Delivering Lowest Total Cost Through Integrated Supply Solutions
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AFFLINK is a large distribution organization that offers integrated supply solutions to deliver the lowest total cost to customers. Their program focuses on vendor consolidation, product standardization, e-commerce capabilities, and continuous improvement initiatives. They have a proven track record of reducing costs for customers through strategic sourcing, process audits, and implementing best practices across multiple customer locations nationwide.
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Delivering Lowest Total Cost Through Integrated Supply Solutions
- 1. Integrated Supply Solutions Delivering Lowest Total Cost
- 2. Agenda/Expectations • AFFLINK the Organization • AFFLINK’s Integrated Supply Solutions Program: – Vendor Consolidation – Standardization – E-commerce – Continuous Improvement • Next Steps
- 3. Track Record
- 4. Packaging Solutions AFFLINK is the largest distribution organization in North America, delivering “lowest total cost” to multi-unit customers. Integrated Packaging Solutions
- 5. Who we are… • 520 Distributor Locations • $5+ Billion Annual Sales Products Market Segments • Industrial Shipping/Packaging • Building Maintenance • Safety Supplies • Manufacturing • Paper Products • Healthcare • Sanitary Maintenance • Retail Chemicals • Foodservice • Janitorial Products • Lodging • Food Service Supplies • Leisure • Healthcare Supplies • Food Processing • Office Papers • Transportation • Entertainment
- 7. AFFLINK Global Accounts Retail / Transportation / Other National National Account Coverage Tom O’Connell Senior Strategic Account Leader 1400 AFFLINK Place Tuscaloosa, AL 35406 Manufacturing - West (205) 344-4152 E-fax: (305) 768-7920 Rick Smith Voice Mail: (800) 222-5521 x 4152 Strategic Account Manager Email: toconnell@afflink.com Manufacturing - Central 2840 East Bay Street Port Angeles, WA 98362 Manufacturing - East (360) 457-8623 Dan Heck E-fax (888) 726- 9931 Scott Kus Strategic Account Manager Voice Mail: (800) 222-5521 x 4610 Strategic Account Manager 7557 Koby Court E-Mail: rsmith@afflink.com 527 Essex Avenue White Lake, MI 48383 (248) 421-4425 Gloucester, MA 01930 E-fax: (800) 787-4945 (978) 281-4210 Voice Mail: (800) 222-5521 x 4604 E-fax: (208) 692-3744 Office Building / Maintenance Voice Mail: (800) 222-5521 x 4625 E-Mail: dheck@afflink. National E-Mail: skus@afflink.com Charlie Palmore Foodservice Healthcare Strategic Account Manager National National Office Building / Maintenance 2 Flower Tuft Court John Pizzola Daron Babcock The Woodlands, TX 77380 Strategic Account Manager Healthcare Development Manager (281) 362-7034 4809 Kensington Avenue 1400 AFFLINK Place E-fax: (281) 362-7034 Richmond, VA 23226 Tuscaloosa, AL 35406 Voice Mail: (800) 222-5521 x 4650 (804) 334-3060 (205) 345-4180 E-mail: cpalmore@afflink.com Efax: (804) 484-6290 Efax: TBA Voice Mail: (804) 261-4310 x Voice Mail: TBA 1310 E-mail: dbabcock@afflink.com E-Mail: jpizzola@afflink.com
- 8. Who we are… • $5+ Billion Annual Sales, $1.5 Billion Packaging Sales • 520 Worldwide Locations, 170 Dedicated Packaging Locations • Division of Performance Food Group •-Fortune: 100 Fastest Growing Companies • Fortune: 2nd Most Admired Company • Forbes: 400 Best Big Companies Products Services • Industrial Bags • E-commerce Your Way • Shrink & Stretch Film • Certified Packaging Specialists • Plastic & Steel Strapping • Factory Trained Technicians • Protective Packaging Products • Systems Integration • Corrugated • Package Design and Testing • Shrink & Stretch Equipment • iSYS-Integrated System • Safety Supplies • Equipment • Palletizing Equipment • Case Sealing & Erecting Equipment • Adhesive Application Equipment
- 9. Cost Drivers in Procurement Process Acquisition Product Vendor Price Catalog Purchase Search Selection Negotiations Maintenance Order $ $ $ $ Receiving Product presentations Interviews Proposal review Development Create Sampling/testing Proposals Cost analysis Product descriptions Mail, phone, Proposals Testing Product match up Pricing Updates fax, electronic Selection Set-up Follow –up considerations Possession $ Inventory Dock time/space Space Match Receiver to P.O. Labor Reorder points Reconcile pricing/invoice/terms $ POD administration Number of days supply Payment authorization Storage Obsolescence, Pilferage Issue check Pa
- 10. Current Procurement Single Location Sourcing Distributor Distributor Distributor Customer Distributor Distributor • Product Search $ • Price Negotiations $ Distributor • Purchase Orders $ • Order Placement $ • Invoices $ Distributor • Error Resolution $
- 11. Cost Drivers in Procurement Process *Multiple Products, Multiple Locations* Acquisition Product Vendor Price Catalog Purchase Search Selection Negotiations Maintenance Order $ $ $ $ $ $ $ $ $ $ $$ $ $ $ $ Possession Receiving Inventory Payment $$ $$ $$ $$
- 12. Current Procurement Multiple Location Sourcing Orders FMC 1 $ Distributor $ $ $ $ $ FMC 2 $ $ Distributor $ $$$ $ $ FMC 3 $ $ Distributor $ $ $ $ $ $ $ $ FMC 4 $ $ $ $ $$ $ Distributor $ $ $ $ $ $ Distributor FMC 5 $ $ $$ $ $ $ Distributor FMC 6 $ $ $ $ $ Distributor FMC 7 Invoices
- 14. Procurement Benefits AFFLINK Features Solution •Leverage volume •National coverage Vendor •National pricing •Local service Reduction •Fewer orders/payables •Vendor •Fewer receivers relationships/leverage Product •Leverage volume •Vendorcontact •Single knowledge •Less overhead dedicated Standardization •Lower pricing potential •Market knowledge •Standard product quality •Best practice audits •Best practices •Customized catalog •Flexible electronic ordering E-Commerce •Accurate pricing •Best in-class e-commerce Ordering •Reduced ordering cost •Web ordering, EDI, KML, FTP •Electronic data history •Accurate invoices •Audit invoices for accuracy •Punch-out technology E-Commerce •Electronic data history •Categoryinvoices – best •Process reviews References – bricks/click Reconciliation practices electronically (LOEB, EDI, •Reduced processing KML, FTP, e-mail, Excel) •Electronic reports – costs •Best practices budgeting comparative data •Billing your-way Continuous •Consistent terms •Industry upgrades •Application cost reduction Improvement •Electronic invoices tracking •Application cost •Summary billing •Account service team reduction •Customized reporting •Quarterly review
- 15. FMC1 Distributor FMC2 Distributor One FMC3 Connection Distributor FMC4 Distributor FMC5 Distributor FMC6 Distributor FMC 7 Distributor
- 16. Application Costs Cost-in-Use Improvement: Stretch film Increase Pre-stretch from 150% to 250% Current New 150% Stretch 250% Stretch Cost $43.08 $45.76 Revolutions 10 10 Cost/load $.421 $.232 Loads/year 80,000 80,000 Annual Cost $33,680 $18,560 Savings/Plant $15,120 (55%) x 8 plants Total Savings = $120,960
- 17. Application Costs Strapping Conversion - Steel to Polyester Steel Std Duty Polyester Size ½ x .020 ½ x .030 Lbs sold 99,000 -0- Ft/Cl 2940 6500 Cl/Wt 100lbs 53lbs Cost/Cl $39.59 $50.65 Cost/Ft $.01346 $.00779 SAVINGS =$16,554 (42%) x 8 Plants TOTAL SAVINGS = $132,432 Benefits: Reduces packaging costs Fewer coil changes Reduces cost of disposal Easier to handle Better packaging integrity Fewer back injuries
- 18. Lowest Total Cost Totals for all products/processes Strapping Conversion $132,432 Stretch Process $120,960 Total $253,393
- 19. How AFFLINK Reduces Application Costs Certified Packaging Specialists • Product Audit • Process Audits • Downtime/uptime • Throughput • Automation • Time to market • Freight cost • Worker productivity • Continuous Improvement Recommendations
- 20. Integrated Supply Solutions Customer Value Proposition b E-Commerce Distributors Preferred Suppliers Preferred Suppliers Cost Productivity Health & Image Savings Safety
- 21. How AFFLINK Manages Opportunity iSYS or Integrated System Powerful, Web-based, collaborative tool that gathers detailed product-usage data, manages activity and drives results at each location. iSYS generates reports for each location detailing: • Process improvement opportunities • AFFLINK activities • Cost savings
- 22. Plant 1 Distributor Plant 2 Distributor One Plant 3 Connection Distributor Plant 4 Distributor Plant 5 Distributor Plant 6 Distributor Plant 7 Distributor
- 23. Integrated Supply Solutions… Geographic Coverage Proven E-Commerce Capabilities Commitment to Supply Chain Excellence Customized Ordering/Reporting System Continuous Improvement Focused Implementation Model Proven Track Record Delivering Lowest Total Cost
- 25. Multi-plant Customer • TODAY’S CURRENT STATE – Spend not leveraged nationally – Hundred’s of supplier’s nationally – Inconsistency of “Best Practices” – Multiple operating systems nationally – No reporting on spend at national level – Excessive inventory in many locations – Inconsistent terms and invoicing from suppliers
- 26. WHY AFFLINK? • Packaging is our “Core” business – 189 Packaging Locations – Flexibility of Servicing Locations “Nationally” – In Excess of $1.5 Billion in Packaging sales – Certified Packaging Specialists “CPS” – Focused only on “Cost Savings” – Cost Savings programs backed by iSYS
- 27. TARGETING COSTS • ACHIEVING OUR “TARGETED” GOAL – Leverage overall spend with Afflink and set baseline price against current pricing – Target product categories for “Standardization” – Leverage categories with supply partners – Identify best products & practices – Implement practices through iSYS – Monitor & Report “ongoing” progress
- 28. IMPLEMENTATION • ACHIEVING OUR “TARGETED” GOAL – 30-60 Day implementation period – Work by division to establish commonality of products – Establish template and best practices to be followed by remaining divisions – Monitor Ongoing Progress