Think outside the Box

Presented by:

Jonas Franceschina

Sourcing Agent IntercoopHG

Landi Switzerland• Landi Switzerland is a Part of the FENACO Group

• 300 Stores all over Switzerland

• 3rd biggest Retail Chain in Switzerland

• Average Growth Rate over past 5 years 12%

• Turn Over 2010 1Billion SFR 1.15Billion USD

• Product Groups: Pottery, Garden Furniture, Tools, Pet Food, Beverages (Soft Drinks, Juice, Wine, Beer), Textile, Bags, Agricultural Products, Household Products, Electronics

• Buying Slogan Quality, Price, Assortment

Vietnam vs. China 2005

How to Become Competitive in Vietnam vs China FOB Prieces?

• Price Efficient Operation

• Only Staff for Core Tasks (Sourcing/Buying)

• Basic Admin Outsourcing to Supplier

• Create Added Value to the Product

• Improve Supply Chain Efficiency to Products

• Use Labor Cost Advantage of Vietnam to Reduce Cost for Oversea Clients

Logistic/ Cross Docking

Loading Truck Step 5

Unload Container 1

Consolidation Step 4

Ware House Out Step 3

Ware House In Step 2Unload Container/Consolidation 1

Loading Truck Step 2

Cross Docking based on Self

Selling Display’s

Conventional Container Load,

Palette or Carton Boxes

(Container Load without Palette 1

Additional Step)

Delivery to Retail Store Step 6Delivery to Retail Store Step 3

Unloading and

Placement in

Shelfs

Step 4

Sale of Goods

Step 5

Piece by Piece

hand picked store

placement of

Product Step 8

Unloading Step 7

Sale of Goods

Step 9

Cross Docking in Numbers

Conventional Product Handling

9 Product Rotations

5 to 10 Days of Storage

Total added logistic and handling cost

per single Product:

30%

Cross Docking

5 Product Rotations

No Warehouse Space Required

Total added logistic and handling cost

per single Product:

20.39%

Cross Docking Cost Advantage 9.61%

9.61% Cost Advantage

Customer

Trader/Sourcing

Agent

• Landi reduces the retail prices

• Trader/Agent can add 1-2% more Margin

Consequence

• Landi increases in sales

• Trader/Agent: Order volumes increase

Outlook

• Landi new market positioning

• Trader/Agent: Bigger Volumes= Lower FOB prices= Profit increase

Reliability Bonus for Vietnam?

Flexible in terms of order volumes

Flexible in product development

ETD plus minus 1 Week

Communication in English possible with most of

Companies

For Europe, GSM Form import tax advantages

Good cooperation between buyer and Supplier

Vietnam Sourcing= Direct Development Aid?

• Small Vietnam Companies Good Products

• Most Cases, Sub Contractors of well known Export Companies (Therefore aware of the Quality Standards)

• However Lack of Export Procedure

• Time Intensive for the first Few orders, also Acting as Consulting to Support the Supplier

• Long lasting Cooperation, Price Advantage

• You always will have the best Possible Support

• Even in Times of low Capacities They will make Capacities available for you

Direct Supplier to Retail Store

Poly Rattan Furniture 2010:

22 Furniture sets in one 20 foot

Container

1 Set 3 Boxes

The biggest 20 Landi shops

able to sell 22 Sets

Decision:

Full Container direct from

arrival port Switzerland to the

Shop

No Transit over Landi

Logistic Hub!!!!

Logistic/ Direct Containers

Loading Truck Step 5

Unload Container 1

Consolidation Step 4

Ware House Out Step 3

Ware House In Step 2Unload Container/Consolidation 1

Loading Truck Step 2

Cross Docking based on Self

Selling Display’s

Conventional Container Load,

Palette or Carton Boxes

(Container Load without Palette 1

Additional Step)

Delivery to Retail Store Step 1Delivery to Retail Store Step 1

Unload and

placement to Store

Step 2

Sale of Goods Step 3

Direct Containers in Numbers

Conventional Supply Chain

9 Product Rotations

5 to 10 Days of Storagee Space

Total added logistic and handling cost

per Product:

30%

Direct Container

3 Product Rotations (Only Store Handling)

No Warehouse Space Required

No Distribution Cost

Total added logistic and handling cost per

single Product:

12.11%

Direct Container Cost Advantage 17.89%

Direct Containers Solution in NumbersSteps Conventional Cross Docking Direct Containers

Sea Freight $4,000.00 $4,000.00 $4,000.00

Demurrage $1,000.00 $1,000.00 $1,000.00

Import declaration $75.00 $75.00 $75.00

Container trucking $500.00 $500.00 $700.00

Container unloading $150.00 $150.00

Ware house in $135.00

Ware house space (average 7 days) $350.00

Ware house out $135.00

Consolidation $135.00

Distribution to store $700.00 $700.00

Unloading $270.00 $270.00 $270.00

Store in $270.00 $270.00 $270.00

Store Sales $135.00 $135.00 $135.00

Total Cost $7,855.00 $7,100.00 $6,450.00

Cost advantage in % 9.61% 17.89%

Maximize Container Volume

• Did you know that in some cases just changes of product dimension, below 1% can result in 20% more container volume?

• Optimized utilization of Container Capacity helps to Reduce Cost for you and your Clients

Product Success Story

• Fire Basket

• Development of flat packed version

• Full version 456pcs in one 20 foot Container

• Flat packed version 2’700pcs in one 20 foot Container

Personal Opinions/Impressions• Selection of Freight Forwarder

• Smaller Companies more flexible

• Direct Phone Number to the Top Management

• 24/7 Available for you

• Better to be Number 1 of a Smaller Company then just a number in a Bigger Company

• Closer Cooperation, Smaller Company can Adjust easier to your Requirements

• Closer and more Efficient Cooperation

• Mutual Agreement of processes, rather having to Adjust to the Service Providers Structure!

Thank you!

Q&A