Transport and Distribution Workshop

5 September 2013 WRAP and Spirit Pub Company

Welcome and Action Plan updates John Sheehy Supply Chain Partnership Advisor

Housekeeping and workshop conduct

When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed

Agenda

13.00 – 13.10 Welcome and introductions

13.10 – 13.20 Context and definitions

13.20 – 13.30 Macro and micro business drivers

13.30 – 13.45 Task 1: Micro-level/business-specific drivers

13.45 – 14.15 Best practice and case Studies

14.15 – 14.45 Task 2: Supply chain opportunities

14.45 – 15.10 Interactive exploration of opportunities and barriers

15.10 – 15.20 Task 3: Action Plans

15.20 – 15.30 Summary and Q&A

Sustainable Logistics Context and useful definitions

Sustainable Logistics

What does it mean in terms of your business?

Let’s quickly share a few quick ideas on a flip chart.

What does this mean in broad terms?

Sustainable Logistics definition

“Sustainable Logistics is an umbrella term for a range of measures that can be used to cut CO2 emissions within companies’ logistics operations. The concept centres on the storage and movement of goods in a way that supports continued economic growth while protecting the environment and delivering a better quality of life for future generations”

Source: Institute of Grocers and Distribution - Nov 2012

Definition examination “Sustainable logistics is an umbrella term for a

range of measures that can be used to cut CO2 emissions within companies’ logistics operations. The concept centres on the storage and movement of goods in a way that supports continued economic growth while protecting the environment and delivering a better

quality of life for future generations”

Sustainability as a Business Management Approach

The 3 Ps

Environmental protection and resource conservation

Economic prosperity and continuity

Social well-being and equity

The three elements of Sustainable Logistics Performance “A sustainable supply chain is one that includes measures of profit and loss as well as social and environmental dimensions. Such a conceptualisation has been referred to as the Triple Bottom Line – Environmental Performance, Social Performance, Economic Performance”

Source: Chartered Institute of Logistics and Transport - Oct 2012

Sustainable Logistics Macro and micro drivers

Macro Drivers

Climate change – the correlation between CO2 emissions and temperature

Fossil fuel availability – soaring demand for oil and diesel leading to higher prices

Road congestion – road traffic exceeding road capacity

Energy use – rising prices and a lack of energy efficiency in the food and beverage industry

Government emissions targets - reducing the UK's greenhouse gas emissions by 34% by 2020 and 80% by 2050

Micro Drivers Centralised distribution – supply chains built around

the bulk movement of product

Stockless supply chains – the move to smaller, more frequent deliveries

Business consolidation – manufacturing efficiency versus transport costs

Developments in product range – a shift from ambient, frozen and national ranges to short shelf life, chilled and local product ranges

Consumer expectations – driving logistics practices and methods of operation

Corporate Social Responsibility – building in self-regulating mechanisms to ensure the business actively complies with the spirit of the law, ethical standards, and societal norms

Task 1: Practical exercise

Micro-drivers

Complete the worksheet

When considering your responses try to consider:

What are the key micro drivers for your business?

Do they relate well to the Triple Bottom Line?

What are the important micro drivers that influence your supply chain interaction with the host organisation?

What can be taken from this Task that can contribute to the development of your Action Log?

Sustainable Logistics Best practices and case studies

Current Sustainable Logistics Improvement

Vehicle developments and technology

Greener Fleets - engine specifications - trailer design - greater capacity vehicles – vehicle telematics

Alternative fuels

Biofuels - Natural Gas - electricity - hybrid vehicles

Operational processes and people

Driver training - improved maintenance – fuel consumption

Changes to ways of working

Delivery and service plans - transport collaboration - logistics system redesign – modal shift - out-of-hours delivery

Transport collaboration: Case study – Sainsbury’s & Nestlé Background

As part of the discussions between Nestle and Sainsbury’s a number of standard backhauls were identified and implemented

A further opportunity was identified for Sainsbury’s fleet based in Maidstone (Kent) to collect bottled water from the Nestle warehouse in Dunkirk and deliver to Nestle in Bardon (Leicestershire)

This required the procurement of 4 box trailers that were capable of meeting the different load restraint and weights required ex Dunkirk, Bardon and Rye Park.

Regular flows of traffic were available and timings could be adjusted to match spare tractor capacity in the off peak times at Maidstone

The opportunity was also developed to facilitate Sainsbury’s to collect volume from a site in Rugby that was transhipped to Maidstone via 3rd party hauliers

Ref: ECR UK Transportation Collaboration Guide

Case study – Sainsbury’s & Nestlé

Revising the Plan

Discussions between Nestle and within Sainsbury’s

identified a much better round trip:-

Day 1 - Maidstone run down to Dunkirk via P&O Ferries at Dover and return same day to Maidstone with Nestle product

Day 2 - Maidstone despatch Nestle product to Bardon, collect Nestle load for delivery to Sainsbury’s Rye Park (Hoddesdon)

Day 2 - Collect Sainsbury’s Tranship load from Rye Park for delivery to Maidstone

Case study – Sainsbury’s & Nestlé

Implementation

Having agreed routes the Sainsbury’s Transport team then had to arrange

the following:-

CMR Insurance cover for France

European breakdown cover

Set up account with Ferry Operator

Obtain Fuel Cards

Communication to all involved

Case study – Sainsbury’s & Nestlé

Results

Initiative has been running for over 1 year

Prompt and open communication between all parties have been essential to success

There were few challenges along the way, mainly with Channel Crossings:- Bad Weather / Operation Stack on the M20 in Kent / The odd Industrial dispute in France

Total round trip over two days, both in off peak times for Maidstone is 760kms, with full for 650kms i.e. 86% of trips

Kilometres saved per annum: Nestle = 21,000 | Sainsbury’s = 43,200 Total = 64,200

Driver training: Case study – Wiseman Dairies SAFED

Background

SAFED (Safe And Fuel Efficient Driving) is a DfT-endorsed driving course, consisting of assessment and training. It aims to improve safety and fuel-efficient driving skills by improving driver awareness and understanding, focusing on factors such as journey planning, gear changing, braking, and engine revving.

Robert Wiseman Dairies is a leading fresh liquid milk company in the UK. The company procures, processes and delivers milk from 8 dairies and 15 distribution depots throughout the UK and has a 900 vehicle fleet. In 2007 Wiseman Dairies trained 56 drivers through the SAFED Programme. This produced such positive business benefit results that the company implemented, and continues to run, its own annual in-house SAFED course. The company has also installed the Isotraks Active Transport Management System with a Driver Style Monitoring module powered using engine telematics data to monitor and reinforce the impacts of best-practice driver training.

Case Study - Wiseman Dairies SAFED Motivations

The drivers for Wiseman Dairies to look at its transport as a route to reducing costs, and increasing environmental performance, were:

A recognition of the increases in fuel costs and potential savings

A corporate commitment to look at environmental performance

A focus on staff satisfaction and driver safety

Results

Average MPG improvement 7%

Reduced average annual mileage per driver to 42,500 miles

Average annual fuel saved per driver 1220 litres

Environmental Improvement for the company – Estimated 920 tonnes of

CO2 and 280 tonnes of carbon per annum

Alternative Fuels: Case Study – 3663 Background

3663 is a leading foodservice wholesaler distributor and supply partner, offering complete catering solutions to over 60,000 customers of all sizes and capabilities across the UK. The company operates:

26 depots, including 3 regional distribution centres (RDCs)

Over 1,025,000 sq. ft. of warehouse storage

765 temperature controlled vehicles making over 48,000 weekly deliveries

Employing 4,300 people

Supplying over 15,000 products, including over 800 Own Brand lines

As part of their wider sustainability agenda the company worked with Convert2Green, the fourth largest bio-fuel producer in the UK, using waste cooking oil to produce bio-fuels for road transport and change the makeup of their vehicle fleet. The intent was to minimise dependency on fossil fuels, and so reduce greenhouse gas emissions and their carbon footprint.

Ref: www.3663.co.uk/waste-oil-recycling

Case Study - 3663 3663 has worked with Convert2Green, and vehicle manufacturer, Scania, to establish the most efficient bio-diesel mix for the 3663 delivery fleet.

Vehicles were replaced/modified on an on-going basis , and now 92% of the fleet is powered by B30 bio-diesel (a mixture of standard diesel and bio-diesel). A key ingredient of the bio-diesel is waste cooking oil, collected from 3663 customers by Convert2Green. 3663’s Waste Oil recycling scheme is accredited to ISO 14064-1 standard.

Results

3663 recycles approximately 2 million litres of waste cooking oil per annum

In the past 4 years, 3663 has used just over 10 million litres of biodiesel

In the past 4 years 3663 has saved over 14,000 tonnes of CO2

by using recycled biodiesel

This has reduced fleet related carbon emissions by 20%.

System Redesign and Collaboration: Case study – Kimberly-Clark, LPR, TDG

Background

Issue here is that there LPR routinely conducts 6 transport movements but only 3 of real value

There is therefore a significant amount of empty running

Case Study - Kimberly-Clark, LPR, TDG

System redesign

An LPR depot is located within Kimberly-Clark DC site at Northfleet site

Site managed and run by TDG

£125k Investment required

Increased processing capability to 1.6m pallets per annum

Vacu-lift sort capability incorporated

Pallet repair facility incorporated

No transport required to deliver pallets to production

Significant reduction in the number of transport legs required

Increased efficiency in Northfleet onsite operations

Increase in pallet availability and quality

Backhauling empty pallets to Kimberly-Clark DC reduces LPR empty running by 7%

LPR saving of 194,000 miles per annum & approx 290,000kgs CO2

Case Study - Kimberly-Clark, LPR, TDG

Sustainable Logistics Identifying your supply chain opportunities

A Road Map to Sustainable Logistics

Step 1—Understand the facts. Perform an assessment of supply chain sustainability in terms of financial, social, and environmental status and needs. Step 2—Develop a vision. Develop an understanding of the entire supply chain (through a mapping exercise) and then talk and collaborate with suppliers and customers, along with stakeholders. A vision statement should then be developed that describes the ultimate goals of a sustainability program and includes a set of goals that will drive actions. Step 3—Create a Road Map. Make sure basic compliance guidelines are being met. Develop a business case to address gaps identified in the sustainability assessment. Select low investment projects, with clear ROI initially. Measure improvements. Extend efforts beyond traditional internal improvements. Examine joint improvement events with key supply chain partners. Finally, consider the triple bottom line in design of new products and initiatives. Step 4—Execute, monitor, review, and change. The process should be looped back around in terms of executing, reviewing, and changing direction (if needed) to continuously gain a better understanding of the impacts of decisions on sustainability.

A Road Map to Sustainable Logistics Sample Vision and Goals

Vision:

Create a sustainability culture that allows employees to improve products and operations to minimize environmental impact while maximizing shareholder return and community benefits.

Goals:

Short Term

Reduce water use by 10% by 2014

Reduce energy use by 10% each year

Ensure 100% of Tier 1 suppliers adopt supplier responsibility statements

Long Term

Redesign products to minimize energy use by the customers

Fully eliminate the use of toxic chemicals in product x by 2020

Task 2: Practical Exercise Opportunities

There are two elements to this task:

Opportunities within your business

Opportunities specifically related to working with The Spirit Group

Sustainable Logistics Possibilities

Current Initiatives in Your Business

Are there any on-going developments to build on?

Vehicle developments and technology

Greener Fleets - engine specifications - trailer design - greater capacity vehicles – vehicle telematics

Alternative fuels

Biofuels - Natural Gas - electricity - hybrid vehicles

Operational processes and people

Driver training - improved maintenance – fuel consumption

Changes to ways of working

Delivery and service plans - transport collaboration - logistics system redesign – modal shift - out-of-hours delivery

Exploration of supply chain opportunities - facilitated discussion This session is intended to stimulate discussion between the delegates and the host company, and give the delegates and host an opportunity to explore opportunities and barriers within the supply chain for

improving the triple bottom line/sustainability.

Task 3: Practical Exercise

Fill out your Action Plan Extension Forms with 5 steps for improvement.

Try to come up with at least 3 actions that you will undertake on your return to work as a result of the workshop.

Action Plan Extension Forms

Any questions?

Come along to the next session to uncover more opportunities....

Forthcoming Spirit Group workshops:

10 Oct 2013 AM, The Nag’s Head – Behaviour change

10 Oct 2013 PM, The Nag’s Head – Water efficiency