Building SYSCOs Supply Chain

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Building SYSCOs Supply Chain
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SYSCO providing food and related products and
services to the Food Service Industry.

• Restaurants
• Healthcare Facilities
• Colleges Schools
• Hotels Resorts
• Other Food Service Customers

• Restaurants
• Healthcare Facilities
• Colleges Schools
• Hotels Resorts
• Other Food Service Customers

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SYSCO Public Offering
March 3, 1970
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SYSCO Company Profile
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Consistent Sales Net Earnings Growth
FY03 Sales 11.9 Net Earnings 14.5
Net Earn. (Millions)
Sales (Billions)
5 Yr. CAGR Sales 11.3 Net Earnings
19.1 10 Yr. CAGR Sales 10.1 Net Earnings
14.5 20 Yr. CAGR Sales 14.6 Net Earnings
16.0 30 Yr. CAGR Sales 16.6 Net Earnings
18.1
All net earnings data is before accounting
changes.
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SYSCO Operates 145 Distribution Locations
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SYSCOs Current Chain Each Operating Company
Optimizes their Performance Independently
Suppliers/Processors
Operating Company
End Consumers
Core Carriers
Farmers
Operating Company
Operating Company
Customers
Inbound Transportation
Forward Warehouse
Operating Company
Core Carriers
Our Supply Chain vision is to drive new
initiatives and decisions, considering all
members of the supply chain
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Challenge Reinvent SYSCOs Supply Chain from
autonomous entities to End-to-End
Optimization
Solution The Redistribution Initiative
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SUPPLY CHAIN MANAGEMENT
Integrating and Managing Processes Across the
Supply Chain
Information Flow
SYSCO
Tier 1
Tier 2
Consumer/
Customer
Supplier
Supplier
Inbound Logistics
End
-
user
Sales Marketing
Merchandising
PRODUCT FLOW
Operations
Finance
Distribution
CUSTOMER RELATIONSHIP MANAGEMENT
CUSTOMER SERVICE MANAGEMENT
DEMAND MANAGEMENT
ORDER FULFILLMENT
Supply Chain Management Processes
MANUFACTURING FLOW MANAGEMENT
SUPPLIER RELATIONSHIP MANAGEMENT
PRODUCT DEVELOPMENT AND COMMERCIALIZATION
RETURNS MANAGEMENT
Source Adapted from Douglas M. Lambert, Martha
C. Cooper,
Janus
D.
Pagh
, Supply Chain Management Implementation Issues
and Research
Opportunities,
The International Journal
of Logistics Management
, Vol. 9, No. 2, 1998, p. 2.
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SYSCOs Supply Chain VisionEnd-to-End Steps for
Supply Chain Initiatives
Getting over the cultural wall
Implement Develop Capability to Sustain
Develop Key Metrics

• Implementinitiatives
• Improve supply chain

Collaborate Externally

• Measure success

Collaborate Internally

• Suppliers
• Carriers
• Customers

Conduct Feasibility Study

• Corporate
• OpCos
• Departments
• SYSCO Associates

Identify the Opportunity

• Business case to validate opportunity

• Analyze for efficiencies and growth

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SYSCOs Supply Chain Vision for Redistribution
Front Royal, VA
Standard Service (lt 500 Miles) Extended Service
(lt 600 Miles) 2 Day Service (gt600 Miles) Regional
Distribution Center (TBD) Broadline Operations
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Northeast Redistribution Network
First SYSCO RDC Location
Northeast - Front Royal, VA Initially servicing
14 Northeast OpCos
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Business Case for Redistribution
Northeast Annual Supply Chain Savings
Handling 14
Transportation 25
Supplier Savings
OpCo
Transaction 6
Inventory Carrying 16
Capital Avoidance 39
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Today There are Inefficient Links Between
Suppliers and SYSCO Operating Companies
Supplier Manufacturing
Supplier DCs and 3rd Party Forward Warehouses
SYSCO NE OpCos
Manufacturer
OpCo
Supplier DC
Manufacturer
OpCo
Forward Warehouse
Manufacturer
OpCo
Supplier DC
Manufacturer
OpCo
resulting in complex and costly product and
information flows

• Multiple orders flowing from multiple OpCos
• Multiple invoices and payments
• Replication of safety stocks
• Significant number of less-than-truckload (LTL)
  shipments
• Less than pallet order quantities

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Redistribution Creates a More Efficient Link
Between Suppliers and SYSCO Operating Companies
Supplier Manufacturing/Distribution
SYSCO Redistribution Center(s)
SYSCO NE OpCos
Direct or RDC Based on Cost
Manufacturer
OpCo
Manufacturer
OpCo
RDC
Manufacturer
OpCo
Manufacturer
OpCo
Aggregation of Demand creates more efficient

• Transportation
• Handling
• Inventory
• Transactions

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Realizing the Supply Chain Vision requires
Collaboration, Optimization, Implementation, and
Infrastructure
Collaboration
Suppliers/Processors
SYSCO Operations
Regional Distribution Centers
End Consumers
Core Carriers
Farmers
Operating Companies
Customers
Dedicated Carriers
Inbound Transportation
Outbound Transportation
Forward Warehouse
Core Carriers
Optimization
Implementation
Infrastructure
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Current Practices by one Member in the Supply
Chain can Create Inefficiencies for Others
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Supplier CollaborationEvaluate the current state
supply chain
007 Virginia
Co-Pack Facilities
008 Northern NE
Supplier Distribution Center
009 Pittsburgh
010Lankford
012 Baltimore
025 Albany
027 Syracuse
051 Central PA
053 Jamestown
3rd Party Distribution Center
054 Connecticut
056 Hallsmith
073 Hampton Rds
075 Philadelphia
076 Metro NY
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Supplier CollaborationIdentify the Most
Efficient Future State Supply Chain
007 Virginia
Co-Pack Facilities
008 Northern NE
Supplier Distribution Center
009 Pittsburgh
010Lankford
012 Baltimore
025 Albany
027 Syracuse
051 Central PA
053 Jamestown
RDC
054 Connecticut
056 Hallsmith
073 Hampton Rds
075 Philadelphia
076 Metro NY
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Why invest in Redistribution?

• Aggressive revenue and earnings growth
• Higher customer service levels
• Wider variety of products for customers
• First step of an overall supply chain vision

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