BLUEPRINT FOR FOOD LOGISTICS A BARRETT DISTRIBUTION CENTERS CASE STUDY For a major US food brand, Barrett began on a small introductory scale in 2008 and quickly proved to be an asset in terms flexibility, accuracy, execution and superior sanitation practices. In 2010 we opened a dedicated facility to support inbound raw materials and packaging, as well as outbound packaged food product. In 2011 the Barrett operations supporting this customer nearly tripled in size, prompting a move to a larger dedicated operation. The value of enabling such a customer to concentrate on its core competency and Barrett to manage all things logistics has helped them to grow and focus on what they do best: manufacture and market great food products. 1
BACKGROUND Barrett Distribution Centers began working with senior supply chain and manufacturing management personnel for a leading US food product company, on a small introductory scale in 2008. Barrett quickly proved to be an asset to the operation, in terms of flexibility, accuracy, execution and superior sanitation practices and in 2010 opened a dedicated facility to support both inbound raw materials and packaging, and outbound finished goods. In 2011 Barrett s operation in support of this important customer nearly tripled in size, prompting its move to a closer location to reduce lead times and transportation cost. What did this Company achieve by hiring Barrett? The primary benefit to this customer, of working with Barrett was to enable focus on its own core competency: manufacturing and marketing top grade food products. Barrett in turn handling all things logistics, has translated to a reliable and trusted asset for the company, and a key resource to them in managing dramatic growth rates on an annual basis. BARRET BLUEPRINT METHODOLOGY Barrett s Blueprint process is a proprietary approach to designing, implementing and managing supply chain solutions which holistically deploy Barrett s people, process and technology resources, in collaboration with others as required. The Blueprint process methodology provides a professional framework for very deliberate consideration of all aspects required to create a tailored road map for each customer engagement. This case study is another in a long line of validations of the process as a value driver that establishes solution control and results that meet or exceed customer expectations. The sketch below charts key steps from initial analysis through design and manage to improvement: Analysis Design Build Implement Manage Improve 2
The next few pages illustrate, step by step, how the Barrett team worked with this quality-centric client to identify opportunities to scale the operation and improve overall logistics efficiency in the face of dramatic growth of its very popular food products. Barrett manages a dedicated facility for this customer, supporting inbound raw materials and packaging, as well as outbound finished goods to retail grocery and big box chains throughout the US. Following is a recap of results achieved, in each phase of the process, using this framework: Design Needs Analysis Process Definition Systems Definition Identify MHE Model Productivity and Staffing Build Retrofit Facility Fixture Facility Systems Infrastructure Installation Spec and procure equipment SOW documentation Implement Dedicated project lead and team Recruit, hire, train Systems testing Contingency planning Contingencies Manage Labor planning Client KPI definition Operating Metrics Quality Performance Management Improve Goal setting Collaborate Gain sharing Benchmark EVA & value positions Barrett Blueprint Process Methodology 3
Design DESIGN PHASE In the Design phase of its proprietary Blueprint Process, Barrett identified 3 core operational components: Case pick, Bulk storage, and Export business. The Barrett design strategically located these components to maximize door usage and operational efficiency which produced: Dramatic improvement in on time shipping performance: from 94.12% to 99.987%. Increased productivity by 15%. Build BUILD PHASE In the Build phases, we performed a velocity analysis by stock keeping unit (SKU), identified fast movers and created a more efficient layout for handling them. By creating pick lines by Size Pack to build uniform pallets and Fast Mover pallets our process improvements resulted in: An 8% improvement in pick productivity. Implement IMPLEMENT PHASE In the Implement phase of our Blueprint Process, Barrett brought together experienced team members from different facilities, and charged them to train the staff on Barrett s best practices and quality management. Manage MANAGE PHASE Barrett has managed the customer s facility to the following combined KPI standards, which exceed industry standard and meet or exceed this important customer s highest performance expectations. On Time Departure 99.987% Inventory Accuracy 99.485% Order Accuracy 99.632% Barrett has consistently posted KPI metrics above goal in every case, trending upward over time. 4
BLUEPRINT FOR FOOD LOGISTICS Improve IMPROVE PHASE Finally, Barrett continues to identify process improvements. We recognized an opportunity to help our client maximize their manufacturing capacity, improve process efficiencies, and lower overall costs by moving the management of all raw materials to our distribution center. 5
CONCLUSION CONCLUSION Barrett Distribution Centers relationship with this foods manufacturer is an excellent example of successful outsourcing, in which each business partner focuses on what it does best, to optimize overall performance of the business. Enabling the customer to concentrate on its core competency and letting Barrett manage all things logistics has created distinct value: helping the customer grow and focus on what it does best; manufacture and market great food products. The critical success factor to measure in a program of this nature requires simultaneous alignment of: Voice-of-the-Customer (Client KPIs and External Customer Requirements) Voice-of-the-Process (Actual Process Performance) Voice-of-the-Business (Financial Success & Health for Both Parties) For Barrett Distribution Centers and its customers, the end result will be a process management culture that rewards Proactive vs. Reactive management, which in turn creates continually improving business performance, ahead of the curve in the customer s industry. 6
ABOUT BARRETT DISTRIBUTION CENTERS ABOUT BARRETT DISTRIBUTION CENTERS Barrett Distribution Centers, headquartered in Franklin, Massachusetts, and founded in 1941 as a single warehouse operation, has grown to serve a wide array of customers and industries with a network of 13 strategic distribution centers throughout the US. These facilities are designed to efficiently handle fast moving consumer goods for leaders and future leaders of the consumer electronics, chemical, food and beverage, and footwear and apparel sectors. Barrett provides both consumer direct fulfillment and retail channel delivery, with facilities and operations covering the East Coast, West Coast, Mid-Atlantic and Southeast. For more, please visit www.barrettdistribution.com. 7