ARC Advisory Group Says Payback in Less Than One Year Puts RedPrairie's Productivity Management Solution in the ``Gold Standard''.

Business Editors/High-Tech Writers

WAUKESHA, Wis.--(BUSINESS WIRE)--June 27, 2003

ARC Survey Finds that 94% of RedPrairie Productivity Management

Customers Would Recommend the Solution

Within the context of a distribution environment where labor costs average 40 to 70 percent of companies' distribution expenditures, and with these costs rising as a percentage of sales for many, Boston-based research firm ARC Advisory Group surveyed users of RedPrairie Corporation's Productivity Management solution. The purpose of the survey was to determine if this solution, unique in the industry for its combination of industrial engineering services, change management consulting and advanced labor management software, is delivering the increased productivity and reduced labor costs required to contain these spiraling distribution expenditures. The answer was a resounding yes.

"We found that 80 percent of respondents increased their labor productivity by at least 5 percent, with 20 percent reporting gains of over 25 percent," says Steve Banker, ARC Director of Supply Chain Research and the author of the study. "On the cost reduction side, over 69 percent of respondents reported labor cost savings of over 5 percent. This translated to solid return on investment (ROI) for RedPrairie's customers, with average payback in less than one year. ARC has investigated a wide range of supply chain solutions and the average payback is close to two years. We consider payback in less than one year to be the "gold standard."

With this high incidence of productivity gains, labor cost reductions and rapid ROI, it is not surprising that RedPrairie customers reported extremely high satisfaction with the Productivity Management solution. 81 percent of respondents said the solution met, exceeded or greatly exceeded their expectations. Furthermore, 94 percent said they would recommend Productivity Management to other logistics professionals. "These are very high numbers compared to most other categories of software," notes Banker.

One manager ARC interviewed was not willing to take the survey, but was willing to be interviewed on an off-the-record basis. He said the project "was so successful, so core to our competitive advantage, that employees have been fired for talking about what we have achieved."

RedPrairie's Productivity Management solution includes industrial engineering services to define preferred methods and discrete standards for each task, change management consulting to address the human factors involved in implementing labor systems, and advanced labor management software. All three are crucial to smooth rollouts and gaining the highest possible benefits from productivity management solutions.

"Discrete labor standards are necessary if labor savings are to be maximized," explained Banker. "Companies that implement labor productivity systems without using discrete labor standards should not expect to receive similar results.

"In almost any type of software implementation, discussions with users will reveal that a key to the success of a project is communication, top down support from key executives, and the need for a champion to drive the process," continued Banker. "This was expressed strongly by the respondents, perhaps due to the cultural changes that productivity management systems initiate. RedPrairie rightly stresses the need for change management as an important element to the success of these implementations."

Another interesting human factor is that many people assume that productivity solutions will not be well accepted in union environments. However, the survey showed that employee relations scores actually increased after implementation of RedPrairie's solution in union shops. This is attributed to the demonstrable fairness of discrete standards in work measurement.

Besides calculating goal times and providing feedback on results, the productivity software also contains strong labor planning tools. "While not all respondents were using the system to facilitate better planning, it appears those that are not are missing an opportunity for even better results," states Banker. "43 percent of respondents reported that their ability to plan labor resources was greatly improved."

Comments John Jazwiec, RedPrairie Company Leader, "Productivity Management is not yet well known as an avenue for reducing distribution costs, but has greater potential than most other supply chain solutions. This survey shows that the savings are real and the three-pronged approach we have taken, with engineering services, change management and sophisticated software, is providing maximum returns for our customers."

Copies of the report are available on RedPrairie's web site at www.redprairie.com or by calling 888-624-8448.

About RedPrairie Corporation

RedPrairie delivers superior logistics results by driving out more logistics costs than anyone in the industry, and enabling customers to consistently achieve their supply chain objectives. This is accomplished through an integrated suite of supply chain execution solutions that provide the industry's leading transportation, productivity, and distribution management capabilities, enhanced with action-oriented components for real-time control and performance measurement. These solutions are deployed through an end-to-end value delivery system (the RedPrairie Approach) that ensures results achievement. RedPrairie delivers measurable results for customers in many markets, including high tech and electronics, consumer goods, food and beverage, third party logistics, retail and wholesale, service parts, and make-to-order manufacturing. Customers include Hewlett-Packard, Procter & Gamble, Nestle, Panasonic, Georgia-Pacific, Eveready, Unilever, Exel, General Electric, Amazon.com, and many others. For additional information, call 1.888.624-8448, or access www.RedPrairie.com.

RedPrairie is a trademark, and DigitaLogistix and DLx are registered trademarks of RedPrairie Corporation. (C) 2003 RedPrairie Corporation. All Rights Reserved.