A presentation delivered by Ingo Brauckmann, Head of Business Development Consumer EMEA, at Logicon Europe 2012. An overview on the collaborative consumer supply chain: one single inventory point along end-to-end supply chain.
2. Purpose of Today
• To show living examples of collaborations
• To foster the dialogue around collaboration
• To challenge your individual collaboration capabilities
Collaboration – make it happen! DHL | Page 2
3. Agenda
1 Introduction to collaboration
2 Examples
3 Way Forward
Collaboration – make it happen! DHL | Page 3
4. Collaboration – A simple definition
Collaboration
is working together to achieve a goal.
(Source: Wikipedia, Jan 2012)
Collaboration – make it happen! DHL | Page 4
5. What drives us to collaborate in Business?
Collaboration
is working together to achieve a goal.
(Source: Wikipedia, Jan 2012)
Sustainability Cost efficiency Better business
• Synergies • Synergies • Higher product availability
• Less CO2 • Less costs • New distribution channels?
Collaboration – make it happen! DHL | Page 5
6. Collaborative Logistics – Key Idea and Benefits
Traditional
consumer
supply chain
Various inventory
points
Key benefits
Separate Retailer
manufacture • Lower logistics
DC’s costs
r
warehouses • Less inventories
• Less obsolescence
Collaborative
consumer • Better service
supply chain • Less CO2 emissions
One single
inventory point Combined Cross-
along end-to-end manufacture docking
supply chain r platform
warehouses
Collaboration – make it happen! DHL | Page 6
7. Benefits of Collaboration Models have been widely
communicated
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8. Agenda
1 Introduction to collaboration
2 Examples
3 Way Forward
Collaboration – make it happen! DHL | Page 8
9. Collaborative Logistics – Two Major Types are of High Interest
Main types of collaboration
• Collaboration is triggered by a group
1 Manufacturer-driven of consumer goods manufacturers
(horizontal collaboration)
• Typically 3-10 large manufacturers
• DHL example: Tradeteam (drinks
industry platform UK)
• Collaboration is triggered by retailer
2 Retail-driven (vertical collaboration)
• Typically rather large number of
small manufacturers
• DHL example: 3C platforms France
(initiated by Carrefour)
Collaboration – make it happen! DHL | Page 9
10. Example 1
Main types of collaboration
• Collaboration is triggered by a group
1 Manufacturer-driven of consumer goods manufacturers
(horizontal collaboration)
• Typically 3-10 large manufacturers
• DHL example: Tradeteam (drinks
industry platform UK)
• Collaboration is triggered by retailer
2 Retail-driven (vertical collaboration)
• Typically rather large number of
small manufacturers
• DHL example: 3C platforms France
(initiated by Carrefour)
Collaboration – make it happen! DHL | Page 10
11. Example 1 – Tradeteam in UK
1 Manufacturer-driven
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12. Background: How Tradeteam was Born…
1 Manufacturer-driven
Situation for Bass Brewers (today Key decisions taken by Bass Brewers
Molson Coors) around 1995 in 1995
• Government ruling to divest in pub • Multi customer 3rd party supplier
infrastructure • Rationalized network with NDC
• Own distribution network with strong • Employee Relations agenda
investment need
• Culture of Service Excellence
• Own supply chain set up not seen as
competitive (capacity utilization, • An award winning business…..
service and factor costs)
Decision to form a Joint Venture (JV) to
keep control and still be able to attract
other parties to create synergies
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13. About Tradeteam
1 Manufacturer-driven
Tradeteam is a joint venture founded in 1995:
50.1% owned by Deutsche Post DHL and 49.9% owned by Molson Coors
DHL Supply Chain
UK and Ireland
Joint Venture Board
Tradeteam Senior Leadership Team
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14. Tradeteam has Transformed
1 Manufacturer-driven
From 1995… …to today
• In-house became 3rd party • Multi customer 3rd party supplier
• One customer • Rationalized network with NDC
• Under utilized network • Employee Relations agenda
• Start of huge change programme • Culture of Service Excellence
• Challenging Industrial Relations agenda • An award winning business…..
• Service Issues
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15. Tradeteam’s Customer Portfolio has developed over the
past years including Brewers, Wholesalers and Pubco’s
1 Manufacturer-driven
1995 2002 2007 2008 2010 2011
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16. Tradeteam Overview 2012
1 Manufacturer-driven
• One National DC (Stretton), 7 RDC’s and 19
Depots Aberdeen Depot
RDC
Dundee
NDC
• Turnover of GBP 155m per annum, Glasgow
500 vehicles and 2,000 people
Hebburn
• Delivers direct to more than 25,000 pubs Culcavy
Penrith
• Delivers 1600 loads into retailers each week Tadcaste
Knowsley r
Grimsby
Tinsley
• Picks more than 45 million items every year Stretton
Norwich
Wolverhampton
with a 99.88% accuracy Aberystwyth
Hams Hall
Ebbw Vale St Ives
Narbeth Gloucester
Enfield
• Delivers over 4 million wines and spirits Swansea
Crayford
cases every year from over 3,500 SKUs Reading
Newquay
Salfords
Exeter Totton
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17. Tradeteam has Diversified its Service Offer beyond Core
Primary and Secondary Distribution
1 Manufacturer-driven
Forecasting & Primary Secondary Customer Reverse Information
Import Order Capture
Replenishment Distribution Distribution Service Logistics & Reporting
Services
• Inbound logistics • DHL Gori • EDI • Retail and • Network WMS • Query resolution • Empties • Service levels
management • Supplier • Telesales Wholesale DC • Order picking • First contact management • Customer
• Demand Management loads service • Container surveying
• Order Capture • Stock rotation
forecasting • Consolidation • Bulk liquid and • Delivery updates sortation • Query resolution
• Promotional grain • Time window
• Stock • Duty Activity delivery • Customer • Stock and trade performance
optimization movements ullage
Management • Cellar operation link • Mood reporting
• Supplier • NDC management
management management • Proactive • Outlet reporting
consolidation customer • Brewery
• Repacking surveying repatriation
• Destruction
SYSTEMS & SUPPORT: Forecasting / Order Management / WMS / TMS / Customer Service
Enablers
PEOPLE: Management development / H&S training / Employee engagement / People Awards
CUSTOMER FOCUS: Dedicated account management / Service Excellence / Customer Surveys
CHANGE MANAGEMENT: DePICT Project Process / Experienced Project Managers
Collaboration – make it happen! DHL | Page 17
18. Key Benefits
1 Manufacturer-driven
Key benefits to the Tradeteam partners
• High service level with reduced stock (no multiple SKU)
• Competitive transport costs due to high synergies in network
• Supports the green agenda
• Platform has capacity to further expand
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19. Example 2
Main types of collaboration
• Collaboration is triggered by a group
1 Manufacturer-driven of consumer goods manufacturers
(horizontal collaboration)
• Typically 3-10 large manufacturers
• DHL example: Tradeteam (wine and
spirits platform UK)
• Collaboration is triggered by retailer
2 Retail-driven (vertical collaboration)
• Typically rather large number of
small manufacturers
• DHL example: 3C platforms France
(initiated by Carrefour)
Collaboration – make it happen! DHL | Page 19
22. Business Case Carrefour 3C: Physical Flows
2 Retail-driven
Industry Regional DC’s Retail Outlets
Consolidation &
Collaboration
Center
Full trucks
Load
Optimization
Full trucks Full trucks
Full trucks
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23. Retail-driven Collaboration –
Example 3C Platform in Lomme (France)
2 Retail-driven
Who does what?
Manufacturers DHL Carrefour
• Deliver to Lomme at own • Signs contract with • Places orders with
cost from factories manufacturers (equal terms manufacturer
• Hold stock at own charge in and conditions) • Takes merchandise
Lomme • Secures all logistics ownership when leaving
• Issue invoice after products operations from reception, Lomme
leave Lomme put to stock, order • Synchronizes
preparation through manufacturers' orders to
• Secure product availability in transport and co-packing
Lomme optimize inbound transport
• Provides set of KPIs to • Takes charge of the
• Exchange via EDI or manufacturer to monitor
manually data for order transport from Lomme to the
operational efficiency Carrefour platforms
preparation, inbound and
outbound with DHL
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24. Benefits
2 Retail-driven
Manufacturers
Before
Key benefits
• Transport costs: Up
to 40% less cost per
pallet
• Stock holding costs:
Up to 20% saving
potential
• Transport distances:
After
25% less km
• CO2: At least 25%
less CO2 emissions
• Transport lead
times: Up to 40%
improvement
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25. Agenda
1 Introduction to collaboration
2 Examples
3 Way Forward
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26. Manufacturer-driven Collaboration –
General Value Proposition for 3 PL
• Neutral and trusted third party/convener facilitating relations between multiple –
possibly competing – manufacturers (avoiding antitrust issues)
• Helping manufacturers pre-empt greater pressure from retailers to enter vertical
collaboration
• Offering scale, pooling, and standardization benefits to manufacturers (especially
those who usually cannot fill trucks by themselves)
• Offering efficiency gains through deep expertise in warehouse management and value-
added services
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27. Retail-driven Collaboration –
General Value Proposition for 3 PL
• Neutral third party facilitating customer/supplier relation
• Single point of contact for the retailer – more easy to hold DSC accountable than
managing multiple small suppliers
• Offering scale, pooling and standardization benefits to small suppliers
• Offering efficiency gains through deep expertise in warehouse management
Collaboration – make it happen! DHL | Page 27
28. Collaborative Logistics –
Cornerstones of Potential 3 PL Offering
• Basic services: full operation of platforms (transport, warehousing)
including quality assurance
• Optional elements
– Value-adding services – e.g., customer service, OTC management, VMI
– Equity company to facilitate gain sharing between collaboration partners
Services
• Potential specialization
– Focus on certain product categories
– Focus on manufacturers with seasonal complementary demand patterns
– Focus on fast movers
– Focus on promotion items
– Focus on multichannel deliveries
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29. Collaborative Logistics –
Who to Focus on?
• Focus on existing customer base (both for Consumer and Retail)
• Potential participants on consumer side: all consumer goods firms, with
potential focus on:
Participant
s – Those suffering from high storage costs in own DC’s
(e.g., high-volume products like detergents)
– Those who have difficulties of distribution with full truck loads
(e.g., high-value-density products like chewing gum)
– Timelines of tendering processes need to be roughly in line
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30. Conclusion
• The need is there!
• The know-how is there!
• It’s up to us to make it happen!
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