Supply Chain Council Meeting

April 16, 2009

Good Morning

Thank-you for attending…

Fine Chocolatier since 1907

Our Legacy is 101 Years of Confectionery

Excellence…

Purdy’s from 1907 – 1925Purdy’s Chocolates since 1907

Mr. Purdy

1907 - Richard Carmon Purdy openson Robson St. Vancouver BC

1910’s - the War years

1920s - Purdy’s expands to new locationon Granville Street

{factory in the basement of the store}

Purdy’s from 1925 – 1963Purdy’s Chocolates since 1907

Mr. Forrester

1925 – Hugh Forrester buys Purdy’s

1930s – Depression: open late, weekend

specials

1940s – War: sugar rations, open atnoon – sold out by 12:30!

- son Frank joins business

- open bigger factory West 7th

Ave

1963 - decision made to sell Purdy’s

Purdy’s from 1963 – 1994Purdy’s Chocolates since 1907

The Flavelles

1963 – Charles Flavelle buys Purdy’s(4 stores & factory)

1970s – opens stores in shopping malls, and inAlberta

1980s – needed bigger factorymoved to Kingsway location

1994 – Karen joins Purdy’s

successful Family Transition

2009 – currently operating 57 stores

including 7 stores in Ontario

Expansion continues as ‘go forward’ strategy…

Manufacturing

High quality Belgian chocolate (milk and dark)

Kingsway plant is a complex environment asflowing chocolate is “piped” through the plant

We process 2 million pounds of Chocolate/year

JIT production set for minimum shelf-life

production geared toward Xmas, EasterValentines

Lean Manufacturing is the prevailing focus

Candy-makers constantly creating new products

Retail Operations

Prime mall locations…high traffic areas

Engaged staff are …“Customer Obsessed”

Stock deliveries done before store opens

Over 50 products on sale at all times

Store imaging and renovation ongoing

‘Point of sale’ better integrated with forecast

Purdy’s Corporate &Fundraising Program

extensive corporate clients (Xmas & Easter) GPP

Significant growth every year, on-line orders

Automated systems improve productivity anddelivery

Key transportation suppliers make significantdifference

Fundraising program sold at discount andprofits distributed to the organization

Supply Chain/Purchasing

Belgian Chocolate sourced in Europe & NA

High quality nuts from Asia, Europe & USA

Packaging sourced in Asia, Europe & NA

World Cocoa prices constantly monitored

Dairy products sourced locally (and Ice Cream)

Packaging vendors constantly evaluated tocomplement product quality

Product and store imaging drives Purchasing

Supply Chain/Distribution

6000 skus distributed to 57 stores (including Ice Cream)

Weekly delivery to every store

Multi-deliveries/wk to stores during peaks

Pick and pack produces near zero claims

Product turnaround in 4 hours – 2 days

Two warehouses to optimize supplycapability

Supply Chain/Transportation

Preferred vendors, cold chain, appointment& inside deliveries

New level of carrier tariff negotiation(FSC, Accessorial, Base Tariff, Incremental Cubing, Leverage)

West Coast advantage with national carriers

limited 3PL our Supply Chain cycle (seasonal)

SupplyChain/Enhancements

New WMS system to coincide with ERPupgrade

Further establish track ability, complianceand metrics

“Go Live” {WMS & ERP} August 4, 2009

Intense training and communication as internalparadigm shifts

Supply Chain/The People

900 employees (BC, AB, ONT)

250 bargaining unit staff (5 yr contract)

In-house LDP for management andsuccession planning

Lean manufacturing training (Lean Sensei)

(modeled after Toyota experience)

L.I.F.E.R.

(LISTEN…INVOLVE…FEEDBACK…ENCOURAGEMENT…RECOGNITION)

Supply Chain/Sustainability

Recycle/re-use (corrugate, plastic, paper etc.)

Revamp all facility lighting-Hydro rebate

No more paper towels (Dyson)

White roof on buildings, Zero-Loc insulation

Continued focus on packaging reduction whilestill protecting the product

Computer hardware recycling

Equip. donations to up and coming candy-makers

Supply Chain/The Future

Prepare for further store expansion

Considering 3PL relationship in Ontario

Achieve staffing economies of scale(Point of Sale, WMS, productivity measurement and ERP upgrade)

Dynamic approach to freight performance

Production MRP to better connection to Retailorder cycle

Purdy’s External

Voted one of Canada’s 50 Best Employers(two years in a row)

Strong member of Retail Council of BC & CDA

Karen former member of Young President’s club

Licensee to the 2010 Olympics (Boxed Chocolates)

Ivory Coast farming community supporter

under the CLASSE program

(CHILD LABOR ALTERNATIVES through SUSTAINABLE SYSTEMS in EDUCATION)

Purdy’s Confectionery onGranville St.

Choklit Park

Purdy’s Temptations…if you’re looking for the Calories…they’re all here…!

Always there for you…

Thank you…enjoy the samples…

We’ll see you at your local mall…

“Fantastic Chocolates…Fantastic Service…Fantastic People”