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Sven Verstrepen : TRI-VIZOR and Christian Dooms : STEF
Brussels, 28th of May 2014
Horizontal collaboration in fresh and chilled
retail distribution :
The Nestlé – Pepsico – STEF case
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Who is BABM ?
The Belgian Brands Association
42 members producing and distributing FMCG branded
products in the BeLux area
BABM members’ turnover: € 5.8 billion in 2010
BABM members accounted for 36,900 direct and indirect
jobs (yearly average between 2003 and 2009)
BABM’s mission: to build the optimum climate for A-brands
to deliver value and choice to consumers, through
constant innovation and free and fair competition
Member services: information providing, networking,
stakeholders contacts
Initiative by 5 BABM members : horizontal collaboration for
their chilled products
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Nestlé & Pepsico fresh & chilled products
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BABM: is there any distribution synergy between 5 Belgian
chilled networks?
Shipper A
Shipper D
Shipper E
Shipper B
Shipper C
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Q1 2010: kick-off; data collection and standardization
Q2 2010: rough network visualization and overlap analysis
Q3 2010: detailed synergy simulation
Q4 2010: Joint RFI + RFQ
Q1 2011: selection of 3PL longlist
Q2 2011: selection of 3PL shortlist
Q4 2011: STEF implementation of 1st company
Q1 2012: STEF implementation of 2nd company
Q2 2012: start of collaborative operations
Project methodology & timeline
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(based on annual drop volume in kg per customer)
Significant geographical overlap exists in the 5 networks
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No collaboration (stand-alone)
Unsynchronized collaboration (groupage in space)
Synchronized collaboration (bundling in space & time)
3 scenarios
Representative sample (3 weeks) of actual order lines of Shippers A, B, C and D
was uploaded into the ORTEC routeplanner
This was coupled with a realistic Activity Based Cost and CO2 calculation model
Individual and combined network costs and carbon footprint for the
4 companies were calculated
3 scenarios were calculated:
– (1) AS IS/individual transport,
– (2) TO-BE1/traditional groupage or “unsynchronized” collaboration, and
– (3) TO-BE2/horizontal collaboration or “synchronized” collaboration
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In October 2010, companies A, C and D
invited 9 Logistics Service Providers
to organize a joint RFI/RFQ for shared
Warehousing and Transportation.
Eventually, STEF won the tender.
1 company drops out but…
Joint tender sent out to LSP longlist
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STEF Presentation 9
Who is STEF ? The closest temperature controlled
food network to your markets.
Canary Islands
STEF Partners
235 sites
in Europe
1.1 M sqm
storage and
X-dock surfaces
15.490
employees
9 countries
4.000
vehicles
50% owned
by STEF
€2,6 bn (+5,2%)
2013
Turnover
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Flow
Analysis
Transport
Planning
Truck
Optimization
Transport
Execution
MULTI-USER WAREHOUSE
Customer 1
Customer 2
Customer 4
Customer 3
STEF: Optimisation through collaborative transport approach or “pooling”
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Advantages of a “pooling solution” for the LSP
Higher fill rate per warehouse
Higher fill rate per truck
Reduction of empty kilometres
Optimised carbon footprint
Attractiveness for new partners to enter
the “pooling solution”
Long term volume stability
Standardization of processes
Necessary condition for a LSP :
redefine the classic “groupage” solution into a “pooling” solution!
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Lessons learned after almost 2 years of operation
The path to collaboration was long and difficult, but once there
was an agreement, the implementation and execution went fast
and smooth
Everything starts or ends with trust in each other
-> key role of Neutral Trustee
Open vision on horizontal collaboration and gain sharing is key
First audit has been held and proved that the system is working
Cost and CO2 reduction is a fact!
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Questions ? Thank you for your attention !