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Richmond May 2009 Mr. Philip E. Sakowitz, Jr. Director & CEO Defense Commissary Agency 1 2 3 • Sustain Customer Savings – Benefit Value – Mandate: 30% – Actual: 31.1% 4 • Commissary Customer Satisfaction Survey (CCSS) – Patron Satisfaction 4.61 (out of 5.0) • American Customer Satisfaction Index (ACSI) – National average for commercial grocers: 76 – DeCA’s score: 76 • FDA Recalls – Above average for commercial grocers 5 Area East Europe West Total Customer Transactions 40.1M 10.8M 42.0M 92.9M Percent Change + 1.5% - 1.2% + 2.5% + 1.6% 6 Area East Europe West Total Data as of May 14, 2009 Customer Transactions 25.1M 6.9M 26.2M 58.2M Percent Change + 2.3% + 3.2% + 1.8% + 2.0% 7 Area Dollar Sales Percent Change East Europe West Total $2.7B $487M $2.6B $5.8B + 4.8% + 2.7% + 5.6% + 5.0% 8 Area East Europe West Total Data as of May 14, 2009 Dollar Sales $1.8B 286M 1.7B 3.7B Percent Change + 6.0% + 5.3% + 4.51% + 5.2% 9 • Audited Opinion of Financial Statements – Clean Audit Opinion — 7th straight year • Internal Controls over Financial Reporting – In top three in DoD for FY 2008 Statement of Assurance for Internal Controls • Commercial Services Mgt (formerly Competitive Sourcing) – "The Omnibus Appropriation Act prohibits funding A-76 during FY 2009." • Constant Dollar Decline!! 10 FY 2000 Constant Dollars ($M) 1,400 1,300 1,200 1,100 1,000 900 800 F Y00 F Y01 F Y02 F Y03 F Y04 F Y05 F Y06 F Y07 F Y08 F Y09 C o st (T hen Yr $ ) 1,019 1,011 1,053 1,094 1,123 1,165 1,203 1,202 1,263 1,280 C o st (F Y 2000 $ ) 1,019 980 983 990 985 982 978 920 912 870 11 “The commissary benefit, administered by the Defense Commissary Agency (DeCA), enhances military families' quality of life by providing them high quality grocery and household products at significant savings. DeCA continues to meet or exceed its performance goals, including increased sales without increased non-inflation costs; superior stewardship of funds; independent customer satisfaction ranking second among the U.S. largest private sector supermarket chains; and grocery savings of at least 30 percent compared to civilian supermarkets. Military Personnel and families consistently rate the commissary among their most highly valued non-pay benefits. The FY 2010 budget request for DeCA is $1.3 billion and supports the delivery of the commissary benefit as an integral part of the total compensation package for Military Personnel”. 12 Highlights: • Sustains commissary benefits for military members and their families • Procures two T-AKE auxiliary cargo ships • Fuel based on crude price of $60.98/barrel – Lower than recent years • Supports warfighter supply, depot and transportation needs at wartime optempo • Provides transformational Global Information Grid access for increased bandwidth needs • Supports continued progress as Pentagon Renovation project nears completion • Enhances anti-terrorism/force protection at Pentagon Reservation 13 14 Groundbreaking: June 24, 2008 15 Grand opening: May 28 Opened Jan 27 Richards-Gebaur, MO Opened Apr 14 Saratoga Springs, NY Opened Apr 21 Dyess AFB, TX Robins AFB, GA Grand opening: June 5 Livorno, Camp Darby, Italy Grand opening: June 30 Fort Drum, NY 16 FY Location Contract Award Opening 2007 Chievres, Belgium Sep 2007 Oct 2009 2008 New Orleans, LA Sep 2008 Oct 2010 2008 Eglin, FL Oct 2008 Dec 2010 2009 Fort Bliss, TX (BRAC) May 2009 Jul 2011 2009 Fort Riley, KS (MILCON) May 2009 May 2011 2009 Moody, GA Aug 2009 Jul 2011 2009 Quantico, VA Sep 2009 Aug 2011 2009 Fort Campbell, KY Sep 2009 Oct 2011 17 • 2008 Physical Activity Guidelines for Americans – The first comprehensive guidelines on physical activity ever to be issued by the Federal Government (HHS) – Provides science-based guidance to help Americans aged 6 and older improve their health through appropriate physical activity. – “Eat Healthy and Be Active Your Way” Proclamation signed May 5 – Navy Lt. Andy Baldwin, MD, promoting physical activity in DeCA – 150,000 copies of the guidelines distributed in 110 commissaries worldwide – DeCA participating in the President's Challenge May 1 - July 24 with more than 3,500 employees registered 18 • Production & Distribution of “How to Conduct a Commissary Tour” DVD – Distribute DVD to DeCA regions, military and civilian dietitians • Continue to work with the DoD Nutrition Environment Enhancement Team for health promotion and promotion of the benefit. • Target dietitians in the War College – Outreach about the benefit and health promotion – The Navy Health Promotion Course – The Air Force Health and Wellness Centers • Kit will be available on www.commissaries.com 19 • DeCA is a federal partner in promoting USDA’s initiative to DoD community • DeCA and its industry partners to promote healthier eating habits in commissaries • Children, military members, seniors targeted for reminders on healthy eating options 20 • Efforts to Improve Your Text here – Re-commissioning at Mayport Commissary to reduce energy use by optimizing refrigeration and air handling controls – Preparing to conduct DeCA-wide equipment assessment to meet FY 2015 energy and water goals • New Initiatives Your Text here – Initiating Web-based refrigeration monitoring – Low ambient “layered” lighting and daylighting at Little Creek NAB Commissary • Successes – Energy reporting Web site – Annual worldwide Facility Energy Supervisor energy efficiency training 21 • FY 2008: 104 on-site sales generated – $4.5M in sales – 41,347 Guard & Reserve customers • FY 2009: 179 on-site sales scheduled (150 goal) – 94 events have been accomplished – $ 5.6M in sales – 52,599 Guard & Reserve customers 22 • DeCA’s new Point-of-Sale System supported by IBM – 255 stores deployed = 100% of the total sales volume – All stores deployed by summer 2008 –Meeting contract goal of downtime –Exceeding Help Desk calls target – Tremendous shift toward Self Check-Out (SCO) Technology • SCOs account for 29% of the total lane count • DeCA overall SCO % of store transactions average is: 31.75% 23 24 • Our Options? – Three legislative authorities areText available Your here for Public-Private Ventures • Military Housing Privatization Initiative (MHPI) • Enhanced Use Lease (EUL) •Your Build tohere Lease (BtL) Text – Only Build to Lease applies to DeCA – and ONLY if off-installation • What are we doing in this arena? – DeCA is currently studying the merits of pursuing legislative change 25 • Current label operations are labor intensive • Technology has not decreased the price as expected • Automatically installed with all new commissary construction • We will replace all commissary labels with ESL with a 1/5 year ratio 26 • Working in partnership with Industry – Conduct meaningful dialogue and interchange of best business practices and processes Your Text here – Synergistic effort builds supply chain alliances and provides vehicle for developing collaborative innovations • Developing Industry Interchange Training Program Your Text here – Excellence through integration of government/commercial processes to drive new business models – Facilitates integrated multidisciplinary training opportunities across core functional areas with international companies – Key element of our Talent Development Program • 10 Industry Partners; 6–12 month assignments 27 THE ONLY WAY TO IMPROVE UPON A MASTERPIECE? ENTIRELY RETHINK IT 28 Focus Items • Corporate Communications Outreach efforts • Workforce Development • Guard and Reserve on-site sales • Partnerships/cooperative efforts • Business transformation • Commissary construction/Build to Lease initiatives • Going ‘Greener’ A model government organization providing the marketplace of choice for the military family 29 Transitioning from Opportunities to Outcomes Strategic Opportunities Strategic Outcomes • Enhance the benefit in a challenging economy • Standardized, compliant and documented processes • Strengthen the benefit and its link to recruitment, readiness and retention • Business priorities that drive all solutions • Develop a consistent and standard approach to our business processes • Create a corporate culture of “One DeCA” • Seek the right metrics to drive improved performance across the enterprise • A culture of innovation • Investments for the future • Leadership and workforce – ready and able • Infrastructure (facilities and IT) – improve to be consistent with our business needs 30 31 39% subscribe to an RSS feed 45% Have started their own blog 55% Have uploaded photos 83% Have watched video clips Social Title Media 77% Of active users have read a blog 58% Have joined a social network 32 • Increased Focus on the Commissary Benefit Awareness Your Text here – DeCA personnel – Industry partners Your Text here • All outreach must be successful • Must be a good steward of taxpayer dollars 33 34 • Equitable, predictableYour andText consistent levels of service here at all stores • Capability to predict resources needed to meet changing requirements Your Text here • Budgets based on unquestionable data and sound analysis • Cost and performance baseline from which to identify improvement opportunities • Right level of service at right cost 35 • 70 Team Members - Stores, Regions and HQs – Your Text here Six core business drivers: 1) Grocery 2) Meat 3) Produce Your Text here 4) Customer Service 5) Admin/Management 6) Specialty Departments • The teams developed 69 ‘One DeCA’ standards” 36 Phase Description Target Completion Date Phase I - Preparation Service Analysis Teams (SAT) selected as experts in six services The Champions were selected for leadership. 30 April 2009 Completed Communities of Practice, using forums on OneNet. Phase II – Identify and Capture Teams met for a week long session April 20-24. Team Champions prepared recommendations April 27 through 1 May. 01 May 2009 Completed Phase III – Select and Model May 13, 2009 “One DeCA” metrics are submitted & vetted -Region deputies -FPO -ESC October 2009 June-Oct. 09 Validate workload requirement to accomplish the duties, time and work studies. Phase IV – Solve and Deploy Jan. 2010 Teams determine priorities within SSPs, Teams and Contractor develop management tool. February 2010 Feb. 2010 Cross Leveling of FTE’s Phase V – Rollout Implement by October 2010. 37 October 2010 • Customers: Why should I shop the Commissary? – They’ve got CLASS! Your Text here • Employees: What can I use to advise me on my performance objectives? – We’ve got CLASS! Your Text here • Industry: How do I know what business model to use with the Commissary? – They’ve got CLASS! • Leadership: How do we validate a return on investment of the Commissary Benefit? – They’ve got CLASS! 38 DoD Budget Scrutiny The Economy Competition Together, We Will Meet Every Challenge! Relevance The Relentless Pursuit of Excellence 39 • Thanks for your Outstanding Support: Text here – Every Day is Mom’s DayYour Campaign – ‘The Commissary – It’s Worth the Trip!’ Campaign – Commissary Commando Competition – May ’09 Your Text here • Upcoming Programs & Events: – Lil’ Heroes Baby Program – Summer ‘09 – DeCA’s $6 Billion Mark celebration – Sep ‘09 – Army 10-Miler Outreach Event – Oct ‘09 “Working Together for Synergy of Service to our Military Patrons” 40 41 Your Text here Your Text here 42 43 44