Subsistence PRIME VENDOR Southern EUROPE 1 The Challenges of a Special PV Operation

Subsistence PRIME VENDOR Southern EUROPE1

The Challenges of a Special PV

Operation

Subsistence PRIME VENDOR Southern EUROPE

A special operation....

1. History

2. Customers & Organization

3. Daily challenges...and more

4. Operation Odyssey Dawn (ODD)

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History

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+

• 1998- Subsistence Prime Vendor and Transportation support for GFM goods • 2002 / 2003

– Setup logistical pipeline for Class I subsistence for ;• Operation Iraqi Freedom (OIF)• Operation Enduring Freedom (OEF)

– PV in Kuwait and Iraq for OIF/OEF – FF&V & Water BPA for OIF/OEF in Kuwait and Iraq

• 2004- FF&V BPA for Spain & Ships• 2010

– Ebrex Food Services becomes part of the ES-KO Group and can now draw on the Group’s support


Customers

• All military services based in southern Europe

• All vessels (including T-AFS) in ;– Mediterranean and Black Seas (6th fleet AOR)

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Geographical coverage

• PV Southern Europe contract covers; – Italy, Spain, Portugal, The Azores, Greece, Turkey, Kosovo, South of France,

Croatia, Slovenia, FYROM, Romania, Bulgaria

– Coast line of Mediterranean and Black Seas for ship support (6th fleet AOR)

From Lajes AB to Incirlik AB

3,300 miles

Boston to SF 2,700 miles

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By Comparison


CentralisedOrder

processing &

Customer service

Southern Europe-Locations

• 4 Operational platforms : – ITALY - Forli– FYROM – Gevgelija– SPAIN - Alicante– THE AZORES - Isla Terceira

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RP

APAP

RP


Southern EuropeOur daily challenges

• Geographical coverage: Distance, border crossing issues, EU veterinary laws are not uniformly applied throughout Europe

• Customs and EU regulations• All our warehouses are bonded: the goods stored for the US forces

have the “in transit” status and cannot enter the EU market (US troops are our only customers)

• Full-time presence of Vets and regular customs inspections and different rules in different countries (Italy, Spain, Turkey, etc.)

• Small volume adds challenge to attain minimum order quantities imposed by manufacturers

• EFS’ order lead-time is 70-75 days, navy ships place their orders 6 days before the RDD, regular customers 2 days

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….and more…..

• Iraq and Afghanistan wars have dramatically reduced full time presence of Navy Ships in the Mediterranean and Black Seas

• Navy Ships orders are highly unpredictable in terms of timing and volume

• Items ordered varies within the same class of ships and the crew on board

• The impact of Navy Ships’ orders increased over the course of the contract due to reduced volume from land based customers

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…However…

• EFS demonstrated capability to quickly adapt to any new challenge– Operation Iraqi Freedom (OIF)– Operation Enduring Freedom (OEF)

– Operation Odyssey Dawn (ODD)

ONGOING

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Navy Ships/Land weekly orders

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20K

25K

15K

10K

5K

CA

SE

S

Week #( January 2009-April 2011)


Case StudyOperation Odyssey Dawn

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OOD : Operation Odyssey Dawn was the U.S. code name for the US part of the international military operation in Libya to enforce United Nations Security Council Resolution 1973 during the initial period of March 2011 and afterwards under NATO command as Operation Unified Protector (OUP).


Case studyOOD

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• March 2nd - DLA requested EFS to bring its inventory in line to support Navy Sales in the area of $7M per month

• DLA later revised the amount to $3.5M per month

• Following the guideline, EFS placed orders at 3 main suppliers

• In the first week, daily conference calls between DLA Troop Support and Ebrex were set in order to arrange for airlifts, as demand requirements due to Operation Odyssey Dawn are well above previous average demand

FIRST WEEK


• Airlifts were organized and are still ongoing to expedite warehouse replenishment in addition to ocean transportation

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OOD / OUP Support


OOD / OUP Support

• Within 48 hours of surge warning from DLA, we doubled our average pipeline in terms of cases/dollar value

• To date, overall pipeline is approx. $15 million• 500 % surge!!

Typical level prior to OOD

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Week # Week #

DLA surge warning DLA surge warning


OOD / OUP Support

W 8 W 9 W 10 W 11 W 12 W 13 W 14 W 15 W 16 W 17 -

5,000

10,000

15,000

20,000

25,000

All platforms

delivered ordered

February-April 2011


• Length and level of support is unclear

• Required support for Operation Unified Protector could end

abruptly and/or be phased out

• The above results in a considerable financial risk for the

company due to ;

– Huge levels of inventory currently carried to support the

surge

– Shelf lives of the items

– US troops being our only outlet

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OOD / OUP– Where we are going


OOD/ Keys for success

• Timely communication of headcount/menu changes = reduced number of NIS and expired items

• Navy ships orders placed with the longest possible lead-time can guarantee the availability of items with low historical demand

• Special communication line for:– Challenges– Contingencies

– Ensure that both surge/mobilization and demobilization are equally covered in the contract and support is equally provided

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• A solid and well supported company• A 10 years proven record of experience• Know-how in a vast and complicated

geographical area• Have met and dealt with all diverse and

unpredictable arising challenges with exceptional results

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Conclusions


THANK YOU

Documents

Subsistence PRIME VENDOR Southern EUROPE 1 The Challenges of a Special PV Operation