Upload
jeffheath
View
211
Download
1
Embed Size (px)
Citation preview
Third-Party Logistics (3PL) ServicesEmbrace the Hybrid
March 7, 2011 | 11:15 am-12:15 am
Jeff HeathDirector Distribution Operations
Overview• Present an alternative to managing an internal distribution
center or contracting Third Party Logistics (3PL)
• Identify OMP objectives
• Factors in reaching decision
• Fit and connectivity
• Challenges, monitoring and measurements
“Embrace the Hybrid”Biology- An offspring resulting from cross-breeding
Automobiles- A vehicle using more than one power source
Hybrids - Giving these clubs the wood's long distance with the iron's familiar swing.
Hybrid Distribution Model
OMP Carson, CA Memphis, TN
Objectives
Mitigate single source site failure =Reduce Shipping cost
Reduce Transit time
Why Hybrid?
Flexibility
Factors to Hybrid• OMP investment in WMS (Navision)
• Hybrid allows OMP to Maintain Control
• Hybrid allows testing of partner with reduce risk
• Hybrid facilitates gaining experience and confidence with 3PL
• Hybrid allows scalability with low capital investment
Factors to Hybrid
• Hybrid facilitates introduction to technology advances
• Hybrid may make sense when growth is sudden or unplanned
• Order pattern experiences frequent swings (spikes)
• Hybrid may make sense when business is declining
When Not to Hybrid• Make versus Buy decision
• In house technology is robust/scalability
• Fixed cost can be absorbed easily
• Firm Demand/ Contracts exist for 3-5 years
• Maintain complete control of business
• Labor is abundant, cost is low
• Training is not complex
• Warehouse space exist
Partner Selection/Defining Fit
Defining Service Criteria by first looking at ourselves , specifically, how we enter and ship orders.
Who are our customers?What’s attributes are important to them?
EngagementExpectationsExchange
Culture/ Uniqueness
Develop Supply Load Plan
Define Requirements and Data Exchange
Identify scope, volumes, frequencies and peak periods
Challenges• Reconciling Inventories• Timing of daily order receipt and cutoff• Sharing OMP’s products nuances and
distinctiveness, UOM & non barcodes• Inventory management at two sites• OMP unit of measures • Symptom of back orders
Monitor
• Are Inventory Supply levels accurate?
• Are the customers satisfied with deliveries?
• Are transportation savings as forecasted?
• Are shipping cost in line with financial forecast?
• Are we making money? Adjust volume ratio’s?
Scorecard
Peace of Mind
99.99% Inventory Accuracy
100% Recognize Revenue
99.99% Fulfillment Accuracy
Initiatives 2011
• Track and Trace 2D Bar code• Expand Drug Pedigree • Cost reduction through technology and
efficiencies
Conclusion• Review Hybrid alternative
• Objectives- basis for decision of maintaining internal DC and 3PL
• When not to Hybrid 3PL
• Fit and Engagement
• Identified challenges for OMP and 3PL
• Monitor/ Scorecard
• Assessment of partnership
?