The Strategic Side of Reverse Logistics  

Today’s  Panel:  

•  Marjorie  Porzycki  –  Customer  Service  and  Logis4cs,  Kra7  Foods  Group  

•  Pam  Erb  –  Vice  President,  Supply  Chain,  Wegmans  Food  Markets,  Inc.  

•  Gary  Piwko  –  Director  Remarke4ng  and  Returns  Management,  Kellogg  Company  

•  Eric  Omdahl  –  Lead  Analyst,  Business  Intelligence  &  Analy4cs/Resource  Recovery  –  Unsaleables,  Target,  Inc.  

Moderator:  

•  Steve  Dollase  –  President,  Supply  Chain  Network,  Inmar  

Marjorie  Porzycki  KraA  Foods  Group  

4

Data  has  changed  the  game  for  Kra7  by  providing        line  of  sight  to  what  is  occurring  once  the  product  leaves  our  customers’  warehouses  

MFG  Plant  

Manufacturing  

Raw  and  Pack  Materials  

Farm  Customer  Whse  

KraA    Mixing  Center  

Customer  Mixing  Center  

DistribuKon  

Take  Away  

Retail  Back  Room  

Retail  Shelf  

Retail  

MFG  Plant  

Farm  Customer  Whse  

KraA    Mixing  Center  

Customer  Mixing  Center  

Raw  and  Pack  Materials  

Take  Away  

Retail  Back  Room  

Retail  Shelf  

MFG  Plant  

Farm  Customer  Whse  

KraA    Mixing  Center  

Customer  Mixing  Center  

Visibility  Before  AddiKonal  Data  

End  to  End    Visibility  with  Data–  Currently  we  have  line  of  sight  for  55%  of  KraA  Volume  on  a  Data  Visibility  Program  

Data  and  Technology  

Mfg. Internal Systems X X

Customer Portal X X X X

Customer Provided - (Excel)

X X X X

Customer Data through 3rd Party (RSi)

X X X X

3rd Party Audits X X X X X

Package Quality Receiving Conditions Receiving Conditions Damage

Assessment Damage Assessment

Case Quality Hidden Damage Rotation Good Product

Overall Damage

Package Quality

Case Quality

Available Data: Case Quantities Shipment History Quantities Received Quantities Received Units

Code Dates Code Dates by Order Inventory Positions Sales Dollars

Inventory Positions Case Quantities Days Of Supply Days Of Supply

Inventory Positions Code Dates

KraA’s  Current  uses  of  Down  Stream  Data  

Sales  •  Prevent  Lost  Sales/Distribu4on  •  Effec4ve  Item  Management  •  Drive  Incremental  Displays/Revenue  •  Quickly  Iden4fy  and  Capitalize  Promo  Opportuni4es  

•  Reduce  Store  Out  of  Stocks/Distribu4on  Voids/Iden4fy  Phantom  Inventory/Correct  Store  Out  of  Stocks  

•  Op4mize  New  Item  Execu4on  •  Close  Distribu4on  Voids  •  Shipper/Module  Sales  •  Drive  Incremental  Revenue  via  Co-­‐Marke4ng  Events  

•  Expedite  reflec4on  of  Price  Decline  at  Retail  •  Sell  in  and  Effec4ve    New  Item  Management  •  New  Item  Trial  •  B-­‐Markdown  Reduc4on  

Labor  Efficiency  

•  Efficiently  Manage  Time    

Supply  Chain  

•  Reclaim  Reduc4on  vs.  Prior  Year  

•  Waste  Avoidance  •  Increase  Direct  Plant  Shipments  •  VMI  Order  Sensing  –  •  Forecas4ng  and  Item  Alloca4ons  

HQ  Usage  •  HQ  Finance  Monitoring  Inventory  Shi7s  •  Monthly/QT  End  Repor4ng  •  BU  PS  –  Adhoc:  Inventory  Builds,  New  Items,  Slow  Moving  Inventory,  Code  Life  Velocity  

Examples  of  Using  Data  to  Address  Unsaleables  

POS,  Velocity,  Inventory  PosiKon  •  Unsaleable  reduc4on  at  Delhaize      =  $2M  in  one  year    

– Kra7-­‐Delhaize  collabora4on  – Forecas4ng,  ordering  and  correc4ng  inventory  early  in  promo4on  cycle  

– SKU  ra4onaliza4on  through  velocity  metrics  

– Partnering  with  Acosta  to  rotate  slow  movers  

Supply  Chain  Product  Analysis  •  Inmar  iden4fied  root  causes  of  

damaged  and  expired  product  across  supply  chain,  enabling  Kra7’s  lean  /  six-­‐sigma  improvement  ini4a4ves:  – Flaps  not  closing  – Ink  jet  not  prin4ng  code  dates  dark  enough  

– Packaging  seal  failures  – Transporta4on  and  handling  damage  7  

Pam  Erb  Wegmans  Food  Markets,  Inc.  

Applying  New  Ways  of  Working  Together  (NWWT)  Framework  to  Our  Unsaleables  Opportunity    

Eliminate  Disrup/ons  and  Enable  Growth  

Trading  Partner  Track  (Compe44ve  Advantage)  

Industry  Track  (Collaborate)  

Focus  on  Consumer  

Prepare  People  for  New  World  

Connect  our  Business  

Informa4on  

Share  Supply  Chain  

Best  PracKces/Standards  

DocumentaKon,  EducaKon,  

CommunicaKon  

Guiding  Principles  and  Frameworks  

Share  Results  

Strategic  Issues  between  Trading  

Partners  

Common  Goals,  Common  Measures  

Specific  Measures  &  PrioriKes  

Other  Data  Sharing  

OpportuniKes  

Strategy  Alignment  Joint  Long-­‐term  Plans  Innova4on  (JAG)  

Knowledge,  Skills  &  Capabili4es  Incen4ves  &  Rewards  

Common  Goals  &  Measures  

Informa4on  Sharing*  

EPC  Data  Sync  

Sustainability  Cross  Industry  Integra4on  Integrated  Supply  Chain  

Eliminate Disruptions

Pro

mo

te G

row

th

Collaborative Projects With Great Return!

Aligned Strategies Aligned Resources Butterfly Diamond

Buying Sales IT

Distribution Logistics

Sales Accounting

Marketing

Common Goals and Measures

IT Distribution Logistics Merchandising Accounting Marketing

Joint Business Planning

New  Ways  of  Working  Together  -­‐  Best  PracKces  

Grow  Sales  

(on-­‐shelf,  freshness)  

Unsaleables  Metric  on  Vendor  

Scorecard  

Reverse  LogisKcs  role    “at  the  table”  

Collect  &    Share  Data    

Missing  Expira4on  Date  

Crushed:  Ver4cal  Crease  

Crushed:  Ver4cal  Crease  (MFG)  

Seam  Splits  

Ding  

Torn  (MFG)  

Torn  

Crushed:  Horizontal  Crease  

Illegible  Expira4on  Date  

Appearance:  Package  (MFG)  

Closure:  Broken  

DC  Top  Damage  by  Type  

Analysis  of  factors  driving  DC  damage…  

11  

Manufacturing  Related    

DistribuKon/Handling  Related    

38.55%  

61.45%  

Overall  %  of  Damage  

Example  

Gary  Piwko  Kellogg  Company  

Sales  –  Costs  =  Profit  

Unsaleables  RemarkeKng  

Manufacturer   Customer  

Plant   NSD/DSD   DC   Store   Consumer  

  Generate  revenue  

  Reduce  costs  

  Measure  drivers  and  influence  improvements  

  Improve  trading  partner  relaKonships  

Focus  

Plant   NSD   DSD  

15  

Warehouse   Retail  Store   Reclaim  

Customer  LocaKons  Kellogg  LocaKons  

Performance Based Analysis Using Customized Metrics

• Outbound  Assessments  

•  Inbound  Assessments    

• Hidden  Damage  Assessments  

• DistribuKon  Variables  • Engineering  Support  Services  • GDSN  Measurements  

• Benchmarking  

•  Inbound  Assessments  

• Hidden  Damage  Assessments    

• Retail  Shelf  Assessments    

•  In-­‐Store  PromoKon  &  Display  Audits    

• Product  CondiKon  Audits    • Customer  SaKsfacKon  Audits  

• Benchmarking  

Three  Stages  of  Reverse  LogisKcs  

1.  End  of  Life  Management  

2.  Driving  Accountability  

3.  Full  IntegraKon  

Eric  Omdahl  Target,  Inc.  

Resource Recovery: Key Functions

Mission:    Drive  sustainable  and  responsible  enterprise  solu/ons  that  mi5gate  risk,  minimize  waste  and  maximize  value  for  Target.  

• Reduce  volume  of  damaged,  defecKve  and  expired  product    

Reduce  Unsaleables  

• Op4mize  end-­‐of-­‐life  physical  disposiKon    

Op4mize  Disposi4on  

• Maintain  compliance  for  proper  product  classificaKon,  permiing  ,    and  other  regulated  waste  programs      

Maintain  Compliance  

• Manage  end-­‐of-­‐life  programs  such  as  Salvage,  DonaKons,  Trash,  Recycling,  ESIM,  etc.  

Manage  End-­‐of-­‐Life  Programs  

Unsaleables Reduction: Business Portfolio Mission:  Drive  profitability  through  enterprise  strategies  aimed  at  reducing  the  volume  of  damaged,  defec/ve  and  expired  product  Target  marks  out  of  stock.  

Target and Inmar: E2E Project Summary

Scope  

Opportunity  

RDC   In-­‐Store  Trailer  Load/Unload   Checklane  

•  RDC  Trailer  Load  (Outbound)  

•  Store  Trailer  Unload  

RDC  •  Trailer  Load  

•  Reserve  

Store  •  Unloading  Processes  

•  Conveyor  

•  Replenishment  Processes  •  Custom  block,  stocking,  back-­‐stock  

ExpiraKon  •  Inventory  mgmt  

•  Rota4on  

Damage  •  Training  •  Custom  Block  

•  sales  floor  processes  •  pull  process,  Sales  Plan  

transi4ons,  Check  lanes  

Sales  Plan  •  Inventory  •  Best  Prac4ces  

Check  Lane  •  Product  Opt  

•  Best  Prac4ces  

•  RDC  Receiving  and  Handling  •  RDC  Storage  and  Transport  •  Kaizen  

Receiving  •  Pallet  Build  •  Lean  Damage  

Storage  •  Pallet  Racks  •  GPM’ers  

•  Inventory  &  Assortment  Op4miza4on  

•  Process  &  Handling  Improvements  

•  Packaging  &  Quality  Best  Prac4ces  

RDC  

•  Technology  &  Repor4ng    Enhancement  

•  Opportunity  &  Analy4c  Support  •  Engagement  &  Educa4on  

Panel  Discussion