Project Details

Project Review: Number 3. 6 November 2008

Project Name: Consumer Division: Managing the Transition Process to a New Outsourced Distribution Network.

Project Objective: Closure and outsourcing of four consumer group warehouses in Australia and New Zealand by December 2008.

Project Plan Version: 1.5 Updated 28 October 2008

Nylex Project Sponsor: Dave Armstrong (DA)

Nylex Project Manager: Tom Evans (TE)

Meta: Peter Molony (PM), Nick Prescott (NP)

Weekly Report Contents

Section A Project Plan, Timings Milestones and Comments Consulting DaysElapsed 21 up till 31st October 2008

Section B

Summary Comments

Delivery Project remains one week behind. Planned completion date is by week ending 12 Dec 2008

Milestones Met Major milestones met this week are:Proposals received from 3PlsClarification of responses with 3 PLs

Key Issues "To be" inventory profile awaiting sales progressing - non critical at this stage.3PL freight responses have not demonstrated an in depth understanding of task resulting in potentially higher costs than present.This is expected to improve as they understand the task. Top help this focus initaly on warehousing and then get then to requte freight costs.Informing staff is underway.Mainfreight has indicated concerns on a December implementation for Brisbane.Toll have not complted warehouse submissio.Only have Auckland. Awaiting their final site visits.

SECTION A Project Plan, Timings, Milestones & Comments

Activity Who Due Date Result Comment

1.0 Project Establishment

1.1 Project Briefing - outline scope & timing for plan development TE, PM, NP 3/10/2008 Met

1.2 Establish Project - program, plan, methodology, data specification & team agreed TE, PM, NP 7/10/2008 Met

1.3 Information Collection - Establish "As Is" & "To Be" Task, Resources & Financial TE, PM 8/10/2008 Met

1.4 Validate raw data for use in model PM 9/10/2008 Met

1.5 Visit Somerton for physical reference TE, PM, NP 7/10/2008 Met

2.0 Establish "To Be" Inventory Profiles

2.1 Develop "To Be" Inventory Profile for each location. PM 13/10/2008 Met

2.2 Review "To Be" Inventory Profile with Sales Team for each location. TE, PM, Nylex Sales 24/10/2008 Not Met Sitting with national sales

2.3 Agree "To Be" Inventory Profile for each location. Nylex 24/10/2008 Not Met Currently not critical but we will need their position by 7 November at latest.

3.0 Develop "As Is" Baseline Existing Distribution Network

3.1 Describe distribution channels - Production Facilities, Distribution Network, Regional TE, PM 7/10/2008 Met

3.2 Map existing product and information flows PM 9/10/2008 Met

3.3 Model existing logistics task PM 10/10/2008 Met

3.4 Describe existing outcomes/issues - time, service, KPI's, 3PL contracts, info, quality, etc. PM 13/10/2008 Met

3.5 Review & agree as representative description of existing operations TE, PM 14/10/2008 Met

4.0 Develop "To Be" Description of Proposed Distribution Network

4.1 Describe "To Be" Distribution Network PM 15/10/2008 Met

4.2 Describe "To Be" Logistics Task PM 16/10/2008 Met

4.3 Review & agree future distribution model TE,PM 16/10/2008 Met

4.4 Develop Key Operating Principles & Rules for "To Be" Network TE,PM 16/10/2008 Met

5.0 Outsourcing Strategy & Process

5.1 Purchasing Strategy TE, PM,NP 16/10/2008 Met

5.2 Develop Proposal Request Document PM, NP 17/10/2008 Met

5.3 Approve Proposal Request Document TE 17/10/2008 Met

5.4 Issue Documents to 3PL's PM 17/10/2008 Met

5.5 Proposal Preparation 3PLs 31/10/2008 Met awaiting some further detail from Toll

5.6 Develop Assessment Template PM, NP 21/10/2008 Met

6.0 3PL Responses

6.1 Receive Proposals for each Element - by Location & for Freight PM 31/10/2008 Met

6.2 Clarify Issues/Responses TE, PM 5/11/2008 Met

6.3 Develop Cost Comparison for Assessment PM 6/11/2008 Largely Met

6.4 Assess Against Template PM, NP 7/11/2008

6.5 Review/Comment TE, PM, NP 7/11/2008

7.0 Develop Total Cost Model

7.1 3PL Cost Structures PM 10/11/2008

7.2 Warehousing - Townsville PM 10/11/2008

7.3 Warehousing - Brisbane PM 12/11/2008

7.4 Warehousing - NZ PM 12/11/2008

7.5 International Freight PM 13/11/2008

7.6 Domestic Freight PM 13/11/2008

7.7 NZ Freight PM 13/11/2008

7.8 Ongoing Client Costs - Systems, Assets, etc. PM 10/11/2008

7.9 Identify Once Off Costs - Transition Costs - Inventory, Assets, etc. PM 12/11/2008

7.10 Sensitivity to Volume Var - Scalability PM 13/11/2008

7.11 Complete Cost Model PM 14/11/2008

7.12 Review/Comment TE, PM, NP 14/11/2008

8.0 Resource Issues

8.1 Inform Staff of Outsourcing Process TE 10/11/2008 Largely Met underway all ready

8.2 Address Property Leases - Internal TE, PM 21/10/2008 MetAddress Property Leases - 3 PL PM 18/11/2008

8.3 Address Equipment Commitments - Internal TE, PM 22/10/2008 MetAddress Equipment Commitments - 3 PL PM 19/11/2008

8.4 Establish SAP Capability for 3PL - Internal TE, PM 23/10/2008 MetEstablish SAP Capability for 3PL PM 20/11/2008

8.5 Staff Redundancies - Internal TE, 24/10/2008 MetStaff Redundancies - Internal/3PL TE, PM 21/11/2008

9.0 Negotiations

9.1 Assess Fit & Cost TE, PM, NP 14/11/2008

9.2 "Best Offer on the Table" TE, PM 17/11/2008

9.3 Clarify Issues Outstanding TE. PM 18/11/2008

9.4 Negotiate Cost/Service TE, PM 19/11/2008

9.5 Review/Revise Contract TE, PM 20/11/2008

9.6 Prepare Final Draft TE, PM, NP 21/11/2008

9.7 Agree Contract - Nylex/3PL TE, Nylex 21/11/2008

10.0 Implementation Plan

10.1 Relocate Inventory According to Inventory Profile at each location TE, PM 21/11/2008

10.2 Transition Warehouses to 3PL - Townsville TE, PM, 3PL 21/11/2008Transition Warehouses to 3PL - Brisbane TE, PM, 3PL 28/11/2008Transition Warehouses to 3PL - NZ TE, PM, 3PL 5/12/2008

10.3 Transition Freight Task to 3PL - Domestic TE, PM, 3PL 21/11/2008Transition Freight Task to 3PL - International TE, PM, 3PL 21/11/2008Transition Freight Task to 3PL -NZ TE, PM, 3PL 5/12/2008

10.4 Establish Operational KPI's, Reporting & Review of 3PL TE, PM 5/12/2008 Latest, earlier for earlier outsourced elements

10.5 Relocate Miscellaneous Equipment, Documents & Items TE, PM, 3PL 21/11/2008

11.0 Project Assessment

11.1 Assess outcomes against project goals TE, PM, NP 12/12/2008