Pavel isaev. danone

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Pavel isaev. danone

  1. 1. Sustainable Transport & Distribution Pavel Isaev Supply Chain Director Danone Russia Moscow – 03/06/2010
  2. 2. Era of Retail Expansion
  3. 3. Inefficient Supply Chain <ul><li>High costs due to parallel operated line hauls </li></ul><ul><li>Less flexibility in departure schedules </li></ul><ul><li>Complex supply chain processes occupy management capacity </li></ul><ul><li>on both sides (Manufacturer and Retailer) </li></ul>Challenges Retailer DC Warehouse of Supplier Production Plant Manufacturer Production Plant Manufacturer Retail Outlet Retail Outlet Retail Outlet Retail Outlet
  4. 4. <ul><li>Existing Network Coverage </li></ul><ul><ul><li>20 DCs and 8 cross docks in 26 cities </li></ul></ul><ul><ul><li>500 Trucks delivering over 30,000 destinations (1,5 times a week on average) </li></ul></ul><ul><ul><li>Current annual volumes handled : more than 350,000 tons </li></ul></ul><ul><ul><li>80% of the Russian population and 85% of the buying power is delivered within 24 / 48 hours </li></ul></ul><ul><li>Network coverage reflects the population spread in Russia </li></ul><ul><li>Service frequency ranges from daily in major cities to once a week in furthest locations </li></ul>Designed to meet manufacturers and retailers’ needs Danone Pan-Russia Chilled Network
  5. 5. TOTAL COST TO SERVE MODEL INBOUND PRIMARY DISTRIBUTION SECONDARY DISTRIBUTION POS Factory expedition Primary warehousing Freight to secondary & Cross-dock Freight to distributors Freight to platforms Distributors POS Customer platforms POS Vanselling Preselling) Internal freight out Internal freight out import Factory export Factory 1 Factory 2
  6. 6. D n K <ul><ul><li>A solution for the food and beverage chilled sector with multiple delivery points in Russia </li></ul></ul><ul><ul><li>Project Idea </li></ul></ul>Network Volumes
  7. 7. Pan-Russia Chilled Network <ul><li>Goods delivered through the network include </li></ul><ul><ul><li>Dairy products </li></ul></ul><ul><ul><ul><li>Milk, traditional and modern dairy, butter, cheese, etc.. </li></ul></ul></ul><ul><ul><li>Semi-cooked or ready meals and sauces </li></ul></ul><ul><ul><li>Packed processed meat </li></ul></ul><ul><ul><li>Chilled and temperature sensitive beverages </li></ul></ul><ul><li>Combined delivery with goods are accepted for </li></ul><ul><ul><li>POS materials to the same delivery point (marketing leaflets and publicity) </li></ul></ul><ul><ul><li>Non-contaminating dry foodstuff tolerating the temperature range </li></ul></ul>Temperature range : 2 o C to 6 o C Specialized in temperature controlled goods delivery
  8. 8. Advantages at a glance The DnK optimized network Main DnK warehouse Production Plant Manufacturer Production Plant Manufacturer Retail Outlet Retail Outlet Retail Outlet Retail Outlet DnK Regional warehouse Warehouse of Supplier <ul><li>On time delivery via optimized DC locations </li></ul><ul><li>Cost reduction through shared facilities and trucks </li></ul><ul><li>Improved delivery time reliability and flexibility in departure schedule (no minimum </li></ul><ul><li>quantity) </li></ul>
  9. 9. <ul><li>Around 5,000 delivery points in Moscow </li></ul><ul><li>3,500 delivery points in St Petersburg </li></ul><ul><li>600 points of delivery in Yaroslav (500 000 people) </li></ul><ul><ul><li>From Retail Chains and Hypermarkets </li></ul></ul><ul><ul><li>To traditional stores </li></ul></ul><ul><ul><li>DnK currently visits over than 30,000 delivery points </li></ul></ul>Network Coverage
  10. 10. D n k solution Operational perspective <ul><li>After sales </li></ul><ul><ul><li>Documents returned after delivery in </li></ul></ul><ul><ul><ul><li>1 week time for 80% of destinations </li></ul></ul></ul><ul><ul><ul><li>2 weeks for far destinations (20%) </li></ul></ul></ul><ul><ul><li>Delivery notes scanned within 24 hours after delivery </li></ul></ul><ul><ul><li>Orders tracing and visibility on web portal with delivery status </li></ul></ul><ul><li>Returns management </li></ul><ul><ul><li>Proposed solutions </li></ul></ul><ul><ul><ul><li>Delivery to the same or to another delivery point </li></ul></ul></ul><ul><ul><ul><li>Destruction </li></ul></ul></ul><ul><ul><ul><li>Return to customer’s DC </li></ul></ul></ul><ul><li>Warehousing </li></ul><ul><ul><li>Storage and picking solution close to the consolidation centers </li></ul></ul>
  11. 11. D n k solution Tariffs <ul><li>Tariffs can be based on weight or on number of pallets </li></ul><ul><ul><li>Smallest quantity invoiced : 10 kg </li></ul></ul><ul><ul><li>1 pallet is considered from 200 kg, but the invoice can be based upon weight only, if requested </li></ul></ul><ul><ul><li>Weekly invoice </li></ul></ul><ul><li>One single contract for all Russia </li></ul><ul><ul><li>Central invoicing </li></ul></ul><ul><ul><li>Central claims management </li></ul></ul><ul><ul><li>Central customer service </li></ul></ul>
  12. 12. <ul><li>Large potential of products to achieve critical mass </li></ul><ul><li>Broad geographical coverage </li></ul><ul><li>High frequency of shipments </li></ul><ul><li>Variety of destinations – from Hypermarkets to small stores </li></ul><ul><li>Flexible distribution </li></ul><ul><li>Cost efficient solution </li></ul><ul><li>Quality, efficiency & reliability as major network characteristics </li></ul><ul><li>Safety and security </li></ul><ul><li>Full traceability and visibility of the flows through IT system </li></ul>D n K - Unique distribution offer on the market
  13. 13. Thank you! Any Questions?
  14. 14. <ul><li>BACK UP </li></ul>
  15. 15. Main warehouse 7 5 6 3 2.5 2 1.5 1.5 1.3 1 1 1 1 1.2 2.3 2 4 Regional warehouses Cross docking DnK Chilled Network: lead times of delivery (days) 2.3 3 4 4 1.4 1.4 2.7 Other towns covered 1.6 Nijni-Novgorod Volgograd Voronezh Rybinsk (XD) Kostroma (XD) Yaroslavl Omsk Novosibirsk Tyumen Perm Ekaterinburg Chelyabinsk (XD) Moscow North Krasnoyarsk Orenburg ( XD ) Magnitogorsk ( XD ) Ufa Kazan Togliatti Samara (XD) Saratov (XD) Novorossiysk (XD) Krasnodar Rostov Kaluga Tchekhov Moscow South St-Petersburg
  16. 16. p. Main warehouse 5 5 8 27 6 16 20 11 9 1 11 13 8 54 13 6 7 Regional warehouses Cross docking DnK Chilled Network: nb of connections per week 3 3 6 6 1 1 1 20 Nijni-Novgorod Volgograd Voronezh Rybinsk (XD) Kostroma (XD) Yaroslavl Omsk Novosibirsk Tyumen Perm Ekaterinburg Chelyabinsk (XD) Moscow North Krasnoyarsk Orenburg ( XD ) Magnitogorsk ( XD ) Ufa Kazan Togliatti Samara (XD) Saratov (XD) Novorossiysk (XD) Krasnodar Rostov Kaluga Tchekhov Moscow South St-Petersburg

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