Continuing education Research Professional development Building professional relationships.

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2 About WERC Warehousing Education and Research Council is the only professional association focused exclusively on logistics management and its role in the supply chain. Continuing education Research Professional development Building professional relationships

3 The WERC Community WERC s Members lead, direct and manage the efficient flow of information, materials or finished goods throughout the supply chain. Distribution / Warehousing / Logistics VPs Directors Managers

4 The WERC Community Manufacturers Wholesalers/Distributors Retailers Consumer Product Goods Pharma Third-party warehousing/logistics providers Transportation Industry suppliers (machinery, software, real estate, etc.) Consultants Educators & Students

5 WERC provides its members and the industry with Education Research Networking Opportunities

6 WERC Annual Conference Local Facility Tours Topic Focus Discussion Groups Case Study Presentations C-Level Discussion Groups Industry Trade Show Practical Education With Take-A-Ways Networking in fun and relaxing settings

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8 WERC DC Measure Study 47 Metrics Including On-time Shipments Lost Sales (Percent of SKUs Stocked Out) Dock-to-Stock Cycle Time, in Hours Order Fill Rate Pallets Picked & Shipped per Hour Distribution Costs per Unit Shipped Peak Warehouse Capacity Used Material Handling Damage Percent of Orders with On-time Delivery

9 Who is in WERC s Study Nature of Work at the Facility Majority (66.8%) focus on case picking vs. pallets 9

10 Who is in WERC s Study Primary Customer Served Respondents serve customers across the supply chain 10

11 Who is in WERC s Study Demographics by Business Strategy

12 Who is in WERC s Study Demographics by Company Size < $100 Million 31.90% $100 Million - $1 Billion 36.20% > 1 Billion 31.90% 12

13 Did you also know Licenses Data for usage in TecSys WMS

14 WERC DC Measure Study License Data for usage in TecSys WMS WERC offer s customized comparative reports Retailers, Manufacturers, Wholesalers/Distributors Continuing to explore other opportunities to make available and usable for the industry

15 What we know Improve Processes Improve Metrics Improve Bottom Line

16 Quantitative Benchmarking Data is Good but it is not Good Enough Quantitative Qualitative

17 To compliment DC Measures

18 Compare Qualitative

19 An example of this Receiving and Inspection Process Benchmarks Process Group Poor Practice Inadequate Practice Common Practice Inspection Cross Docking No inspection process at receipt No process to identify or expedite products Insufficient inspection to identify nonconforming product, essentially checking for damage only. No cross docking process Informal expediting of products Sufficient inspection to identify nonconforming product. Failing product is quarantined to prevent use Informal process with manual lists are kept to support cross docking of products needed for current orders and replenishment, Good Practice Sufficient inspection to identify nonconforming product which is then quarantined to prevent use or referred to suppliers within a prescribed timeframe Formal but manual process for crossdocking or immediate replenishment requirements for received product not in inventory but needed for current orders Best Practice Inspection process results in quarantine, immediate notification to suppliers & carriers and initiates return process System-enabled alerts for incoming product s immediate order requirements, creating a crossdocking or immediate replenishment task upon receipt

20 Seven Steps to Successful Benchmarking Plan Step 1: Set benchmarking priorities Step 2: Identify the key processes to be assessed Measure Step 3: Collect data - operational and managerial Step 4: Research and compare best-in-class performance to internal and external standards Compare Step 5: Identify gaps and reasons for low performance Step 6: Develop an improvement roadmap and set priorities Supply Chain Visions Source: WERC s Warehouse Manager s Guide to Benchmarking, 2 nd Edition (2010) Act Step 7: Close gaps and improve/refine processes

21 WERC s Assessment & Certification Program

22 What are our challenges? Customer Relations Automation Justification Bottlenecks Space Utilization Challenges Candid Employee Input Increasing Quality Cutting Cost Improving Productivity Improved Communication

23 Doesn t the industry already have this?... Publications & White Papers Trade Press Unbiased Assessment Consultants Facility Tours

24 Assessment & Certification Process Application Pre-Audit Survey Onsite Audit Day 1 Delivery of Results Process Improvement Workshop Day 2 Rate, Rank & Plan Pre-Audit

25 Delivery of Results Process-by-Process review of the findings & observations. A review of the 3-Wishes.

26 Delivery of Results Comparable Base Scores Gap Analyses Below Needs Meets Good Best Process Group Minimum Attention Standard Practice Practice Receiving & Inspection Material Handling & Putaway Slotting Storage & Inventory Control Picking & Packing Load Consolidation & Shipping Shipping Documentation Warehouse Management System

27 What can multiple facilities get? Process Group Overall Average 3PL Sites Facility A Facility B Receiving and Inspection Material Handling & Putaway Slotting Storage & Inventory Control Picking & Packing Load Consolidation & Shipping Shipping Documentation Warehouse Management Systems Graded worse than average Graded better than average

28 Process Improvement Workshop An overview of the 7 Step Benchmarking & Road Mapping Model

29 Seven Steps to Successful Benchmarking Plan Step 1: Set benchmarking priorities Step 2: Identify the key processes to be assessed Measure Step 3: Collect data - operational and managerial Step 4: Research and compare best-in-class performance to internal and external standards Compare Step 5: Identify gaps and reasons for low performance Step 6: Develop an improvement roadmap and set priorities Supply Chain Visions Source: WERC s Warehouse Manager s Guide to Benchmarking, 2 nd Edition (2010) Act Step 7: Close gaps and improve/refine processes

30 Rate, Rank & Plan An exercise to rate and rank the potential improvements based on strategic importance, value and cost. The creation of an action item list with assigned responsibilities for further research, development and implementation of improvements. Opportunities Resulting from Warehouse Audit Meetings: Item Number Rank or Priority Opportunity Name Detailed Description of Opportunity Describe Benefit of Taking Action Describe Potential Risks Potential Value: Direct Savings Other Factors Estimated Cost to Implement Time Required to Implement Strategic Value (1-3) Cost Impact (1-3) Perceived GAP (1-5) Owners: Enablers Individuals Processes Technology

31 APL Logistics Atlanta, GA Operated for Colgate-Palmolive Co. Aquarius- Grupo SID Tultitlán Edo. de Mex. - Operated for Colgate-Palmolive, Co.* Colgate-Palmolive Co. Atlanta, GA Operated by APL Logistics* Aprilia, Italy, Operated by Geodis* Aspropygros, Greece - Operated by Diakinisis* Cali, Colombia S.A. Guatemala City, Guatemala Jyderup, Denmark Operated by Frode Laursen* Macro Centro de Distribución, SJI - Operated by Zimag Logistics* Madrid, Spain, Operated by FCC Logistica Mission Hills Centro de Distribución, SJI Olszowa, Poland - Operated by FM Logistic* Tultitlán Edo. de Mex. Operated by Aquarius - Grupo SID* Unna, Germany Operated by DHL* DHL Cali, Columbia Operated for Unilever* Unna, Germany Operated for Colgate-Palmolive, Co.* Hunter Fan Company Byhalia, MS Ingersoll Rand/Trane National Parts DC, Southaven, MS National Parts DC, Memphis Tradeport KENCO Orlando FL Operated for Whirlpool* 31 GE Industrial Mt. Juliet, TN - Operated by LEGACY Supply Chain Services* Hunter Fan Company Byhalia, MS Ingersoll Rand/Trane National Parts DC, Southaven, MS National Parts DC, Memphis Tradeport KENCO Orlando FL Operated for Whirlpool* LEGACY Supply Chain Services Mt. Juliet, TN Operated for GE Industrial* Nexus Distribution CDC Bedford Park, IL Scholastic National Service Organization Jefferson City, MO* Starbucks Coffee Company Auburn, WA - Operated by OHL* Dallas, TX - Operated by OHL* LaVergne, TN - Operated by OHL* Swagelok OFC Component Warehouse Solon, OH Trojan Battery Company Santa Fe Springs, CA Unilever Cali, Colombia - Operated by DHL* Zimag Logistics Macro Centro de Distribución Operated for Colgate- Palmolive, Co.*

32 Benefits beyond what you can see Indentifying Process Degradation Morale True Comparative Differentiator Collaboration

33 Benefits beyond what you can see