Company Profile

REO DISTRIBUTION OVERVIEW

Reo Distribution Services specializes in transportation and warehouse solutions for a wide range of customers. Operating out of Waynesboro, Va., Reo Distribution provides global freight brokerage services as well as a variety of warehousing, distribution, transportation, freight management and third-party logistics services.

OUR BASIC BUSINESS AND CORE COMPETENCY(CIES)
We provide full-service total logistics solutions for clients including a host of value-added services. We take pride in being a key provider of warehousing outsourcing services for many clients. We see ourselves as a responsive logistics partner with professional expertise, quality facilities, strategic locations and equipment, and outstanding staff and personnel.

SERVICES PROVIDED

Fulfillment
Bar Coding
Pick and Pack
Price Marking
Light Assembly/Kitting
Testing and sampling
Packaging and bundling
Pallet display building
Temperature controlled storage environment
Consolidation
Pool shipments
Foreign Trade Zone
Web-enabled WMS
EDI
Transloading - Truck, Rail
Freight Brokerage
Network Analysis
SKU/Slotting Profiling
Lot and batch control
GMP compliance
Computerized inventory control
Haz-Mat
Value-added services including

Toll services
Bulk excipient manufacturing
Small order distribution
Labeling
Export container preparation
Stretch-wrapping
Product sampling

OUR OVERALL APPROACH TO THE MANAGEMENT OF ONGOING RELATIONSHIPS
We believe that communication with and responsiveness to our clients is the key to a successful relationship. To that end, we attempt to learn as much about our client’s business as possible and to apply our past experiences to enhance the services we are contracted to supply. As our business relationships mature, we maintain a dialog with our contacts to make certain that we are fulfilling all of their needs.

MEASURING THE PERFORMANCE OF OUR OPERATIONS
We measure performance by Profit/(Loss) evaluations, safety, employee standard performance reports, and account evaluation. We report performance to our clients through a variety of methods: trend analysis reports, inventory accuracy reports, shipping/receiving errors reports and additional reporting methods as required by the client. Performance information is provided through in-person conference with client; e-mails; letters; faxes; and through written reports. It is our goal to measure items that impact customer service, product risk, operational cost, inventory value or other agreed to metrics that assist our customer in evaluating the success of our services.

CLIENT COMMUNICATIONS
We consider communications with a client to be one of the most important elements in any business relationship. We determine the requirements of each party involved, and then document this in our Quality Management Manual, which outlines all aspects of our operations as it pertains to the customer. Communications can be in various forms, starting with the simple modes of telephone, fax and e-mail and proceeding to more complicated systems including a Warehouse Management System, EDI, Bar Coding, Radio Frequency (RF), and the Internet using software programs that will provide secured access to supply chain data through a web browser. The complexity of a business dictates the timeliness of communications and the methods necessary to accomplish the end goal.

OUR APPROACH TO RISK MANAGEMENT AND DISASTER RECOVERY
Our primary focus is on safety training to reduce risk. We evaluate each of our facilities and work with our insurance agents and carriers to put the necessary insurance coverage in place to meet each facility’s specific needs. External auditors will supplement management oversight of our facilities to determine compliance and identify areas where we can improve risk management. We have in place at all facilities emergency response plans, which outline specific roles and responsibilities for each operating unit. We conduct regular safety training meetings and, at operations where needed, we perform process and operations risk assessment evaluations. Safe operations and safe employees make for best operations. We also work with outside emergency responders in formulating plans for extraordinary emergency events.

QUALITY AND PROCESS IMPROVEMENT PROGRAMS
The successful operation of our facilities is contingent on a successful quality program. Each facility has a quality program defined by a Quality Manual specific to the needs of that facility. Implementation of this program varies from integrating quality activities with the responsibilities of specific line and management personnel to a separate quality staff that reports directly to upper management and operates independently of warehouse operations. Quality manuals are reviewed annually, or as changes occur. Periodic internal audits of our operations are conducted to insure all personnel are following the correct methods of operation. Additionally, process change procedures are in place to accommodate process improvements as they are developed.

EMPLOYEE TRAINING AND RETENTION
We believe that employee retention is a requirement of any successful operation and is dependent on several conditions. The facility management team must instill a sense of pride in each worker towards his/her workplace and his/her work. By continuous training personnel as procedures and policies evolve and are developed, we are able to make employees understand that we are concerned about first their safety and then their productivity, in that order. By conveying this message, we find that this ensures that our employees are treated fairly, paid fairly, and remain responsible for their actions. We establish a working partnership that encourages our employees to feel like an important part of our company. Whenever possible, we promote from within, we schedule regular reviews of all personnel and offer an educational program subsidized by the company. We also employ the use of an outside employee relations consultant who administers a bi-annual employee survey to identify trends and pinpoint areas management may need to address. Our annual employee turnover based on a study for the period 2006-2009 is 8%. We believe we are able to maintain a low turnover rate because of the pride we instill in our employees. Temporary employees are used in peak activity periods, and, when we recognize excellent work ethics by a temporary employee, we try to offer regular employment.

METRICS USED TO MONITOR QUALITY
We utilize a Situation Reports (SR) system to monitor accidents, errors, safety issues, customer complaints, and other events that can affect our company or our relationship with our clients. This system is used by all employees to allow a constant flow of communications concerning our day-to-day business operations. The SR’s are analyzed in a quarterly trend analysis report that is reviewed by management with all personnel in a particular facility. As SRs are written, facility management forwards them to a responsible party for review and/or corrective actions. Each individual SR is discussed with all appropriate operating staff and updated as it is processed. For each SR, such processing includes corrective actions, root cause analysis and periodic future review to qualify the effectiveness of the corrective actions taken. We have definitive numbers with respect to the number of SRs an employee can be involved in before his bonus compensation is affected. Quality is everyone’s responsibility and this system enforces that concept and helps management assess accountability on an individual employee basis.