turblog thtuesday 20 september, 2011 - inovamais.pt · turblog – thtuesday 20 september, 2011 ......

CONFIDENTIAL Site visit presentation – March 2011 1

DHL Supply Chain (Fashion) - Consolidation Operations

TURBLOG – Tuesday 20th September, 2011

Robin Moore - Operations Director Airports and Consolidation


Introduction – concept

Overview – where we currently operate in UK

Case studies

Heathrow Airport

Bristol and Bath (comparison)

Lessons

Format


Uncontrolled Urban Logistics

LGV Part Loaded

Van Part Loaded


Consolidated Urban Logistics

LGV Part Loaded

Van Part Loaded

DHL LGV Fully Loaded

Supermarket

Hospital Shopping Mall

Convenience

Store


Urban Consolidation Centres

A logistics facility that is situated in relatively close proximity to the

geographic area that it serves, be that a city centre, entire town, or a

specific site, from which consolidated deliveries are carried out within

that area. A range of other value-adding services can also be provided

at the Consolidation Centre.

(Urban Freight Consolidation Centres final report)


Current Consolidation Operations

STRATFORD CITY

http://image.guardian.co.uk/sys-images/Arts/Arts_/Pictures/2007/06/05/olympics460.jpg


Heathrow Case Study

Heathrow airport used to receive >49,000 supplier deliveries every year to Terminals 1- 4


Airport Orientation


Airport Vehicle Movements

Perimeter roads*: data shows average movements of:

day: c.114k

month: c. 3.4m

year: c. 41m

Northern Perimeter Road alone: circa 10.9m

Central Terminal Area movements: c. 16.7m *

Freight: Transport for London estimates 2 million movements per annum

Notes:

• * Prior to T2 Closure


Heathrow Airport’s Development Plan

T3

T4

T5 T1

T5B T5C

Consolidation is a prerequisite to the development

of the Eastern and Western campus and all future

planning permissions

T2


Heathrow’s Consolidation Centre (HCC)

HCC


HCC History

2000 – Pilot study from Excel site in Ashford.

April 2001 – Exel awarded an initial 5 year, open book contract for a

25,000 ft2 site at Hatton Cross.

January 2005 – site changes location to ex-MOD building, near

Stockley Park.

April 2006 – contract extended to cover 2nd site move to ProLogis Park.

April 2007 – a second, 3-year contract awarded to DESC, following

tender.

March 2008 – Terminal 5 was added to this service.

September 2009 – a 2.5 year contract extension, up to October 2012.


HCC Development Timeline

HCC cage volumes

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The HCC moves to the new site, complete with

the Restricted Zone

DFT directed that all airside deliveries must come through the HCC

WH Smith, Harrods, Boots & Dixons come

on board

T5 opens 27 March 2008

Summer Peak 2009

2010: 472,391 (1.5% up on 2009)

2009: 465,065 cages (23% up on 2008’s (379,517))

T2 Closes


HCC Customers

BAA has 146 trading companies with 323 outlets spanning four terminals.

The HCC is configured to manage a wide range of products, from industrial

spares through to clothes and also chilled or frozen food:

FASHION CATERING

BOOKS GIFTS &

ACCESSORIES

MUSIC

http://www.burberry.com/UK/Home/main.shtml


Terminal Operation

Security &

Screening

Last mile

logistics

Delivery to

store

Employer of Choice


T5 Wellington Road

DHL run operation to control access to and operation of T5 unloading

bays at Wellington Road

DHL staff manage overall operation, bookings, banking and unloading;

access control sub-contracted to Reliance Security

Contract created against estimated requirement and not competed

Contract extended to January 2013


HCC’s Volumes & Metrics - 2010

Criteria Day Week Year

Inbound suppliers drop-offs 97 (129*) 680 35,360

DHL last-mile vehicle trips 46 (69*) 322 17,000

Cages delivered to Terminals 1,294 (2098*) 9,059 472,391

*28th July 2011


IT Systems Capabilities

Enhanced Supplier discipline:

Bookings In

Delivery Windows

volumes variation (over / under)

Asset management:

track from despatch, through

delivery, to return for all media

real time data up to to POD

Management data including:

Productivity (volume of transactions

etc.)

Lates & Potential Lates

Despatch (per Terminal and store etc.)

Management reports

Supplier discipline

Media tracking

Other Styleflow users


Improved security

across the supply

chain & release of

space

Flexibility

to support BAA &

retailer’s

contingency plans

Environmental

benefits: 70,000

fewer deliveries to

airport

Fewer disruptions

to supply chain

reliability -

guaranteed

service

Reduced risk

through controlled

flows from 1 main

supply partner

Reduction in

pollution & traffic

congestion at

terminals by 70%

Value delivered to customer

Airport customer needs A best-in-class supply chain is key

Purpose build 56,488 sq ft facility with multi-

temperature warehouse for wide variety of retail

goods

Security sealed cages & scanning for all airside

deliveries

Delivery accuracy ensured via bar code scanning

Continuous improvement monitored via monthly

service level surveys with retailers & BAA

Effective waste

management

and returns

management

Operation

running since

2001

Security & safety

Achieve environmental targets

Support infrastructure changes

Increase retail sales – ‘on-shelf availability’

Maximise effective retail space in terminals

Operational efficiency

HCC Operation

PEOPLE

Total Headcount: 180 excluding agency:

23 Management and 10 Clerical

30 Drivers and 117 Operatives

FLEET

13 tractor units

14 urban Artic rear trailers

1 Hybrid (on trial)

17T refrigerated hire vehicle

1 Smiths Electric Vehicle (9T)

SECURITY

90% of FTEs hold full airside passes, requiring 5 year

references and Criminal Records checks

61 staff trained to Level 1 to 3 security standards and as

X-Ray operators

L3 cage and carton scanners

Department for Transport (DfT) Restricted Zone

Security access to T5 Wellington Road


HCC Sustainability Metrics

Metric Annual Impact

Inbound suppliers drop-offs 30,787

Last-mile vehicle trips 17,768

Cages delivered to Terminals 464,337

Last Mile Supplier runs avoided (kms) 181,529

Last mile logistics (kms) 349,898

PM10s savings (kg) 17.2

NOX savings (kg) 600

CO2 savings (tonne) 521*

Cardboard recycling (tonne) 322

62k (2008)


Need for Change Imperatives

Heathrow

Business as usual not

sustainable

Secure Consolidation

Operational

delays

measured

Increased

retail

offering

required

Competition

from other

airports

Environmental

Issues

Licence to Grow

Requirement

to make

Revenue

Passenger

growth

Security

Concerns

increased

threat, new

legislation


Value-Adding Services

Cross-docking Security Scanning Delivery Consolidation Electric Vehicle Remote Stockrooms Pre-Retailing In-store logistics Home Delivery Recycling & Disposal


Central store

Utilisation of HCC facility

Centralised hub for all operations

24/7 emergency response

Forward stores

Optimise number of locations and stock profile

Full stock visibility

Secure stores with good access and booking

out processes

Ongoing perpetual Inventory audits

Key benefits

HCC on-site security scanning of goods before delivery

Utilisation of existing Heathrow specific skills and expertise

– e.g. airside access and knowledge

Maximised stock integrity and visibility across stores

network and reduction in airside stocks requirement

Delivery to point of use

Reduced ‘traffic flow’ into Heathrow through maximising

use of existing vehicles

DHL International Engineering Stores


Contingency Support


Bristol Consolidation Centre (BCC)

2003 – Bristol identify potential for a consolidation scheme

2003 – Bristol City Council secure for funding from CIVITAS, ITT sent out and

OJEU process

2004 – Promotion of scheme to retailers and businesses in Bristol

2010 – Bath survey of retailers and businesses on town centre

2010 – BANES secure for funding from CIVITAS Plus, ITT sent out and OJEU

process

2011 – Joint venture with Bath and North East Somerset Council

2011 – Service now serves 71 retailer in Bristol and 15 retailers in Bath


BCC supporting Bristol and Bath

Bath City

Centre

Cribbs Causeway

Shopping Centre

Consolidation Centre

Broadmeads and

Cabot Circus

Shopping Centres


BCC Possible Support to NHS

Bath RUH

Southmead Hospital

£430m rebuild project

completion expected in

2014

Consolidation Centre

New South Bristol

Community Hospital

Due to open Spring 2012


BCC Benifits

ENVIRONMENTAL

Electric fleet - zero emissions (local) & low noise impact

76% reduction in delivery trips for retailers

Saving +268,000 vehicle kms

Saving 85.3 tonnes of CO2, 2771kgs of Nox

Collection & recycling of cardboard & plastics– +29,200kgs since launch

SERVICE

Over half of retailers achieve 20 minute saving per delivery

100% on time delivery

No losses or damages

CIVIL

Powerful PR message

Leading the way in urban logistics today

Supports statutory requirements relating to the measurement of air quality & reduction of

pollution


BCC Users View

“DHL provides a very friendly, reliable and efficient service”

“The service has made our lives a lot easier”

“We are very impressed; the timing is perfect and the guys are very helpful”

“Excellent! The deliveries are always prompt and I like the additional attention paid to security”

75% of retailers participating in Bristol chose consolidation because of improved service & reduced cost.

96% would recommend the service to another retailer


Consolidation delivers benefits but…

Resistance to change

Other stakeholders fear loss of scope

Retailers fear loss of Control

Difficulties of ‘triangular / split relationships

Lessons







Lessons

BAA

DHL Retail

HCC

Contract

Concession

Agreement

User

Agreement







Lessons

BAA

DHL Retail

Supply

Chain

HCC

Contract

Concession

Agreement

User

Agreement







Communications with retailers essential

Good relationships with retailers on every shift

Agreed process, schedules and escalation procedures

Reporting of service levels

Demonstration of value – value add services

Unlocking events required

T5 Planning Enquiry

9 August 2006 – Liquid bomb plot

Iterative change/complexity

Lessons

BAA

DHL Retail

Supply

Chain

HCC

Contract

Concession

Agreement

User

Agreement


QUESTIONS

[email protected]

turblog thtuesday 20 september, 2011 - inovamais.pt · turblog – thtuesday 20 september, 2011 ......

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