visibility in the supply chain - consumer brands association
TRANSCRIPT
Visibility in the Supply
Chain
Presenters
Andrew Lam – Vice President of Global Planning has been with the company for
fourteen years working in multiple areas of the supply chain ranging from
procurement, sourcing, deployment, planning, and new system implementations.
Jill Donoghue - Vice President of Logistics has been with the company for twelve
years. Prior to Bumble Bee, Jill held various supply chain roles at Keebler Foods,
Pechiney Plastic Packaging and Kraft Foods, all based in Chicago.
Ruby Popp - Vice President of Sales Support Services has been with the company
for fifteen years. Prior to Bumble Bee, Ruby worked in new product development
for Hanson Beverage Company and Don Miguel Mexican Foods, both in Southern
California.
Agenda
Overview of Bumble Bee Seafoods
Supply Chain Optimization
Global Transportation Management Solution (TMS)
Vendor Managed Inventory (VMI)
Overview of Bumble Bee Seafoods
North America’s largest branded seafood company with #1 or #2 position in virtually
every segment of U.S. and Canadian shelf stable seafood
Bumble Bee was originally founded in 1899
We are a now a private, domestically owned company and one of the last North
American processors of tuna, sardines and clams
We process more than 60% of our requirements and maintain strategic co-pack
relationships in 20 countries
Over $1B in annual sales
Improving our consumers’ quality of life by providing sustainable, nutritious, convenient and affordable seafood products
CORPORATE VISION
Supply Chain Optimization Project
Supply Chain Optimization Project
Real-time visibility to supply plan and procurement
Activate Supply Network Planning in APO
– DRP (Distribution Resource Planning)
– MRP (Manufacturing Resource Planning)
– Rough-Cut Capacity Planning
– Deployment / Transport Load Builder
Formalization of information = One source of data
Increased efficiency
Enhanced understanding of supply drivers
Focus on optimizing and reducing safety stock
Before Supply Chain Project
After Supply Chain Project
Rounds Loins Loins Brites Finished Goods
Finished Goods
Loining Facility Data Feeds
SAP ECC Material Requirements Planning
SAP APO Supply Network Planning
Loining Facility Manufacturing Plants DC’s
Rescheduling
Data Load
Reqmts
Deploy
Reqmts Reqmts Reqmts
Deploy
Manual Adjustments
Sale
s D
em
and
Data and System Flow Example
Safety Stock Methodology
Data Drivers
= (Safety Factor) x (Uncertainty Factor) x (Lead Time)
Safety Stock Element Bumble Bee Data Element
Service Level
(Product Availability Target) 98.5%
Demand Variability
(Forecast Accuracy)
Forecast Accuracy
Item-Location MAPE
Supply Variability
(On-time production, and
delivery of finished goods)
Produced – Schedule Adherence
Purchased – On Time Deliveries
Lead Time
(Supplier, manufacturing ,
and delivery lead time)
Production Frequency Interval
Production Leadtime
Transit Lead Time
Safety Factor
Uncertainty Factor
Lead Time
Safety Stock
𝑁𝑂𝑅𝑀𝑆𝐼𝑁𝑉 𝐶𝑦𝑐𝑙𝑒 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐿𝑒𝑣𝑒𝑙 × 𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡 𝑀𝑎𝑝𝑒 2 + (𝑆𝑢𝑝𝑝𝑙𝑦 𝑉𝑎𝑟𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦)2 × 𝑇𝑜𝑡𝑎𝑙 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒
Variable Reduction Bumble Bee
Inventory Reduction
Service Level (In terms of Fill Rate)
1% 10-15%
Demand Variability 10% 5%
Supply Variability 10% 1%
Variable Sensitivity
98.0%
98.5%
99.0%
99.5%
100.0%
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
$55,000,000
$60,000,000
$65,000,000
Inventory Fill Rate
69 Days
44 Days
Safety Stock Reduction Example
Global TMS
International Freight – Situation
All crucial aspects of Import orders were manual
Critical dates in SAP were not always accurate
– Entered manually by variety of people and process was not consistent
– Updates were not always accurate or timely
– No opportunity to identify and address obstacles to on-time delivery
Purchase Orders were managed via e-mail and telephone
– Vendors did not consistently notify BB when delays occurred
– Notifications were not always timely
– No database for Vendor KPI reporting
– Uncertainty surrounding delivery led to increased inventory
– Employees were manually closing POs in SAP
Regulatory compliance was not system supported
– Missing or delayed documents were not managed pro-actively
– Shipments were delayed as a result of late or incomplete documentation
– Documents sent via e-mail and courier and retained by multiple parties
Carrier Management
– Carrier rates and contracts were managed in spreadsheets
– Tracking was done via multiple carrier websites
– No database for Carrier KPI reporting
– No mechanism for ensuring Routing Guide compliance
Response: Implement an International TMS solution
Better quality information equates to more efficient management,
which leads to cost reduction.
International Freight – Situation
Global TMS Review RFP Process
11 Participants
Variety of solution types (SaaS and License Install)
CargoSmart Selected
CargoSmart provides global shipment management software solutions
that enable shippers, logistics service providers, and ocean carriers to
improve planning and on-time deliveries
Connected to over 30 ocean carriers, CargoSmart leverages big data
sources and a cloud-based platform to offer sailing schedules, visibility,
documentation, contract management, compliance, and benchmarking
solutions
Launched in 2000, CargoSmart helps over 130,000 transportation and
logistics professionals to increase delivery reliability, lower transportation
costs, and streamline operations
Phase 1 – Booking, visibility and document management
Beta Partnered with Two Suppliers in December 2013
Methodically rolled out remaining packers Jan – Dec 2014
– Packers with similar implementation characteristics identified and scheduled accordingly
Intense auditing of data from multiple sources
– Packers, Ocean Carriers, Brokers, Dray Carriers, etc.
Standardized Packer Operating Environment
Ongoing Packer Training
Phase 2 – PO Management and KPI reporting starting in 2015
Phased Implementation
Global TMS Solution - Benefits
Supports goals and data requirements of Supply Chain
Optimization project
– Improved visibility and accuracy of dates in SAP
– Inventory reduction through reliable and consistent milestone management
Manual processes become automated and timely
– Closure of SAP POs is automated via EDI
– SAP dates updated via EDI for critical milestones, from PO creation
through final delivery
– Packer compliance to routing guides enforced at time of booking
International Freight Savings
– Routing guide compliance – optimal carrier selection
– Reduction in container demurrage
– ISF filing brought in house
Global TMS Solution - Benefits
Supports regulatory compliance
– Single repository for documentation
– Centralization of regulatory control
– Standardization of processes
– Packers notified via system to upload missing documents
– Protection from costly penalties
Management by exception
Improved Reporting
– KPI reporting for Vendors
– KPI reporting for Carriers
– Centralized database of rates
– Transit analysis by lane
Centralized Global Visibility to Movement of Product
Complex playing field: International Logistics
– Multitude of providers and hand offs (packer, carrier, agent,
broker, dray carrier)
– Lower levels of standardization than experienced domestically
Complex implementation environment
– Languages, time zone, change management, unique packer
operating environment (business drive, cultural)
Data inconsistent from carrier to carrier
While the Phased rollout was required to protect the business,
timing of savings were delayed
Learnings
VMI
Why VMI? VMI is a means of optimizing end-to-end Supply Chain and Sales
performance by increasing collaboration with customers through shared data.
Our goal is to align business objectives and optimize Supply Chain
operations for both Bumble Bee and its strategic partners.
Bumble Bee is responsible for maintaining the customer’s inventory levels
and for generating the customer’s purchase orders guided by mutually
agreed upon objectives and measures.
Bumble Bee receives data electronically that advises a customer’s sales and
stock levels allowing us to view every item carried and potentially true point-
of-sale data.
Detailed data of the entire supply chain of both partners allows for
collaboration at multiple levels in order to drive the success of the brand.
Opportunities for Bumble Bee to have traditional collaboration with customers
is limited with priority going to larger partners. VMI is the way for Bumble Bee
to open the door to partnerships that will be beneficial for all.
Current Situation
Limited collaboration
Little to no visibility of customer’s inventory resulting in
additional safety stock required
Limited control over customer’s buying behavior
– Customers “rush” orders for promotional events impacting future
sales and promotions
– Warehousing and transportation services are at the customer’s
request and not optimized
Rebills and lump sums created to capture funding missed
during promotional periods resulting in financial hits that are in
future months rather than the period the activity actually took
place
Response: Implement VMI with strategic partners
VMI Benefits Collaboration/Communication
– Preferred Vendor/Strategic Partner status
– Improves forecasting for both partners
– Streamlines new item intros / exit of items
– Improves promotion execution
– Aligns with customer’s scorecard to achieve KPI targets
– Increases sales
Inventory Control – Prevents out of stocks
– Improves fill rate
– Improves turns
– Reduces periods of supply for both partners
– Improves on-time delivery
Order Smoothing – Case picking to full layers or pallets to expedite the shipping/receiving process
– Load leveling opportunities/Smooth dock activity
– Co-loading collaboration opportunities
– Improves order/load planning for promotions
– Potential opportunity to shorten order cycle times
VMI Review Bumble Bee implemented SAP in 2008 which streamlined
operations and provided the platform for a successful VMI
program
Bumble Bee conducted extensive research into VMI solutions
– Collaborated with other CPG companies
– RFPs with four of the top VMI software suppliers
– Variety of solution types (SaaS and License Install)
Bumble Bee selected Datalliance
– Leading provider of VMI and related services
– Manages more SKUs/locations than any other independent VMI
system in the world
– No software installed, fully hosted SaaS
– Solution is always current with three updates per year
– All Customer Care support services are included
Implementation Build VMI solution with Fred’s, Inc.
– Dollar store customer that is favorable to VMI
– Customer is focused on best practices and continuous
improvement initiatives
– Customer willing to “train” new suppliers
– Provides Bumble Bee team the opportunity to learn VMI in a
controlled environment Datalliance software
Customer KPI review and reporting
Buyer weekly conference calls
Process flow for internal departments
Next Steps
– Build on success of pilot
– Focus on strategic partnerships
Learnings Clean Data
– Item Master synchronization between parties
– TI x HI accuracy for proper ordering patterns
Forecasting – Customer On Hand/On Order inventory status
– Customer’s required safety stock days
– Base vs. Event (promotional) sales
– Customer’s system forecast vs Bumble Bee’s
Lead-Time Components – Customer’s lead-time from PO generation to PO receipt into warehouse
– Customer appointment scheduling days
– Transit time from Bumble Bee warehouse to customer warehouse
– Customer’s fiscal calendar
People – Commitment throughout your organization
– Experienced people are key to success
Conclusion
Visibility in the Supply Chain
– Supply Chain Optimization Project
– Global TMS
– VMI
Visibility in the Supply Chain leads to faster data, faster
product movement which = Customer Satisfaction + Cost
Effectiveness
Thank You!
Andrew Lam, Vice President Global Planning
Jill Donoghue, Vice President Logistics
Ruby Popp, Vice President Sales Support Services