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Collaborative Supply Chain Discussion of Opportunities & Challenges
2 © ES3, LLC 2011 Proprietary & Confidential
Agenda
• Brenda Hambleton
• Chief Strategy Officer ES3’s Shared Supply
Network
• Walt Lentz (via video)
• Ahold, SVP Supply Chain Giant’s D2S Experience
• Joe Hurley
• Giant Eagle, VP Supply Chain Giant Eagle’s Consolidation
Experience
• Sandy Scott
• ConAgra, Sr. Director of Warehousing ConAgra’s D2S &
Consolidation Experience
3 © ES3, LLC 2011 Proprietary & Confidential
ES3
ES3 is a third-party logistics provider focused on the consumer packaged goods (CPG) industry
ES3 is a leading provider of collaborative warehousing
ES3 services all classes of trade for the CPG industry with facilities across the US
ES3 manages one of the country’s largest CPG transportation networks providing inbound services as well as outbound services to retail distribution centers and stores
ES3 develops and delivers innovative, automated solutions
4 © ES3, LLC 2011 Proprietary & Confidential
Future Value Chain 2020
The Consumer Goods Forum: 400+ manufacturer and retailer participants Capgemni, HP, Microsoft www.futurevaluechain.com
5 © ES3, LLC 2011 Proprietary & Confidential
Future Value Chain 2020
6 © ES3, LLC 2011 Proprietary & Confidential
Why Shared Supply Chain is a Big Deal?
Savings
Service
Sustainability
30%
50%
4%
8 © ES3, LLC 2011 Proprietary & Confidential
9 © ES3, LLC 2011 Proprietary & Confidential
Shared Supply Network Requires Collaboration
Collaboration requires balance
Balance is achieved through:
Shared governance of value creation
Equitable sharing of savings
Common goals
A neutral third-party provides the structure, systems, and security that enables collaboration
10 © ES3, LLC 2011 Proprietary & Confidential
Collaborative Warehousing Benefits
Elimination of a distribution center and leg of transportation saves more than 30% of supply chain costs
Savings of $0.54 to $0.781 are shared with partners
1 Based on A. T. Kearney analysis, July, 2010 and The GMA 2008 Logistics Survey
11 © ES3, LLC 2011 Proprietary & Confidential
Collaborative Warehousing Benefits
Smaller economic order quantity
Faster order delivery cycle
12 © ES3, LLC 2011 Proprietary & Confidential
Collaborative Warehousing Benefits
ES3’s facility is about 35% more efficient than a conventional facility
Elimination of a retail distribution center and transportation leg bring carbon savings to more than 50%
Consumer gets fresher product
13 © ES3, LLC 2011 Proprietary & Confidential
ES3’s Collaborative Solutions
Traditional 3PL Services
• Full service to the entire NE
• Activity-based pricing
• Solutions for all channels
Consolidation • Reduces
transportation costs
• Provides 24 hour service
• Improves fill rates to stores by ~4%
D2S • Reduces costs
• Eliminates OS&D
• Improves assortment & speed to shelf
14 © ES3, LLC 2011 Proprietary & Confidential
ES3’s Collaborative Solutions
All Northeast retailers across all channels
Retailer Experience with D2S (Direct-toStore) Walt Lentz
16 © ES3, LLC 2011 Proprietary & Confidential
Ahold USA – ES3 Services by Banner
Single-manufacturer truckloads from ES3 manufacturers
Daily delivery of multi-manufacturer truckloads through ES3’s Consolidation program
Cross-dock of pallets selected for stores
50% of stores serviced by ES3’s D2S program
100% of stores serviced by ES3’s D2S program
17 © ES3, LLC 2011 Proprietary & Confidential
Walt Lentz Video
Retailer Experience with Consolidation Joe Hurley
19 © ES3, LLC 2011 Proprietary & Confidential
Giant Eagle - Overview
Manufacturer Experience with D2S & Consolidation
Sandy Scott
21 © ES3, LLC 2011 Proprietary & Confidential
ConAgra- Overview