collaboration make it happen logicon 2012
DESCRIPTION
A presentation delivered by Ingo Brauckmann, Head of Business Development Consumer EMEA, at Logicon Europe 2012. An overview on the collaborative consumer supply chain: one single inventory point along end-to-end supply chain.TRANSCRIPT
Ingo Brauckmann
Collaboration – make it happen Logicon, Amsterdam, 8 February 2012
DHL | Page Collaboration – make it happen! 2
Purpose of Today
• To show living examples of collaborations • To foster the dialogue around collaboration • To challenge your individual collaboration capabilities
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Introduction to collaboration 1
Examples 2
Way Forward 3
Agenda
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Collaboration – A simple definition
Collaboration is working together to achieve a goal. (Source: Wikipedia, Jan 2012)
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What drives us to collaborate in Business?
• Synergies • Less CO2
Sustainability
• Synergies • Less costs
Cost efficiency
• Higher product availability • New distribution channels?
Better business
Collaboration is working together to achieve a goal. (Source: Wikipedia, Jan 2012)
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Collaborative Logistics – Key Idea and Benefits
Traditional consumer supply chain Various inventory points
Collaborative consumer supply chain One single inventory point along end-to-end supply chain
Separate manufacturer warehouses
Retailer DC’s
Combined manufacturer warehouses
Cross- docking platform
Key benefits
• Lower logistics costs
• Less inventories
• Less obsolescence
• Better service
• Less CO2 emissions
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Benefits of Collaboration Models have been widely communicated
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Introduction to collaboration 1
Examples 2
Way Forward 3
Agenda
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Collaborative Logistics – Two Major Types are of High Interest
• Collaboration is triggered by retailer (vertical collaboration)
• Typically rather large number of small manufacturers
• DHL example: 3C platforms France (initiated by Carrefour)
Main types of collaboration
Retail-driven
• Collaboration is triggered by a group of consumer goods manufacturers (horizontal collaboration)
• Typically 3-10 large manufacturers • DHL example: Tradeteam (drinks
industry platform UK)
Manufacturer-driven 1
2
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Example 1
• Collaboration is triggered by a group of consumer goods manufacturers (horizontal collaboration)
• Typically 3-10 large manufacturers • DHL example: Tradeteam (drinks
industry platform UK)
• Collaboration is triggered by retailer (vertical collaboration)
• Typically rather large number of small manufacturers
• DHL example: 3C platforms France (initiated by Carrefour)
Main types of collaboration
Manufacturer-driven
Retail-driven 2
1
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Example 1 – Tradeteam in UK
Manufacturer-driven 1
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Background: How Tradeteam was Born…
• Government ruling to divest in pub infrastructure
• Own distribution network with strong investment need
• Own supply chain set up not seen as competitive (capacity utilization, service and factor costs)
• Multi customer 3rd party supplier • Rationalized network with NDC • Employee Relations agenda • Culture of Service Excellence • An award winning business…..
Situation for Bass Brewers (today Molson Coors) around 1995
Key decisions taken by Bass Brewers in 1995
Manufacturer-driven 1
Decision to form a Joint Venture (JV) to keep control and still be able to attract
other parties to create synergies
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Tradeteam is a joint venture founded in 1995: 50.1% owned by Deutsche Post DHL and 49.9% owned by Molson Coors
About Tradeteam
Tradeteam Senior Leadership Team
Joint Venture Board
DHL Supply Chain UK and Ireland
Manufacturer-driven 1
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Tradeteam has Transformed
• In-house became 3rd party
• One customer
• Under utilized network
• Start of huge change programme
• Challenging Industrial Relations agenda
• Service Issues
• Multi customer 3rd party supplier
• Rationalized network with NDC
• Employee Relations agenda
• Culture of Service Excellence
• An award winning business…..
From 1995… …to today
Manufacturer-driven 1
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Tradeteam’s Customer Portfolio has developed over the past years including Brewers, Wholesalers and Pubco’s
1995 2002 2007 2008 2010 2011
Manufacturer-driven 1
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• One National DC (Stretton), 7 RDC’s and 19 Depots
• Turnover of GBP 155m per annum, 500 vehicles and 2,000 people
• Delivers direct to more than 25,000 pubs
• Delivers 1600 loads into retailers each week
• Picks more than 45 million items every year with a 99.88% accuracy
• Delivers over 4 million wines and spirits cases every year from over 3,500 SKUs
Tradeteam Overview 2012
Stretton
Enfield
Tinsley
Knowsley
Hams Hall
Gloucester
Glasgow
Culcavy
Aberdeen
Dundee
Penrith
Hebburn
Tadcaster
Grimsby
Wolverhampton Norwich
St Ives
Salfords Totton
Aberystwyth Ebbw Vale
Exeter
Newquay
Swansea
Narbeth
Crayford Reading
Depot
RDC
NDC
Manufacturer-driven 1
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Tradeteam has Diversified its Service Offer beyond Core Primary and Secondary Distribution
• DHL Gori • Supplier
Management • Consolidation • Duty
Management
• EDI • Telesales • Order Capture • Promotional
Activity
• Retail and Wholesale DC loads
• Bulk liquid and grain movements
• NDC management
• Repacking
• Network WMS • Order picking • Stock rotation • Time window
delivery • Cellar
management
• Query resolution • First contact
service • Delivery updates • Customer
operation link • Proactive
customer surveying
• Empties management
• Container sortation
• Stock and trade ullage management
• Brewery repatriation
• Destruction
• Service levels • Customer
surveying • Query resolution
performance • Mood reporting • Outlet reporting
Order Capture Primary Distribution
Customer Service
Information & Reporting
Reverse Logistics Import Secondary
Distribution
Serv
ices
En
able
rs SYSTEMS & SUPPORT: Forecasting / Order Management / WMS / TMS / Customer Service
PEOPLE: Management development / H&S training / Employee engagement / People Awards
CUSTOMER FOCUS: Dedicated account management / Service Excellence / Customer Surveys
CHANGE MANAGEMENT: DePICT Project Process / Experienced Project Managers
• Inbound logistics management
• Demand forecasting
• Stock optimization
• Supplier consolidation
Forecasting & Replenishment
Manufacturer-driven 1
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Key Benefits
• High service level with reduced stock (no multiple SKU)
• Competitive transport costs due to high synergies in network
• Supports the green agenda
• Platform has capacity to further expand
Key benefits to the Tradeteam partners
Manufacturer-driven 1
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Example 2
• Collaboration is triggered by a group of consumer goods manufacturers (horizontal collaboration)
• Typically 3-10 large manufacturers • DHL example: Tradeteam (wine and
spirits platform UK)
• Collaboration is triggered by retailer (vertical collaboration)
• Typically rather large number of small manufacturers
• DHL example: 3C platforms France (initiated by Carrefour)
Main types of collaboration
Manufacturer-driven
Retail-driven
1
2
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Retail-driven 2
Example 2 – Retail Consolidation Platform in France
Image © Carrefour
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Retail-driven Collaboration – Carrefour in France
Consolidation of small and medium size suppliers
in Collaborative Consolidation Centres
(“3C”)
Clear retail target to:
• Increase service level (product availability)
• Decrease stocks (working capital)
• Decrease complexity at loading ramps
• Further optimize logistics costs
• Deliver green benefits
The starting point The solution approach
Retail-driven 2
Image © Carrefour
START HERE
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Industry Regional DC’s Retail Outlets Consolidation &
Collaboration Center
Full trucks
Full trucks
Full trucks
Load Optimization
Full trucks
Business Case Carrefour 3C: Physical Flows
Retail-driven 2
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Retail-driven Collaboration – Example 3C Platform in Lomme (France)
Who does what?
• Deliver to Lomme at own cost from factories
• Hold stock at own charge in Lomme
• Issue invoice after products leave Lomme
• Secure product availability in Lomme
• Exchange via EDI or manually data for order preparation, inbound and outbound with DHL
Manufacturers
• Signs contract with manufacturers (equal terms and conditions)
• Secures all logistics operations from reception, put to stock, order preparation through transport and co-packing
• Provides set of KPIs to manufacturer to monitor operational efficiency
DHL
• Places orders with manufacturer
• Takes merchandise ownership when leaving Lomme
• Synchronizes manufacturers' orders to optimize inbound transport
• Takes charge of the transport from Lomme to the Carrefour platforms
Carrefour
Retail-driven 2
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Benefits
Before
After
Manufacturers
Retail-driven 2
Key benefits • Transport costs: Up
to 40% less cost per pallet
• Stock holding costs: Up to 20% saving potential
• Transport distances: 25% less km
• CO2: At least 25% less CO2 emissions
• Transport lead times: Up to 40% improvement
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Introduction to collaboration 1
Examples 2
Way Forward 3
Agenda
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Manufacturer-driven Collaboration – General Value Proposition for 3 PL
• Neutral and trusted third party/convener facilitating relations between multiple – possibly competing – manufacturers (avoiding antitrust issues)
• Helping manufacturers pre-empt greater pressure from retailers to enter vertical collaboration
• Offering scale, pooling, and standardization benefits to manufacturers (especially those who usually cannot fill trucks by themselves)
• Offering efficiency gains through deep expertise in warehouse management and value-added services
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Retail-driven Collaboration – General Value Proposition for 3 PL
• Neutral third party facilitating customer/supplier relation
• Single point of contact for the retailer – more easy to hold DSC accountable than managing multiple small suppliers
• Offering scale, pooling and standardization benefits to small suppliers
• Offering efficiency gains through deep expertise in warehouse management
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Collaborative Logistics – Cornerstones of Potential 3 PL Offering
• Basic services: full operation of platforms (transport, warehousing) including quality assurance
• Optional elements
– Value-adding services – e.g., customer service, OTC management, VMI – Equity company to facilitate gain sharing between collaboration partners
• Potential specialization – Focus on certain product categories – Focus on manufacturers with seasonal complementary demand patterns – Focus on fast movers – Focus on promotion items – Focus on multichannel deliveries
Services
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Collaborative Logistics – Who to Focus on?
Participants
• Focus on existing customer base (both for Consumer and Retail) • Potential participants on consumer side: all consumer goods firms, with
potential focus on: – Those suffering from high storage costs in own DC’s
(e.g., high-volume products like detergents) – Those who have difficulties of distribution with full truck loads
(e.g., high-value-density products like chewing gum) – Timelines of tendering processes need to be roughly in line
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Conclusion
• The need is there! • The know-how is there! • It’s up to us to make it happen!
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Thank You!
To discuss this further please contact: Ingo Brauckmann Head of Business Development Consumer EMEA DHL Supply Chain Mobile: +49 40 7345 9401 [email protected]
©2012 DHL Supply Chain All rights reserved throughout the world. Trademarks or registered trademarks are property of their respective owners. While every precaution has been taken to ensure accuracy and completeness in this literature, DHL Supply Chain assumes no responsibility, and disclaims all liability for damages resulting from use of this information or for any errors or omissions.