"Love All — Serve All"

Hard Rock Cafe transitions to outsourced logistics, fulfillment and distribution

Waltham, MA — December 2, 2003 — Avicon, a company that designs and implements supply chain strategies, today announced the implementation of its logistics outsourcing engagement at Hard Rock Cafe International, which Avicon said would result in improved working capital, operating margins and customer service levels.

Tony Paladino, director of planning, distribution and logistics at Hard Rock Cafe, said his company hired Avicon as a strategic advisor to determine if outsourcing was the best model to attain the functionality and cost efficiencies they needed for retail apparel and gifts operations. "Avicon's expertise in the logistics industry was invaluable. They helped us select the optimal 3PL to meet Hard Rock's strategic and operational objectives," he explained.

Paladina added that Avicon's Logistics Outsourcing Methodology and experience in transportation and global distribution helped the company make a critical long-term decision.

Projected benefits from Hard Rock Cafe's logistics outsourcing initiative include reduced North American warehouse space by 44 percent; reduced operational costs by 20 percent; improved service levels by 22 percent; real-time supply chain visibility; optimized transportation costs, distribution network, and contract terms and liability protection; and improved operational efficiencies.

Avicon also served as an advisor and consultant to Hard Rock Cafe as they transitioned their in-house back-office activities to an outsourcing model for their logistics, fulfillment and distribution functions.

Avicon said it used its PICO framework in the consulting process, which assesses the supply chain from four interrelated views: process, information, cash and organization. This was to enable Hard Rock Cafe to break from traditional operating models and move to a virtual organization.

"We were able to successfully address Hard Rock Café's operational challenges, including obsolete inventory, low inventory turns and high back-office fulfillment/logistics costs," said Mark Holmes, director of business consulting at Avicon. "By focusing on its core competencies in the retail apparel and gifts business and outsourcing non-core functions, Hard Rock Cafe will be better able to support its strategic objectives and business goals."

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