by Mode
45
156
494
753
609
681
321
106 28 5 0
1%
5%
15%
24%
19%
21%
10%
3%
1% 0% 0%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
800
Shipments
TL Lbs/Shipment: Network
Average= 16,582 COV=47%
63
322
1350
829
333
144 105 14 21 17
2%
10%
42%
26%
10%
5% 3% 0% 1% 1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
200
400
600
800
1,000
1,200
1,400
Shipments
TL Cases/Shipment: Network
Average= 1,106 COV=61%
66
115 133
693
655
805
525
58 47
101
2%
4% 4%
22%
20%
25%
16%
2% 1%
3%
-3%
2%
7%
12%
17%
22%
27%
-50
50
150
250
350
450
550
650
750
850
1 2-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40 >40
Shipments
TL Pallets/Shipment: Network
Average= 20 COV=92%
PLASTIC PRODUCTS
PRIMEWARE COMPOSTABLE
GLOVES
TAKE OUT PACKAGING
PAPER GOODS
PLASTIC CUPS & CONTAINERS
PADS & SCREENS
WOODENWARE
POINT OF SALE
BAMBOO
-
5,000
10,000
15,000
20,000
25,000
2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20 11/1/20 12/1/20 1/1/21
Network Pallets by Division - Top 90% of Average Daily On-Hand
01-Feb20 02-Mar 03-Apr 04-May 05-Jun 06-Jul 07-Aug 08-Sep 09-Oct 10-Nov 11-Dec 12-Jan21
For12
Months
PLASTICPRODUCTS 1.9 3.9 2.6 2.9 3.0 4.0 4.0 4.0 4.2 4.6 5.2 4.1 3.6
PRIMEWARECOMPOSTABLE 1.0 1.6 1.1 0.8 0.7 1.5 1.0 0.9 1.2 1.1 1.5 0.9 1.1
GLOVES 1.8 4.4 5.4 5.1 4.8 7.2 7.8 7.1 10.2 8.4 8.7 6.0 5.4
TAKEOUTPACKAGING 2.3 4.1 3.0 6.1 5.1 6.7 5.9 6.9 6.6 6.7 7.4 8.2 5.5
PAPERGOODS 2.4 3.2 0.7 0.8 1.3 2.4 2.5 3.0 3.8 4.1 3.9 3.9 2.4
PLASTICCUPS&CONTAINERS 1.5 2.0 1.2 1.8 2.4 3.5 4.3 3.1 3.7 3.2 4.5 3.6 2.9
PADS&SCREENS 3.3 3.8 1.4 1.6 1.9 2.8 2.1 2.6 3.0 2.9 4.3 3.2 2.6
WOODENWARE 4.7 6.7 1.4 0.8 1.4 1.6 1.1 1.2 1.6 1.3 1.1 1.0 1.7
POINTOFSALE 5.1 5.2 1.4 2.1 3.4 4.5 4.3 5.5 5.4 5.2 5.5 3.9 4.0
BAMBOO 2.9 3.0 0.4 0.4 0.3 0.6 1.1 0.9 2.5 0.8 0.8 0.8 1.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
TURNSBYDIVISIONS-Top90%ofAverageDailyonHand
10,900
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2/1/2020 3/1/2020 4/1/2020 5/1/2020 6/1/2020 7/1/2020 8/1/2020 9/1/2020 10/1/2020 11/1/2020 12/1/2020 1/1/2021 2/1/2021
Utilization
Pallets
Exton Core Capacity Utilization
Capacity Utilization On Hand Pallets Capacity
25,500
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
5,000
10,000
15,000
20,000
25,000
2/1/2020 3/1/2020 4/1/2020 5/1/2020 6/1/2020 7/1/2020 8/1/2020 9/1/2020 10/1/2020 11/1/2020 12/1/2020 1/1/2021 2/1/2021
Utilization
Pallets
Charleston Core Capacity Utilization
26,500
0%
20%
40%
60%
80%
100%
120%
-
5,000
10,000
15,000
20,000
25,000
30,000
2/1/2020 3/1/2020 4/1/2020 5/1/2020 6/1/2020 7/1/2020 8/1/2020 9/1/2020 10/1/2020 11/1/2020 12/1/2020 1/1/2021 2/1/2021
Utilization
Pallets
Ft. Worth/Dallas Core Capacity Utilization
15,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2/1/2020 3/1/2020 4/1/2020 5/1/2020 6/1/2020 7/1/2020 8/1/2020 9/1/2020 10/1/2020 11/1/2020 12/1/2020 1/1/2021 2/1/2021
Utilization
Pallets
Flex Core Capacity Utilization
Turns
On Hand Inventory
Storage Capacity Utilization by Facility
71%
89% 84%
66%
20%
7%
9%
26%
6%
2%
4% 6%
1% 1% 1% 2%
Exton (Core) Charleston (Core) Ft.Worth-Dallas (Core) Flex (Core)
Ocean Freight Drayage $ Chassis $ Additional $
0
10
20
30
40
50
60
70
80
90
15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75
Containers
Transit Times China to Charleston (Core)
Avg: 39 Days Cov: 35%
POL Country Ocean Freight Drayage $ Demurrage $ Chassis $ Additional $ Duties & Fees $ Total Inbound
China $7,193,820 $1,239,434 $38,540 $402,048 $88,298 $8,483,064 $17,458,211
Vietnam $2,588,095 $360,928 $6,531 $126,715 $25,509 $599,021 $3,710,308
Malaysia $991,071 $148,342 $7,548 $50,205 $16,147 $457,284 $1,673,397
Taiwan $667,750 $112,615 $5,053 $35,851 $9,783 $99,403 $931,705
India $105,943 $17,825 $1,826 $5,425 $1,643 $36,268 $169,471
Thailand $12,940 $891 $0 $412 $290 $1,679 $16,212
Indonesia $8,368 $571 $0 $490 $110 $93 $9,632
Total $11,567,987 $1,880,606 $59,498 $621,146 $141,780 $9,676,813 $23,968,937
Container Component Costs by Country
Component Costs by Facility Transit Times
Container Size Profiles
30,759
34,959
30,505 29,541
24,465 25,549 25,311 24,282
Exton (Core) Charleston (Core) Dallas Flex (Core)
Average Lbs/Container
China Vietnam
2,457
2,432
2,467
2,414
2,751
2,587
2,667
2,531
Exton (Core) Charleston (Core) Dallas Flex (Core)
Average Cube/Container
China Vietnam
LBS Cube
1.9
1.6
2.0
1.7
2.3
1.8
1.2
1.6
1.4
1.7
2.6
1.6
1.4
1.6
1.6
1.7
2.4
1.7
0.0 1.0 2.0 3.0
Dallas
Ft. Worth (Core)
Charleston (Core)
Exton (Core)
Flex (Core)
Network
Days
Average Transit Times
Combined TL LTL
83% 89% 90%
70%
85%
17% 11% 10%
30%
15%
0%
20%
40%
60%
80%
100%
Exton (Core) Charleston
(Core)
Ft.Worth-Dallas Flex (Core) Network
Domestic Inbound Mode Mix (Cases)
TL LTL Parcel
88% 94% 95%
86% 92%
12% 6% 5%
14% 8%
0%
20%
40%
60%
80%
100%
Exton (Core) Charleston
(Core)
Ft.Worth-Dallas Flex (Core) Network
Domestic Inbound Mode Mix (Lbs)
TL LTL Parcel
Mode Mix
Vendor Ship From
Transit Times
Shipment Type Xfer
Cases Destination Group
Origin Group Exton Charleston Ft.Worth/Dallas Flex Total
Exton 22% 8% 6% 2% 38%
Charleston 2% 0% 3% 0% 5%
Ft.Worth/Dallas 1% 3% 0% 1% 5%
Flex 11% 13% 27% 0% 51%
Total 36% 24% 36% 4% 100%
DC Transfer Flows
Shipment Type Xfer Shipment Type Xfer
Ship Mode FTL Ship Mode FTL
$/Shipment Destination Group Cases/Shipment Destination G
Origin Group Exton Charleston Ft.Worth/Dallas Flex Network Origin Group Exton
Exton $867 $2,208 $3,781 $5,329 $1,631 Exton 1,217
Charleston $3,100 $3,004 $3,052 Charleston 1,942
Ft.Worth/Dallas $4,517 $3,481 $474 $2,712 $3,340 Ft.Worth/Dallas 1,687
Flex $8,153 $8,782 $6,321 $7,360 Flex 1,474
Network $3,051 $6,087 $5,706 $4,282 $4,669 Network 1,329
Shipment Sizes
Shipment Type Xfer Ship
Transport $ Origin Group Case
Ship Mode Exton Charleston Ft.Worth/Dallas Flex Network Ship
FTL $256,064 $42,728 $70,130 $1,442,535 $1,811,458 94% FTL
LTL $58,618 $7,940 $14,493 $31,315 $112,367 6% LTL
Network $314,682 $50,668 $84,623 $1,473,850 $1,923,824 Netw
16% 3% 4% 77%
Shipment Type Xfer Ship
Mode Mix
54%
41%
4%
14%
26%
44%
19%
7% 4% 4%
18%
11%
15%
26%
7%
4% 4%
4%
11%
22%
30%
37%
22%
7%
11% 11% 15%
26%
48%
70%
85%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<85% 85 to 90% 90 to 94% 94 to 97% 97 to 98% 98 to 99% >99%
%
Responses
Order OTIF (cases) Performance Target
VERY DISSATISFIED SOMEWHAT DISSATISFIED NEITHER SATISFIED NOR DISSATISFIED SOMEWHAT SATISFIED VERY SATISFIED
Order OTIF
4%
21%
58%
8%
17%
42%
25%
8% 8%
17%
8%
33%
13%
13%
8%
13%
32%
25%
25%
4%
92%
83%
71%
52%
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 days 2 -3 days 4 - 5 days 5 - 7 days 7 - 10 days 10- 15 days > 15 Days
%
Responses
Total Lead-Time Performance Target
Order Lead-Times
3%
17%
36%
19%
17%
31%
22%
33%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Split Order at Line Level Ship Line Complete Split Individual Lines
%
of
Responses
Order Split Method Acceptbility
NOT AT ALL OCCASIONALLY FOR SOME ORDERS FOR MOST ORDERS FOR ALL ORDERS
Splits Acceptability
2% 2%
7%
21%
48%
2%
2%
7%
17%
31%
12%
24% 21%
24%
26%
43%
33%
31%
14% 17%
31%
38%
19%
7%
7%
62% 60%
40%
26%
14%
7%
2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 days 2 -3 days 4 - 5 days 5 - 7 days 7 - 10 days 10- 15 days > 15 Days
%
Responses
Backorder Lead-Time Performance Target
Back Order Lead-Times
FOR ALL ORDERS
26%
FOR MOST ORDERS
19%
FOR SOME ORDERS
7%
OCCASIONALLY
32%
NOT AT ALL
16%
How Often Are Splits Acceptable
58%
43%
13%
8%
22%
35%
17%
9%
21%
13%
26%
39%
13%
13% 9%
4%
17% 22%
30%
39%
26%
13%
8% 4% 4%
13%
39%
61%
78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<85% 85 to 90% 90 to 94% 94 to 97% 97 to 98% 98 to 99% >99%
%
Responses
Line Fill Rate (cases) Performance Target
Case Fill Rates

Supply Chain Design Using Optimization and Simulation
Understanding Operational Feasibility and Increasing Organizational Buy-In
Optimization (Structure) Simulation (Performance)
Purpose • Prescribes overall network structure based on the
lowest total delivered cost, given a demand
requirement, alternative flow paths and facilities,
storage and sourcing constraints, and inventory
profiles
• Predicts how a proposed supply chain design will
operate providing customer service level metrics and
daily inventory levels
Granularity • Monthly
• Cases demanded by SKU
• Aggregated customers (3-digit zip codes pickup vs
shipped)
• Average costs
• Daily
• Orders
• Ship-to customers
• Detailed costs (ex. LTL weight breaks)
• ACR buying logic and inventory policies (GAINS)
• Receiving Capacity
• Service Policies (ex. backorders, partial orders)
Decisions/Outputs • Customer service territories
• Facility purpose and size
• Preferred stocking locations
• Inbound/outbound flow to/from each location
• Service levels (OTIF, Fill Rates, Splits, Lost Sales)
• Daily Inventory levels
• Operational costs
How they complement each
other
• Feeds simulation a network structure to test and
obtain operational results.
• Feeds optimization inventory levels based on service
targets.

How Simulation Increased Organizational Buy-In
Modeling Actual Planning and Execution Logic
Compute
Projected Vendor
Line-Location
Service
For each SKU check if
Excess Inventory
exists at other ACR
Locations
No Order
Created
1
Y
N
Create
Transfer
Order(s)
Y
Done
Y
N
N
N
Y
Add these
SKUs to
the Vendor
Order
Compute Projected
Vendor
Line-Location Service
2 3 4
Compute Order Qty
for each SKU and
Cube and Weight
for Vendor Order
5
6
Y Reduce Qty
for each SKU
by X DOS
Create Vendor
Order
Y
In Jeopardy
Excess
Exists
Replen Qty
needs met
by Xfers
Still in
Jeopardy
Other Skus
between OUTL
and ROP
Cube or Weight
exceeds 40’
Container
Cube or
Weight still
exceeds 40’
Container
Cube or
Weight within
Full Tolerance
N
7
N
9
Y
Increase Qty for
each SKU by X DOS
N 8
Y
N
ACR Buying Logic Customer Order Routing
Transportation Mode Selection
Inventory
Product is
pulled from
Inventory at
Pick Time
Pick Time
Time
Ship Time Order
Due Date
Dispatch Time
Max Dwell Time
Ship Time = Due Date – Dispatch Time
Consolidation Queue Transportation
Cancel
Date
Backorder
Time Limit
Backorder
Time Limit
Dispatch Time
Last Date
Backorder
Can Arrive
Mode Selection
Check Shipment
Size
TL
LTL
Route the order and order lines to the DC that can
fulfill based on each customer’s requirements:
• Partial fill allowed on orders or lines?
• Orders or lines can be split; shipped from
multiple DCs?
• Orders or lines can be backordered?
Summerville, SC
▪ Ave Inbound volume: 20,044
▪ Days Over Capacity: 53
▪ Capacity shortfall: 67%
Receiving Operations
• Receive inbound shipments
respecting receiving a
storage capacities
• Use offsite 3PLs when
needed
• Hold in yard on trailers as
needed

Historical
Actuals
Planned
Usage
Planned
Optimized
Hub &
Spoke
Centralized
Reduced
Footprint
Strategies Evaluated
Scenario Group Run Plan
Strategy Formulation
Hub & Spoke Reduced Footprint
Centralized
Planned
Optimized
Planned
Planned
Usage
Planned
without
MEIO
Only
"C"
SKU,
DC2
Hub
Only
"C"
SKU,
DC4
Hub
All
SKUs,
DC2
&
4
Hubs
All
SKUs,
DC2
Hub
Only
"C"
SKUs,
DC2
Hub
2
DC,
close
DC1
&
3,
existing
storage
3
DC,
close
DC1,
3
DC,
close
DC1,
3
DC,
close
DC2,
Total
Cost
($M)
10.6M Cases 15,5 M Cases
existing
storage
existing
storage
existing
storage
Case
Fill
Rate
56 Optimization and Simulation Runs
The Hub & Spoke Networks
• Total costs similar or more.
• Reduced inventory were more than offset by double handing and transfer
costs to “spokes”
• C only Hubs, pushed up inventory buys of As and B’s at non-hub
locations offsetting expected inventory consolidation benefits of the C’s
• Case fill rates were lower across the board
Centralized Network
• Total Costs and Case Fill Rates similar to Planned Optimization; not worth
pursuing due to change in separate Customer orders
Bi-Coastal Network
• Lowest Total Cost network current demand, deemed too risky
• Substantial storage and receiving capacity expansion with forecasted demand

Reassigning 27% of Customer Ship To Locations &
Rightsizing Inventory Led To…..
New Design (Forecasted Demand)
Planned (Forecasted Demand)
$/ Case
Working
Capital On
Hand
-11.6% 50%
Financial
Demand
Served
Order Fill
Rates
Line Fill
Rates Order Splits Back Orders Lost Sales
46% 26% 30% -65% -85% -95%
Customer Service
Avg. Pallets
on Hand
SKU
Locations
Out of
Region
Fulfilment
1% -16% -65%
Stocking Strategy
DC 1 DC2 DC3 DC4 Network
Planned 176% 74% 62% 54% 80%
Reconfigured 88% 102% 75% 86% 88%
All Offsite 3PLs eliminated
Storage Utilization
TL Cases
TL
Shipment
Size LTL Cases
LTL
Shipment
Size
91% 51% -49% 35%
Customer Delivery
Baseline

Implementation - Making our Network Design and Strategy a Reality

Implementation
Prep Work + Analysis
• Test process with single
customer realignment
• Update master data settings
• Remap demand / drives new
DC requirements
• Leverage supply planning tools
• 3PL reductions
• Manage transfers
• Assess PO change
opportunities
Planning + Analysis
• Inbound activity review and
sourcing alignment
• Change POs / re-route
inbounds where possible
• Direct new / future inbound
POs to new DC default
locations
• Exception and gap
management with view
towards service
Inventory Execution
• Inventory drawdown –
mange down at existing
location
• Inventory transfers – fill
service gaps during
transition
• Inventory build at new
default location
• Place go-forward POs to
optimized location
Customer Realignment
• Communicate with customers
• Execute customer
realignment
• Change Default Shipping
Locations – Go live
Commercial
Internal / External Change Management
Demand Remapping / “Big Bang”
Governance and Tracking

The Value Proposition and Preliminary Results

Start Today
Lines by Default Region
Achievable Savings Projections for 2022
Given considerable volatility and uncertainty of 2022 and the timing of the implementation activities, the strategic
savings opportunity has been discounted:
Projected Annual Savings: 19.8%
• Transfers between DCs will not be 100% eliminated: stock rebalancing needed; volatility in lead-times
• Customer delivery transportation improvements only 44% obtainable: not at targeted order fill rates
Resulting Achievable Annual Savings: 6.4%
• Implementation activities will take 6 months
Achievable Savings for 2022: 3.2%
Start Today
Orders by Default Region
14%
13%
Start Today
Cases by Default Region
7%
Just 12 weeks into the implementation phase – we are seeing immediate results

Our Network Design Key Takeaways
• Increased knowledge of our overall Supply Chain network - understanding true cost drivers and
service implications through in-depth analysis (quantitative and qualitative) as well as external
benchmarking with our customers.
• Gained insights and better understanding of our operating policies (purchasing policies, splits order
impact, replenishment guidelines)
• Multiple strategic network scenarios evaluated to meet the needs of our near-term profitable growth
aspirations and commercial strategies
• The strategy is pragmatic and will deliver achievable savings and improved service levels through the
efficient deployment of our inventory working capital investment without significantly increasing our
network footprint
• Implementation work is underway - realigning customer service territories is expected to take 1H of
2022 and stabilizing by 2H. Note, both transition costs and accelerated savings are baked into the 2022
preliminary plan.

IMAGINE 2022
21
Any Questions?
THANK YOU!

AmeriCare Royal

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