Transcript Document

Indiana Logistics Summit
October 19, 2005
Supply Chain Strategy & Real Estate
• Overview: Becton Dickinson - BD
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Strategic Decision Making
Network Rationalization
Site Criteria
Building Design
BD – Company Overview
• Medical Technology Company serving Healthcare Institutions,
Life Science Researchers, Clinical Laboratories, Industry and
General Public
• $5.3 Billion Revenue (~50% North America)
• 3 Divisions:
– Medical Device: Ex. Needles; Syringes; Catheters; Surgical Blades
– Bioscience: Research Tools which Study Genes, Proteins & Cells
– Diagnostics: Microorganism Mgm’t; Blood Collection Products
• 25,000 Employees Worldwide
• 59 Manufacturing Plants Globally
• U.S.A.
– 4 DC’s - 1.4mm Sq.Ft; Expanding in 2006 to 1.75mm Sq.Ft
– Constructing new DC: Plainfield, IN - 653,000 sf; exp. to 970,000 sf
• NYSE: BDX
Strategic Decision Making
Supply Chain – Real Estate
• Distribution Orientation…
• Planning or Reacting?
– Trigger event – Service, Cost, Space,
Sudden Change in Business
Requirements, Acquisition/Divestiture
– 3 – 5 year planning for growth, inventory
rationalization
• Business Case over IRR hurdle
• Internal Selling
Network Design
• Network Design is a Balance
– Service requirements - (cycle time, order fill, “last mile”)
– Total Cost to Serve - (Distribution, Transportation & Inventory
Carry Cost – Safety Stock)
– Risk
• Optimized Network = Optimizing Constraints
– Optimal # of DC’s with sufficient capacity in Optimal
geographic locations with Optimal Transportation &
Inventory Costs which will meet/exceed Customer
Expectations
Location Selection – Key Drivers
• Location - driven in general by optimization of
transportation costs
– Centers of Gravity: Manufacturing & Customers
• Key Factors to selecting one City over another:
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Existing Operations – Incumbent factor
Existing educated labor base within community
Transportation Equipment Availability
State, County & Local tax & training incentives
Availability of Investment Grade Land
Sophistication of Local Government concerning
planning & efficient, ‘rules based’ decision making.
– Supportive, Responsible & Seasoned
Building Design
• Key Factors, Changes
– Building Height – 40’ clear - MHE
– Velocity vs. Storage Density
– T5 motion lighting
– Climate Control – reinforced roof
– Security built into site layout
– ESFR sprinklers to NFPA standard
– Building to FM standard