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FCPC Symposium

FCPC Symposium. Supply Chain Think Tank Summaries April 19, 2012. What action can you take?. Let’s continue the discussion! Visit www.gpsqtc.com/fcpc Summary of common issues across Supply Chain functions (across all Think Tank groups) Summary of Collaborative Opportunities

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FCPC Symposium

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  1. FCPC Symposium Supply Chain Think Tank Summaries April 19, 2012

  2. What action can you take? Let’s continue the discussion! Visit www.gpsqtc.com/fcpc • Summary of common issues across Supply Chain functions (across all Think Tank groups) • Summary of Collaborative Opportunities • Examples of actions and results in various Food and Consumer Products companies

  3. Common Issues across all groups • Cost management • Impacts to cost and/or financial productivity • Information visibility and demand anticipation • Access to upstream and downstream information that helps anticipate and absorb demand changes • Supply chain strategy and planning • Supply chain structure and planning decisions that match supply to demand • Performance measurement and information standardization • Understanding of performance and key supply chain information through existence (or lack) of Key Performance Indicators (KPIs) or information standards • Supply chain execution conflicts/mismatches • Anything that prevents the smooth flow of products/transactions within and between functions

  4. Collaborative Opportunities • Effort to share planning data (especially downstream sales and demand data) to anticipate demand spikes and improve planning accuracy • Cooperative effort to jointly understand and improve supplier/customer factories – will lead to win/win savings, aligned expectations, KPI commonality, information standardization, etc. • Jointly examine failures in supply chain execution processes to catch and solve defects within and across departments/functions • Supply chain strategy sessions in which supplier/customer jointly make decisions on site locations, manufacturing and inventory strategies, use of third parties, etc. • Define cross-supply chain KPIs and performance management to optimize the extended supply chain

  5. Colour coded affinity of common issues across all bullet points

  6. Common Issues across all groups • Cost management in a productivity-focused environment • Information visibility and demand anticipation • Supply chain strategy and planning • Performance measurement and information standardization • Supply chain execution conflicts/mismatches

  7. Logistics • Order Size, Frequency, Supplier Mgmt. Relationships, Velocity, Lead Time, Customer Expectations • Lack of Visibility to Forward Demand • Cost of Fuel • Labour • Driver Shortages • Regulations

  8. Logistics cont. • Truck Capacity • Asset Availability • Cost of Real Estate • Core Business Hours – Now 24/7 • Network Design Challenges • Ability to Respond – 3PL • OTR vs. Intermodal • Delivery Performance/Carrier Metrics • Accessorial Charges

  9. Logistics cont. • Customer Base Expansion • Customer Fleet Mgmt. – Cost • Push vs. Pull – Over Production from Plants • In-Bound Unloading Schedules • Food Safety • Emergency Response Plan • Food Security • Cross-Border Regulations & Inspections • Package Design

  10. Manufacturing • Forecast accuracy • Inventory Carrying Cost • Production Costs • Procurement • Transportation • Capitol expenditures for capacity • Cost of poor Quality • Scrap • Rework • Downtime • Maintenance costs and overhead

  11. Manufacturing cont. • Throughput Efficiency • Lack of common production metrics across the supply chain • Skilled labour shortage • Packaging costs • Design costs • Especially running design changes

  12. Warehouse • Retail Ready Packaging • What is the true definition • How will this affect our future • Forecasting models Vs Plant batch/run sizes • Basic fact we are always in the middle between sales and production • Increasing demand in Customer freshness requirements • SKU rationalization opportunities

  13. Warehouse cont. • Lack of Industry Standards in Retail Demands • Pack size • Order size • ASN requirements • Compliance fees • 24/7 coverage • Labeling • Box Coding • Complex shipping specs and delivery requirements • Customer Pick-up

  14. “Inside the Warehouse” • Skilled labour • Automate vs. Manual vs. Flexibility vs. Cost • How do we determine the best solution • Operational efficiency • Temperature controlled cost optimization • Maintenance costs • Cases per hour • Cost per case • Pick accuracy • Damage • LIFO , FIFO and FEFO (First Expired First Out) how to organize

  15. “Inside the Warehouse” cont. • Destruction Costs • Basic understanding that Warehousing is moving from a “cost of doing business” to “need to optimize” • Consolidating opportunities, when and how. • Distribution Network Optimization • Possibilities to share resources • Cost and over head is shouldered individually • Owning vs Partnering vs Multi-partner vs 3rd Party

  16. Customer Service #1 • Anything that prevents the smooth flow of products/orders • Outcome of any discrepancies caused by interruptions in product/order flow (i.e. fines) • *Data integrity (general) • *Retailer fines process more aggressive and starting to involve customer service – requires new skills in customer service • Pricing mismatches (internal and external) • Mismatch of information between sales, category managers, and customers regarding pricing, timelines, new product introductions * High importance

  17. Customer Service #1 cont. • Product availability and availability date – mix of attendees have ATP. One-offs and small shortages particular issue. Often don’t know when product is short until after should have shipped • Differences between customer forecasts and what was ordered leads to product allocations • Booking customer appointments to deliver at customer. Some companies leave that task to carriers

  18. Customer Service #1 cont. • Expediting due to: • Customer replenishment setup • Forecasting errors • Deduction management (difference between what’s received vs. what was ordered • Reconciliation of all returns (store, distributor/DC) for various reasons (discontinuation, past shelf life, seasonal, quality, damage, pick error) • Trade funds deduction vs. payment by check for invoices • Productivity major focus area

  19. Customer Service #2 • Scope of the discussion: • Order-to-Delivery • Who is the customer? • Retailers • With respect to the above, what are manufacturers biggest pain points?

  20. Customer Service #2 con’t • Brainstorm output unfiltered: • Lack of technology at retailers • i.e. Dock Scheduling Softward • Warehouse capacity • Number of doors • Warehouse space • Incremental charges • Off-loading • Detention

  21. Customer Service #2 con’t • Brainstorm output unfiltered (Con’t): • Preferred carriers • Lack of communicationwithin and across retailer functions • i.e. Supply Chain vs. Merchandising • Lack of communication across manufacturer functions • i.e. Sales vs. Supply Chain • Manufacturers SC resources act as brokers, can influence but have no authority

  22. Customer Service #2 con’t • Brainstorm output unfiltered (Con’t): • Within manufacturers organization: • Lack of Sales visibility/accountability to Supply Chain needs • Conflicting reward systems across functions (Sales vs. Supply Chain) • Reactive efforts saps time of SC resources • Prevents value-add customer service • Lack of common measures of success across trading partners (Sales/Marketing/Manufacturing/Distribution)

  23. Customer Service #2 con’t • Summary • Lack of common success measures across trading partners (functions) • Lack of alignment of reward systems across functions • Lack of communication • Across manufacturers functions • Across and within retailer functions • Leads to inefficient use of manufacturer resources and less effective processes to serve the customer (retailer)

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