LOGISTICS February 8-11, 2009 Gaylord Texan Dallas, Texas. Title Sponsor :

Transcription

1 LOGITIC 2009 February 8-11, 2009 Gaylord Texan Dallas, Texas Title ponsor :

2 Grocery Network Cost Reduction trategies

3 Current ituation Tough Retail environment Expense pressure Fuel Operating cost Initiatives: Increasing cube utilization 28 pallet program Packaging improvements Network integration Remote Reefer operations

4 Current Environment Holiday sales weakest in 38 years Retail sales flail Christmas week U.. weekly sales fall most in almost 6 years Grocery sales are healthy in 2008 Home kitchens are more active as restaurants take a fall

5 DOE FUEL INDEX Diesel Price Trending In 2008 The following chart depicts the weekly trend of fuel prices compared to last year. In week 49, diesel fuel was $1.02/per gallon lower than last year ICC FUEL CHART December 30,

6 The Price of Fuel is Impacting Our Business How far on $ worth of diesel?

7 Cube aving Idea

8 Grocery Cube Optimization T T T T T T T T T T T T T T T Index Benefits Reduce store loads from HVDC $40 M dollar network savings at current fuel prices Eliminate100,000 -tons-a-year in greenhous e gases Decrease damages = traight Pallet T = Turn Pallet

9 am s Club Yoplait Containers Old package New Package Value Created Member Benefit: Allows for additional flavor in the package Member surveys suggest they prefer the spoonability Business/Environmental Benefit: 53% decrease in resin 16% increase in cube utilization Production efficiencies for the supplier add additional cost savings Reduction in truckloads

10 Concentrated Detergent Water aved Diesel aved Fewer Trucks Reduced Out of tocks Lighter Bottle to Carry

11 Big Hitters Progress Report Network Cube Graph Current Year Last Year

12 Optimizing Backhaul Flow and Profitably Regional Network Dry Grocery Network Perishable Grocery Network

13 TRM RF Yard Management ystem YTEM FEATURE Two-Way Control: turn unit On/Off, change set points, change modes and diagnostics Unit Monitoring: temperatures, modes, set points, fuel levels, door openings and alarms GP Data: yard location, trailer movement notification, gate arrival and gate departure ensors: wireless fuel level and door opening sensors PRIMARY BENEFIT Drives efficiencies for both warehouse operations and fleet maintenance Provides gate arrival and departure times to better track asset utilization

14 LOGITIC 2009 February 8-11, 2009 Gaylord Texan Dallas, Texas Title ponsor :

15 A Passion to ELIMATE Waste Focus On Expense Control ustainability

16 Current ustainable Packaging Projects Branded private label bottled water ϖ Changed corrugate tray to a corrugate padsaving approx. 119 tons of corrugate. ϖ Pallet reconfigure from (60) 24-packs to (72) 24- packs increasing palletization efficiency by 20% Reducing the bottle weight by 4.7 grams to 15.5 grams saving approx. 140 tons of PET needing to be disposed of. Bakery ϖ Changed doughnut box from a olid-bleach- ulfate (B) to a more environmentally friendly material, Kraftpak. This will use less material and still retain strength. ϖ Changing non-recyclable Oriented Polystyrene (OP) plastic containers to recyclable Polyethylene Terephthalate (PET). For one KU alone - 36 tons can be recycled Vs being hauled to a landfill.

17 Current Condition Optimizes within the respective functional areas, which results in an inability to maximize flow Merchandising 65% pend Logistics 4% pend Retail Operations 18% pend - Vendor funding - Forced distributions - Warehouse efficiencies - Cube maximization - Inbound - Outbound - Forced to optimize what flows to them

18 Business Case Problem: Considerable waste is associated with the existing transportation design: Utilization: - Trailer - Equipment Process rework Excess trips Cause: This waste is driven by an inability to solve against the variability from sales, and is further complicated by ordering, delivery frequency and timing of promotion and seasonal shipments PO Weekly Grocery ales Pilot tore A $2,300,000 $2,200,000 $2,100,000 $2,000,000 $1,900,000 $1,800,000 $1,700,000 $1,600,000 $1,500,000 unday Monday Tuesday Wednesday Thursday Friday aturday

19 Business Case (continued) Which results in a dynamic transportation design # of Routes Average Routes per Day of the Week (Grocery) Thursday Ad Break unday Monday Tuesday Wednesday Thursday Friday aturday and underutilized trucks 33% How do we fix this?

20 Pilot to Eliminate Waste & Increase Cube Key deliverable: A flow design with leveling that eliminates waste and drives savings Focus: Establishing fixed flow: -Pallet flow (same number, same height) -tatic transportation (every day, same route, same time) -Leveling with work balancing (filling the empty space on the truck) Activities: elect pilot store(s) Fix the number of deliveries at 7 Ensure number of pallets selected equal pallets planned Pre-specify the number of pallet positions on the route olve for the daily customer variability

21 How Do We Move Toward Predictability, Flow & tability? Rule #1- Order writing: Write the order to demand Rule #2- End cap promo shipment: Initial order shipment for promo (IOQ) - Tuesday - Lead IOQs - Wednesday - Bulk IOQs (cereal, paper, soap, baby) $2,300,000 $2,200,000 $2,100,000 $2,000,000 $1,900,000 $1,800,000 $1,700,000 $1,600,000 $1,500,000 unday Monday PO Weekly Grocery ales Pilot tore A Tuesday Wednesday Thursday Friday aturday Rule #3- Fast movers, high cube: Currently utilizing water Order from back room store size for weekend demand Rule #4 - Use seasonal events as a leveling tool

22 teps to Get to a Leveling Design Utilize tools to level the week Leveling Hypothesis Leveling Tools: 1000 Promo Cube eas onal Fas t-moving Promo Turn easonal Fast-moving / high cube unday Monday Tuesday Wednesday Thursday Friday aturday Resulting in a full truck Turn Promo FM/HC Connection: Retail & Merchandising: Timing Quantity

23 Initial Results 1. Average 100 cube increase per pilot stores 2. Increase on-time delivery % on holiday weeks 3. Non transportation related benefits: More BALANCED warehouse workflow easonal goods shipment plan (as part of leveling) yield service leveling improvements

24 Logistics NETWORK COT REDUCTION TRATEGIE AT MEIJER 24

25 Diesel Fuel & Cost as a % of ales Price Per Gallon Bi-Monthly Diesel Fuel Price 2003 to

26 Technology Upgrades 26

27 Technology Upgrades Implementing Technology To: Govern peeds Gear Vehicles to Cruise peeds / Reduce RPM s Limit Idle time Reduce Congestion Provide Real Time Information 27

28 Tracking Technology Onboard Computer Wirelessly Updated via GP; Connecting Dispatch with Driver in Real Time Travel Trail of Tractor From 1/1/09 to 1/8/09 Tractor Travel Trail 28

29 Communication with Drivers 01/08 07:38 01/08 07:38 Ron Bosma 01/08 07: am accident on 94 west bound at 78 mile marker. stopped traffic. tx ron 01/08 07:36 01/08 07:37 Ron Bosma 01/08 07: am. 94 west at 78 mile marker. accident avoid if possible. tx ron 01/06 21:11 01/07 04:43 Dan tarr 01/06 21:10 There are several locations that the highways are closed because of slippery roads. Please drive safe 01/06 20:14 01/07 04:43 Dan tarr 01/06 20:14 I 75 southbound is closed at mile 34 because of multiple accidents ( road is very icy ) 01/06 10:55 01/06 11:21!Totalmail 01/06 10:55 DIRECTION TO LEPWA L IPARI Bunert WARREN,MI/ From Newport; 75 north to 696 east to gross beck exit. 96 east to 696 east to Gross Beck exit 26. Don t go to Gross Beck road!!!! Bune 01/04 08:59 01/04 09:00 Tim Hine 01/04 08:59 i96 CLOED EATBOUND, Traffic routed off at 137 milestick near Howell. EEK ALT ROUTE. 01/04 07:29 01/04 07:32 Tim Hine 01/04 07:29 6 car pile-up N B 136 milestick. 01/03 07:23 01/03 07:24 elders, Lenore 01/03 07:22 UNIT! UNIT! UNIT! BRING'EM BACK BOY! IF YOU CAN T GET ONE, GIVE RICK A CALL HE THE MAN TO GET THE JOB DONE! THANK YOU AND HAVE A GREAT DAY. 01/03 02:23 01/03 03:35 elders, Lenore 01/03 02:23 ATTN LANING DRIVER; IF YOU PULL A GM LOAD AND IT I NOT FULL COULD YOU PLEAE LET DIPATCH KNOW. JUT GIVE ME A CALL AND LET ME KNOW HOW MANY FEET OF ROOM I AVAILABLE ON YOUR TRLR AND WHAT TORE YOU ARE HAULING THE LOAD TO. THANK YOU 01/02 10:44 01/02 10:49 Rick Patnoude 01/02 10:44 Happy New Year!! please plan on going to 90 for a shuttle if you are on the west side of the state. This includes k-zoo, tc and cad. thank you for your support. 01/02 03:24 01/02 04:20 elders, Lenore 01/02 03:24 Lansing drivers, if you do not find your trlr on the grocery ready line you may find it on the west end of 86 dry box return line. Thank you 01/01 05:00 01/01 05:01 Brian Hubert 01/01 05:00 BACK GATE I CLOED 29

30 Trailer Fullness Trailer Fullness - By Year 95% 90% 90% 92% 93% 85% 85% 80% 77% 80% 75% 70% 65% 60%

31 Backhaul Revenue Backhaul Revenue History

32 Backhaul Revenue Now have 12 non-meijer vendors that we provide transportation service Overlay Meijer vendors transportation network with our own to reduce excess capacity Common trailer pool with power for move provided by closest geographic service provider 32

33 Equipment Improvements Michelin X-1 Wide Base Tires Aerodynamic Improvements Motion Alignment 33

34 Equipment Improvements Average MPG GOAL Fuel Economy MPG MPG MPG MPG MPG 34

35 Questions??? Thank You 35