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Indiana Logistics Summit. October 19, 2005. Supply Chain Strategy & Real Estate. Overview: Becton Dickinson - BD Strategic Decision Making Network Rationalization Site Criteria Building Design. BD – Company Overview.

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indiana logistics summit

Indiana Logistics Summit

October 19, 2005

supply chain strategy real estate
Supply Chain Strategy & Real Estate
  • Overview: Becton Dickinson - BD
  • Strategic Decision Making
  • Network Rationalization
  • Site Criteria
  • Building Design
bd company overview
BD – Company Overview
  • Medical Technology Company serving Healthcare Institutions, Life Science Researchers, Clinical Laboratories, Industry and General Public
  • $5.3 Billion Revenue (~50% North America)
  • 3 Divisions:
    • Medical Device: Ex. Needles; Syringes; Catheters; Surgical Blades
    • Bioscience: Research Tools which Study Genes, Proteins & Cells
    • Diagnostics: Microorganism Mgm’t; Blood Collection Products
  • 25,000 Employees Worldwide
  • 59 Manufacturing Plants Globally
  • U.S.A.
    • 4 DC’s - 1.4mm Sq.Ft; Expanding in 2006 to 1.75mm Sq.Ft
    • Constructing new DC: Plainfield, IN - 653,000 sf; exp. to 970,000 sf
  • NYSE: BDX
strategic decision making supply chain real estate
Strategic Decision Making Supply Chain – Real Estate
  • Distribution Orientation…
  • Planning or Reacting?
    • Trigger event – Service, Cost, Space, Sudden Change in Business Requirements, Acquisition/Divestiture
    • 3 – 5 year planning for growth, inventory rationalization
      • Business Case over IRR hurdle
      • Internal Selling
network design
Network Design
  • Network Design is a Balance
    • Service requirements - (cycle time, order fill, “last mile”)
    • Total Cost to Serve - (Distribution, Transportation & Inventory Carry Cost – Safety Stock)
    • Risk
  • Optimized Network = Optimizing Constraints
    • Optimal # of DC’s with sufficient capacity in Optimal geographic locations with Optimal Transportation & Inventory Costs which will meet/exceed Customer Expectations
location selection key drivers
Location Selection – Key Drivers
  • Location - driven in general by optimization of transportation costs
    • Centers of Gravity: Manufacturing & Customers
  • Key Factors to selecting one City over another:
    • Existing Operations – Incumbent factor
    • Existing educated labor base within community
    • Transportation Equipment Availability
    • State, County & Local tax & training incentives
    • Availability of Investment Grade Land
    • Sophistication of Local Government concerning planning & efficient, ‘rules based’ decision making.
    • Supportive, Responsible & Seasoned
building design
Building Design
  • Key Factors, Changes
    • Building Height – 40’ clear - MHE
    • Velocity vs. Storage Density
    • T5 motion lighting
    • Climate Control – reinforced roof
    • Security built into site layout
    • ESFR sprinklers to NFPA standard
    • Building to FM standard