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Georgia Tech February 4, 2003. Go Dawgs !!!. “ Our Mission is to be the Reseller’s Preferred Source of Business Products and Services through Leadership in Operational Excellence, Customer Support, and Integrity”. S.P.Richards Sales Results. 2001 $1,379,859,000 + 3.2%

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Georgia Tech

February 4, 2003



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Our Mission is to be the Reseller’sPreferred Source of Business Products and Servicesthrough Leadership inOperational Excellence,Customer Support,and Integrity”


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S.P.Richards Sales Results

  • 2001 $1,379,859,000 + 3.2%

  • 2000 $1,336,500,000 +10.5%

  • 1999 $1,218,367,000 + 9.0%

  • 1998 $1,122,000,000 + 3.4%

  • 1997 $1,081,000,000 + 4.4%

  • 1996 $1,035,000,000 + 9.2%

  • 1995 $ 948,000,000 +11.9%


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S.P.Richards History

  • Established in 1848

  • Over 150 years of experience in the Office Products Industry

  • Oldest continuouslyoperating business in Atlanta, Georgia

  • Purchased by Genuine Parts Company in 1975


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GPC Overview

Sales Results 1995-2000

7,981,687,000

8,369,857,000

8,220,668,000

6,614,032,000

5,720,474,000

6,005,245,000

5,261,904,000


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GPC Overview

  • Automotive Parts Group ( NAPA )

  • Industrial Parts Group ( Motion Industries )

  • Office Products Group ( S.P.Richards Co. )

  • Electrical/Electronic Materials Group ( EIS )

  • Common to all divisions is expertise in warehousing and distribution

2001 Sales


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GPC Overview

  • NAPA - Automotive Parts Group

  • Motion Industries - Industrial Parts Group

  • S.P.Richards - Office Products Group

  • EIS - Electrical/Electronic Materials Group

2001 Operating Profit


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S. P. Richards Competitive Overview

  • National wholesaler - United Stationers

  • Regional wholesalers

  • Computer supplies wholesalers

  • Furniture wholesalers


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How Our Customers Compete

  • Mega Dealers ( Office Depot, Corporate Express )

    • National scope ( National contracts )

    • Next day delivery

    • Purchasing control

    • Low price

  • Independent Reseller

    • High service

    • Next day ( or same day ) delivery

  • Internet Reseller

    • Ease of ordering

    • Quick delivery


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How Our Customers Use Us

  • Items resellers don’t stock

    • The smaller the reseller, the fewer items they stock

    • Economic decision

  • Expand selection

    • Their catalog

    • Our catalog

  • Backup during transitions ( new catalogs )

  • Backup for temporary out-of-stocks

    • Can be huge volume

    • Impossible to forecast


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How Our Customers Use Us

  • Business relationship with S. P. Richards and United

    • No such thing as a backorder

    • Missed order is lost business

  • Most orders are for pre-sold merchandise

    • End user order to our customer

    • Item they don’t have

  • Wrap & Label

    • Consumer packaging

      • To: End User

      • From: Office Depot

    • Approximately 77% of our orders


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- Charlotte

- Atlanta


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Trends Favoring Wholesale Distribution

  • Inventory reduction

    • Traditional resellers

    • Stockless resellers

      • Total Fulfillment

    • E-commerce

      • “Pure Play” Internet resellers ( No“Bricks or Mortar” )

  • Resellers expanding beyond their geographic reach

    • Nationwide drop shipping

  • Niche specialists seeking to provide a complete business product offering


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S.P.Richards Strengths

  • 36 full stocking Distribution Centers

  • 2 Furniture DC’s

  • 3 Horizon USA ( Data Supplies ) DC’s

  • Broad inventory offering

    • 22,336 catalogued items featured at every DC.

    • Over 30,000 total items in inventory

  • 1% - 2% list price advantage over our major competitor

  • Best service

    • Fastest delivery

    • Highest service levels

    • Fewest errors

  • Lowest cost structure


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S.P.Richards Competitive Advantage

  • Intense focus on our customers

  • Highly personalized service

  • Flexible - Do anything they need us to do to further their business

    • Physical delivery

    • Information Systems

  • Best customer relationships in the industry

“Every customer is our only customer”


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S.P.Richards Competitive Advantage

“At S. P. Richards,We make money the old fashioned way”…

Manually


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Disclaimers

  • The information presented here represent the views of the presenter, not necessarily that of S. P. Richards Company

  • You can’t improve without looking at your weaknesses

    • “… it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.”

- Winston Churchill

  • S. P. Richards might look like a poor distributor,

    except in comparison to all the others.












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S.P. Richards Logistics Challenges

  • Rapid Delivery

    • Business began as same day order picking, next day delivery

    • S. P. Richards moved the industry to “same night” deliveries 20 years ago

      • Everyone wanted the first AM delivery

      • Allowed resellers to deliver earlier to their customers

      • Deliver more rapidly than the competition

    • Unattended; key access

    • All customers have merchandise at the start of the next business day

    • Required reduced cycle times for S. P. Richards


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S.P. Richards Logistics Challenges

  • Rapid Delivery

    • No pre-planning of orders

      • “Real-time”

      • Constantly adjusting

    • Difficult to plan quantity and timing of labor

      • Statistically based

        • Tuesday, Wednesday, Thursday are heaviest shipping days

        • Housekeeping Monday and Friday

        • Managing overtime a challenge

        • Adjust and stagger starting times as appropriate

        • Part time labor a huge plus where available

    • Continuous manual expediting

      • More flexible than systems driven prioritization


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S.P. Richards Logistics Challenges

  • Rapid Delivery - Examples:

    • Corporate Express - Whippany, NJ

      • Shipped from: Moorestown, NJ

      • Order cutoff: 6:30 PM

      • Truck departs: 7:00 PM

      • Delivery: 8:00 PM

    • Staples - Ontario, CA

      • Shipped from: Mira Loma,CA

      • Order cutoff: 5:00 PM

      • Truck departs: 5:45 PM

      • Delivery: 6:00 PM


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S.P. Richards Logistics Challenges

  • Rapid Delivery - Examples:

    • Lindy Office Products - Los Angeles, CA

      • Shipped from: Mira Loma,CA

      • Order cutoff: 6:00 PM

      • Truck departs: 8:00 PM

      • Delivery: 9:00 PM

    • Independence - Cleveland, OH

      • Shipped from: Pittsburgh, PA

      • Order cutoff: 6:00 PM

      • Truck departs: 7:00 PM

      • Delivery: 11:30 PM


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S.P. Richards Logistics Challenges

  • Rapid Delivery

    • WMS Implications

      • Order prioritization is paramount

        • Multiple picking zones

        • Different travel times through system

      • Order completion needs to be prioritized, not order initiation

      • How do you maintain the same degree of responsiveness with an automated system that you had with a manual one?

    • Accuracy vs. Cycle time


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S.P. Richards Logistics Challenges

  • Stockless Fulfillment

    • USA Express

      • EDI transmissions

        • 70% of orders

        • Another 15% remotely entered by our customers

        • Real-time acknowledgement

      • Auto-routing by zip code

      • Out-of-stocks routed to alternate facilities

      • Wrap and Label

      • Order up until 3:00 PM, UPS shipment same day

      • Order tracking


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S.P. Richards Logistics Challenges

  • Stockless Fulfillment

    • USA Express

      • Can ship to 96% of the US population next-day UPS ground

      • Still a small percentage of the overall business

      • All 36 Distribution Centers must be small package experts

      • Enforcing consistency a challenge

    • Premium on high order fill rate from one DC

      • Minimizes number of boxes

      • Consistent delivery times

      • Developed a system that allows customer to prioritize:

        • Quickest shipping

        • Fewest packages

        • Automated with the EDI transmission


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S.P. Richards Logistics Challenges

  • Service Levels

    • Don’t get a second chance - order lost if out of stock

    • Demand often not statistical

      • “Random hits”

        • Different DC’s

        • Different items

        • Different times

      • Communications important

        • Learn more about customer’s business

        • Collaborative inventory management?


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S.P. Richards Logistics Challenges

“Forecasts are always wrong,

and planners are always surprised”

- George Plossl



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S.P. Richards Logistics Challenges

  • Service Levels

    • Developed SPRinter network

      • Same night service from other DC’s

      • Raises fill rates 1% to 2% to customers

    • Wrap and Label

      • Efficient merging for resellers

      • Creates extra box(es) for consumers


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S.P. Richards Logistics Challenges

  • What I didn’t mention

    • Transportation

      • Most deliveries on our private fleet

      • Every stop every night


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S.P. Richards Logistics Challenges

  • Learnings

    • World class is doing more than what your customer needs with excellence

    • It’s about process design and organization

    • Must eliminate work

      • Lower costs

      • Reduced cycle times

    • Automation where it helps meet ( or anticipate ) customer requirements


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SPR Philadelphia

Your mission, should you choose to accept it…

  • Increase order picking efficiency in C and D zones

    • Reduce labor costs

    • Equal or better quality

  • Decrease number of multi-zone orders

    • Increased customer satisfaction

    • Reduce packaging costs

  • Reduce empty space (air) in the shelves

  • Increase efficiency of UPS orders

  • Improve full case/broken case picking (paper)

  • Capital investment that fits the business


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SPR Philadelphia

  • Currently picking with carts

  • Every picker travels the whole zone each picking tour

  • Average tour consists of 50 order lines

  • Pick directly into final packaging

  • Except for customers who demand it, pack separate boxes in each zone

    • Multi-zone orders have to be sent downstairs on a conveyor and completed

    • Drastically increases order cycle time


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SPR Philadelphia

Start /

Finish

Conveyor

From

Upstairs

(Unfinished)

*

Conveyor

From

Upstairs

(Finished)

Checking/Packing

Finished UPS From Upstairs

C Zone - Floor Level - Mostly 18” Shelving


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SPR Philadelphia

D Zone - Mezzanine - Mostly 30” Shelving


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SPR Philadelphia - Data

D Zone ( Small goods - Mostly 18” Shelving )

  • Picking aisles numbered as labeled

    • Bins A, C, E, Etc. to the left

    • Bins B, D, F, Etc. to the right

  • All bins 42” wide

  • Pallet positions in center open area and along right wall

  • Location ending with “B” denotes an item with reserve stock somewhere else

  • Bin location only denotes shelf, not position


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SPR Philadelphia

*

Start /

Finish

C Zone - Mezzanine - Mostly 30” Shelving


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SPR Philadelphia

C Zone - Mezzanine - Mostly 30” Shelving


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SPR Philadelphia

C Zone ( Light Bulk - 30” Shelving )

  • Picking aisles numbered as labeled

    • Bins 1, 3, 5, Etc. to the left

    • Bins 2, 4, 6 Etc. to the right

  • All bins 42” wide

  • Pallet positions in center open area, along with checking and packing

  • Location ending with “B” denotes an item with reserve stock somewhere else

  • Bin location only denotes the bin, not the shelf



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SPR Philadelphia - Data

  • Sales

    • Date, Item, Order #, Line #, UOM, Qty Ordered, Qty Shipped

  • Item

    • Item, Description, Status, Item Class, Vendor, Bin Location, Zone, Sales & Case UOM’s, Dimensions

  • Locations

    • Bin Location, Zone, Bin, Location Type, Reserve Location?

  • Zone Descriptions

  • Items Needing Dimension Information

    • Lists

    • Information on Atlanta stocking status


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SPR Philadelphia

Limitations

  • Mezzanine supported by shelving uprights

  • COMPUTER SYSTEM doesn’t (today) support multiple locations for an item

    • Philadelphia not yet on WMS (PkMS)

  • Items stored by manufacturer

  • Items assigned different size spaces based upon normal volume on hand


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SPR Philadelphia

General Data Limitations

  • Selling UOM’s quantity per case missing in many cases

  • In many cases, case dimensions also missing

    • Provided vendor in item file

    • Provided S. P. Richards catalog

    • Provided Atlanta stocking information

  • Multiple SKU’s assigned to one location

  • Locations not to the item level




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