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.

1. Ingo Brauckmann
Collaboration – make it happen
Logicon, Amsterdam, 8 February 2012

2. Purpose of Today
• To show living examples of collaborations
• To foster the dialogue around collaboration
• To challenge your individual collaboration capabilities
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3. Agenda
1 Introduction to collaboration
2 Examples
3 Way Forward
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4. Collaboration – A simple definition
Collaboration
is working together to achieve a goal.
(Source: Wikipedia, Jan 2012)
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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?
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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
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7. Benefits of Collaboration Models have been widely
communicated
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8. Agenda
1 Introduction to collaboration
2 Examples
3 Way Forward
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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)
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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)
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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
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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)
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20. Example 2 – Retail Consolidation Platform in France
2 Retail-driven
Image © Carrefour
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21. Retail-driven Collaboration – Carrefour in France
2 Retail-driven
The starting point START
HERE The solution approach
Clear retail target to:
• Increase service level (product
availability) Consolidation of
small and medium size suppliers
• Decrease stocks (working capital)
in
• Decrease complexity at loading ramps Collaborative Consolidation Centres
(“3C”)
• Further optimize logistics costs
• Deliver green benefits
Image © Carrefour
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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
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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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31. Thank You!
To discuss this further please contact:
Ingo Brauckmann
Head of Business Development Consumer EMEA
DHL Supply Chain
Mobile: +49 40 7345 9401
ingo.brauckmann@dhl.com
©2012 DHL Supply Chain
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respective owners. While every precaution has been taken to ensure accuracy and completeness in this
literature, DHL Supply Chain assumes no responsibility, and disclaims all liability for damages resulting
from use of this information or for any errors or omissions.
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