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Supply Chain Update June 19, 2008. 2 Supply Chain Update For Campbell Sales Organization Supply Chain Update Agenda 1.Customer Service 2.Customer Pickup.

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Presentation on theme: "Supply Chain Update June 19, 2008. 2 Supply Chain Update For Campbell Sales Organization Supply Chain Update Agenda 1.Customer Service 2.Customer Pickup."— Presentation transcript:

1 Supply Chain Update June 19, 2008

2 2 Supply Chain Update For Campbell Sales Organization Supply Chain Update Agenda 1.Customer Service 2.Customer Pickup Program 3.Distribution Network Review 4.Sysco RDC’s 5.Project 380 6. Questions & Answers

3 3 Customer Service Case Fill: We are at or above our F’08 Service goals! Order Fill: We are at or above our F’08 Service goals! Supply Chain Update For Campbell Sales Organization

4 4 Customer Pickup Program 1.Customer Pickup Program…Allows our customers to pickup their orders from our plants and warehouses using their own truck equipment or truck equipment from a certified trucking company with whom they have a contract. 2.Campbell cannot legally give a customer a pickup allowance that exceeds their actual cost to deliver to any given customer. 3.Customer Pickup allowances are calculated as follows: 4.Line haul Rate ($/Truck) + Fuel Surcharge ($/Truck) + Unload Allowance ($/Truck) = Total $/Truck Divided By TL Minimum Weight (43,000 Lbs for Dry or 39,000 Lbs for Frozen or Refrigerated) Supply Chain Update For Campbell Sales Organization

5 5 Customer Pickup Program Customer Pickup Allowance Calculation Dry Grocery Napoleon, OH to St. Louis, MO Line Haul = $700 Fuel Surcharge = $308 Unload Allowance= $105 Total= $1,113 Minimum TL Wt= 430 Cwt Pickup Allowance= $2.59/Cwt University Park, IL to St. Louis, MO Line Haul = $1,475 Fuel Surcharge = $207 Unload Allowance= $135 Total= $1,817 Minimum TL Wt= 390 Cwt Pickup Allowance= $4.66/Cwt Frozen/Refrigerated Examples:

6 6 Campbell North America Foodservice Manufacturing Locations 38* Supply Chain Update For Campbell Sales Organization

7 7 Campbell Soup Co. (Plant DC) Sacramento, CA TMT Warehouse Napoleon, OH Campbell North America Foodservice Current U.S. Dry Grocery Distribution Network = TMT Napoleon Service Area = Sacramento Service Area = Campbell FoodService Dry Grocery DC Supply Chain Update For Campbell Sales Organization

8 8 Versacold Warehouse Modesto, CA Continental Refrigerated Services University Park, IL Campbell North America Foodservice Current U.S. Frozen Distribution Network = Campbell FoodService Frozen DC = University Park, IL Service Area = Modesto, CA Service Area Supply Chain Update For Campbell Sales Organization

9 9 RDC - Creating an Efficient Link Between Suppliers & OpCos Redistribution is the process of aggregating demand for products across Operating Companies and determining the lowest possible cost flow path for the product Supplier Manufacturing/Distribution Supplier Manufacturing/Distribution SYSCO Redistribution Center(s) SYSCO Redistribution Center(s) SYSCO NE OpCos Reduction in the number of orders (from a centralized source) Reduction in the number of ship-to destinations for suppliers Reduction in the number of invoices and payments Reduction in safety stock Increase in the number of full truckload/rail shipments Increase in the number of pallet quantity orders Through consolidation of orders, we expect … Through consolidation of orders, we expect … Manufacturer Direct or RDC Based on Cost Customer Service Inventory Cost of Goods Sold OpCo RDC Supply Chain Update For Campbell Sales Organization

10 10 Sysco RDC Project Supply Chain Update For Campbell Sales Organization Open and operational

11 11 What is Project 380? Combining Refrigerated (38 ) + Frozen (0 ) = 380 Project 380 is the planned distribution consolidation of NAFS U.S. refrigerated products into the NAFS U.S. frozen distribution system Project 380 Supply Chain Update For Campbell Sales Organization

12 12 Shared synergies from the physical DC footprint will also drive alignment from a process and organizational standpoint Demand Planning Supply Planning Deployment NAFS Supply Chain Organizational Optimization Backhaul Allowances – Shared Foodservice customers currently operate under 2 distinctly different policies between StockPot and AFH Order Leadtimes – Aligning to AFH order to delivery processes will reduce StockPot leadtimes by an average of 50%...but this comes with significant complexities from a Planning perspective and risks to aged finished goods loss NAFS Supply Chain Supply Chain Update For Campbell Sales Organization

13 13 Project 380 also integrates with, or directly enables, other NAFS initiatives ProjectEnablerIntegration Points/Project 380 Considerations One Voice A common DC footprint will enable the infrastructure to support this project Project Harmony Supports process synergies vs. unique configuration NAFS Alignment Organizational synergies, Supply Chain Update For Campbell Sales Organization

14 14 A basic premise of Project 380 is to transition non-Safeway distribution network to DC’s currently being used on the frozen foodservice side of the NAFS business Proposed New - Versacold Modesto, CA # of Customers - 76 (18 currently picking up frozen) Volume – 8.7MM Lbs # of SKU’s – 279 SKU’s Proposed New - CRS University Park, IL – Chicagoland area # of Customers – 224 (68 currently picking up frozen) Volume – 17.3MM Lbs # of SKU’s – 341 SKU’s Current State - Bellingham Cold Storage (BCS) Bellingham, WA – Approximately 60 miles north of Everett, WA Current DC for all non-Safeway channels – 403 SKU’s, 6M orders and 26MM lbs annually Supply Chain Update For Campbell Sales Organization

15 15 Even for the West Coast, order to delivery leadtime reductions are significant Future State Example Everett to Philadelphia, PA – 15 days CRS to Philadelphia, PA – 8 days Reduction of 7 days (46% reduction) Future State Example Everett to San Francisco, CA - 10 days Versacold to San Francisco, CA - 4 days Reduction of 6 days (60% reduction) Current state order to delivery timelines range from a low to 8 calendar days to a high of 16 days for East Coast, less than truckload deliveries. Future State Example Everett to Portland, OR - 9 days Versacold to Portland, OR - 7 days Reduction of 2 days (20% reduction) Supply Chain Update For Campbell Sales Organization

16 16 Questions? Supply Chain Update For Campbell Sales Organization


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