Logistics Requirements Review

Transcription

1 Logistics Requirements Review Targeted to New Domestic Vendors Summer 2006 Last Update

2 Page 2 Agenda 1) Welcome and Overview 2) Vendor Resources 3) New Program Execution 4) Supply Chain Network 5) Flow Types 6) Storage Handling Types 7) Packaging & Shipment Requirements 8) Transportation Requirements 9) Vendor Compliance 10) Data Options

3 Page 3 Lowe s Vision We will provide customer-valued solutions with the best prices, products and services to make Lowe s the first choice for home improvement 8 th Largest U.S. Retailer 6 th Largest Importer in the U.S. Ranked 50 th in Fortune th Largest Retailer in the World

4 Page 4 Lowe s Values Customer Focused Ownership Respect Teamwork Passion for Execution Integrity We are united by these guiding values and beliefs and trust each employee to live by them.

5 2) Vendor Resources Summer 2006

6 Typical Lowe s Team Structure Merchandising Logistics Forecasting Vendor Supply Chain Replenishment Performance Management Director Director Director Director Director Director Manager Merchandiser Specialist Planning Manager Manager Demand Planner Analyst Manager Specialist Manager Specialist Manager Systems Manager Sr. Specialist Product Selection Inventory Planning Sales Forecast Vendor Compliance Order Execution Performance Summaries Price Negotiation Assortment Planning Promotion Selection Store Presentation Promotion & Reset Inventory PO Forecast Vendor Collaboration Meetings Cost Reduction Damage Vendor Education RP Set-Up Store Inventory Requests Service Level In-Stock Analysis Import Pipeline Management Store Communication Command Center Inventory & Program Optimization Network Optimization Page 6

7 Lowe s Cross Functional Teams Merchant Merchandising Director Demand Planner Plan-o-grammer Merchandise Focused Cross-Functional Teams Logistics Manager Replenishment Manager Replenishment Specialists Vendor Supply Chain Specialist Inventory & Program Optimization Network Optimization Page 7

8 Page 8 LowesLink.com What is LowesLink.com? An information warehouse allowing for better communication between Lowe s and Vendors/Carriers Vendor Partnership Manual EDI Compliance Transportation Info Vendor Compliance Under Login to Loweslink, click New to Lowe s to register to secure site

9 Page 9 New Partner Information New Partner Information

10 New Vendor Checklist Page 10

11 Partnership Manual Page 11

12 Store Lookup Application Page 12

13 3) New Program Execution Summer 2006

14 Page 14 Program Timeline Line Review Vendor Selection Logistics Setup Order Product Research, fact gathering Determine needs Invite viable vendors Vendor Meetings Review programs Evaluate options Analyze data Determine best fit Select programs Negotiate buy backs Sample items Channel analysis Validate pricing Analyze ship units Bar codes EDI Create RPs Lead-time Safety stock Order products Package & Load Fill Rates On-time delivery Transportation issues Product flow Financial analysis Non-productive inventory Monitor & adjust Educate vendors

15 Page 15 Process Summary - Overview Process Summary Overview Proforma Line Review ISS, PCM and PES (Program Executive Summary) must match on item information. Sample POs will be issued once ISS and PCM have been completed. Final Decisions Communicated ISS PCM PES Item Information Item Setup Item Information Item and Execution Information DCD Execution Information Optimization Execution Vendor Partners Lowe s Supply Chain Team

16 Page 16 Vendor Item Setup Sheet (ISS) Location: Loweslink.com>Product Information>Item Setup Sheets> CIS Item Set-up Sheet

17 Page 17 Item Setup Sheet Video Tutorial Location: Loweslink.com>Product Information>Item Setup Sheets> Item Set-up Sheet Video Tutorial

18 Page 18 Vendor Item Setup Sheets (ISS) Vendor Item Setup Sheets must be completed and ed to Lowe s Information provided in your product proposal must be accurate and complete. The accuracy of ALL DATA is the responsibility of the vendor! Product Content Management (PCM) is utilized to manage all item data and must be utilized by all Lowe s vendors Data must be accurate and complete Item specific information related to PCM will be communicated by your Lowe s Merchandising team and/or the Lowe s PCM Coordinator supporting your business category. PCM Support Hotline (866) Product Information Support Portal Lowespcm.nfpondemand.com All components are required and needed for efficient product flow Vendor capacity, product dimensions, pricing, etc. Truckload or Container unit information needs to be filled in Accurate dimensions are extremely important to ensure efficient distribution Detailed information should be filled out by the appropriate vendor personnel Ex.: Duty, Harmonized code & Material breakdown with percentages.

19 Page 19 Solution Providers Host Solution Providers 1SYNC IM ( FSEnet ( IDEA ( Behind The Firewall Provides Lansa ( NuBridges ( Location: Loweslink.com>Product Information>New Vendor On-Boarding Steps>Solution Providers

20 Page 20 Pricing DOMESTIC Pricing DC Collect - F.O.B. Origin, Freight Collect to the DC Store Direct Collect - F.O.B. Origin, Freight Collect to the Store DC Prepaid - F.O.B. Destination, Freight Prepaid to the DC Store Direct Prepaid - F.O.B. Destination, Freight Prepaid to the Store Provide any DC Specific or Patch/Region Specific Pricing Vendor Supply Chain Specialist will analyze, validate, and negotiate pricing alternatives

21 Item Samples All vendor new and changes to current items must be sampled by Lowe s Items submitted should be in the final shippable configuration that will be provided to Lowe s Verify dimensions Verify packaging meets Lowe s criteria NO Mockup s allowed Scannable barcodes (both I2 of 5 for shipping containers and UPC codes for sellable units) Sample P.O.s shipped prepaid as free goods (Donate or Destroy) If requested, sampled items will be returned freight collect VSCS will notify you once processed and may request a follow-up sample Common failure is bar code discrepancies Location: Loweslink.com >Partner Information > Partnership Manual > Samples Page 21

22 Page 22 Bar Coding Each store selling unit must have a unique UPC Individual pieces or cases Shipping containers must have a unique I 2 of 5 Single item pallets or master cartons GS1-128 barcode is required on pallets along with the ASN 856 (Please refer to the Barcode Guidelines on Loweslink.com) Any changes must be approved by Lowe s 100% scan rate is required For more detailed bar code information contact: Bar Code Coordinator barcodeissues@lowes.com Location Loweslink.com > Partnership Manual > Item Setup > Bar Coding

23 Page 23 Electronic Data Interchange (EDI) Vendors are required to have EDI capability Purchase orders are released and transmitted via EDI several times each day Vendors are required to check for orders at least once a day For more detailed EDI information contact, view the EDI Quick Reference document available at under the EDI tab.

24 Page 24 EDI Web Forms For our business partners who do not utilize a traditional EDI system, Lowe's offers an alternative solution - EDI Web Forms. EDI Web Forms allows you to exchange purchase orders and submit invoices right from your Internet web browser.

25 4) Supply Chain Network Summer 2006

26 Page 26 Centralized Distribution Lowe s has several distribution facilities into which product can be shipped: 14 Regional Distribution Centers 14 Flatbed Distribution Centers 4 Coastal Holding Centers 3 Transload Centers 3 Millwork Facilities 1 Trap Facility 1 Internet Facility Supporting 1,700+ Stores In the United States, Mexico, and Canada

27 Page 27 Regional Distribution Center Square Footage 1.5 Million Shipping Doors 150 Receiving Doors 80 Stores Serviced 120 SKU s Managed 34,000 1XD 16,000 Stock 18,000 Network Cartons Shipped per day Network Cube Shipped per day 1.3 Million 3.5 Million

28 Page 28 RDC Equipment Stand up Fork Lift Basic fork lift trucks Used to unload inbound trailers Used to run product off receiving dock and deliver to carton induct points or shipping dock Walkie Rider Pallet transporter capable of moving up to four full pallets at a time Used to unload inbound trailers Used to run product off receiving dock and deliver to carton induct points or shipping dock Order Picker Used to pick from upper level perm rack locations a.k.a. cherry picker, order selector, OP Reach Truck Used for pallet put away in both perm rack and pick module Used for full pallet picking from perm rack Squeeze Clamp Attachment Pneumatic, metallic paddles for clamping product for transport Used to unload inbound trailers Slip Sheet Basiloid Attachment for top lift carton handling

29 Page 29 Distribution Contact Information Loweslink.com > Lowe s Partnership Book > Transportation & Distribution > Distribution Center Information

30 5) RDC Flow Types Summer 2006

31 Page 31 Flow Types Stock 1 XD & VPXD Transload Store1 Store2 Store1 Store2 Store1 Store2 RDC On Hand Qty Safety Stock Qty RDC Cross Dock Only No Safety Stock RDC s On Hand Qty Safety Stock Qty Transload Cross Dock Only Vendor Vendor Vendor

32 Page 32 Flow Types Stock Product is shipped to a Lowe s RDC and stored in a location in the facility When demand exists for the product, it is picked from the storage location and shipped from the RDC to a Lowe s store 100% Cross Dock (1XD) Product is not stored in a location in the facility. It is ordered based on demand at the store level. Upon arrival at the RDC, it is received and then immediately moved via conveyor, forklift, or squeeze clamp truck to the outbound trailer dock door. It is then shipped from the RDC to a Lowe s store. Vendor Prepared Cross Dock (VPXD) Individual Store Purchase Orders grouped together for shipment in Truckload volume to the Lowe s RDC that supports those stores. VPXD orders are not received at the RDC Upon arrival at the RDC, orders are immediately processed for shipment to the Lowe s store Store Direct Flow Some programs that do not flow through a Lowe s Distribution Center; instead they ship directly from the vendor to a Lowe s store. This is known as Store Direct flow. Alternate Ship Units (ASU) Only one ship unit quantity can be setup in Lowe s system at the RDC s. However, an ASU can be ordered through an RDC that is different than the current RDC ship unit quantity.

33 6) RDC Storage Handling Types Summer 2006

34 Page 34 Breakpack Store Department Container Conveyable Case Ship Non-Conveyable Case Ship Pallet Ship Mini-Pallet Ship Bulk Storage Stack Rack Storage and Long Length Storage Vendor Prepared Cross Dock (VPXD) Customer Focused Delivery (CFD) Storage Handling Types

35 Page 35 Breakpack The process by which inner pack bundles/boxes are separated from the master carton for shipment to a Lowe s store. Master Carton Maximum Dimensions containing breakpack Longest dimension of master carton < 26 Second longest dimension of master carton < 15 wide Shortest dimensions of master carton < 10.5 height Breakpack Maximum Dimensions 22 Length 14 Width 9 Height

36 Page 36 Store Department Container Master Carton is too small to be conveyed on its own. Master Carton is < 8 x 5 x 1 RDC picks item in Master Carton quantity and places in overpack box Over-pack box is placed on conveyor for shipment from RDC to store

37 Page 37 Master Carton Conveyable Case Ship Item dimensions meet the Lowe s Conveyability Guidelines and can be safely conveyed without incurring damage or damaging other items/equipment. Items must be braced/packaged so that product will not shift or protrude from carton as it moves along the conveyor. Liquid items will be conveyed upright and should be labeled with the Liquid icon. When possible, place in boxes with flaps facing up. 70 lb. Weight limit Minimum master carton dimensions 8 x 5 x 1 Maximum length 60 Maximum height 24

38 Page 38 Non-Conveyable Item does not meet dimensional criteria for conveyability and/or cannot be safely conveyed without incurring damage or damaging other items or is a risk to the safety of DC staff. The Ship Unit from RDC to Store equals a multiple of the Master Carton Quantity. Non-conveyable items are picked individually for stores, delivered to the outbound store trailer with a piece of mobile equipment, hand scanned, and then loaded on outbound trailers.

39 Page 39 Pallet Ship Item ships into the RDC in full pallet quantities (single-item pallets) and the Ship Unit from RDC to Store equals the pallet quantity Pallet is delivered to the outbound store door via a forklift truck.

40 Page 40 Mini Pallet Stock Mini-Pallet used for items that ship on a quarter-pallet (20 x 24 ) from vendor to RDC to store 1XD Mini-Pallet primarily used for promotional sidestacks Refer to LowesLink Promotional Display Guidelines for specific requirements for promotional mini-pallets (also known as quarter-pallet sidestacks)

41 Page 41 Bulk Storage Bulk Storage is used for items greater than 7 cubic feet (12096 cu. in) in volume or > 140 lbs and can be handled using squeeze clamp equipment: Lowe s prefers a stack height of 20 ft for optimal storage capacity utilization. The recommended stack height is to be identified by the vendor, but must be a minimum of 16 feet without incurring damage to product or selling carton. Items must be able to maintain stack integrity without use of shrink-wrap or other bracing mechanisms. If items cannot stack 16 feet high, they will be classified as an exception item. Palletized exception items must be capable of stacking 3 pallets high ( at least 60 per pallet) Exception items must be approved by your Vendor Supply Chain Specialist. Item must be capable of handling via squeeze-clamp equipment without incurring damage. Lowe s preference is that item be able to clamp on all 4 sides (*** Does not apply to Appliances)

42 Page 42 Stack Rack & Long Length Storage Stack Racks are used for large-sized, high volume items stored on oversized (91.5 L X 41.5 W) metal racks Stack Rack items must be capable of stacking 60 high in the racks without damage to cartons and/or sellable product. Long-length Storage is used for items that are not wide enough for bulk storage but are > 54 L along longest side Two types of long-length storage exist: Vertical Long- Length Storage (product that must be stored vertically ) Horizontal Long-Length Storage (Product that can be placed with longest side horizontal to ground )

43 Page 43 VPXD Vendor Prepared Cross-Dock (VPXD) orders are store-specific Purchase Orders that are aggregated into Truckload groupings for shipment to the Lowe s Regional Distribution Center (RDC) that services the designated group of stores. VPXD can be used for ongoing Replenishment of items through the Lowe s Regional Distribution Center (RDC) network, as well as for special events and promotions (resets, sidestack and seasonal off-shelf promotions, etc). The vendor builds pre-allocated, multi item pallets for shipment to a specific Lowe s store. Purchase Order Destination is a Lowe s Store (ex: Lowe s #0595 Mooresville, NC), but order is shipped to and cross-docked through a Lowes Regional Distribution Center (ex: Lowe s RDC 960 Statesville, NC) Upon arrival at the RDC, items are immediately cross-docked through and directed for shipment to the specific store identified on the Purchase Order Vendor must label the pallets with the VPXD Placard (see Appendix A) to help the RDC identify which store to direct the shipment to. The Purchase Order is not received into inventory at the RDC; it is received upon arrival at the final store destination. Vendor Prepared pallets are shipped fully intact through the RDC and arrive at the store in the same configuration as shipped from the vendor.

44 Page 44 Customer Focused Delivery (CFD) CFD is a company-wide initiative on quality distribution for our customers. The initiative is focused on delivery of perfect product to stores that is safe and easy to unload. CFD Primary Objective is to: Eliminate product damage found on store shelves Consistently deliver product in perfect merchandise condition to stores Ensure delivery of product that is safe and easy to unload at stores Improve profit margin by eliminating inefficiencies within Supply Chain and/or Store processes Maintain and improve Lowe's brand image

45 Page 45 Special Handling Icons Hand Truck No Hand Truck Forklift No Forklift This Side This Way Up Arrow Icon Team Lift Icon Liquid Icon Clamp Icon No Clamp Icon Maximum Stack Height Request Assistance

46 7) Packaging & Shipment Requirements Summer 2006

47 Page 47 Packaging & Shipment Requirements Share the Packaging and Shipment best practices with your Shipping/Traffic Managers and Warehouse Operations Managers on the proper procedures for shipments to Lowe s Stores and Regional Distribution Centers. Minimize freight costs Minimize the potential for damage during transport Improve receiving efficiency to help product reach stores more quickly Avoid Refused/Rejected purchase orders to eliminate fines The Lowe s Vendor Supply Chain Specialist (VSCS) for your program can help answer questions you may have.

48 Page 48 Packaging Guidelines Carton Size Optimization Does item need to be shipped fully assembled? Is carton size fully utilized? Does carton include air or unnecessary packaging? Is selling unit packaging the right size? Carton Sealing Requirements Cartons should be sealed with glue or tape Banding is not permitted on conveyable product Metal banding is not permitted Carton Access Points Requirements Access lifting points are required on cartons greater than 24 x 18 x 18 and greater than 30 lbs. Use of Desiccants Moisture sensitive product require the use of small desiccant of silica gel or clay only. Do not scatter desiccant bags loosely inside a trailer or rail container Labeling Lowe s prefers soy or water based inks Refer to the labeling requirements on Loweslink.com Barcodes If Master Carton quantity is greater than one a valid I2of5 bar code is required Refer to Bar Coding requirements on Loweslink.com Special Handling Icons: Are required on all shipping cartons

49 Page 49 Shipping Documents Lowe s requires the following documentation to be included with every shipment: EDI Advanced Ship Notice (ASN) VICS Bill-of Lading Packing Slip

50 Page 50 Advance Ship Notice (ASN) Lowe s requires an Advance Ship Notice (ASN) from our suppliers: Vendor s must submit ASN as soon as the truck is sealed or before the shipment leaves your facility. Vendor can use either EDI or Webforms to exchange the ASN data electronically with Lowe s. For more details, review the ASN information available at under the EDI tab.

51 Page 51 Advanced Shipping Notice The Advance Ship Notice is a key EDI document that allows Lowe s to plan for the receipt of shipments from your company. The Advance Ship Notice provides Lowe s with shipment information such as: Actual ship date Estimated delivery date Carrier Information Item & Quantities Shipped The carrier and actual ship date will be used by Lowe s to identify shipments that may miss their targeted delivery date as well as provide Lowe s with the number of shipments expected to deliver to a Lowe s location on a given day. The EDI Advance Ship Notice also provides the actual shipped quantities by item which is used to expedite the receipt of product within Lowe s distribution and store locations. For more detail on Lowe s ASN requirements, please refer to the Lowe's EDI ASN Implementation Guide. This document also provides information on labeling pallets with the GS1-128 bar code and sending pallet details in the EDI ASN. Lowe s must receive timely ASNs. If you do not send ASN before shipment arrives, your shipment may be refused entry to the Lowe s RDC. Change ASN s are acceptable.

52 Page 52 VICS Bill Of Lading Lowe s requires that all vendors use the VICS Bill of Lading. The VICS Bill of Lading standard format and documentation may be found on LowesLink.com or at The bill of lading must clearly identify shipment contents and show all purchase orders included in the shipment. You must clearly identify our company name, the Lowe s location number (IE: LOWE S HOME IMPROVEMENT # 0489 ) and address in the consignee information on the bill of lading. Lowe s core carriers have adopted the VICS format. Core Carrier contacts can assist vendors with questions about VICS.

53 Page 53 Packing Slip Lowe s requires a legible, machine printed packing slip for all Purchase Orders (both Store and RDC shipments). If there are multiple Purchase Orders in a shipment, each PO must have a separate packing slip. The packing slip must be clearly located in a plastic packing slip enclosed pouch on the exterior of the first carton of each PO and visible to the loader. The packing slip must identify the Lowe s item number(s) in ascending numerical sequence, the Lowe s Purchase Order number, store number, model number, quantity and the shipper s name.

54 Page 54 Load Bracing Requirements: Vendors are required to load trailers so that the freight will ride safely to the destination. Load shift on Truckload volume shipments as a result of poor palletization, poor shrink-wrapping, or poor load bracing will be the responsibility of the vendor. This applies to both Collect and Prepaid shipments to any Lowe s Store or RDC. Vendor is responsible for the cost of any load bracing devices used on Truckload shipments, including (but not limited to) load bars, air bags, and load latches. This applies to both Collect and Prepaid shipments to any Lowe s Store or RDC. Drivers do not carry load bars and are not required to assist in loading. For assistance with load-shift problems or freight claim prevention contact: Transportation Hot line Loading

55 Page 55 Palletization Best Practices Unitize like items (same SKU) together on the same pallet by quantity ordered. This will significantly improve receiving and storage efficiency. Stock items MUST always be unitized together on one pallet 1XD (100% cross dock) AND are conveyable are allowed to have multiple SKU s on a pallet Unless otherwise approved by the VSCS utilize only standard GMA 48 x 40, 4 way entry pallets are required Maximum allowable overhang is 1 on either side of the shortest side of pallet (i.e. the 40 side of standard pallet)

56 Page 56 Pallet Height Guidelines Pallet Height limit will vary based on product characteristics and flow TL Shipments - Stock/1XD Product: o 54 Maximum (Double stack in trailer) o 60 Maximum (RDC racking maximum) o 108 Maximum (Maximize freight w/ slip sheet) LTL Shipments - Stock/1XD Product: o 92 Maximum (Max height of roll-door trailers) Vendor Prepared Cross-Dock Product (either TL or LTL): o 92 Maximum (Max height of roll-door trailers) Maximum weight per pallet is 2,500 lbs due to equipment limitations

57 Page 57 Pallet Dimension 48 (D) x 40 (W) GMA Hardwood o o o The Perfect Pallet Use of non-standard pallet must be approved in writing by your VSCS Approved non-standard pallet must be forklift accessible If using a non-standard pallet design with 4 runners, maximum allowable spacing between 2 middle runners is 7 inches. See Fig. below. 60 in height (for perm racks) Shrink wrap intact, wrapped to pallet Packing slip

58 Page 58 Best Practices Review your packaging for opportunities to reduce cubic volume or weight Does your palletization guidelines match Lowe s requirements Review outbound truckload loads for poor utilization and provide feedback to VSCS Utilize load configuration software to optimize palletization and trailer utilization Identify opportunities to consolidate shipments into truckload volume via Pooled Replenishment Programs or Load Consolidation Programs Review Lowe s Bar Code guidelines including GS1-128 requirements for pallets Any changes to packaging structure or ship units must be approved by the Vendor Supply Chain Specialist (VSCS), will require new sample

59 8) Transportation Summer 2006

60 Page 60 Truckload Routing Lowe s strictly enforces its Preferred Carrier Program Routing Requirements and Vendor Agreement manual updates are available only through the LowesLink.com web site via digital certificate Collect Truckload shipments will be routed by Lowe s Transportation department if order exceeds the LTL-TL weight break defined as exceeding 18,000 lbs. or occupies more than 20 linear feet of trailer floor space TL carrier dispatcher schedules pickup appointments 48 hours prior to the scheduled ship date

61 Page 61 Truckload Routing Vendor is responsible for contacting Lowe s traffic if a core carrier has not scheduled an appointment by noon the day before the scheduled ship date Do not wait until the order is late before contacting the Lowe s transportation hotline at TL Prepaid shipments must be shipped using Lowe s Preferred carrier. Defer to the TL RDC Carrier Reference matrix available on the LowesLink.com Transportation Site Vendors should select approved TL core carriers that have a drop trailer pool at the destination RDC.

62 Page 62 Lowe s RDC Truckload Carrier Reference Guide Requires Digital Certificate to access Transportation information

63 Page 63 LTL Requirements Exceeds small package requirements, under 18,000lbs, and does not exceed 20 linear feet of trailer floor space Routing Requirements Vendor must follow the specific Origin-to-Destination routing outlined in the Lowe s Routing Guide on all LTL orders Failure to follow specified routing requirements will result in a $500 administrative fee plus recovery freight charges per occurrence. Shipment Requirements Vendor must contact carrier at least 24 hours prior to scheduled shipment to schedule pickup. Vendor is liable for detention fees if PO is not ready to ship on the designated PO Ship Date LTL Consolidation Vendor should never hold PO s Multiple POs shipping to the same Lowe s destination (RDC or store) on the same day must be combined on one (1) Master Bill Of Lading to avoid fines for Failure to Consolidate.

64 Page 64 Small Parcel Requirements Transportation Small Parcel Small Parcel Requirements 150 pounds or less per single package or 235 pounds or less for a single shipment. Single shipment does not contain more than 11 parcels Each parcel included in shipment meets the dimensional requirements for Parcel Shipment does not contain DOT regulated HazMat items If even one parcel in the shipment does not meet the requirements listed above, the entire shipment must be routed LTL To avoid fines, vendor must notify their VSCS to receive a Routing Requirements Exception. Include your VBU# and reason for requesting exception.

65 Page 65 Small Parcel Routing Transportation Small Parcel Parcel Shipment Requirements Vendor must use the Small Parcel carrier designated in the Small Parcel Routing Matrix in the Routing Guide available on LowesLink.com Collect Parcel shipments with Lowe s paying the freight must be tendered to Parcel carriers under Freight Terms of 3 rd Party Billing. New vendors should contact Transportation@lowes.com to receive Lowe s 3 rd party billing number Do not tender as Collect or Prepaid terms

66 Page 66 LTL & Small Parcel Routing Guide Pages 22-24

67 Page 67 Parcel Software Data Requirements Small Parcel Software Vendor must enter all shipment data in the Small Parcel Software (either UPS.com or FedEx.com) according to the instructions listed in the Routing Guide For FedEx instructions visit For UPS instructions visit Entry must contain Store # and PO # for each shipment. When entering data use only numeric characters. Do not use words or symbols in the numeric fields (e.g. : #, _, etc) Incorrect or missing data will result in all freight charges being reversed to the vendor plus an administrative fine will be issued.

68 Page 68 Vendor Shipment Status (VSS) Application Lowe s encourages all Collect Freight vendors to sign up for this FREE software application available through LowesLink. Using Vendor Shipment Status can help improve shipping performance: Allows vendors to see load tenders to carriers and carrier acceptance of loads Enables you to communicate issues in a timely manner to avoid late shipments Provides details of Consolidated Loads (pickup sequence, carrier acceptance of load, etc) Helps vendors determine whether loads should ship via Less-Than- Truckload Carrier or Truckload Carrier.

69 Vendor Shipment Status (VSS) Application Page 69

70 Transportation Operational Map Page 70

71 9) Vendor Compliance Summer 2006

72 Page 72 Vendor Compliance Policy 95% On-Time 98% Fill Rate

73 Page 73 Vendor Compliance Expectations Lowe s expects all purchase orders to be shipped complete and arrive at our facilities when scheduled. You should have your shipment ready on the scheduled ship day and coordinate with the carrier regarding arrangements for pickup at your facility New Store & Reset orders must be perfect (100% complete and ontime) There is a $5,000 fine for new store & reset orders that do not ship complete and on time, with no warnings. A fine of $1,000 can be applied for each purchase order containing non-compliant bar coding Vendor Report Card measures performance Vendors receive report card reporting monthly Vendor Supply Chain Specialist manages reporting- please be sure you provide your contact information prior to first shipment Poor Vendor performance will result in fines or loss of business. Vendors are responsible for sending and maintaining current contact information to VSCS for monthly Report Cards.

74 Page 74 Communication is key Vendor Compliance Process Contact the Supply Chain team weekly with root causes for items below 98% Fill Rate If you have access to Vendor Dart pull the Vendor Fill Rate report Vendors have two weeks after Report Card is received to respond to performance below goal. Root cause responses will be reviewed with the team to determine if fines will be implemented Non-Compliance Up to 20% of the invoice value can be assessed for On-time and Fill Rate below goal Please be proactive and anticipate problems before they occur so we can develop solutions together

75 Report Card Examples Page 75

76 10) Vendor Dart Options Summer 2006

77 Page 77 Vendor Data Options Vendor DART: Flexible Reporting for a variety of metrics including Sales, Inventory, Turns, Fill Rate, SPM, SOS, Forecasting, InStock & Service Level. Qualification: $8million in annual sales to qualify. Number of users per vendor is limited DART Lite: Flat file of basic Sales and Inventory data Qualification: Nursery or Import vendor Weekly Vendor Forecast Electronic Data Interchange (EDI 852) : Data is transmitted in EDI format depending on criteria vendor chooses Qualification: Full EDI Vendor (i.e. not a Webform vendor) 3 rd Party: For Vendors that do not qualify for above options or wish to outsource data analysis Questions contact Vendor.DART@lowes.com

78 Page 78 Questions Concerning: Contact General Mailbox Data Synchronization Product Content Management (PCM) General Mailboxes Digital Certificate Loweslink Display and Fixtures Display Management EDI transmittals, Webforms Contacts listed on EDI Quick Reference available on Loweslink under the EDI tab Payables, Debit Memo s Trade Payables Vendor.Inquiry@lowes.com Carriers, Routing Guide Transportation Transportation@lowes.com Vendor Compliance Vendor Supply Chain Specialist (VSCM) Vendor Sales & Inventory data Vendor DART VSCS directly or if do not know VCSC, Vendor.Compliance@lowes.com Vendor.DART@lowes.com