US Foodservice/HMSHost Business Review
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Transcript US Foodservice/HMSHost Business Review
Centralized Distribution Solutions
2007 ACI-NA Concession
Conference
Presented By Dan Bent
HMSHost
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Topics
Internal Distribution Challenges
Critical components
Differences in an airport environment
Models In Use
Direct
Cross-Docking
Redistribution
3rd Party (Cross-docking and/or redistribution)
Strategies To Ensure Success
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Components Of Internal Distribution
Invoice
Quality/
Freshness
Requisition
Terminal
Shrink/Loss
Storage Space Prevention
Inspecting
Inventory
Purchase Ordering
Bill Of Lading
Bonded
Picking Ticket
Order
Facilities
Credit Memos Receiving
Temperature/
Recovery Time Control ServSafe
Recalls
Pars
Returns
Drops
Certification
HAACP
Tailgate Delivery
In-Store Delivery
Distributors
Redistribution
Concealed Damage
Hot Shot
Development
Cross
Deliveries
Cross Docking
Manufacturers
Contamination
Time-sensitive
Cold Chain
Deliveries
Commissary
Delivery Window
Chain Of Control
Production Product
Labeling/
Substitutions
Space
Fill Rates Nutritionals
Tampering
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Key Differences In Airport Environment
Security
Requirements
Key Drop Deliveries Not Allowed
Background Checks/Badging
Importance Of Chain Of Control
Significant Space Constraints
Volumes Much Greater Than Streetside Operations
Remote Production Needs Due To Limited Concourse
Space
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Internal Logistics Process - Direct Delivery
In Direct Delivery, the commissary or store:
Places order with the vendor.
Order is delivered directly to the store.
Store inspects, receives and stores the products.
Store makes any adjustments to invoices and
sends invoices to accounting for processing.
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Internal Logistics Process - Cross Docking
In Cross Docking, the commissary is a “Pass
Through.”
Commissary or store places order.
Order is delivered on pallets to the commissary.
Commissary inspects fresh perishable items &
spot-checks rest of the order (e.g., temperature,
counts) and then sends to store.
Receiving associate at store checks in delivery.
Store manager makes any adjustments to
invoices and sends to accounting for processing.
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Internal Logistics Process – Redistribution
In Redistribution, the store places orders with
commissary using a Requisition Form.
Commissary orders from vendors.
Commissary inspects, receives and stores
products.
Commissary makes any adjustments to invoices
and sends invoices to accounting for processing.
Upon receiving a Requisition from a store,
commissary picks, packs, and delivers the
products to the store.
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Internal Logistics Process – 3rd Party
In 3rd Party, the store places orders and a 3rd Party
receives them and either cross docks (most common)
or redistributes.
Commissary or store places order.
Commissary or store provides documentation of
order to 3rd Party.
3rd Party inspects fresh perishable items & spotchecks rest of the order (e.g., temperature, counts).
3rd Party may X-ray product if have equipment.
3rd Party delivers the products to tenants’
commissary and/or stores.
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Each Model Contains Trade Offs
Direct
Delivery
Cross
Docking
3rd
Party
Redistribution
Pros
Pros
-Efficient labor -Centralized
-Less handling receiving
-Relationship
with distributor
Pros
-Less trucks
on tarmacs
Pros
-Greatest
control
-Improved
buying
Cons
-Excess
inventory
- Not adequate
concourse
storage space
Cons
- Quality
Assurance
issues
-Additional
layer/costs
Cons
-More labor
than direct or
cross-docking
Cons
- Excess
inventory
- Not adequate
concourse
storage space
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Optimal Model Dependent On Airport
Different models help meet the unique needs of
the airports - any model (or hybrid) can act as a
“Central Distribution Solution”
Assign central responsibility
Implement clear processes
Centralize expertise for QA and par management
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Strategies To Ensure Success
Make Quality Assurance Job #1
Inspect product
Maintain the cold chain
Designate a centralized resource
Proactively Manage Your Vendors
Understand brand requirements (may vary)
Monitor and document (e.g., fill rates, etc…)
Development
Create
a regular dialogue
Process Makes Perfect
Develop, document, train & inspect standards
Become a Learning Organization (e.g., HMSHost has
Commissary Group HMSHost
fromConfidential
branches
meet on best practices).11
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