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Georgia Tech February 4, 2003

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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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slide1
Georgia Tech

February 4, 2003

slide3
“Our Mission is to be the Reseller’sPreferred Source of Business Products and Servicesthrough Leadership inOperational Excellence,Customer Support,and Integrity”
s p richards sales results
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%
s p richards history
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
gpc overview
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

gpc overview7
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

gpc overview8
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

s p richards competitive overview
S. P. Richards Competitive Overview
  • National wholesaler - United Stationers
  • Regional wholesalers
  • Computer supplies wholesalers
  • Furniture wholesalers
how our customers compete
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
how our customers use us
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
how our customers use us12
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
slide14
- Charlotte

- Atlanta

trends favoring wholesale distribution
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
s p richards strengths
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
s p richards competitive advantage
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”

s p richards competitive advantage19
S.P.Richards Competitive Advantage

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

Manually

disclaimers
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.

s p richards logistics challenges
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
s p richards logistics challenges32
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
s p richards logistics challenges35
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
s p richards logistics challenges36
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
s p richards logistics challenges37
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
s p richards logistics challenges38
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
s p richards logistics challenges39
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
s p richards logistics challenges40
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?
s p richards logistics challenges41
S.P. Richards Logistics Challenges

“Forecasts are always wrong,

and planners are always surprised”

- George Plossl

s p richards logistics challenges48
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
s p richards logistics challenges50
S.P. Richards Logistics Challenges
  • What I didn’t mention
    • Transportation
      • Most deliveries on our private fleet
      • Every stop every night
s p richards logistics challenges51
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
spr philadelphia
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
spr philadelphia53
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
spr philadelphia54
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

spr philadelphia55
SPR Philadelphia

D Zone - Mezzanine - Mostly 30” Shelving

spr philadelphia data
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
spr philadelphia57
SPR Philadelphia

*

Start /

Finish

C Zone - Mezzanine - Mostly 30” Shelving

spr philadelphia58
SPR Philadelphia

C Zone - Mezzanine - Mostly 30” Shelving

spr philadelphia59
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
spr philadelphia data61
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
spr philadelphia62
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
spr philadelphia63
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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