London Boroughs Consolidation Centre

(LBCC) Project

Demand Management Webinar – 1st July 2014

Kevin Churchill – Head of Procurement.

London Borough of Camden.

www.lamiloproject.eu/

Agenda.

• Project Vision & History.

• Concept Trial Outputs.

• The Consolidation Centre Solution.

• Target Reduction Metrics.

• Behavioural Change.

• Learning so far.

• Discussion.

• Contact Details.

Project Vision & History. The Vision

• A new method of managing and co-ordinating deliveries of goods in London.

Project History

• Started in Summer 2012 at a London Boroughs ‘Heads of Procurement’ meeting in

Camden.

• Agreement between Camden, Enfield and Waltham Forest to start a multi-Borough

consolidation centre concept trial for ‘everyday’ product lines to test the consolidation

concept in London Boroughs.

• LAMILO funding secured Spring 2013. Mayors Air Quality Fund funding secured

Spring 2013.

• Procurement process started in Summer 2013 to appoint a logistics partner for a 6-9

month project concept trial, which DHL won.

• LBCC opened on 13th January 2014, for 9 months.

• 4 supplier partners, 2 product lines – stationery and cleaning products.

• Approx. £1m of business per annum, across 3 Boroughs.

Concept Trial Outputs.

Outputs

• Business Case – that summarises results and makes case for long term solution.

• Procurement exercise for long term solution – subject to Business Case approval.

Environmental Operational

Financial

Why Consolidate? – the benefits are…

The LBCC Consolidation Centre.

Office Depot Banner

Greenham Trading

LBCC

Camden End Users

Enfield End Users

Waltham Forest End Users

Supply Chain Model.

Janitorial Express

The Infrastructure. Operating Facility Vehicles

• Two 7.5t Euro 5 emissions standard

• 2 vehicles in use Mon-Fri.

• Deliveries occur between 0930 -1600.

• Serves 300 council buildings across 3

London Boroughs.

• 143km2 area to be covered.

• DHL are a bronze member of the ‘Fleet

Operators Recognition Scheme’.

Handled 3000 parcels so far.

Ideally located near strategic road network.

2,000sq ft warehouse space.

Suppliers deliver into the LBCC at pre-agreed

time slots between 0630-0800hrs.

15-20min turnaround time for suppliers’ vehicles.

Goods are delivered to council buildings as per

the operational plan.

Target Reduction Metrics.

Summary Emmisions Reduction

No of

Vehicle

Trips

KMCO2

(g)

NOX

(g)

PM

(g)

No of

Vehicle

Trips

KMCO2

(g)

NOX

(g)

PM

(g)

60 2880 2022 873 49 3120 149735 105145 45408 2567

26 987 731 285 5 1352 51345 37995 14807 261

57% 66% 64% 67% 90% 57% 66% 64% 67% 90%% Reduction LBCC Model

Current Supply Chain Model

New Supply Chain Model

Weekly Annual

Behavioural Change.

Who?

• Procurement Staff - Procurement Policy led. Challenge Demand. Change tender

documents.

• Ordering Staff - Challenge Demand. Work with less product, fewer deliveries

& plan ahead for remainder.

• All Staff - Challenge Demand. Reduce use of product. Personal items

to be delivered at home.

• Suppliers - Offer pricing transparency & more del. Choices e.g. to

LBCC.

• Logistics Companies - Support local & regional transport strategies.

What we would like them to do?

Learning so far… Financial/Savings

• Consolidation must Save or at least

Break-Even.

• Savings expected to come from primarily

Delivery Time savings by suppliers.

• Delivery costs not transparent to buyers.

• Suppliers ‘delivery to desk’ is high cost.

• Suppliers differentiate on a same day or

next day delivery service and build in

margin.

• Suppliers are reluctant to pass on

logistics savings mid-contract.

• Cost reduction is expected for new

contracts.

Environmental

• Environmental benefits are achievable.

• Consolidation model likely to have a greater overall positive impact than converting existing fleet to zero emissions.

• Collecting from suppliers on return leg and/or back-hauling waste has positive impact.

• Need to maximise the drop size of loads inbound and outbound.

• Electric vehicles are not available on a short term hire basis.

Learning so far…cont 1. Operational/Customer Experience.

• Positive experience of consolidation.

• Now 1 delivery not 20, per day.

• Need good understanding & clarity of the current delivery arrangements.

• Need to understand parcel labelling requirements – for consolidation.

• Need to understand returns process and how this works for each supplier – impact on ordering systems.

• Need to understand customer issues process – how does this work for each supplier.

• Emergency deliveries are not needed if stock & orders are planned ahead.

• Councils do not always keep an operational database of site information.

Procurement Process.

• Consolidation model should be

procurement policy-led and in tender

documents.

• Market development needed – only 2

bidders.

• Have a bespoke, good quality specification

like LBCC.

• Get the contract right - resolve issues on

title, insurance, liability. Council standard

terms need bespoking.

• A number of council supply chains fall

outside of procurement due to being of

relatively low value.

Learning so far…cont 2. Communications

• Staff behaviour change is critically

important – put time into

comms/messaging to get understanding &

behaviour change to stick.

• Use a number of comms channels

(intranet, targeted emails, phone calls,

work-shops).

• Some staff may perceive a consolidation

centre will lead to delays – be ready.

• Don’t try to change too much process at

the same time (e.g. min order

volumes/values).

Other

• ‘Logistics’ does not have a strong

presence with local government

compared to procurement.

• Suppliers are reluctant to forego the

control associated with performing their

own logistics & reducing delivery

frequency.

• Council business systems do not cater

well for logistics/operations information.

• Collaboration with other partners and

using an existing third party facility is

working well.

• The End.

• Thank you.

• Feedback/Comments/Discussion?

Contact Details

• Kevin Churchill

• Head of Procurement – London Borough of Camden

• T: + 44 (0) 207 974 4342.

• E: kevin.churchill@camden.gov.uk

• W: www.lamiloproject.eu/

• Supporting Information.

Inside the LBCC • Over 3000 orders consolidated by DHL.

• Focus on integrating more volume into the centre.

• A no. of different product categories have been consolidated/stored so far….inc: library books,

public health docs, bulk paper.

Mailroom and Libraries have started

using the interim storage solution……..

Distribution of Public Health Packs to

68 Pharmacies in Camden….

Boxes located in the

Underground car-park

Labelled, moved

to the new

holding area and

collected by DHL

Delivered by DHL over

a course of a few days

LBCC operated by DHL in Edmonton

Multi-Borough, multi-supplier

Transport

Diagram

NO OF LBCC

BOOKING IN

SLOTS REQD DAY

Office 06:30

Depot

Bunzl

Greenham

17:00 (Day 1

for Day 2) Banner 07:00

Janitorial

Express 07:30 NO OF 7.5 TON

VEHICLE TRIPS DAY

LB CAMDEN

BUILDINGS

LB ENFIELD

BUILDINGS

LB WFOREST

BUILDINGS

4 Monday 2 Monday 1 1

2 Tuesday 2 Tuesday 2

4 Wednesday 2 Wednesday 1 1

2 Thursday 2 Thursday 2

4 Friday 2 Friday 1 1

0 Saturday 0 Saturday

OUTBOUND VEHICLES FROM LBCC TO LB BUILDINGS

ES

TIM

AT

ED

LO

AD

SIZ

E/N

O O

F O

RD

ER

S

LARGE

ES

TIM

AT

ED

VE

HIC

LE

UT

ILIS

AT

ION

FULL 80-100%

LARGE/MEDIUM HIGH 60-80%

MEDIUM

INBOUND VEHICLES INTO LBCC

MEDIUM 50-60%

MEDIUM/SMALL MEDIUM/LOW 30-50%

Deliveries - Operational Plan

Site Address:

LBCC c/o Heal’s Distribution Centre

10 Ardra Road

Edmonton

N9 0BD

The Service