the next generation of supply chain - gma · the next generation of supply chain collaboration: how...
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The Next Generation of Supply Chain Collaboration: How CPG Leaders are Making it Happen Brad Blizzard, Director, U.S. Logistics, Colgate-Palmolive Gene Evans, Strategic Project Manager, Supply Chain Partnerships, The Clorox Company Roger Sechler, Director, Transportation, Del Monte Foods Kevin Zweier, Principal, Transportation Practice, Chainalytics
The Next Generation of Supply Chain Collaboration
How CPG Leaders are Making it Happen Brad Blizzard, Gene Evans, Roger Sechler, and Kevin Zweier
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Using analytics to identify opportunities to collaboratively transport products from multiple CPG manufacturers to a retailer
Investigating opportunities for operational feasibility
Utilizing 3rd party to manage and execute the collaborative shipping and cost allocation process
What are we doing?
Reducing cost-to-serve while increasing velocity
5 Co-shipping addresses these competing desires
Why should you care?
More frequent replenishment Less inventory Fewer trucks at
the dock
Retailer Manufacturer More sales
Lowest total landed cost to deliver those
sales
Retailer participation as order and shipping patterns need to change
What’s needed to make it work?
Information (i.e. data) and a willingness to share it
CPG companies located in the same general area with a willingness to co-mingle freight
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OK, but how?
Kevin Zweier Principal,
Transportation Practice
Chainalytics Gene Evans
Strategic Project Manager, Supply Chain Partnerships
Clorox
Roger Sechler
Director, Transportation
Del Monte Foods
Brad Blizzard Director,
U.S. Logistics
Colgate-Palmolive
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Company Profiles
Founded 1913 Oakland, CA Liquid Bleach
Revenue $5.5 Billion
Employees 8,400
Global Footprint 100+ Countries 78% of Sales
in U.S.
Annual Truckload Shipments
275,000+
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Brands
Company Profiles
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CA
OR
KS
TX
IL
GA
OH
PA
Distribution Networks
CLOROX
Lathrop
Redlands
Roanoke Fairburn
University Park
Aberdeen, MD
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Company Profiles
Founded 1913 1806 Oakland, CA New York, NY Liquid Bleach Soap
Revenue $5.5 Billion $18 Billion
Employees 8,400 36,000
Global Footprint 100+ Countries 223 Countries 78% of Sales
in U.S. 76% of Sales are
International
Annual Truckload Shipments
275,000+ 80,000 in the U.S.
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Brands
Company Profiles
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CA
OR
KS
TX
IL
GA
OH
PA
Distribution Networks
CLOROX
Lathrop
Redlands
Roanoke Fairburn
University Park
Aberdeen, MD
COLGATE-PALMOLIVE
Rancho Cucamonga
Portland
Grand Prairie
Atlanta
Hamilton, NJ New Concord
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Company Profiles
Founded 1913 1806 1886 Oakland, CA New York, NY Oakland, CA Liquid Bleach Soap Premium Coffee
Revenue $5.5 Billion $18 Billion $4 Billion
Employees 8,400 36,000 5,200
Global Footprint 100+ Countries 223 Countries 1 Country 78% of Sales
in U.S. 76% of Sales are
International 93% of Sales
in U.S.
Annual Truckload Shipments
275,000+ 80,000 in the U.S. 200,000+
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Brands
Company Profiles
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CA
OR
KS
TX
IL
GA
OH
PA
Distribution Networks
CLOROX
Lathrop
Redlands
Roanoke Fairburn
University Park
Aberdeen, MD
COLGATE-PALMOLIVE
Rancho Cucamonga
Portland
Grand Prairie
Atlanta
Hamilton, NJ New Concord
DEL MONTE
Ft. Worth
Fontana
Topeka
McAllen
Rochelle
Kankakee
Bloomsburg
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Typically two or more large shippers work together to find cross-network collaboration opportunities Transportation is usually a subset of a larger partnership
Chainalytics is often brought in after a partnership is established, but we have matched companies up as well
Chainalytics is a neutral partner who looks across the historical data to and identify transportation collaboration opportunities Participating shippers allow Chainalytics to expose some rate and volume
information to participants Analysis looks across Truckload and Less-than-Truckload volumes to see
where participants are shipping on similar lanes and where they might have less than full trucks already moving that are ripe for consolidation
How do you start collaborative shipping?
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July 2013 Model Statistics $18+ Billion in transportation
spend 15+ Million truckloads 108 Members with TL spend
ranging from $10MM to over $500MM Includes U.S., Canada and
Mexico 7 Separate models (dry van,
temp-control, intermodal, flatbed, 3 short haul models) Equivalent to over 7% of the total
North American for-hire truckload market
Freight Market Intelligence Consortium Truckload Member Demographics
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22%
15%
8%
46%
9%
Industries by Transportation Spend
Retailers
Consumer Goods
Paper & Packaging
Food & Beverage
Industrial/Other
23%
25% 29%
23%
Members by Annual Spend
$0 - $50MM
$50MM - $100MM
$100MM - $250MM
$250MM+
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Possible Co-Shipping Opportunity
19 Source: Google Maps
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Then, comes the hard part…
…a deep dive into the operational considerations of the participant shippers and retailer to find the
true opportunities, and map out the execution
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Why are we investing in co-shipping?
Depending on existing ordering and supply chain profiles, value can show up differently across companies
Potential Retailer Value
Inventory reductions; improved working capital position
Maintained or improved in-stock position
Enable top line growth Less receiving dock congestion Improved logistics expense Sustainability gains
Improved strategic alignment with retailer
Maintained or improved in-stock position
Enable top line growth Improved logistics expense Sustainability gains
Potential Manufacturer Value
Changes in Order & Shipment Profiles
Customer DC 1 Pre Co-Ship Co-Ship Customer DC 2 Pre Co-Ship Co-Ship Vendor 1 Vendor 1
# of Shipments 44 52 # of Shipments 51 52 Avg. Load Weight 23,975 20,287 Avg. Load Weight 28,817 28,262 Vendor 2 Vendor 2
# of Shipments 17 52 # of Shipments 20 52 Avg. Load Weight 29,087 9,509 Avg. Load Weight 32,815 12,621 Vendor 3 Vendor 3
# of Shipments 12 52 # of Shipments 12 52 Avg. Load Weight 6,423 1,482 Avg. Load Weight 6,096 1,407 Avg. Weight/Shipment 22,280 31,278 Avg. Weight/Shipment 26,495 42,290 Shipments Received/Year 73 52 Shipments Received/Year 83 52
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Order Management Process
Retailer creates POs across co-ship vendors in alignment with agreed upon parameters around volume, frequency, and date management
POs are processed independently by each vendor
Each vendor EDIs their PO shipment information to agreed upon independent 3PL
3PL pays carrier and invoices each vendor based on agreed upon cost allocation methodology
3PL provides pertinent KPIs and scorecarding
Tenders loads to carrier
Schedules pick-up
appointment with each
vendor DC
Schedules co-load delivery
appointment with retailer
Provides pertinent 214 event
confirmations
Qualifies loads for co-shipment based on pre-defined parameters
and communicates shipment variability
back to vendors
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Detail Management
Carrier Commitment
Value Proposition
Challenges of Co-Shipping
Retailer Capabilities
Execution Solution
Product Complexity
What We’re Doing Now
3 Shippers co-loading into 6 retailer DCs Retailers seeing inventory improvement while maintaining in-stocks
Shipper cost result are variable
Automated solution using 3PL
Additional pilots with other shipper combinations into other retailers and DCs Similar results/benefits
Manual process, not scalable
Expanding to additional retailer using 3PL model
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LONGER TERM
What’s next?
Increase engagement with retailers Define clear value
proposition for all trading partners Begin scaleable,
regional initiative Explore shared
dedicated fleet and co-location opportunities
NEAR TERM
Expand to other regions Most shippers located in
same campus Specialized equipment for
dedicated fleet Shared warehouse space
for VAS with e-commerce solution
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Questions?
Kevin Zweier [email protected]
Roger Sechler [email protected]
Brad Blizzard [email protected]
Gene Evans [email protected]
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