CLoCS - ITB, 16 Januari 2010Logistics Operation Overviewin FMCG Industry

AGENDA

AGENDA

MARKET & DEMANDKalimantan 2010% of Total PopulationGRDP (current Rp)GRDP/Cap (Rp mn)6%8%

28.91.79%11%

8.9%Sumatra 2010% of Total PopulationGRDP (current Rp)GRDP/Cap (Rp mn)21%23%

22.01.46%14%

12.8%Java 2010% of Total PopulationGRDP (current Rp)GRDP/Cap (Rp mn)59%60%

20.91.32%14%

12.6%CAGR (%)Bali & NT 2010% of Total PopulationGRDP (current Rp)GRDP/Cap (Rp mn)5%3%

11.81.50%15%

13.3%East Indo 2010% of Total PopulationGRDP (current Rp)GRDP/Cap (Rp mn)2%2%

22.21.62%19%

17.3%Sulawesi 2010% of Total PopulationGRDP (current Rp)GRDP/Cap (Rp mn)7%4%

11.91.25%14%

13.0%CAGR (%)CAGR (%)CAGR (%)CAGR (%)CAGR (%)Note: GRDP in Current Rp (including inflation 7%)Source:LPEM University of Indonesia

Demand Potential Ranking among regions 2006 2010based on growth, income per capita, population & distribution of income (1)Region Jakarta

Riau

North Sumatra

Nanggroe-Aceh D

West Sumatra

East Kalimantan

West Java

East Java

Central KalimantanPopulationGDP per capitaExpenditure per capitaDistribution of incomeRanking234156789Source:LPEM University of Indonesia= Good= Not GoodMARKET & DEMAND (2)

AGENDA

Information FlowProduct FlowSUPPLY CHAINCOSTUMERDEMANDSUPPLY(Internal company)(external company)Reconcile?$$$$$

SUPPLY VS DEMAND: RECONCILE?They both areIf manufacturingwere more flexible, wellable to meet customerrequirements We can only beso flexible atreasonable costManufacturing& distributionSales &MarketingWho is right ?ManufacturingManagerSalesManager

Information FlowProduct FlowSUPPLY CHAINPRODUCTIONDEMANDSUPPLY(Internal company)(external company)Reconcile?

Demand Planning / ForecastingAccurate forecast means higher turnover & lower cost

Baseline Forecast

Event Forecast

Forecast New Product

Forecast

AGENDA

Information FlowProduct FlowLOGISTICS OVERVIEWPRODUCTION

TYPICAL DISTRIBUTION NETWORKManufacturing Site(B)Manufacturing Site(A)Central Distribution CentreDistributionCentre 1DistributionCentre 2DistributionCentre 3Inbound logisticsOutbound logisticsNational DemandArea DemandNational SupplyArea SupplyArea Demand

Distribution Requirement PlanningDistribution Network ManagementHow much stock to keep at every stock pointInventory level working capitalHow much stock to replenishDRP calculationWarehouse ManagementStock Priority ManagementWarehouse ManagementCapacity planningStock keeping methodsRacking configurationWarehouse layoutThroughputDocking capacity unloading capacityDispatch capacity loading capacityStock Flow ManagementFIFOFEFOShipment / Delivery ExecutionTransportation ManagementTransport ProviderShipment / Delivery ExecutionDistribution Cost SavingContigency Route ManagementINBOUND LOGISTICSManufacturing Site(B)DistributionCentre 2Central Distribution CentreBack Of Factory

DISTRIBUTION REQUIREMENT PLANNINGDCCDCLT = 21 daysW3W2W1W0Forecast = 500Safety Stock= 5000Projected On Hand= 3000Stock Transfer Order = 2500STO = Forecast + SS Proj OHExample:

Customer ServiceCustomer OrderPurchase OrderReplenishment OrderReplenishment ModelInventory LevelOrder FulfillmentShipment / Delivery ExecutionBilling ProcessProof Of DeliveryKPI Service Quality?On Shelf AvailabilityCasefill On TimeJoint InitiativesService ImprovementsEfficiency ImprovementsWarehouse ManagementShipment / Delivery ExecutionTransportation ManagementTransport ProviderShipment / Delivery ExecutionDistribution Cost SavingsContigency Route Management

OUTBOUND LOGISTICSDistributionCentre 1Service Quality: How much?Is it On time?In Good Shape?Easy to Unload?Delivery

PURCHASE ORDER & DELIVERYSend POCustomer/StorePrincipalOrder EntryPO Checking: SKU/Description Barcode Price Qty Total POExpedition ReportPO ElectronicSynchronizationOrder ProcessorWHSSend Expedition ReportPO ManualLoad PlanningPickingAssembling &LoadingData interface: SKU/Desc-Barcode PriceTotal PO CompletenessAllocationDelivery Monitoring / Daily Monitoring : Est. Arrived Delivery Qty FulfilmentTotal POOrder Validation

REPLENISHMENT ORDERReplenishment Order = Stock Norm Stock On Hand Stock IT*Inventory model manages STOCK NORM level

REPLENISHMENT ORDER & DELIVERYPRINCIPALProduct FlowIn-transit StockFACTORYSupplyULI WHSCUSTOMERERP SystemMARKETOrderOrderDaily Sales & StockGenerate OrderParameter SetupDatabaseInformation FlowIntransit DataKPI: Service QualityCustomeProductSourcing WhsSch. Date & Req. DateEtc.

AGENDA

KEY PERFORMANCE INDICATORDistributionCentreArrival:Is it On Time?Qty as ordered?In Good Shape?Easy to unload?Return?DeliveryThe ability to deliver goods as customer ordered = SERVICEDelivery:Lead Time as Planned?Broken Product?Theft?Delivery:Stock available as ordered?Dispatched On Time?Problem while stock picking?Transportation available?Any order revision?Major KPIs:Service QualityCost

MEASUREMENT

CCFOT(%) provides the Loss tree framework for capturing Service, Efficiency and On-time Losses togetherInternal Company reporting is consistent CCFOT Reducing CCFOT loss areas would drive improvement of Customer Service KPIs*Figures are not actual dataExample Of CCFOT Loss:

AGENDA

Logistics is aboutCooperation(UsNOT you & i)

INITIATIVES

Service ImprovementElectronic Data InterchangeAdvance Shipment NotificationIntegrated Promotion Activity PlanningCPFRVMIOn Shelf AvailabilityEfficiencyNight Delivery Holiday DeliveryPalletized DeliveryDistribution BypassBackhaulingRetailer Centralized DeliveryLogistic Discount Agreement

INITIATIVES

Bikin kotak baru RMS (RM) processing.*Bikin kotak baru RMS (RM) processing.*Bikin kotak baru RMS (RM) processing.*