Memorandum for Record s2

MEMORANDUM FOR RECORD

SUBJECT: Meeting with Industry, 28 Sep 2016

ATTENDEES:

Attendees: Mr. Mike Yaksich, Deputy Director Mr. Doug Nomura, CDC-G Manager Mr. Jerry Durham, CDC-G Deputy Mr. Greg Huntley, CDC-K Manager Ms. Karin Hand, Chief Inventory Management

Mr. Phil Igoe, President ALA European Chapter (HPM) Mr. Jeff Windhagen, Committee Chairperson ALA European Chapter (Sissi Werke/Capri Sonne) Ms. Bonita Tilley, Treasurer ALA European Chapter (Acosta) Mr. Jeff Sledden, Secretary ALA European Chapter (OSC)

Mr. Yaksich chaired the meeting in Mr. Brown’s absence. He welcomed everyone and introduced the new CDC-G Manager Doug Nomura, who recently arrived from Hawaii. Mr. Nomura has an extensive background in logistics, both in uniform and as a civilian, and was previously stationed at Germersheim as Battalion Commander.

Mr. Brown attended the Area Director’s meeting at HQ DeCA last week where several topics were discussed, including transformation, variable pricing, private label, vendor stocking, and the proposed NAF conversion. The Boston Consulting Group has been contracted by DoD to assist the agency with the variable pricing initiative. Dates for implementation of these initiatives/pilot projects are pending.

- Ansbach will receive approximately 2,000 rotational troops; no time frame was mentioned; however, expect this to occur in early 2017 - The US military installations in Turkey have been designated as unaccompanied tours of duty for both civilian and military personnel. - The commissary buildings at Illesheim, Sembach and Spangdahlem will be returned to the respective installations within the next 30 days. - The Panzer and Croughton new store projects are both programmed for FY18 with completion in FY20. - The Schinnen to Brunssum move is still TBD. A new store will be built (Army funded) and an existing warehouse will be used. - DeCA is working with USAFE on the Izmir Commissary relocation (from the Hilton Hotel in downtown Izmir to the Gen Akin Garrison, a Turkish military garrison with a NATO contingent); the move is due to force protection. A new facility will be built (AF funded) to house both the commissary (first floor) and AAFES (second floor). - Wiesbaden is status quo. A facility assessment was completed and the results do not warrant the construction of a new facility. - The overall sales goals for CONUS and OCONUS will not change; however, Mr. Jeu is looking for a 1% sales increase for FY17. - Baumholder freeze refrigeration is being replaced with equipment which was transferred from the former Bamberg Commissary when it closed (the equipment was newly installed at Bamberg prior to closing). Industry requested a reset at the completion of the project; Mr. Yaksich will discuss with Mr. Sholedice, Ramstein Zone Manager. - Mr. Darden and a team from Italy have been TDY to the Sigonella Commissary to assist store personnel with shelving installation and stocking, due ongoing issues connected with the sequestration of product ordered by the Italian court, in regards to a court case against the Navy Exchange by a former NEX employee. The store is fully stocked in chill/freeze, deli/bakery, and hot foods, but at this time they do not have their complete semi-perishable assortment available. The NAS Sigonella Skipper has done an excellent job in keeping the community informed and there have been no customer complaints regarding the situation with regards to the commissary - DeCA Europe is working with the German authorities, USAREUR Provost Marshall and DeCA General Council in trying to obtain approval to donate distressed, damaged, close dated, expired product to local food banks (Die Tafel). - Mr. Durham stated that all non-grocery items (POS) going into Turkey must have all details annotated on the customs forms (including cost). If the items are not properly documented they will not go on the truck. - Ms. Hand mentioned that the fill rates for this year’s holiday season (OTBs) are terrible; many items are not available at all or short shipped and we have seen several items arrive damaged. - Personnel Moves: o Kevin Kegler selected for SD Baumholder; arriving Oct/Nov o Luana Harris will depart Patch for Eglin in mid-January 2017 o Panzer Store Manager selection pending o Delores Hill will depart Ankara for Ft Hamilton NY in the next couple of months o Harry Loader, recently from Key West, is the new Croughton Store Director o Kimberly Mobley new SD Menwith Hill o Alconbury SD Arthur Hidalgo is on extended sick leave; Dennis Holm is Acting SD o Lashonda Miller selected as Store Manager Mildenhall; Intern from Ft Eustis o Kelley Store Director selection pending; Carlos Diaz-Velez departed for Hawaii o Mary Giles new Store Director for Garmisch

Questions from Industry

1. Vendor Stocking:

 Some Vendor stocking contracts only allow for 5/6 day work weeks. This situation is causing major issues at store level. Suggestions?

 No Vendor stocking on Sunday (No Deliveries) or Wednesday (Slowest business day)?  Aviano will not stock seasonal if no Vendor stocker is available.

Mr. Yaksich sent an email to the Store Directors earlier this week stating that they need to work with Industry on which days are best for everyone. The email also included the issue of breaking down displays (noted below); Mr. Yaksich will send a copy of the email to Mr. Igoe to share with the chapter members. Regarding Aviano, Mr. Yaksich will discuss the specific issue (seasonal shippers) with the Zone Manager.

2. Promotions/Displays:

 Some Managers are only willing to order Manager’s Specials. Why do we have Priority separate categories on the promo packet then?

Store Directors should be fully participating in the bi-weekly promotional program and optimizing space. Industry stated that Store Directors are not fully utilizing available space; Wiesbaden Commissary was specifically mentioned. Ms. Hand will draft an email to send out regarding promotions and participation

 Companies are tearing down other company’s displays. Merchandising hours are being used to teardown other company’s items. Can DECA store workers help teardown and box up residual DP product?

As stated above, an email was sent to the field informing the Store Directors and Zone Managers that it is not the responsibility of the broker to tear down their displays or the displays of their competitor. Store Directors need to ensure that the area is ready to go for the next display period.

Industry said that Spangdahlem and Wiesbaden are very good on sending information to brokers on display space and request that the rest do the same (send the Excel file via email 1 week in advance)

 Are Promo’s stopping through the Holiday’s? Some stores have indicated starting October there will only be Manager’s special’s ordered.

Bi-weekly promotions are set for the full calendar year, with 24-25 promotional periods each year; everyone is provided a copy of the calendar prior to the start of each year. The 2017 promotional calendar has also been released. There are no CPs/OTBs Oct-Dec due to the large amount of holiday product; this has always been the case, no change. There is however, a lot of holiday product inbound during this time frame (Thanksgiving, Christmas, Hot Cocoa/Cider, Super Bowl) and Store Directors must accommodate these items as well as the items on the bi-weekly promo packages as best they can.

It was also mentioned that the Vogelweh Store Director said he needed to get Mr. Brown’s approval on product being sold in (sell sheets). Should this occur again, Industry needs to contact the Zone Manager and if there is no resolution, elevate it to Mr. Yaksich

Can DeCA push a case to each store on Promotion products to ensure the price changes?

3. Buy Back Markdown:

 Is there a listing of Vendor markdown/buyback items? (Chill) Stores are unaware of many items and insist buyback on items which are not Vendor markdown or buyback.

There is no listing of specific items; however, all chill items are on buyback and the majority of freeze, with the exception of a few Kosher products. Brokers for these items are (should be) aware of their buyback items.

Industry mentioned that there is an issue at store-level with items on VCMs that don’t belong to them. Mr. Yaksich will send an email to the Store Directors requesting their assistance with attention-to-detail regarding the VCMs to ensure that products which are written up belong to the appropriate broker. Accounting reversals have to be done when this happens and they are very time consuming and labor intensive for all parties involved.

 Is there a standard procedure for billing vendors for markdown/buyback?

See above; issue pertains to the reversal of VCMs

 Salvage is out of hand, and we are held to the fire on over ordering etc.

Apparently this question pertained to one store which is now resolved. The distressed lists (at the CDCs) have been within normal range and are actively worked. Any concerns should be immediately addressed so actions can be taken.

4. Sales Signs:

 Some stores refuse to make sales signs for the shelf. Isn’t this service for the CUSTOMER?

Industry stated that this is occurring at Ramstein Commissary and some others as well; VPR signs are being put up by Industry and commissary personnel are removing them. Mr. Yaksich will include this on his email to the Store Directors requesting they support printing sale signs when needed.

5. When will EBS go live in Europe?

We are already using Category Analyzer and HQs published a NTT on September 26, 2016 with the upcoming schedule and that was forwarded to Mr. Igoe for distribution to the broker community.

6. Chievres: Customs raid and status?

No comment

7. Sigonella shutdown status?

Already discussed

8. Are there any upcoming full store resets scheduled?

9. Incirlik status. Returning families?

Already discussed; no families to return

10. POG’s sets, brief suggestion from industry for consideration.

Industry will work with the Store Directors to coordinate a date for a specific set and look at preparing a schedule which can be sent to all players

Mr. Yaksich thanked everyone for attending; the next meeting is scheduled for January 18, 2017 at 1300 in the 2nd floor conference room of building 2780 on Kapaun AS.