The Next Generation of Supply Chain Collaboration

Transcription

1 The Next Generation of Supply Chain Collaboration How CPG Leaders are Making it Happen Brad Blizzard, Gene Evans, Roger Sechler, and Kevin Zweier

2 What are we doing? Using analytics to identify opportunities to collaboratively transport products from multiple CPG manufacturers to a retailer Investigating opportunities for operational feasibility Utilizing 3rd party to manage and execute the collaborative shipping and cost allocation process Reducing cost-to-serve while increasing velocity 2

3 Why should you care? Retailer More frequent replenishment Less inventory Fewer trucks at the dock Manufacturer More sales Lowest total landed cost to deliver those sales Co-shipping addresses these competing desires 3

4 What s needed to make it work? Information (i.e. data) and a willingness to share it CPG companies located in the same general area with a willingness to co-mingle freight Retailer participation as order and shipping patterns need to change 4

5 OK, but how? Chainalytics Kevin Zweier Principal, Transportation Practice Clorox Gene Evans Strategic Project Manager, Supply Chain Partnerships Colgate-Palmolive Brad Blizzard Director, U.S. Logistics Del Monte Foods Roger Sechler Director, Transportation 5

6 Company Profiles Founded 1913 Oakland, CA Liquid Bleach Revenue $5.5 Billion Employees 8,400 Global Footprint Annual Truckload Shipments 100+ Countries 78% of Sales in U.S. 275,000+ 6

7 Company Profiles Brands 7

8 Distribution Networks OR CA Lathrop Redlands KS University Park IL OH PA Aberdeen, MD Roanoke Fairburn GA TX CLOROX 8

9 Company Profiles Founded Oakland, CA New York, NY Liquid Bleach Soap Revenue $5.5 Billion $18 Billion Employees 8,400 36,000 Global Footprint 100+ Countries 223 Countries 78% of Sales in U.S. 76% of Sales are International Annual Truckload Shipments 275, ,000 in the U.S. 9

10 Company Profiles Brands 10

11 Distribution Networks Portland OR CA Lathrop Redlands KS University Park IL OH PA New Concord Hamilton, NJ Aberdeen, MD Rancho Cucamonga Roanoke Grand Prairie Fairburn GA Atlanta TX CLOROX COLGATE-PALMOLIVE 11

12 Company Profiles Founded Oakland, CA New York, NY Oakland, CA Liquid Bleach Soap Premium Coffee Revenue $5.5 Billion $18 Billion $4 Billion Employees 8,400 36,000 5,200 Global Footprint 100+ Countries 223 Countries 1 Country 78% of Sales in U.S. 76% of Sales are International 93% of Sales in U.S. Annual Truckload Shipments 275, ,000 in the U.S. 200,

13 Company Profiles Brands 13

14 Distribution Networks Portland OR Lathrop CA Redlands Fontana Rancho Cucamonga University Park Rochelle Kankakee Topeka IL KS Fairburn Roanoke Grand Prairie Ft. Worth TX McAllen OH Bloomsburg GA PA New Concord Atlanta Hamilton, NJ Aberdeen, MD CLOROX COLGATE-PALMOLIVE DEL MONTE 14

15 How do you start collaborative shipping? Typically two or more large shippers work together to find cross-network collaboration opportunities Transportation is usually a subset of a larger partnership Chainalytics is often brought in after a partnership is established, but we have matched companies up as well Chainalytics is a neutral partner who looks across the historical data to and identify transportation collaboration opportunities Participating shippers allow Chainalytics to expose some rate and volume information to participants Analysis looks across Truckload and Less-than-Truckload volumes to see where participants are shipping on similar lanes and where they might have less than full trucks already moving that are ripe for consolidation 15

16 Freight Market Intelligence Consortium Truckload Member Demographics July 2013 Model Statistics $18+ Billion in transportation spend 15+ Million truckloads 108 Members with TL spend ranging from $10MM to over $500MM Includes U.S., Canada and Mexico 7 Separate models (dry van, temp-control, intermodal, flatbed, 3 short haul models) Equivalent to over 7% of the total North American for-hire truckload market Industries by Transportation Spend 9% 22% Retailers Consumer Goods Paper & Packaging 15% Food & Beverage 46% Industrial/Other 8% Members by Annual Spend 23% 23% $0 - $50MM $50MM - $100MM $100MM - $250MM 29% 25% $250MM+ 16

17 Possible Co-Shipping Opportunity Source: Google Maps 17

18 Then, comes the hard part a deep dive into the operational considerations of the participant shippers and retailer to find the true opportunities, and map out the execution 18

19 Why are we investing in co-shipping? Potential Retailer Value Inventory reductions; improved working capital position Maintained or improved in-stock position Enable top line growth Less receiving dock congestion Improved logistics expense Sustainability gains Potential Manufacturer Value Improved strategic alignment with retailer Maintained or improved in-stock position Enable top line growth Improved logistics expense Sustainability gains Depending on existing ordering and supply chain profiles, value can show up differently across companies 19

20 Changes in Order & Shipment Profiles Customer DC 1 Pre Co-Ship Co-Ship Customer DC 2 Pre Co-Ship Co-Ship Vendor 1 Vendor 1 # of Shipments # of Shipments Avg. Load Weight 23,975 20,287 Avg. Load Weight 28,817 28,262 Vendor 2 Vendor 2 # of Shipments # of Shipments Avg. Load Weight 29,087 9,509 Avg. Load Weight 32,815 12,621 Vendor 3 Vendor 3 # of Shipments # of Shipments Avg. Load Weight 6,423 1,482 Avg. Load Weight 6,096 1,407 Avg. Weight/Shipment 22,280 31,278 Avg. Weight/Shipment 26,495 42,290 Shipments Received/Year Shipments Received/Year

21 Order Management Process Retailer creates POs across co-ship vendors in alignment with agreed upon parameters around volume, frequency, and date management POs are processed independently by each vendor Each vendor EDIs their PO shipment information to agreed upon independent 3PL Qualifies loads for co-shipment based on pre-defined parameters and communicates shipment variability back to vendors Tenders loads to carrier Schedules pick-up appointment with each vendor DC Schedules co-load delivery appointment with retailer Provides pertinent 214 event confirmations 3PL pays carrier and invoices each vendor based on agreed upon cost allocation methodology 3PL provides pertinent KPIs and scorecarding 21

22 Challenges of Co-Shipping Value Proposition Product Complexity Retailer Capabilities Carrier Commitment Execution Solution Detail Management 22

23 What We re Doing Now 3 Shippers co-loading into 6 retailer DCs Retailers seeing inventory improvement while maintaining in-stocks Shipper cost result are variable Automated solution using 3PL Additional pilots with other shipper combinations into other retailers and DCs Similar results/benefits Manual process, not scalable Expanding to additional retailer using 3PL model 23

24 What s next? NEAR TERM Increase engagement with retailers Define clear value proposition for all trading partners Begin scaleable, regional initiative Explore shared dedicated fleet and co-location opportunities LONGER TERM Expand to other regions Most shippers located in same campus Specialized equipment for dedicated fleet Shared warehouse space for VAS with e-commerce solution 24

25 Questions? Kevin Zweier Gene Evans Brad Blizzard Roger Sechler 25

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