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A Proposal Presentation For
THE EVALUATION COMMITTEE
50 Storrs Street
Concord, New Hampshire
July 24, 2012
Participants
� Craig Bulkley
� George Tsiopras
� Jim Gehr
� Fred Takavitz
Confidential 2
� George Tsiopras
� John Bunnell
� Peter Hastings
� Stephen Judge
� Fred Takavitz
� Scott Lyons
� Steve Hess (tentative)
� Robert Maclellan
� Robert Rujevcan
� Becky Ross
Presentation Objectives
� Confirm our understanding of the NHSLC’s opportunities and challenges
� Present Exel as a strategic resource
� Confirm our understanding of the NHSLC’s opportunities and challenges
� Present Exel as a strategic resource
Confidential 3
� Present Exel as a strategic resource
� Show the strong fit between our organizations
� Review our solution in detail
�Discussion of possible next steps
� Present Exel as a strategic resource
� Show the strong fit between our organizations
� Review our solution in detail
�Discussion of possible next steps
Opportunity for New Hampshire
� Improving net income
�Minimizing risk
� Store renewal
Confidential 4
� Store renewal
� Long term contract
� Control
�Quality of service
Exel as a Strategic Resource
�Maximizing Net Income– What our customers say
– Industry specific experience and knowledge
Certain customer logos redacted
Confidential 5
– Industry specific experience and knowledge
– Continuous improvement and innovation
Exel as a Strategic Resource
�Creating Certainty
– Stability and Scale
Confidential 6
Exel as a Strategic Resource
�Creating Certainty
– Consistent disciplines
o Performance Measurement
o Process Improvement
Project Management
Confidential 7
o Project Management
o Quality Assurance
o Customer Satisfaction
o Employee Engagement
– Depth of management
– The Exel team
Exel as a Strategic Resource
�Providing Flexibility– Approach to IT and real estate
– Every customer’s solution is unique
– Transparent commercial model
Confidential 8
– Transparent commercial model
Exel as a Strategic Resource
�Transparent and open relationship– First Choice – Relationship management
Confidential 9
Exel as a Strategic Resource
�End-to-end supply chain solution: Control 360�End-to-end supply chain solution: Control 360
Integrated expertise:Control 360 rationalizes the supply chain network, improving service and cost. Fifth Channel’s digital ad network and eCommerce platform
Certain commercial information redacted
Confidential 10
network and eCommerce platform create significant revenue growth for states and provinces.
Our services are supported by the expertise of our companies:
Exel’s Solution
�Transparent commercial model
RFP Model:
A fully variable rate structure
Only altered for cost inflation every 30 months
Rates for Suppliers and the NHSLC
Consider
atio
ns
RFP M
odel
Propose
d Model
Protection against cost
overunsYes Yes
Certain commercial information redacted
Confidential 11
Rates for Suppliers and the NHSLC
Proposed Model:
A fixed variable rate structure
NHSLC pays budgeted fixed costs
Variable rate per unit does not change
Annual review of fixed and variable costs
Suppliers solely fund cost of distribution
Inflation adjustments Yes Yes
Volume variances
built-inNo Yes
Ability to alter
servicesRestricted Unrestricted
Cost transparency No Yes
Risk premium built-in
to ratesYes No
Profit sharing Unknown Set by NHSLC
Improvements accrue
to the NHSLCNo Yes
Any risk borne by
SuppliersNo Yes
Exel’s Solution
�Key profile assumptions– Inbound 43% palletized, 45% slip-sheet, 12% floor loaded
– 5,323,967 cases picks
– 591,719 bottle picks
– 0.7 cube per case
– 9 units per case, 65 cases per pallet average
Confidential 12
– 9 units per case, 65 cases per pallet average
– 10,009 SKUs on hand
– 15,229 pallets on hand in year 1 with 4% growth
Exel’s Solution
�Process flow diagram
Certain commercial information redacted
Confidential 13
Exel’s Solution
�Video clips– Receiving
– Put away
– Replenishment
– Picking
– Wrapping
Confidential 14
– Wrapping
– Loading
– Bar coding
– Auditing
– Laser truck
Exel’s Solution
�Organizational Chart
Confidential 15
Exel’s Solution
�Center of gravity
Concord –Center of Gravity (COG)
55 miles
Confidential 16
Seabrook - $147K higher in annual transportation cost than COG
Nashua - $40K higher in annual transportation cost than COG
Merrimack - $28K higher in annual transportation cost than COG
55 miles
27 miles
35 miles
Exel’s Solution
�Facility sizing– Conceptual layout
– Year 5, 203K SF warehouse with 4K SF of office
– 40’ clear height
– 17,770 pallets on hand
– Slotted by velocity to reduce travel:
Confidential 17
– Slotted by velocity to reduce travel:
SKU
Type SKU
CF3/SKU/WK Slot Type
A 1,014 59.10 Single Pallet Deep
B 1,364 8.24 Case Flow
C 3,894 0.96 Hand Stack
D 3,737 - Hand Stack
Total 10,009
Exel’s Solution
�Facility layout
Bottle Pick
Outbound Inbound
hand
Confidential Commercial information
redacted
Confidential 18
Office
Bottle Pick
A SKU – single pallet deep
C SKU-hand
stack
Battery Charger
B SKU-case flow
C SKU-hand
stack
Reserve
B SKU-case flow
Exel’s Solution
�Operations clock
Activity Time of DayReceiving
First Shift
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Confidential 19
Receiving
Receiving Putaway
Order Entry
Transportation Planning
Order Release
Replenishment
Order Assembly
Loading
Shipping
Cycle Count
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Award of Business
Letter of Intent
-get signed agreement to move forward
Assembly of Team (PM & Mgmt)
-engage Project Manager
-transition in General Manager
Phase 1 Phase 2
Exel’s Solution
�Transition Schedule
Certain commercial information redacted
Confidential 20
-transition in General Manager
-set up kick off session
-assign accountability and dates
-identify tenant improvement requirements
-day in the life / validation of design
-discovery and validation of assumptions
-complete detail project plan
Contract
-agree to commercial terms
-contractual agreement & sign off
Facility Set Up
-sign off lease
-complete tennant improvements
-order & install racking
-prep facility for start up (including system set up)
System Planning & Preparation for all BU's
-conduct business requirements review
-complete EDI & set up
-complete testing and review
-conduct day in a life session
-complete & test hardware set up in the facility
System Implementation
-post implementation support
Communications
-Monthly Project Update Meeting
-Readiness Review Meetings
-Quarterly Senior Sponsor Meeting
Recruiting
-extend offers to internal / external candidates
-conduct job fairs - build pipeline
-execute strategy for seeding operation
-on-board management team (Mgrs, Supv's) M S
Training
-on-board hourly associates
-conduct training on Exel operations
-complete and validate SOPs
-conduct training / day in a life for all associates
-test and validate quality program
Receiving
-Inbound Product to prepare for Shipping
Launch
-begin shipping product by business unit
Exel’s Solution
�Mechanization review
1. Conventional solution
– Utilize double pallet jacks and voice units pick locations
Confidential 21
2. Laser truck
– Unmanned laser guided truck automatically moves empty pallet to the picker, along the picker and to staging
– Results in less travel time for the picker
Exel’s Solution
�Mechanization review3. Pick to belt
– Utilize pick towers with conveyor belts in the middle for both case and bottle pick
– Operators walks down aisle and
Confidential 22
– Operators walks down aisle and batch pick cases across order
– Shoe sorter sort cartons to store land where operators palletize cases onto pallets
4. ASRS
– Automated Storage and Retrieval System reduce building footprint by going vertical
– Automated putaway and replenishment
Automated Replenishment
to pick face via SRM
Pick to pallet jack
Triple Deep ASRS
Exel’s Solution
�Mechanization review– Which option produces the lowest cost solution?
– Parameters: All-in Cost per FTE 52,211.55$
All-in Cost per Supervisor 79,500.64$
All-in Cost per Mechanic 57,041.80$
Annual cost per SF 9$
Term (years) 10
Mech Annual Maintenance % 3%
Certain commercial information redacted
Confidential 23
– Laser Truck has the best paybackMech Annual Maintenance % 3%
Conventional (base) Laser Truck Pick to Belt ASRS
Direct FTE 62 54 58 48
Direct Labor CPH 41 47 44 53
Supervisors 5 4 4 3
Mechanics - - 3 3
Space Requirement (SF) 190,000 190,000 268,000 150,000
MHE 660,952$ 660,952$
Mech 2,275,000$ 15,980,000$ 4,700,000$
Rack 1,693,475$ 1,693,475$ 1,440,000$ 6,893,333$
Total CAPEX 2,354,427$ 4,629,427$ 17,420,000$ 11,593,333$
Change over Conventional 2,275,000$ 15,065,573$ 9,238,906$
Annual Labor Cost 3,650,442$ 3,139,928$ 3,492,474$ 2,915,782$
Annual Real Estate Cost 1,710,000$ 1,710,000$ 2,412,000$ 1,350,000$
Mech Maintenance 68,250$ 451,967$ 277,167$
Total Annual Cost 5,360,442$ 4,918,178$ 6,356,441$ 4,542,949$
Change over Conventional (442,264)$ 995,999$ (817,493)$
Simple payback (years) 5.1 No payback 11.3
Exel’s Solution
�Exel’s real estate capabilities
– Integrated Solutionso Full spectrum of services ranging from location assessment to build-to-
suit development to financing
– Expertiseo Proven track record of a dedicated, experienced CRE team
Confidential 24
o Proven track record of a dedicated, experienced CRE team
– Innovationo Thought leadership & creativity to arrive at the most efficient solutions
– Independent & Objectiveo Partnership approach to real estate strategy & solutions
– Results Driveno Goal of lower supply chain costs with mitigated risk
– International Capabilitieso Global real estate locations, services & support provides increased
market leverage
Exel’s Solution
�Procon (general contractor) credentials
Confidential supplier/vendor information
redacted
Confidential 25
Exel’s Solution
�Civil engineer credentials
Confidential supplier/vendor information
redacted
Confidential 26
Exel’s Solution
�Aerial perspective of the site location
Confidential 27
Exel’s Solution
�Site plan
Confidential 28
Exel’s Solution
�Elevation sketch
Confidential 29
Exel’s Solution
�Construction schedule
Certain commercial information redacted
Confidential 30
Exel’s Solution
� Incentives– Town of Bow water connection
Confidential 31
Exel’s Solution
�Exel’s IT capabilities– Staff of over 400 IT professionals
– Portfolio of supply chain execution and planning software applications
o Core competency in solution selection, implementation, ongoing support, operational usage
– Experience with many technology providers
o Executive level relationships with all key providers
o Influence over product design and functional enhancements
Certain supplier / vendor information redacted
Confidential 32
o Influence over product design and functional enhancements
– Experience with multiple concurrent implementations
o Over 50 implementations per year
o Close communication between operational requirements and technology
o Wide variety of integration methods and topologies used
o Have completed start-ups in 60 days or less
– On-going professional IT support
o Support mechanisms already in place:
– Trained site resources
– First and second level support in-house
– Support procedures and escalation processes in place
o Leverage previous infrastructure investments
– World class Technology Centers
o Aggressive approach to information security
– Disaster Recovery agreement with SunGard – testing to begin Q1, 2013
Exel’s Solution
� Strategic Partnerships
• Exel works with leading supply chain execution software providers
Warehouse
Management
Transportation
Certain supplier / vendor logos redacted
Confidential 33
Transportation
Management
Supply Chain Event
Management &
Visibility
Work Force
Management
IT solutions are determined based on the requirements of the customer and the operational solution being deployed to meet these needs.
Integration
Exel’s Solution
� Gartner Magic Quadrant
Confidential 34
Exel’s Solution
� Exel brings a structured approach to:– Warehouse System Configuration
o Concepts of locations, zoning, sequencing rules
– Test scripts and key focus areas for review
– Standard Operating Procedures (SOPs) and Work Instructions (WIs) tailored for Manhattan and RP operations
Confidential 35
(WIs) tailored for Manhattan and RP operations
– Understanding key functional/system alignment for areas of Receiving, Replenishment, Waving, Picking, QC, and Loading
– Training
o Leverage Exel’s experienced Manhattan super-users from other sites to the assist with the start-up
o Access to Exel’s training library and methodologies tailored to Manhattan
– User Certification and Best Practices
– Go-Live Support and Issue Resolution
NORTH AMERICA:
� Exel Direct – 9 Hubs with 11 additional planned
for 2012
� Alberta Gaming and Liquor Commission – 5 sites
� 31 Gifts – 4 sites
o Pick-to-light/Integration to Sterling OMS
� Vente-Privee.com – 1 site
Flash sales ecommerce distribution
Exel’s Solution
� Exel’s Manhattan WMS Installations
Certain customer information redacted
Confidential 36
o ASRS/Voice
� Toys ‘R’ US.com – 6 sites
o KIVA/Pick and Pass Transfer
� Alpargatas – 1 site
o Multi-channel footwear distribution
� Diesel – 2 sites
o Footwear in West Coast and Apparel in East Coast
� Coty – 1 site
o Mechanized/Carousel/pick-to-light
o Flash sales ecommerce distribution
� Thinkgeek.com - 1 site
o Pick Tower with pick and pass transfer
LATAM:
� Nike Brazil and Makro
APAC and EMEA:
� 70 customers
Exel’s Solution
� Track and review employee performance� Quantify lost time costs� Assign activity based costs
� Red Prairie Labor Management System
Certain supplier / vendor information redacted
Confidential 37
� Labor Hours Reporting– Direct Labor
– Indirect Labor
– Units per Hour
– % Travel Time
� Labor Cost Reporting– Average Cost/Labor Hour
– Average Cost/Throughput
� Pick Quality/Errors– Pick Errors/1000
– Chargeable Pick Errors/1000
– Pick Error Percentage
� Operational Measures – Planned vs. Actual Staffing
Comparison
– Expected vs. Actual Indirect
– Expected vs. Actual Performance
– Planned vs. Actual Labor
Exel’s Solution
Features:
� Repository of all order activity
� Backorder Management
� Order Sourcing
Benefits:
� Only shippable orders dropped to WMS
� Ability to perform credit checks
� Web based visibility to order and
� Distributed Order Management (IBM / Sterling)
Confidential 38
� Order Sourcing
� Vendor ASN creation portal
� Order consolidation
Banks
Suppliers
Distributors
Carriers/3PL
Customs
Warehouses
DCs
Call CenterKiosk
Mobile
WebCatalog
Stores
Customers
� Web based visibility to order and inventory status across the network
� Ability to manage by exceptions via queues
Exel’s Solution
� Oracle BI Publisher– Manhattan Baseline Reports
o Inventory Activity, Outbound Orders, Receipt Report, Partial Shipped Orders, Order Activity, Warehouse Damage Report
– Single URL for all users
Certain supplier / vendor information redacted
Confidential 39
– Excellent report formatting, scheduling and distribution capabilities
– Wide range of output options with PDF, HTML, Excel, PPT and RTF
– Custom Report Capability
– Feature/Functionality of the site can be expanded to meet customers needs
– Document Repository
– Content Management (Check In / Check Out Features)
Exel’s Solution
Certain commercial information redacted
Confidential 40
Strong Business Fit Between our Organizations
�Can assist NHSLC with achieving its goals
– Unique commercial model
– Flexible approach
– Commitment to continuous improvement
Confidential 41
– Innovation and best practices
�Our capabilities create certainty
�Exel is willing and able to invest capital
�Relationship management
Next Steps
�NHSLC visit Exel sites
– Edmonton, Alberta
Confidential 42
Appendix
Confidential 43
� Shoppers Drug Mart
– Mini-load, A-frame, goods to man, robotic palletizer
� Coty
– Mini-load
� Shoppers Drug Mart
– Mini-load, A-frame, goods to man, robotic palletizer
� Coty
– Mini-load
Exel’s Capabilities: Automation / Mechanization
Certain customer names redacted
Confidential 44
– Mini-load
� Walmart
– Mechanized sortation systems for case and unit picking
– Mechanized flow-through for fast moving inventory
� Tesco
– ASRS
– Mini-load
� Walmart
– Mechanized sortation systems for case and unit picking
– Mechanized flow-through for fast moving inventory
� Tesco
– ASRS
Exel’s Capabilities: Demand Management
�Examples of Demand Management Services�Examples of Demand Management ServicesCustomer System Interface Demand Planning Replenishment Results
United
Supermarkets
JDA
(Manugistics)
WMS: Biceps/
Triceps
Forecasted demand for a
network of 48 corporate owned
stores (2 banners) in the
Southwest Texas region.
Demand was forecasted for
9,000 grocery, dairy and frozen
food SKU's.
Number of Vendors 500 Service Level (Ending: 98.6%)
4.6% increase within the first two
years
Number of SKU's 9,000 Inventory Dollars
39% reduction within the first two
years
Number of DCs 1
Inventory Days On Hand (Ending: 19
DOH)
40.9% reduction within the first two
years
30% improvement within the first
Certain customer names and vendor / supplier
names redacted
Confidential 45
Daily Suggested Orders 50 Forecast Performance
30% improvement within the first
two years
Alberta Gaming
and Liquor
Commission
JDA
(Manugistics)ERP: JDE
Forecast demand for 5,000 fast
moving liquor SKU's in Western
Canada.Number of Vendors 40
Number of SKU's 400
Number of DCs 2
Inventory Days On Hand (Current:
70 DOH)
15% reduction within the first two
years
Daily Suggested Orders 10 Forecast Performance
30% improvement within the first
two years
The Northwest
Company
JDA
(Manugistics)
WMS: Retek/
Red Prairie
Forecast demand for a network
of 163 grocery stores (2
banners) in Northern Canada.
Demand is forecasted for 7,300
grocery, dairy and frozen food
SKU's.
Number of Vendors 575 Service Level (Current: 97%)
3% increase within the first two
years
Number of SKU's 7,300 Inventory Dollars
12% reduction within the first two
years
Number of DCs 2
Inventory Days On Hand (Current:
28.5 DOH)
20% reduction within the first two
years
Daily Suggested Orders 40 Forecast Performance
19% improvement within the first
two years
7-ElevenAccess based
ToolWMS: Manhattan
Forecasted demand for 320
liquid SKU's for a network of
more than 200 convenience
stores in the Los Angeles area.
Number of Vendors 6 Service Level (Current: 99.8%)
2% increase within the first two
years
Number of SKU's 320 Inventory Dollars
22% reduction within the first two
years
Number of DCs 1
Inventory Days On Hand (Current:
9.4 DOH)
16% reduction within the first two
years
Daily Suggested Orders 10 Forecast Performance
20% improvement within the first
two years
Increasing Revenues: Digital Ad Network
�Currently piloting screens in Alberta and shortly Saskatchewan
�Currently piloting screens in Alberta and shortly Saskatchewan
Confidential 46
Some of Exel’s Customers
Retail
Consumer
Chemical / Energy
Certain customer logos redacted
Confidential 47
Automotive / Industrial
Life Sciences
Technology
Exel Direct
Exel Transportation
Industry Specific Experience and Knowledge
DHL Global Forwarding, our affiliate does an extensive amount of business with boards in Ontario (10 year relationship), New
Operate the warehousing and distribution services for the Alberta Gaming and Liquor Commission, and with our recent 5-year renewal our relationship will span over 20 years.
Certain customer logos and customer
confidential information redacted
Confidential 48
Tradeteam operates a multi-customer supply chain service for brewers, drinks suppliers, and retailers throughout the U.K.
Giorgio Gori holds a greater than 50% share of the global market for the cross-border shipments of wine and spirits
business with boards in Ontario (10 year relationship), New Brunswick, Newfoundland, Nova Scotia, PEI, and Quebec
Distribute spirits in the United States, Argentina, and Korea
Exel’s Solution Exel Development Projects
Customer confidential information redacted
Confidential 49
Exel’s Solution
�Procon (general contractor) credentials
Confidential supplier/vendor information
redacted
Confidential 50
Exel’s Solution
�Procon (general contractor) credentials
Confidential supplier/vendor information
redacted
Confidential 51
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