PhyleTec - Supply Chain Management is a business application software system that integrates all business processes and systems into one seamless and efficient framework. Woodland Paper has selected PhyleTec - Supply Chain Management as the software technology to enable our Enterprise Resource Planning (ERP) project. ERP consists of common global processes and systems integrated across all business units within Woodland Paper. With PhyleTec, all key Woodland Paper processes, such as Vendor Manufacturing, Order Management, and Product Delivery are linked together across business units. As a result, Woodland Paper can provide greater speed, accuracy, and service in meeting the needs of you, our customers.

Woodland Paper is introducing PhyleTec - Supply Chain Management for the following reasons:

1. To support our strategic objective of operating excellence - Operating Excellence will improve our ability to better meet your needs, both in the execution of our business processes to serve you and the way we use and manage information about our business with you.
2. To enable our people to focus on adding value to you, our customer - A key outcome from this implementation will be more robust and efficient processes which will empower our employees and reduce administrative tasks. We will have more time to add more value to your company rather than handling mundane data entry tasks, tracking down information, and thus, delaying decisions.
3. To update and integrate our IT systems - While our current business processes and systems have served us well for many years, we feel that they are not robust enough nor capable of providing the global standardization of information and integration we need going forward.
4. To facilitate easier integration of new businesses and acquisitions - As we continue to grow by developing and acquiring new businesses, PhyleTec will allow us to easily integrate these new businesses into our existing businesses. Thus, as we continue to grow with you, we will remain in a position to continue to provide you with excellent service.

Over the past year, Woodland Paper has been preparing for the implementation of the most current release of PhyleTec - Supply Chain Management (Version 3.5) and other systems in a phased roll-out approach across all of our business units. We are currently scheduled to roll out the new SCM common processes and systems in our Paper Merchant and Distribution business in the first quarter of 2007.

The processes involved in the transition to PhyleTec include the following:

• Sales
• Paper Management
• Order Entry
• Purchasing & Warehousing
• Purchasing & Direct Shipments
• Receiving & Put-away
• Inventory Management
• Picking & Shipping
• Customer Invoicing
• Vendor Payments
• Returns Management
• Collections (AR)
• Employee Compensation
• Financial Management

What will change as a result of Woodland Paper implementing PhyleTec - Supply Chain Management?
When we implement this system, you will see the following changes:

1. Improved quoting time.
2. Improved speed of access to information about your account and account history.
3. Ability to access account and paper program information over the Internet.
4. More detailed quoting, acknowledgment, shipping, and invoicing documentation.
5. Increased ability to focus more on bringing cost savings and value to your organization.

Please continue to contact, inquire and order our products and services as you have in the past. Nothing will change in respect to order entry today. However, you will start to see benefits to your company in respect to increased speed, accuracy, and service that we provide to you on a continuous basis.

If questions arise, please contact immediately your Woodland Paper Service Representative. They have been trained to answer any questions that you have pertaining to this new endeavor.