2010 Your Product Has Been Refused


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You are viewing presentations from conferences that I have attended. Please enjoy & if we can help you with any logistics projects in the Americas please contact me at 678.364.3475

Bill was also on the Board of Directors for the St.Vincent DePaul Foodbank in Roseville California helping with the fund raising and meals to the poor program. While based in Northern California he was successful in fund raising programs for the Crusade of Mercy and helped Father Dan Madigan at the Sacramento Food Bank also. For 2008, Bill is a member of the Board for WORKTEC on also an Advisory Board Member for Boys and Girls Club for Metro Atlanta-Clayton County Chapter. See www.worktec.biz or www.bgcma.org . Bill is also on the Board of Directors for the Southeastern Warehouse Association & represents Georgia for 2010-2012.


Bill Stankiewicz
Vice President and General Manager
Shippers Warehouse
Email: williams@shipperswarehouse.com

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2010 Your Product Has Been Refused

  1. 1. “Your Product has been Refused Now What?!”
  2. 2. “..unsaleable products represent avoidable coststhat affect the entire value chain, estimated to be a$15 billion annual cost to the industry…..root causesof these costs are often misunderstood, leading toincremental profit leakage” ** ** According to a recent report published by GMA, FMI and Deloitte
  3. 3. 8 Years Ago Customers were seeking… Assistance in the quest for Perfect Order Fill Rates that were measurable Tighter management of customer convenience returns ► overstocks; promotions; discontinued products Metrics for logistic related delivery exceptions ► order changes; order entry errors; mis-ships Control of OS&D events that was consistent & immediate Factor in the SKU value when determining to return product Root cause determination/action plans/execution Reduced cycle return times Single chain of control for all product exceptions Pre-established processes for production irregularities or withdrawals
  4. 4. Solution Design Apply structure ► Create a call center and introduce technology to give structure and discipline to the return process so that best practices may be applied consistently. Establish rules ► Establish business rule sets specific to each customer, product group and temperature, customized by client that were consistently applied to identify products for return, donation, or destruction. Thus, eliminating non-value added transportation expenses. Centralized control and accountability for product Identify return cycle times Execute transportation Identify actionable events to continuously improve upon Return comprehensive and actionable program reporting
  5. 5. Stakeholders to the Value Proposition Manufacturers ► Measures ability to achieve Perfect Order Fulfillment ► Create organizational accountability within your own network ► Consistent, intentional handling of product exceptions to maintain a preferred chain of control of the brand. This prevents branded products ending up in unauthorized venues or becoming astray. ► Quantitative analysis determines the disposition result ► Evaluation of SKU value and restocking costs compared to transportation cost to return product. No product returned if the cost of returning is greater than the product value.
  6. 6. Stakeholders to the Value Proposition Manufacturer (cont.) ► Database of all donation locations is available to direct carriers to the closest drop spot minimizing additional charges ► Donation certificates signed by the driver that product has been donated to a specific authorized charitable entity ► Tracks inventory value ► Dramatically improves cycle return time to active inventory ► Database allows: • Analysis of exceptions by warehouse, carrier, receiver or SKU • quicker resolution of customer deductions • Increases the efficiency of staff resolving deductions and credits
  7. 7. Stakeholders to the Value Proposition Charities ► Largest and quickest access to product nationwide ► High degree of product integrity ► Better access to longer shelf lives Carriers ► Timely resolution and communication to the carrier minimizes detention and the unprofitable use of driver’s hours of service ► Database of all donation locations is available to direct carriers to the closest spot to drop product and move on to the next load quickly Retailers ► Eliminates pressure to take in and hold unwanted product ► Gets carriers off the premise and on to their next load quickly
  8. 8. Mature Customer Event Trends 2005-2009 6,000 5,000 4,000Events 3,000 2,000 1,000 0 1/1/2005 4/1/2005 7/1/2005 1/1/2006 4/1/2006 7/1/2006 1/1/2007 4/1/2007 7/1/2007 1/1/2008 4/1/2008 7/1/2008 1/1/2009 4/1/2009 7/1/2009 10/1/2005 10/1/2006 10/1/2007 10/1/2008 10/1/2009 What Changed? Order Minimums, Return Policies, Quality Improvements, Customer Service Error Reduction, Order communication improvements
  9. 9. Sample of 2009 Event Codes 49% Customer Refusals 33% Customer no longer wants the product 15% Code date/shelf life 15% Not on PO or did not order 8% Customer ordered error 6% Order was cancelled 4% Duplicate order 12% 20+ other misc reasons 15% Damage 10% Carrier Issue 9% Shortage 8% Customer Convenience 6% Overage <3% Withdrawals/Other
  10. 10. Sample of 2009 Event Disposition Codes Product Disposition Totals ► 46,000,000 lbs of food products ► 2,500,000 cases ► $62,000,000 in retail value Disposition Classification Summary by Product Value ► $40,000,000 returned ► $3,400,000 donated ► $3,400,000 destroyed ► $8,600,000 accepted or shorted ► $6,600,000 other including re-delivery, re-consignment, re-worked
  11. 11. Hunger in America Nearly 1 in 6 people in the United States do not know where their next meal will come from That’s 49.1 million Americans ► 16.7 million children (1 in 5) ► Nearly 40% of households served by Feeding America have one working adult ► The number of individuals who were food insecure increased 36% over 2007 and the number of children increased 35% over 2007 The need is growing: Demand for food assistance is up 30% on average vs. YA ► Unemployment a key factor * Household Food Security in the United States, 2008; 2009 Food Bank Survey
  12. 12. How Feeding America Works
  14. 14. Liability Protection Bill Emerson Good Samaritan Act Protects you from liability when you donate to a non-profit organization Protects you from civil and criminal liability should the product donated in good faith later cause harm to the needy recipient Standardizes donor liability exposure. You or your legal counsel no longer have to investigate liability laws in 50 states Sets a floor of "gross negligence" or "intentional misconduct" for persons who donate grocery products http://www.usda.gov/news/pubs/gleaning/appc.htm
  15. 15. Benefits of Donating Security and integrity of brands Nationwide network of 501(c)(3) charities Savings in dumping fees: $4,000 per truckload 91% of consumers have a more positive image of companies that support a good cause 86% of consumers are likely to switch brands when a product is associated with a good cause 67% of Food Shippers of America member companies have donated to Feeding America in the past 12 months Your Contacts: Bill Thomas Feeding America - Vice President of Product Development 312-641-6611 bthomas@feedingamerica.org Peg Collins-Sarinyamas Feeding America - Director of Transportation 312-641-6516 pcollinsarinyamas@feedingamerica.org
  16. 16. Feeding Americaformerly named America’s Second Harvest