Supply Chain Logistics

Steve Schommer

Team Leadership Case Study Examples

June 2024

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LEADERSHIP PEDIGREE – KNOWLEDGE NETWORK 4,000 FIRMS RESULTS – SEVEN CASE STUDY EXAMPLES

Table of Contents - Steve Schommer

• Knowledge Network – Industry examples of companies worked with or for.

• Case Study 1 - Design and build a life-saving drug distribution model.

• Case Study 2 – Supply chain optimization contains 1,237 elements.

• Case Study 3 - Transport using 14 live video cameras reduced claims 95%.

• Case Study 4 - COVID-19 Supplier packaging redesign saved $6.5M.

• Case Study 5 - Import optimization cut cost 40% and cut transit 7 days.

• Case Study 6 - Transport collaboration eliminated freight cost to Walmart.

• Case Study 7 – Global export to 160 countries reducing cost 18.7%.

• Case Study 8 – LTL to one dedicated truck saved $250,000.

• Strategic Assessment - Global Supply Chain Transportation

“Imagination is more important

than knowledge” (Einstein)

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STEVE SCHOMMER - KNOWLEDGE NETWORK OF 4,000 COMPANIES

• Life Sciences • Manufacturing • Retail / F&B • Transportation / 3PL Profile Facts:

• Most Proud Team Accomplishment – Designed and Deployed A Life-Saving Drug Distribution Model – Saved 3,000 People

• Largest Operations Warehouse Managed – 1.5M SF (Product Value $5B)

• Largest Fleet Managed – 350 / Largest Team Managed - 150

• Largest P&L Managed - $100 Million

• Largest Supply Chain Redesign – 160 Countries

• Supply Chain Transformation Savings - $1.3 Billion Same Day Life-Saving Drug Model

Case Study 1 – Transportation Distribution

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Build Change Into Your Plan

• Challenge: Design a repeatable, cost-efficient transportation operational system capable of delivering life-saving biopharma therapies to any of 6,000 hospitals, clinics or pharmacies within eight hours of a diagnosis or phone call.

• Solution: Led a 35-person team that developed (and deployed) a unique operational model. By utilizing data science analytics, we identified predictive patient locations and mapped out the most efficient routes, considering airports, roads, and traffic patterns, including travel speeds. Our team identified the most strategic forward stocking sites and established partnerships with blood centers—and then negotiated competitive rates with parcel couriers for the final mile delivery. The system was designed to deliver within 8 hours, and on average, achieved a 5.5-hour turnaround from the initial phone call to the patient's infusion. Despite the challenges posed by C19, we ensured Covid-free deliveries by sanitizing each parcel at delivery. Design, Build, Deploy a Same-Day Life-Saving Drug

Distribution Model – Saved 3,000 People

CASE STUDY

End to End Digital Information and Physical Products Combining Art & Science – People, Process & Technology Model Became Keystone For Transforming Business Ecosystems Case Study 2 – 1,237 Supply Chain Elements

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• Challenge: Misdiagnosis of problems in supply chain is a common issue for most companies. A report by McKinsey & Company indicated that inefficiencies cost companies 10% of their annual revenues. Key reasons include the following:

• Complexity and Data Overload

• Lack of Visibility

• Siloed Operations

• Communication

• Inadequate Root Cause Analysis

• Reliance on Outdated Technology

• Human Cognitive Bias

• Lack of Expertise

• No Time

• Solution: The cornerstone for supply chain transformation is getting visibility to the intellectual movement of information and physical movement of products. We formally identified and documented 1,237 different elements that make up the end-to-end supply chain including the most common gaps.

• The model was utilized for Strategic Assessments across multiple industries to identify the true root cause of problems. Clarity enabled optimization and integration of people, process and technology for company business models. This enabled targeted precision roadmaps for solution execution to critical challenges. The result has been savings of over

$1.3 billion.

Most companies misdiagnose the root cause of problems costing them billions. CASE STUDY

On Time. On Temp. No Shortages. No Damages.

No Failure To Supply (FTS) Penalties.

Case Study 3 - Innovative Transportation

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• Challenge: The pharmaceutical industry incurs annual losses of $100 billion due to various supply chain transportation issues—including product loss, inventory shortages, damages during transit, temperature excursions, and failure to supply penalties from the buyers for late shipments.

• Solution: We designed, built, and deployed advanced “first-of-its-kind” video solutions that integrate 14 live cameras installed on transportation tractors and trailers. By refining SOPs across operations (i.e., picking, packing, shipping, BOLs, content counts, etc.), we improved efficiency, safety, and transparency of transportation operations. Through this innovative solution, we empowered the 3PL operational warehouse and transportation teams to make data-driven decisions addressing issues proactively that mitigated risk and accurately identified the root cause of claims that turned out to not be shipper or carrier related. Claims from the “Big 3” wholesalers were reduced by 95%. CASE STUDY

Leveraging Partners – Zero Cost Direct Reports

Case Study 4 - Supplier Packaging Redesign

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• Challenge: Due to variations in pallet heights and widths, double stacking was not possible in all

refrigerated trailers. This posed a challenge for the rapid distribution of over 100 million COVID-19 test kits, a critical commodity during the pandemic.

• Solution: The first phase involved having the packaging supplier run case optimization through their pallet configuration software. This was followed by a second phase of collaborative communication between the

manufacturer, transportation carriers, and 3PL. The seamless coordination between parties resulted in a rapidly accelerated distribution, full cube utilization and an impressive savings of $6.5 million.

• Most companies don’t take advantage of their vendors and suppliers as “Free” direct reports. On average, you have an additional staff of over fifty people.

Turning chaos and disruption into opportunity and

advantage to save $6.5 million

CASE STUDY

The Power of the Opposite

Case Study 5 - Import Ocean Containers

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• Challenge: A major drug manufacturer (purchasing from a CMO) needed a lower cost and quicker route from Italy to a 3PL located in TN. Their previous routing was from Italy to NY to TN (using MSC, CMA, or Maersk).

• Solution: Sometimes the power of the opposite means re-evaluating and considering all options, not just the obvious ones. Using data for routing and port options, including lower-cost Southern ports in the US, we

optimized and redesigned their import model and

negotiated new rates with applicable service providers

(i.e., steamship line, forwarders, transportation carriers). By selecting Turkon, a small SSL, we were able to secure more free days and shorter overall linehaul to Memphis reducing cost by 40% and cutting seven days off transit.

• Always have a Preferred AND Approved plan to mitigate risk when compelling events happen like the Baltimore port bridge collapse.

Cost Reduction 40% / Saved Seven Days Transit

CASE STUDY

The Power of Partners

Case Study 6 - Collaboration

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• Challenge: In the floral industry, 80% of cut flowers come from outside the USA including Columbia and

Ecuador. Of the 20% grown in the USA, 75% come from California. To catch the Walmart floral distribution model in the USA, the shipments must be sent to Miami at the cost of the California flower grower.

• Solution: The power of collaboration was the keystone to designing a model that leverages three strategic partners. The heavy pallet beverage industry was a perfect match for the lightweight flower industry. Both require temperature control. Combining light and heavy commodities optimizes cube and weight utilization in the trailers. Collaboration with a reefer carrier needing to return to Miami was the key to low rates using scheduled service Monday, Wednesday and Friday. The beverage company saved 25%, the flower grower eliminated cost from California to Florida and the trucking company increased fleet utilization.

Transform Freight Expense into a Free Freight Program CASE STUDY

Beverage Pallet

2,000 Pounds

Flower Pallet

400 Pounds

The Art and Science of Global Distribution

Case Study 7 - Global Export 160 Countries

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• Challenge: A major drug manufacturer distributing to 160 countries was experiencing high cost, poor service and significant claims, in particular, shipping to developing countries in the world.

• Solution: Evaluate the fixed and variable cost profiles along with historical service and claims. Identify best is class transportation service options among over 500,000 potential partners globally.

• Incorporate the “art” of transportation management by understanding that certain countries are challenged with corruption or influence that negatively impacts service, cost and claims. Redesign the transportation routing guidelines based on actionable intelligence.

• For example, in some of the most corrupt countries, the routing design is through the airport with the lowest risk for service and claims. This is a dynamic model not static and requires real time KPI monitoring to work effectively.

• Negotiations were conducted with transportation carriers and the transportation routing matrix was revised to 160 countries. The result was a savings of 18.7% along with service enhancements to customers. Global Transportation - Risk Mitigation / Cost Savings 18.7% CASE STUDY

Controlling The Both And World

Case Study 8 – LTL To FTL Dedicated

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• Challenge: Local LTL Delivery from a 3PL distribution center was shipping for 120 manufacturers. There were ten key locations within 20 miles of the distribution center. The cost for LTL service was high and had an unacceptable claims frequency.

• Solution: The solution involves thinking in a mindset of both/and not an either/or model for transportation. Meaning, many companies just use transportation carrier partners and do not run any of their own assets.

• By shifting the model LTL became FTL with positive impacts to service, cost and claims. The both/and model was using LTL and dedicated FTL to deliver LTL shipments depending on client order volumes.

• The solution was using an independent contractor, running dedicated equipment for the 3PL. This model eliminates the risk of owning assets and the savings on just one truck delivering locally was $250,000. In addition, for 75% of shipments the customer received the freight one day sooner with fewer claims. One Asset – Saved $250,000

CASE STUDY

Rapid evaluation that delivers crucial insights to your business so you can optimize supply chain logistics transportation processes, reduce cost, improve service, manage compliance and mitigate risk, strengthen sustainability efforts, and align strategies with your overarching business goals.

Transformation Process First Step

A Strategic Assessment of Supply Chain Logistics

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• Identify gaps in the alignment of people, process, and technology.

• Insights into critical KPI’s that provide actionable intelligence.

• Cost reduction roadmap – 5% to 35% savings.

• Effective strategies for managing your service partners.

• Legal, regulatory, and quality actions to mitigate risk.

• Assessment is NOT to find fault, assess blame or point fingers!

• Our team goal is to uncover opportunities to differentiate our company and give us a competitive advantage in the marketplace.

• Ultimately, the Strategic Assessment makes us all look great as we take the first step in transforming global logistics.

• Transform out of status quo to a more cost-effective and service- intensive logistics model.

Expected Benefits and Outcomes from the Strategic Assessment Open Discussion:

Next Steps:

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