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Supply Chain UpdateJune 19, 2008
2Supply Chain Update For Campbell Sales Organization
Supply Chain UpdateAgenda
1. Customer Service
2. Customer Pickup Program
3. Distribution Network Review
4. Sysco RDC’s
5. Project 380
6. Questions & Answers
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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
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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)
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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:
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Everett, WA
Denver, PA
Willard, OH
Marshall, MI
Paris, TX
Richmond, UT
Phoenix, AZ
Dallas, TX
Ft. Gibson, OK
Omaha, NE
Fairmont, MN
Lakeland, FL
Aiken, SC
Richmond, IN
Downers Grove, IL
Dickson, TN
Napoleon, OH
Douglas, GA
Listowel, ON
Bloomfield, CT
Dry Grocery Product Manufacturing LocationFrozen Product Manufacturing LocationRefrigerated Product Manufacturing Location
Mississauga, ON (2)Toronto, ON (3)Tillsonburg, ON
Kitchener, ON
Downingtown, PANew Holland, PAPhiladelphia, PA
Holland, MI
Alma, GA
Medina, NY
Reading, PA
* Not including Nieppe, France (Pepperidge Pirouettes)
Dumont, NJ
Solon, OH
Valdosta, GA
Campbell North America Foodservice
Manufacturing Locations 38*
Supply Chain Update For Campbell Sales Organization
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Campbell Soup Co. (Plant DC)Sacramento, CA
TMT Warehouse Napoleon, OH
Campbell North America FoodserviceCurrent 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
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Versacold WarehouseModesto, CA
Continental Refrigerated ServicesUniversity Park, IL
Campbell North America FoodserviceCurrent U.S. Frozen Distribution Network
= Campbell FoodService Frozen DC
= University Park, IL Service Area= Modesto, CA Service Area
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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
SupplierManufacturing/Distribution
SupplierManufacturing/Distribution
SYSCORedistribution Center(s)
SYSCORedistribution Center(s) SYSCO NE OpCosSYSCO 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 consolidationof orders, we expect …Through consolidationof orders, we expect …
ManufacturerManufacturer
ManufacturerManufacturer
ManufacturerManufacturer
ManufacturerManufacturer
Direct or RDC Based on Cost
Customer Service
Inventory
Cost of Goods Sold
OpCoOpCo
OpCoOpCo
OpCoOpCo
OpCoOpCo
RDC
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Sysco RDC Project
Alachua, FL
Salt Lake City, UT
Atlanta, GA
Front Royal, VA
Hamlet, IN
Dallas, TX
Supply Chain Update For Campbell Sales Organization
Open and operational
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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
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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
NAFS Supply Chain
NAFS Supply Chain
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Project 380 also integrates with, or directly enables, other NAFS initiatives
Project Enabler Integration 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,
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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
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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)
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Questions?
Supply Chain Update For Campbell Sales Organization
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