EnsuringProductIntegritythroughCost Effective, EfficientandReliableFoodSupply Chain
Vishal Sharma VP Operations RKFoodlandPvt Ltd
30Oct12
www.rkfoodland.com
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AboutRadhakrishnaFoodlandPvtLtd DriversofSupplyChain SupplyChainManagementBenefits SupplyChainChallenges CaseStudiesQSR&Retail
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RadhakrishnaFoodlandPvtLtd (RFPL)
30Oct12
www.rkfoodland.com
AboutRFPL
30+ yearsexperienceinsupplychainbusiness
NationalWholesaleBroadlineDistribution(NWBD) RetailChainofConvenienceStore FoodlandFresh FreshCategory FFV,NonVeg,Bakery Staples
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AboutRFPL
ColdChainExpertise Pioneeredeffortsintransitioninginstitutionalfoodservices industryfromunorganizedtoorganizedsector Managedover30000 peopleatmultiplesitesPanIndia IndustryandSectorExperience Learningbydoing Longtermstrategiccollaborativerelationships PANIndiapresence
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PanIndiapresence
TotalFleetSize 275(owned/leased) TemperatureControlled 137 Reachingoutto66 majorcities Nearly1000 distributionpoints Approx.800 vehiclesoperated Owned/leased Vendormanaged
Foodland TheBrandBehindSuperBrands
SupplyChain Solutions
Warehousing
Transportation &Logistic Services
ValueAdded Services
Project Management
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SomeofOurClients
FMCG
Retail QSR FoodService Pharma
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FMCGSUPPLYCHAINEXPERIENCE
MotherWH Depots
SubContract Unit
Distributors
Factory
Retailers
RawMaterial
Consumers
RETAIL&QSRSUPPLYCHAIN EXPERIENCE
SUPPLIERI SUPPLIERII SUPPLIERIII
DISTRIBUTION CENTRE
STORES
STORES
STORES
RFPL WAREHOUSEMANAGEMENT
Kalamboli DC
Noida DC
RFPL WAREHOUSEMANAGEMENT
Kalamboli DC
Noida DC
FoodlandsWarehouseManagement
ProvideShared/Dedicatedfacilities ManageMultiTemperatureproducts Optimizeefficiency inventorycontrol Safety&SecurityofStockandAssets Forecasting&Scheduling
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FoodlandsTransportManagement
FleetDevelopment&Management Routing&Optimization ShipmentTracking FreightPaymentAccounting Inspection&Reportingonreceipt
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FoodlandsValueAddedServices
InventoryManagement ReverseLogistics CoPacking/PackingDesign RetailSolutions ITImplementationandIntegration PromotionalSupport
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FoodlandsProjectManagement
SolutionDesign TechnologyImplementationandSupport PropertyManagement Material/MachineryProcurement IndustrialRelations
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FoodlandsUnitManagementSystem
MOBILISATION AUDITS
TRAINING
Brand Protection
TECHNOLOGY
PEOPLE
COMMERCIALS
S
REVIEWS
S
E
TOOLS
CUSTOMER DELIGHT
ITC
OPERATIONS
M
Business Continuity
KRA / KPIs
REPORTS
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FoodSupplyChainDrivers
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DriversofSupplyChainPerformance Inventory Facilities
Transportation
Information
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DriversofSupplyChainPerformance
CompetitiveStrategy
SupplyChainStrategy Efficiency Responsiveness
SupplyChainStructure
Inventory
Transportation
Facilities
Information
Drivers
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DriversofSupplyChainPerformance Inventory
RoleofinventoryintheFoodSupplyChain: o Anticipationoffuturedemand
o Productionanddistributioncostsreduction
Economies ofscale
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DriversofSupplyChainPerformance Transportation
RoleoftransportationintheFoodSupplyChain: o Transportationmovestheproduct betweendifferent
stagesinaSupplyChain
Transportationchoicesimpacttheresponsivenessandthe efficiencyoftheSupplyChain
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Transportation Efficiency
ImproveRouting
EnsureFulltruckloads Driveshorter,safer&smarterroutes Reduceoutofrouteexcessmileage
ReduceEmptyMileage
Increasevendorbackhauls Optimizenetworkdesign
DeployInnovativeTechnology
Enhancedispatchingtools Visibilitythroughdashboards
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Transportation Efficiency
TrucksFillProcess:
Adjustpallet&truckcapacities Clubdeliverydaystogether AdjustDeliveryFrequency AdjustTruckconfigurations ImproveSystems Educatelocalrouters
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Transportation Efficiency
PerfectTrucks: TruckTrackerArchitecturewithoutput
KmReport TruckloadabilityReportfromfacilities ExceptionReport Routedeviationfrequency ColdChainCompliance Transporterwisevolume&Value
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Transportation EfficiencyMeasurement
No.ofPERFECTTRUCKsinaMonth
OK
>90% Truck Utilization
Not OK
A PERFECT TRUCK
Truck followed the Route
Trucks AC Worked on the Route
Truck reported back within TAT
Truck delivered without Damage/Shortage
A Truck with all parameters Green is a Perfect Truck
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DriversofSupplyChainPerformance Facilities
RoleofFacilities intheSupplyChain: o Whereinventoryistransformed intoanotherstate
ManufacturingFacility o Whereinventoryisstored beforebeingshipped WarehousingFacility
Choicessuchasnumberoffacilitiesorcapacityimpactthe SupplyChain
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FacilityEfficiency
EnergyEfficiency
o Morenaturallighting o Reduceelectricityconsumption
DieselConsumption o Auto Cut o ReduceOverCapacity o ReduceRentals o PreventiveMaintenance:Filtercleaning, Changing,EngineDecarbonizingetc
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FacilityEfficiency
LaborProductivity
o ImproveFacilityLayout o A,B,Cclassification&arrangement o Seasonalstockarrangement
Automation o PalletizationandHOPTsandBOPTs o Lift/ConveyerBelts
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FoodSafety &QualityManagement
QualityAspect
ColdChainManagement BatchLevelTraceability CertificationProgramme ContinualImprovement Programme Compliances
Benefits
Productintegrity&qualityassuredandthus brandprotection AbsolutestockcontrolthusensuringFEFO, reducingthepickingtime,controlsWET Ensuresthatpeopleareaware&havethe relevantknowledgetodeliver Systematicapproachtowardsmeasurable KPIs/SLAs.Thus,Ensuringcontinuous improvementoftheoverallsystem Ensurescompletebrandprotection&business continuity
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FoodSafety &QualityManagement
QualityAspect
ContingencyPlanning Security&AccessControl
Benefits
Ensuresconsistentsuppliesevenincaseof naturaldisastersorothercrisissituations Preventssabotageandtamperingofproducts andcontrolsWETaswell
ForeignMatterControl& CustomerSafetyandthusprotectsbrand image Hygiene PreventiveMaintenance
Ensuresthattheequipmentsareworkingin thebestconditionandtheoperationsarenot hamperedbybreakdown Verifythelevelofexecutionofprocesses, accuracyofdataandlevelofachievementof targetsandpromotesimprovement
InternalAudits
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AUDITS
External3rd PartyAudits ISOAudits DQMPAudits CSRAudit ClientAudits HalfYearly Yearly Yearly Asperschedule
InternalQualityAudit
Quarterly
DriversofSupplyChainPerformance Information
RoleofInformationintheSupplyChain: o Servesastheconnection betweentheSupplyChains
variousstages(allowscoordination ofactions) o AllowsdailyoperationsofeachstageoftheSupply Chain(ex.:aproductionschedulingsystemneeds information)
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ITasanEnabler
Time TemperatureIndicators eSCMbasedoninternet,GPS&GIS DecisionSupportSystems(DSS) eMist(ElectronicMISforTransportation) KPIDasboards
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InformationTechnology
Platforms RAMCOMarshall SAPR3/ISRetail,BIW EPOS(RetailStore) DRIVE(Transportation) IBMLotusMailSolution GPSsolution
CDMA/GSMlinkedtoSatellite
Since1998 Since2006 Since2006 Since2007 Since2008 Since2007
AdoptedtoClientERPSoftware o PepsiCo (SAP) o Bharti WalMart(MGDS)
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RFPLprovidesClientwithSeamlessand RealTimeSupplyChainVisibility
SeamlessandRealTimeSupplyChainVisibility
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FacilityScorecard KPIs
Bucket KPIs KPIBenchmark BucketScore Benchmark RFPLguarantee Attrition% Costofrecruitment PeopleManagement Costoftraining Manpowercost Voiceofemployeesurvey Inventoryaccuracy Manpowerproductivity Warehouse Putaway/pickingefficiency/accuracy Management Warehousingcost WarehouseShrinkage Freightcost TransportationShrinkage Transportation Management Transportationcost Vehicletypeandutilization Customercomplaints IssueresolutionTAT OrderprocessingTAT CustomerManagement OTIF(MT/TT) Voiceofcustomersurvey CRScompliance Delay/ErrorinMIS MISManagement CompletenessofMIS Productavailability and RangeavailabilityatRD integrity Stocksfreshness
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ConsiderationsforSupplyChainDrivers
Driver Efficiency Responsiveness
Inventory
Costofholding
Availability
Transportation
Consolidation
Speed
Facilities
Consolidation/Dedicated
Proximity/Flexibility
Information
Whatinformationis bestsuitedforeachobjective
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SupplyChainManagement Benefits
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SupplyChainManagementBenefits
ReductionofSCcosts o Nontransportcosts o Transportcosts Lowerinventories Improveddeliverytime Improvementinservicequality
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SupplyChainChampions: Servicevs.Costs
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Source:McKinney&Institutefor supplychainmanagement
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SupplyChainChampions: Costvs.Performance
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Source:McKinney&Institutefor supplychainmanagement
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Apictureisbetterthan1000words! Howmanywordswouldbebetterthan3pictures?
Asupplychainconsistsof
Supplier Manufacturer Distributor Retailer Customer
Upstream
Downstream
aimstoMatchSupplyandDemand, profitablyforproductsandservices achieves SUPPLY SIDE DEMAND SIDE
The right
Product
+ + + + +
The right The right The right The right
The right
Price
Store
Quantity
Customer
Time
Higher
Profits
SupplyChainChallenges
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Challenges
OperationalChallenges QualityInfrastructure SeasonalImbalance Manualloading/unloading Lowefficiencyreferunitsforvehicles Practiceslikeshuttingoffreferunits
StructuralChallenges Realcostofdoingbusiness
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TotalCostofOwnership
Keyareasthatweimpactasserviceproviderandoutcome ifwefailtodeliver
ONTIME
Lossofsaleformaterialnotreachingontime Additionalovertimeofcrewwaitingtounloadingthematerial Stockoutatstores Lossofsaleanddropinfootfall Lossofopportunitytodelightcustomerandimpactonbrandimage Dropinyieldoftheproduct;morewastagesatstores ChancesofstockgettingHOLDatstoresleadingtolossofsale Dropingrossmarginatstoreandlossofincentiveforteams Coulddelaytimeboundpromotionsplannedatstores Opportunitylosstogeneratehighsalesduringfestivals Lossofsaleandimpactduetoinventorycarryingcosts
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INFULL
Qualityofproduct
Promotions
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Casestudies
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CASESTUDY RETAILDC OPERATIONS
DCserves 104Retail stores 40(3refer+ 50(3refer+ 37dry) 47dry) Dedicated Dedicated vehicles vehicles Average Dispatchesper day: 1200 cases DChandles 8000 SKUs Dedicated Teamof477 People
WorldsLargest RetailersDC: 85000sqft
Pickingefficiency 45linesperhr Fillrate 99.5%
Average Productivityof receivingdock: 4casespermin
KPIimprovements last3~5years
DCcontrollablecostas%ofsales
8 6 4 2 0 2008 2009 2010 2011 2012 500 450 400 350 300 250 2010 2011 2012
DCsales(cr)
Auditscore 96(2012)
86(2010) Fillrate 98.7(2012)
Productivity(cpmh)
13 11 9 7 5 2010 2011 2012 120 100 80 60
Noofstorescovered
93.8(2011)
2010
2011
2012
KPI
shrinkage(%)
0.4 0.3 0.2 0.1 2010 2011 2012 98.5 98 97.5 97 96.5
pickingaccuracy(%)
Cost
2010 2011 2012
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ValueadditionbyRKFoodland(2011vs.2012)
DCsalesincreasedby31% Costtosalesreducedby26% Productivityincreasedby40%(10.8vs.7.7) Averagestockinstoreincreasedto94% AverageDCfillratesincreasedto98.7%from93.8% DCdamagesreducedby50% APauditscore 94%;Externalfoodsafetyaudit 96% Foodlandauditscore 89%(QHHSSEMCC) 51%morethroughputthananyothersimilarDConapersqftbasis
Consolidationcenter operations Startedin2012 13vendors(27more inpipeline) 6stores 97%fillrate
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BirthofConsolidationCentre(CC)
HowwillIsupply suchasmall LoadtoRetail Store? Vendorsnotsupplying ontime!!MyShelvesare emptyandIamloosing onSales.HowwillI resolvethisproblem???
Vendors Retailer
WhatisConsolidationCentre?
A Consolidation Centre (CC) is a warehouse dedicated to receiving, staging, and dispatching (or transporting) material to a specific geographic location, development, or district. Its primary mission is to enable combination of discrete shipments into fewer, more efficient deliveries.
HowtheConsolidationCentreworks?
CASESTUDY QSR
Supplychainoperations
InfrastructureCreation
DistributionCenter Refer&DryVehicles Longtermassociation
ValueAddedServices
PurchaseOperations InventoryPlanning OrderManagement HandlingFreshProduce Updatingpricemaster VendorPayments Preparingannualbudget Audits Trainings Handlingpromotionalitems HandlingOPS&MNRitems Newlaunchsupport MonthlyMIS NewStore/routesurveys
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DCOperations
Receiving Storage Stocktransfer/intercompany sale
Transportation
Inbound&Outbound Normal&Dynamicrouting StoreScheduling
CASESTUDY QSR Supplychainoperations
EndtoEndSupplyChainOperations
DemandForecasting,Ordering,warehousing&transport(primary&secondary) Promotion/Eventhandling Supplier&StoreOrderProcessingincludingPayments InventoryManagement
256 stores
121 NE 135 SW
Associated since1996
36 major suppliers
89 Dedicated vehicles Develop& retain talent
WorldsLargest QSR
490SKU
250Food/nonfood 240Ops
13000+ outbound tripsayear
OTIF 87% Fillrate 96%
Lower costs
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Scope ofActivities
DistributionCentre Maintaininventorylevel Racking&storage Handlingequipment Trainedmanpower ISO,DQMP&Statutorycompliance ITsupport Valueaddedservices Delivery Adequatefleet Temperaturecompliance Backupforbreakdown Turnaroundtime ReverseLogistics
AtStores NoStockouts Adequatespace TrainedManpower Zeromachinedowntime
Our objective
100%
Customer Delightat store CustomerService OrderCollection&Processing Storescheduling&routeplanning Reconciliationwithstore Productrecall VendorSupport Sticktoproductionscheduleto honourdeliveryschedules. Maintainadequaterawmaterial inventory Temperaturecompliance Scheduleddowntimefor machines
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ImperativesforBusiness
(ManagementCommitment) BusinessForecast ExpansionNewstores/cities NewSKUlaunch Integratenewvendors&locations Agreedservicelevel Infrastructure(facilitysetup, trucks&equipments) Resourcedeployment Financialcapability/workingcapital Licensesandregistration 56
InventoryPlanning Monitorsalestrend Stockreplenishment TimelyplacePurchaseorders QIP/GRN/SOCPreparation
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QSRSupplyChainEffectiveness Measures
WarehousingManagement
Warehouseproductivity InventoryDaysonhand Value/Quantity Rentalspercase
TransportationManagement
OnTimeDelivery% TruckSpaceUtilization% TransportProductivity FuelEfficiency(Kms /Litre)
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LiveTracking
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Locationwiseinoutreport1
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LogisticsStandards
DQMP(DistributorQualityManagementProcess) OperationsandCustomerRelations(OperationsManual) QualityControl(HACCP/QIP) ColdChainstandards Hygieneregulations Producthandlingstandards Emergencyandcontingencyplans Risk&Crisismanagement Continuousunannouncedinternaland3rd partyauditsforDCsresultin superiorqualityscoresregularly.
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InventoryManagementisakeyenabler
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Synchronizationdeliverssignificantbusiness benefitstoboththecustomerandthesupplychain
Enablers
Onestopshoppingconcept Inventorymanagement Centralfilemanagement Restaurantsimplification
SynchronizingtheperishableSupplyChain
Demandforecasting
Promotional+ContinuousSupply RestaurantandDClevel
SupplyPlanning
RestaurantandDClevel
VisibilityandCollaborationacrossthechain
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Strategyforefficiencies
Cust DC:
integrated
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Powerofonebenefits
Profits Overheads Warehousing Profits Overheads Transportation Profits Overheads People/labor Management Profits Overheads Network Management Profits Overheads IT/MIS Management
COSTSAVINGS
C O S T
D U P L I C A T I O N
Profits
Overheads
Warehousing Transportation People/labour Management Network Management IT/MIS Management
OneManagementTeam Multiskilling Drivesinnovation EliminatesInefficiencies
TRADITIONALSERVICESMODEL
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Thank You
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