WEBVAN.COM

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WEBVAN.COM (NASDAQ WBVN)
The Last Mile of E-Commerce
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FAST FACTS

• Operations first began in San Francisco in 1999
• Now open for business in Chicago, San Francisco,
  Sacramento, and Atlanta
• Atlanta Specifics
• Operations began in Atlanta May 2000
• Employs over 600 individuals
• Competition includes Kozmo, Peapod, and
  Streamline

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WEBVAN BUSINESS MODEL

• The Last Mile of e-commerce
• A more convenient, efficient, and cost-effective
  way to get products to consumers
• What everyone really wants to know Is it a
  proven model?

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PRESSROOM

• New business means constant change
• Webvan.com Gives Customers Added Value
• with Ashford.com Partnership
• Webvan Unveils New Redesigned Webstore,
• New Logo, and Branding Strategy
• Webvan and HomeGrocer Agree to Merge

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SUPPLY CHAIN
Business lies between wholesaler or vendor and
consumer Food and Merchandise (the product)
flows down supply chain to end
consumer Customer data (order information) flows
up supply chain to Distribution
Center Manufacturer / Wholesaler relationship is
independent of Webvan operations
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WEBSTORE

• Order initiated by consumer on-line
• Consumer selects delivery window, compiles
  product list,
• and submits order

• Order is relayed
• electronically to distribution center for
  processing
• Placed order triggers product flow down supply
  chain

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STOCKING UP

• Forecasts by Exponential Smoothing
• Demand history in San Francisco
• Vast amounts of customer hit data
• Special Times - e.g. Thanksgiving - how do
  they do it?
• Aggregate forecasts are drilled down to
• product level
• Electronic Data Interchange (EDI)
• Purchase Orders automatically submitted
• electronically to most wholesalers / vendors when
  nearing reorder point

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WHOLESALER

• Wholesaler establishes product line from multiple
  
• manufactures (Webvan has little control over this
  relationship)
• Supply Breakdown
• 80 of sales volume handled by Fleming (NYSE
  FLM) Wholesales
• 20 of sales volume supplied vendor-direct
• Aggregate product list at wholesaler includes
• Milk/Dairy, Meats, Poultry, General Wholesale,
  Beverage, Produce, Baked Goods

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RECEIVING
Product shipment cost paid by supplier Incoming
shipments arrive in vendor vans, semi- trucks,
or independent carriers to one of 18 loading
docks Most wholesalers / vendors have standing
delivery times on a daily or weekly basis
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DISTRIBUTION CENTER

• Atlanta Distribution Center (DC)
• Location Suwanee, GA
• Peak hours of operation 12 am-6 am (order
  packing)
• Facility Size 350,000 sq. ft.
• Interesting Details
• - 50,000 SKUs
• - Facility is the equivalent of 18-20
  standardgrocery stores in volume (sales
  dollars)

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DC (continued)

• Operational Details
• Automated order processing system
• Approximately 4.5 miles of conveyor
• Barcode scanning system for tote routing
• Tote Identification
• Yellow- Dry Goods
• Green- Chilled Goods
• Blue- Frozen Goods

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MOVEMENT TO STATIONS

• 9 stations serving Metro Atlanta
• Alpharetta
• Atlanta (Airport)
• Atlanta (Downtown)
• Marietta
• Norcross
• Roswell
• Suwanee (also DC)
• Tucker
• Woodstock

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MOVEMENT TO STATIONS

• Each Station is within 1-1.5 hrs of DC
• Products travel securely in refrigerated
  semi-trucks
• Standing delivery times to station result in LTL
  shipments when demand is low

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STATIONS

• Pull system (JIT)
• No inventory stored in totes
• Products packed to order
• Totes transferred from large semi-trucks to small
  courier vans
• Peak hours of operation 5-7am and 1-3pm

Chattahoochee StationFloor Plan
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FINAL DELIVERY
10-12 courier vans service each station covering
20-30 square miles total Deliveries scheduled
from 7-2pm and 3-10pm Optimized route printouts
assigned to each courier
Courier van has a refrigerated section Labor
costs 40 of total transportation costs
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IN-HOME SERVICE

• 1st time customers receive Webvan introduction
  and promotional incentives
• Credit Card Transaction device built into
  handheld Palm Pilot

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