TWICE A WEEK REPLENISHMENT TO MAX PROGRAM

SUBJECT: TWICE A WEEK REPLENISHMENT TO MAX PROGRAM -----------------------------------------

OVERVIEW: In an effort to continuously improve service to retail facilities, SSPO will implement an enhanced replenishment program, referred to as Twice a Week Replenishment to Max. Under this enhanced program, SSPO can provide retail facilities with two full replenishment orders per week. Parts will be restored to their maximum stocking policy levels twice per week with this new system.

This bulletin provides the following information:

Part I: Program Logic Part II: Program Benefits Part III: Program Details A. Participation B. Replenishment Exceptions

PART I: PROGRAM LOGIC

Twice a Week Replenishment to Max was created by SSPO in an effort to better serve retail facilities by providing more balanced replenishment orders.

Under the new Twice a Week Replenishment to Max logic the shipment previously known as the replenishment order will continue being referred to as the replenishment order. The old expedite order will also be known as a replenishment order. Parts will now be replenished to their maximum stocking policy levels twice per week.

PART II: PROGRAM BENEFITS

This replenishment enhancement will allow SSPO to slightly decrease stocking policy quantities for fast moving parts, since these parts will be replenished in full twice per week. Thus, while the same part numbers will still be stocked, the quantities for some part numbers will decrease.

Retail facilities can expect the following benefits:

* More balanced orders to receive into inventory

* Reduced inventory investment (approximately 5 - 15%, based on facility size)

* Slightly reduced storage space requirements

* Continued high off-the-shelf availability

PART III: PROGRAM DETAILS

A. Participation

Participation in this program is optional.

Each facility, regardless of transportation means (dedicated or non-dedicated), elects one of the following options:

* Receive two full replenishment orders each week under the Twice a Week to Max logic. Both replenishment orders bring parts up to their maximum stocking policy levels.

* Receive one replenishment order and one expedite order per week. The replenishment order brings parts up to their maximum stocking policy levels. The expedite order brings any part which has fallen below its minimum stocking policy level back to the maximum level.

B. Replenishment Exceptions

High Cube Parts

With Twice a Week Replenishment to Max in place, SSPO may need to balance shipments by controlling the distribution of some large, bulky parts. These particular items, which consume a great deal of space or CUBIC volume, will be referred to as High Cube Parts.

High Cube Retailers

Some retailers on Twice a Week Replenishment to Max will be classified as High Cube Retailers. High Cube Retailers are specific retailers whose High Cube Parts are brought up to their stocking policy maximums on only one, not both, replenishment orders. However, High Cube Retailers who fall below their minimum on any High Cube Part will be brought up to the maximum regardless of replenishment day. This High Cube logic, which follows the old replenishment logic, exists in the Twice a Week process to allow SSPO to balance routes.

High Cube Retailers are notified of their High Cube Status by their Shipping Schedules. An asterisk is placed in front of the word REPLENISHMENT to indicate which order will regularly contain High Cube Parts. [See Figure 1 ] A listing of High Cube Parts accompanies Shipping Schedules for High Cube Retailers.

Facilities using Twice a Week Replenishment to Max who are NOT High Cube Retailers will not find an asterisk before REPLENISHMENT on their Shipping Schedules since either order may contain High Cube Parts. [See Figure 2]

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