THE MODERN DISTRIBUTION CENTER...THE MODERN DISTRIBUTION CENTER JOHN FRIEL – DISTRIBUTION DIRECTOR...

THE MODERN DISTRIBUTION CENTER

JOHN FRIEL – DISTRIBUTION DIRECTOR

REPUBLIC NATIONAL DISTRIBUTING COMPANY

October 23, 2017

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RNDC AT A GLANCE

ANNUAL VOLUMES

Total Cases Shipped

78,000,000

Bottles Shipped

82,000,000

Total Picks

160,000,000

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ANNUAL DELIVERY INFORMATION

• Over 217,00 Delivery Routes • Making 3.96 million

individual deliveries • Driving 34.5 million miles

• More than 1300 trucks • Over 950 pieces of material

handling equipment (MHE)

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MARKET FOOTPRINT

R N D C

N D C

C O N T R O L

R N D C / Y O U N G S

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RNDC MICHIGAN OPERATIONS

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RNDC OPERATES IN THREE ROLES TODAY IN MICHIGAN

AUTHROIZED DISTRIBUTION AGENT (ADA)

SPIRITS BROKERAGE

WINE DISTRIBUTION

BUSINESS

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MICHIGAN BUSINESSES

Main Distribution Center in

Brownstown, MI

Escanaba, MI

Crossdock

Saginaw, MI Crossdock

Grand Rapids, MI

Hyper Terminal

Traverse City, MI

Crossdock

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MICHIGAN TODAY

FULL CASES

• 2,600,000 from Brownstown DC • 966,000 from Grand Rapids DC • 3,200,000 Total for Michigan • 5.7% of Total RNDC Case Volume

BOTTLES

• 29,600,000 from Brownstown DC • 12,600,000 from Grand Rapids DC • 42,200,000 Total for Michigan • 51% of Total RNDC Bottle Volume

TOTAL CASES

• 5,000,000 from Brownstown DC • 2,200,000 from Grand Rapids DC • 7,200,000 Total for Michigan • 9.2% of Total RNDC Cases Shipped

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ANNUAL VOLUMES - MICHIGAN

• Spirits Bottles • Spirits Full Cases

Orders are placed 48 hours before

delivery

• Wine Full Cases • Wine Bottle Orders

Orders are placed by 5PM, the day before

delivery • All wine orders are packed and merged

• All full case spirit orders are packed and merged.

Trucks are loaded for delivery

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TODAY’S ORDERING CYCLE

BROWNSTOWN PICKING 24 HOURS A DAY FIVE DAYS PER

WEEK THREE SHIFTS

GRAND RAPIDS PICKING 18 HOURS

PER DAY FIVE DAYS PER WEEK

TWO SHIFTS

TOTAL HEADCOUNT PICKING BOTTLES IN

MICHIGAN

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BOTTLE PICKING - LABOR

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SYSTEMS IN USE TODAY

Voice picking application used in Brownstown bottle picking

only

Sortation system integrator (formerly Contech)

Appian Routing systems

How can we reduce the cycle time for customer spirits

orders?

How can we drive greater through put in

our DC?

Are we centrally located for statewide

distribution?

What can we do to reduce out of stocks to

our customers?

How do we uphold our core values of servicing

our internal and external customers?

Does our current distribution system set

us up for long term success?

What technology can we leverage for

productivity improvement?

How are we positioned to handle additional

growth?

Are we delivering best in class service?

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RNDC’S CHALLENGES

LIVONIA, MICHIGAN

MODERN DISTRIBUTION CENTER

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RNDC MICHIGAN DC

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LIVONIA, MICHIGAN

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RNDC MICHIGAN SITE PLAN

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OVERALL FLOOR PLAN

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RNDC MICHIGAN OFFICE PLAN

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OVERALL RACK LAYOUT

RNDC MICHIGAN RACKING TOTALS

NOTE

1. Total number of full pallets = 28,905 (In Rack) 2. Total SKU’S = 26,143 (In Rack) 3. Total number of cases = 1,692,552 (In Rack) 4. Floor storage (Based Upon 3 High Average) = 6,780 5. Total Cases – Floor Storage = 379,680 6. Total Facility Storage as built – 2,072,232

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PICK MODULES

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MODULE #1

“BOTTLE ROOM” / UBER SPIRIT” --- (TWO LEVELS SYSTEM) A. Floor level carton flow (1,344) SKU’S – “Bottle Pick” B. Mezzanine level carton flow (648) SKU’S – “Bottle Pick” C. Mezzanine level static shelving (5 levels) – (9,625) SKU’S –

“Bottle Pick” D. Total SKU’S in Module #1 – (11,617) – “Bottle Pick”

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MODULE #2 & #3

FLOOR LEVEL “BOTTLE PICK” (CARTON FLOW) MEZZANINE LEVELS 2 AND 3 “FULL CASE” (PALLET FLOW) – (THREE LEVEL SYSTEM) A. Floor level carton flow (1,412) SKU’S – “Bottle Pick” B. Mezzanine levels two and three (full pallet pick) (40) SKU’S in “Dedicated Pick” (288) SKU’S in “Cluster Pick” (8) Empty pallet return lanes

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MODULE #4

FLOOR LEVEL “FULL CASE” (CARTON FLOW) MEZZANINE LEVEL 2 “FULL CASE” (PALLET FLOW) LEVEL THREE “FUTURE” – (TWO LEVEL SYSTEM) A. Floor level carton flow (884) SKU’S – “Full Case Picking” B. Mezzanine level 2 (full pallet pick) (20) SKU’S “Dedicated Pick” (144) SKU’S “Cluster Pick” (4) Empty pallet return lanes

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MODULE #5

200ML SPIRITS “BOTTLE PICK” (CARTON FLOW) FLOOR LEVEL ONLY A. (456) SKU’S – “Bottle Pick”

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SUMMARY

SUMMARY OF SKU’S IN MODULES #1, #2, #3, #4 AND #5 A. (5,272) SKU’s “Bottle Pick” – “Carton Flow” B. (9,625) SKU’S “Bottle Pick” – Static Shelving” C. (884) SKU’S “Full Case” – “Carton Flow” D. (100) SKU’S “ Full Case” – Dedicated” E. (720) SKU’S “Full Case” – “Cluster Pick” F. (20) Empty Pallet Return Lanes G. (16,601) Total available SKU’s – “Pick Locations”

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PICKING AND SORTATION SYSTEM

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RNDC LIVONIA CONVEYOR SYSTEM

Four distinct bottle rooms

Six full case pick lines

Four Aisle Shuttle system

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RNDC MICHIGAN SHIPPING SYSTEM

MEDIA1.MP4

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SHUTTLE/BUFFER SYSTEM

Single deep system –Allows higher rack utilization –Ensures smoother inbound processing 4 aisles (future 5th aisle) –15,260 locations, expandable length in future 8 lifts 64 shuttle vehicles total, plus 2 spares 2,400 cases/hour

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SHUTTLE/BUFFER SYSTEM

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SYSTEMS IN USE TOMORROW

Voice picking application used in Brownstown only

Sortation System Integrator

Roadnet Routing Systems

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SYSTEMS IN USE TOMORROW

Shuttle/Buffer System

GreenMile Driver Tracking Technology

Geotab Drive through Gridline for ELD and Driver

Performance

Blue Violet Networks Video

Verification

Manhattan Associates WMS

& LMS 38

SYSTEMS IN USE TOMORROW

WMS, LMS AND SLOTTING

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• MANAGES THE FLOW OF PEOPLE, PRODUCT AND INFORMATION THROUGH THE WAREHOUSE TO EFFICIENTLY AND ACCURATELY SERVICE OUR CUSTOMERS

• PROVIDES REAL TIME INVENTORY VISIBILITY AS PRODUCT MOVES THROUGH THE WAREHOUSE

• ACTS AS AN INFORMATION HUB PROVIDING DATA FOR OTHER APPLICATIONS; LABOR MANAGEMENT, SLOTTING, WAREHOUSE CONTROL SYSTEMS, VOICE PICK, AND HOST INVENTORY LEVELS

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WHAT WMS PROVIDES RNDC

FUNCTIONALITY PROVIDED BY WMS

Inventory Management

Execution

Inventory Consolidation

Putaway

Vintage Management

Cycle Count

Inventory Control

Warehouse Transfers

Inbo

und Shipment

Scheduling Receiving Returns

Material Handling Interfaces RF & Voice Support User Profile & Security Bar Code Compliance (GTIN)

Activity Tracking Task Management

Planning

Cartonization Dynamic Pick Locations

Inventory Allocation

Fulfillment Wave

Management Replenishment

Out

boun

d

Pick/Pack Exception Handling

WMS • Engineered

Standards

• Individuals

•Teams

Labor Management

Time and Attendance

100% Web-based Application

HOW DOES LMS WORK

GOLDEN ZONING SLOT FASTEST MOVING ITEMS IN THE BEST PICKING LEVELS.

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SLOTTING’S LOGIC

medium fastest demand

slowest

golden zone

HOW THIS CHANGES OUR BUSINESS

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ORDER CYCLE TOMORROW

• Spirits Bottles • Spirits Full

Cases

Orders are placed 24 hours before delivery

• Wine Full Cases • Wine Bottle

Orders

Orders are placed by 5PM, the day before

delivery • All orders are packed and merged

Trucks are loaded for delivery

Livonia Distribution

Center

Traverse City

Crossdock

Escanaba Crossdock

Grand Rapids

Crossdock

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NEW DISTRIBUTION MODEL

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2019 OPENING – LIVONIA, MI