Export Operations October 2009 James Burdine EMEA Sales

Export Operations October 2009 James Burdine EMEA Sales Conference Frankfurt, Germany

Operations FY 0910 Vision l We believe deeply in the importance of Operations to attract new customers and keep current clients ordering l Ensuring on-time delivery to customers in emerging markets is key to sales growth, building customer and sales force trust, and establishing the Scholastic Brand 2

Team Operations: Who Are We? l Katelin Lau-Yan l l Marta Smiarowska l l Export Operations Specialist International Product Marketing Coordinator Bhavna Yadav l Manager, Delhi Customer Service Center l Plus 300+ Scholastic Operations, Supply Chain, Logistics, Manufacturing, Planning, Delivery and Inventory Management individuals l Supporting $500 million International Business: l l l Export Asia International Subsidiaries 3

Team Operations: How We Work l Scenario 1 l Identify and take action on problems as they occur l l Scenario 2 l Identify problems that occur in patterns or trends and determine if a process solution can be implemented to reduce instances l l These are everyday order issues as the come up For example, high levels of order entry keying errors in 2008 resolved in large part by the standardized order form Scenario 3 l Determine whether a problem is systematic and caused by inability or apathy, at which point we develop “human” solutions (i. e. we create plans to move work out of JC) l For example, Proformas & the majority of Export order processing 4

What does the India Customer Service Center do? 5

Operations FY 0910 Some interesting statistics: l In FY 0910… l How Many Paid Units is Export Projected to Ship? l How Many Orders is Export Estimated to Ship? 6

Operations FY 0910 Some relevant statistics: l In FY 0910… l How Many Paid Units is Export Projected to Ship? § § l Palletized Units: 1. 1 MM Full Carton Units: 8. 7 MM Loose Units: 5. 1 MM TOTAL Units: 14. 9 MM! How Many Orders is Export Estimated to Ship? § 142, 000 Orders! 7

Operations FY 0910 l On an average day, how many books are shipped from JC? l Book Clubs § § l Units on a Peak Day: 1, 200, 000 Units on a non-Peak Day: 650, 000 WMS (or Everything Else) § § PEAK DAY § Loose Units: 120, 000 § Full Cases: 12, 000 § Full Pallets: 100 NON-PEAK DAY § Loose Units: 100, 000 § Full Cases: 9, 000 § Full Pallets: 75 8

Operations Achievements in FY 0809 l Operational Improvements helped increase Export Profitability in FY 0809 by Reducing NSO Customer Service Cost l l l Implementation of the Book Club Freight Forwarder Program in China, Brazil, Hong Kong, Taiwan and recently tested in Peru Development of an AS 400 mirror site for Delhi team to use while the main AS 400 site is offline for nightly maintenance Transfer of low impact, high volume daily tasking from NYC Ops to Delhi Team Initiated transfer of Regional Order Processing to Delhi Team Transfer of Trade Order Processing from NSO to Delhi Team Transfer Special Offer Order Processing to Delhi Team 9

Operations Initiatives FY 0910 Goals l l l l Support the sales force quest for profitable sales growth Identify and fix process challenges that inhibit growth Export made in sales in 160 countries in FY 0809 – we must adapt our operation to reflect the complexity of international order processing, customs and global shipping Ensure that we standardize the right processes to streamline the value chain from order entry to customer delivery Strive to simplify processes – eliminate steps, etc – where possible Educate the sales force to Scholastic process and timetables to set customer expectations and track operations performance Foster regular, open communication between the sales force and operations team 10

Operations Initiatives FY 0910 Plans l l l l Maximize use of the Delhi Customer Service Call Center allowing International management control over multiple tension points in the back office value chain Identify key metrics and measure performance against them Engage the sales and marketing team in the planning stage of initiatives Build-on collaboration with Senior JC Management on improving DHL Relationship Create an ad-hoc network of key stakeholders in domestic supply and operations to further strengthen international operations Create more efficient processes for managing complex manufacturing projects (C. Sakoian and L. Warfel) Develop a standardized manufacturing quote request process Create excess inventory opportunities for developing markets 11

Operations Initiatives FY 0910 Item Target Date Status Move low impact, high volume daily tasking to the Market Support Team Initiated September 2008 Ongoing Optimize Customer Service Team training on key systems and products Initiated September 2008 Ongoing Collaborate with JC-Based Corporate IT to develop an AS 400 mirror site to be utilized by the India Team during nightly US system backups November 2008 Complete Transfer International Trade Order Processing to India Team. (Driver: capture lost revenue opportunities by keeping order entry in close contact with the sales rep, ensuring orders ship complete) April 2009 Complete Transfer International Literacy Initiatives Processing to India Team - including My Arabic Library Orders. (Driver: capture lost cost and efficiency opportunities by ensure timely and complete order processing - avoiding the costly order capture errors which resulted in duplicate and incomplete shipments in past years May 2009 Complete Transfer Mexico Export Order Processing to India Team May 2009 Complete Begin Transfer of Regional Order Processing to India June/July 2009 In Progress Transfer Middle East Order Processing to India Team June/July 2009 In Progress Transfer Key Account Order Processing to India Team August 2009 Pending Transfer Export Book Fair Order Processing to India Team August 2009 Pending Transfer Caribbean Order Processing to India Team (Excludes Puerto Rico) September 2009 Pending Transfer Eastern Europe Order Processing to India Team October 2009 Pending Transfer Puerto Rico and Latin America Order Processing to India Team January 2010 Pending Transfer Western Europe Order Processing to India Team February 2010 Pending 12

Q&A Hopefully, what follows will have equal parts Question and Answer. 13