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TULSA, OKLAHOMA DISTRIBUTION CENTER 1 FACILITY STATUS MEETING NOVEMBER 11, 2009 SERGE PEPIN, SVP TECHNICAL DIRECTION/MSL – PPD ROGER CARROLL, VP CORPORATE.

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Presentation on theme: "TULSA, OKLAHOMA DISTRIBUTION CENTER 1 FACILITY STATUS MEETING NOVEMBER 11, 2009 SERGE PEPIN, SVP TECHNICAL DIRECTION/MSL – PPD ROGER CARROLL, VP CORPORATE."— Presentation transcript:

1 TULSA, OKLAHOMA DISTRIBUTION CENTER 1 FACILITY STATUS MEETING NOVEMBER 11, 2009 SERGE PEPIN, SVP TECHNICAL DIRECTION/MSL – PPD ROGER CARROLL, VP CORPORATE ENGINEERING MIKE SCHEWENE, VP SUPPLY CHAIN NA PPD

2 2 Welcome to the Tulsa Oklahoma SalonCentric Distribution Center, we are glad to have you as guests today and hope we can make your visit informative! Please let us know if we can assist you in any way possible during your visit!! SalonCentric Mgmt!

3 Requirements while visiting the Oklahoma SC Distribution Center –You must sign in and out at reception desk –You must be accompanied by site personnel at all times –Safety shoes are required while out in warehouse –High visibility vests are required while out in warehouse –Be aware of site evacuation and egress maps located throughout facility –Evacuation area located at Southwest corner of facility parking lot –Smoking in designated areas only. –Dial 911 in case of emergency –First responders are in high visibility YELLOW vests Safety Orientation 3

4 9:00 - 9:15 Meet and Greet Jim McCrary 9:15 - 9:30 Facility Summary and Structure Jim McCrary 9: :00 Market Overview/Customer ServiceGregg Wilkinson 10: :45 Order Process/Profile/Inventory/HeadcountGregg Wilkinson 10: :00 Site TourJim McCrary 12: :30 Lunch (Open Discussion) 12:30 – 1:15 SH&E OverviewHeather Peters 1:15 - 2:00Cost Review/ Capitol InvestmentsGregg Wilkinson 2:00- 3:00Site Challenges and OpportunitiesJim McCrary, Russ 3:00 - 4:00Questions and Wrap Up! Agenda 2

5 Facility Summary 5 165,000 Total SQF 12,000 SQF Office 153,000 SQF Warehouse

6 ManCom and Distribution Organization Structure 6 Jim McCrary Operations Director James Carter Facility Coordinator Denise Jones Picking Renee Stopple Picking Charles Ingraham Shipping Heather Peters SH&E Coordinator Ray Trimble Production Coordinator Steve Jones Replenishment Angie Fuller Receiving 6 Full Time 2 Temp 16 Full Time 3 Temp 6 Full Time 5 Temp 11 Full Time 6 Temp 11 Full Time 6 Temp 2 Full Time 1 Temp Maint/Janitorial 3 Full Time Inventory Control

7 Sales, Human Resource and Administrative Management Structure 7 Rex Blair (VP of Sales- Sub Distribution) Kristen Eckert (Accounting Controller) Susan Massie (Sales Manager) Erin Vierthaler (HR Manager) Cynthia Bartos (Education Manager) Lora Hakel (Customer Service Manager)

8 Market Overview 8 Customers Serviced  RDA and State Sub-Distributors 114 Independent Owners – Typically husband and wife team or other family group 249 store locations 526 sales consultants Small geographic territories Contractual relationship based upon sub-distribution agreement (non-exclusive), not franchisee agreement Order and shipped weekly on defined schedule Selling price is salon less 1/3 rd or 30% off salon for store only lines with a 4% 30 prompt pay discount  SalonCentric Stores Currently 16 store locations replenished weekly

9 Market Overview 9

10 10

11 Market Overview 11 Actual Sales Annualized Actual Sales Annualized Salon Equivalent St LouisMO 7,119,275 9,492,366 14,238,550 Greater KCKS 2,873,417 3,831,223 5,746,834 JoplinMO 2,534,689 3,379,585 5,069,377 Denver NWCO 2,510,997 3,347,996 5,021,995 LexingtonKY 2,460,571 3,280,761 4,921,142 TulsaOK 2,161,689 2,882,252 4,323,378 BeachesMT 2,125,336 2,833,781 4,250,672 LouisvilleKY 1,977,022 2,636,029 3,954,043 Granite CityIL 1,964,244 2,618,992 3,928,488 AustinTX 1,936,234 2,581,645 3,872,468 Total Top 10 27,663,473 36,884,631 55,326, % Total Sub-Distribution 112,041, ,388, ,083,196

12 Organization 12

13 Customer Service Territories 13

14 Order Process order locations Orders are processed weekly based upon an assigned order/shipping day Customers transmit an electronic order on their assigned order day The orders are processed through an import routine and any exceptions are resolved CS reps follow up on any orders that are missing Backorders are maintained for anything that can not be shipped. Current orders and backorders are batched to produce one picking pass for the order. Orders have an assigned shipping method – orders are not rate shopped on a weekly basis. We influence the customer, but since they pay freight, they determine the carrier

15 Order Profile 15 $LinesUnitsUnits/Line Largest 123,786 1,858 25, Average 12, , Mean 9, , Average Weekly order dimensions 214 orders 618,000 units 95,000 lines 24,000 cases and 7,200 totes 800 Pallets 522,000 lbs

16 Picking Profile 16 Total UnitsLoose PicksGroup PicksCase PicksTotal Reaches Monthly Avg 2,593,848 1,243,036 96,629 88,488 1,428,153 Annual 31,126,174 14,916,434 1,159,544 1,061,852 17,137,831 48%19%33% * Case inner packs that get picked to a tote/box. Example: 6 pack of Shades EQ color vs a 36 unit case of Shades EQ

17 Product Overview 17 Total Sku’s 11,294 PPD Inventory Matrix560 Logics172 L'Oreal576 Redken685 Pureology138 Mizani90 Total PPD2,221 Other Hair Care Farouk842 Tigi722 Joico409 Framesi335 Nioxin236 Sexy Hair224 ISO192 Pravana179 Rusk167 Alterna130 Crew107 Kenra101 Bosley12 Other Hair Care3,656 Nails OPI1,157 Creative480 Backscratchers128 Sparitual179 Nails1,944 Misc3,474

18 Inventory Performance 18 Service Levels InventoryE&O InventoryCogs - Last 12TurnsDOS% E&OLines$ Redken4,209,933332,483 35,707, %98.4% Pureology826,26838,919 6,936, %90.5%93.3% Matrix1,676,904550,282 16,659, %94.9%91.5% Logics201,403113,525 1,247, %97.1%95.9% LP476,18776,507 5,533, %91.1%89.8% Mizani70,76614, , %99.1%98.7% 7,461,4611,126,31166,518, %96.1%95.3% Other7,274,2721,367,441 50,401, %92.3%91.0% 14,735,7332,493,752116,920, %94.0%93.2%

19 Headcount 19 CorpOkILCOALFlNCTotal Warehouse Employees Customer Service Credit & Collection Information & Control IT62311 Purchasing11415 Diversion Sub-Total Temp Warehouse Other549 Planned Temp Conversions5 13

20 Site Tour 20 Safety shoes and high visibility vests must be worn while on the tour. Slip-on safety shoes and vests are provided if needed at the warehouse entrance! Welcome! You matter to me!

21 Incident Summary 21

22 Frequency Rate Summary 22

23 YTD –Total Energy Consumption- (121,360 kWh) –Atmospheric Discharge CO2- (912 Kg) –Transportable Waste- (39.6 Cubic Tons) –Landfill- (4.7 Cubic Tons) –Water Consumption- ( ) –Recycling- (36.3 Cubic Tons) Plastic, Pallets, Paper and Cardboard All solid waste has been going to Covanta Waste to energy facility since August Waste to energy since August of 2009 is 3.3 cubic tons, waste is turned into steam which provides electricity is a benchmark year for Tulsa facility; the goal for 2010 will be to reduce Energy, Discharge, Waste and Landfill by 5% while increasing Recycling by 5% Waste minimization/reduction plans are initiated for the site with the goal of decreasing waste and energy by 5% and increasing recycling by 5% Environmental Summary 23

24 476 days without a lost time incident ! SH&E Goals will be met by the end of 09;  Sites emergency response plan developed  ORS 001 A: 85% compliance achieved  Main focus 2009:  PIT separation  Pallet and racking safety auditing program  High visibility clothing program  Improved PIT driver training program  Initiated PIT driver medical clearance program  General SHAP conducted (50% of employee involved)  37 SOP created and training conducted  Salon Centric safety web site:  Ergonomics program implemented  SH&E training hours in 2009 have doubled from Jan to Sept, (avg hrs per month)  Main focus 2009:  Weekly trainings conducted by management and supervisors  New hire employee safety orientation program  Visual Communication Campaign launched  SH&E fundamentals training followed by 3 managers Safety Overview

25 Zero lost time accidents while reducing incidents!  Actions to achieve goal :  Detailed SHAP  SH&E Basic Roadmap for Distribution  ORS 002 :Safety suggestion/hazard reporting award program  MESUR behavioral based safety in conjunction implementation  Reduce waste and energy by 5%  Increase recycling by 5%  SH&E Fundamentals training (for supervisors)  Compliance audit 2010 Safety Overview - Goals

26 Cost Review 26 Physical Distribution Tulsa Tul-CPU Labor 1,948, Total Facilities 566, Subtotal DC 3,356, Total Distribution 3,638, Freight to Salons 46, Total Distribution + Freight 3,684, Total I&C 50, Customer Service Tulsa Labor 218, Total Facilities 14, Total Customer Service 265, Credit Tulsa Labor 50, Total Facilities - - Total Credit 50, Bad Debt 162, Total Logistics Cost 4,214, Units 23,276,883 CPU $ Note Reference Handout – 9/30/09 Logistics Cost by Facility prepared by J. Witherite

27 Trailer Restraint Systems (ERM) Replacement of LPG Trucks (ORS-001A) Alarm System Upgrades (ERM/NFPA 72) Pedestrian Barrier Project (ORS-001A) 2009 Capital Improvements 27 Estimated Installation- Mid Dec 09

28 Reducing the Frequency Rates! No flammable or level 2 and 3 aerosol containment per RIO 17C (ERM/Zurich) Inadequate sprinkler system; system needs to be upgraded to ESFR per NFPA 72 (Zurich) Racking systems need to be inspected by an engineer for structural integrity and floor ratings. 29 CFR (d)(1) (ERM) Pallet supports and netting need to be added to selective pallet racking to meet RIO- 16 and LOG-96, RIS-32 (ERM) Mechanical equipment and racking is aging Exposed loading and unloading dock Improving order/reception efficiency from Streetsboro 2015 Reduction Environmental Goal Site Challenges and Improvement Opportunities 28

29 Thank you for visiting the Tulsa, OK Salon Centric Beauty Alliance Distribution Facility!! 29


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