Visibility in the Supply

Chain

Presenters

Andrew Lam – Vice President of Global Planning has been with the company for

fourteen years working in multiple areas of the supply chain ranging from

procurement, sourcing, deployment, planning, and new system implementations.

Jill Donoghue - Vice President of Logistics has been with the company for twelve

years. Prior to Bumble Bee, Jill held various supply chain roles at Keebler Foods,

Pechiney Plastic Packaging and Kraft Foods, all based in Chicago.

Ruby Popp - Vice President of Sales Support Services has been with the company

for fifteen years. Prior to Bumble Bee, Ruby worked in new product development

for Hanson Beverage Company and Don Miguel Mexican Foods, both in Southern

California.

Agenda

Overview of Bumble Bee Seafoods

Supply Chain Optimization

Global Transportation Management Solution (TMS)

Vendor Managed Inventory (VMI)

Overview of Bumble Bee Seafoods

North America’s largest branded seafood company with #1 or #2 position in virtually

every segment of U.S. and Canadian shelf stable seafood

Bumble Bee was originally founded in 1899

We are a now a private, domestically owned company and one of the last North

American processors of tuna, sardines and clams

We process more than 60% of our requirements and maintain strategic co-pack

relationships in 20 countries

Over $1B in annual sales

Improving our consumers’ quality of life by providing sustainable, nutritious, convenient and affordable seafood products

CORPORATE VISION

Supply Chain Optimization Project

Supply Chain Optimization Project

Real-time visibility to supply plan and procurement

Activate Supply Network Planning in APO

– DRP (Distribution Resource Planning)

– MRP (Manufacturing Resource Planning)

– Rough-Cut Capacity Planning

– Deployment / Transport Load Builder

Formalization of information = One source of data

Increased efficiency

Enhanced understanding of supply drivers

Focus on optimizing and reducing safety stock

Before Supply Chain Project

After Supply Chain Project

Rounds Loins Loins Brites Finished Goods

Finished Goods

Loining Facility Data Feeds

SAP ECC Material Requirements Planning

SAP APO Supply Network Planning

Loining Facility Manufacturing Plants DC’s

Rescheduling

Data Load

Reqmts

Deploy

Reqmts Reqmts Reqmts

Deploy

Manual Adjustments

Sale

s D

em

and

Data and System Flow Example

Safety Stock Methodology

Data Drivers

= (Safety Factor) x (Uncertainty Factor) x (Lead Time)

Safety Stock Element Bumble Bee Data Element

Service Level

(Product Availability Target) 98.5%

Demand Variability

(Forecast Accuracy)

Forecast Accuracy

Item-Location MAPE

Supply Variability

(On-time production, and

delivery of finished goods)

Produced – Schedule Adherence

Purchased – On Time Deliveries

Lead Time

(Supplier, manufacturing ,

and delivery lead time)

Production Frequency Interval

Production Leadtime

Transit Lead Time

Safety Factor

Uncertainty Factor

Lead Time

Safety Stock

𝑁𝑂𝑅𝑀𝑆𝐼𝑁𝑉 𝐶𝑦𝑐𝑙𝑒 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐿𝑒𝑣𝑒𝑙 × 𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡 𝑀𝑎𝑝𝑒 2 + (𝑆𝑢𝑝𝑝𝑙𝑦 𝑉𝑎𝑟𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦)2 × 𝑇𝑜𝑡𝑎𝑙 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒

Variable Reduction Bumble Bee

Inventory Reduction

Service Level (In terms of Fill Rate)

1% 10-15%

Demand Variability 10% 5%

Supply Variability 10% 1%

Variable Sensitivity

98.0%

98.5%

99.0%

99.5%

100.0%

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

$50,000,000

$55,000,000

$60,000,000

$65,000,000

Inventory Fill Rate

69 Days

44 Days

Safety Stock Reduction Example

Global TMS

International Freight – Situation

All crucial aspects of Import orders were manual

Critical dates in SAP were not always accurate

– Entered manually by variety of people and process was not consistent

– Updates were not always accurate or timely

– No opportunity to identify and address obstacles to on-time delivery

Purchase Orders were managed via e-mail and telephone

– Vendors did not consistently notify BB when delays occurred

– Notifications were not always timely

– No database for Vendor KPI reporting

– Uncertainty surrounding delivery led to increased inventory

– Employees were manually closing POs in SAP

Regulatory compliance was not system supported

– Missing or delayed documents were not managed pro-actively

– Shipments were delayed as a result of late or incomplete documentation

– Documents sent via e-mail and courier and retained by multiple parties

Carrier Management

– Carrier rates and contracts were managed in spreadsheets

– Tracking was done via multiple carrier websites

– No database for Carrier KPI reporting

– No mechanism for ensuring Routing Guide compliance

Response: Implement an International TMS solution

Better quality information equates to more efficient management,

which leads to cost reduction.

International Freight – Situation

Global TMS Review RFP Process

11 Participants

Variety of solution types (SaaS and License Install)

CargoSmart Selected

CargoSmart provides global shipment management software solutions

that enable shippers, logistics service providers, and ocean carriers to

improve planning and on-time deliveries

Connected to over 30 ocean carriers, CargoSmart leverages big data

sources and a cloud-based platform to offer sailing schedules, visibility,

documentation, contract management, compliance, and benchmarking

solutions

Launched in 2000, CargoSmart helps over 130,000 transportation and

logistics professionals to increase delivery reliability, lower transportation

costs, and streamline operations

Phase 1 – Booking, visibility and document management

Beta Partnered with Two Suppliers in December 2013

Methodically rolled out remaining packers Jan – Dec 2014

– Packers with similar implementation characteristics identified and scheduled accordingly

Intense auditing of data from multiple sources

– Packers, Ocean Carriers, Brokers, Dray Carriers, etc.

Standardized Packer Operating Environment

Ongoing Packer Training

Phase 2 – PO Management and KPI reporting starting in 2015

Phased Implementation

Global TMS Solution - Benefits

Supports goals and data requirements of Supply Chain

Optimization project

– Improved visibility and accuracy of dates in SAP

– Inventory reduction through reliable and consistent milestone management

Manual processes become automated and timely

– Closure of SAP POs is automated via EDI

– SAP dates updated via EDI for critical milestones, from PO creation

through final delivery

– Packer compliance to routing guides enforced at time of booking

International Freight Savings

– Routing guide compliance – optimal carrier selection

– Reduction in container demurrage

– ISF filing brought in house

Global TMS Solution - Benefits

Supports regulatory compliance

– Single repository for documentation

– Centralization of regulatory control

– Standardization of processes

– Packers notified via system to upload missing documents

– Protection from costly penalties

Management by exception

Improved Reporting

– KPI reporting for Vendors

– KPI reporting for Carriers

– Centralized database of rates

– Transit analysis by lane

Centralized Global Visibility to Movement of Product

Complex playing field: International Logistics

– Multitude of providers and hand offs (packer, carrier, agent,

broker, dray carrier)

– Lower levels of standardization than experienced domestically

Complex implementation environment

– Languages, time zone, change management, unique packer

operating environment (business drive, cultural)

Data inconsistent from carrier to carrier

While the Phased rollout was required to protect the business,

timing of savings were delayed

Learnings

VMI

Why VMI? VMI is a means of optimizing end-to-end Supply Chain and Sales

performance by increasing collaboration with customers through shared data.

Our goal is to align business objectives and optimize Supply Chain

operations for both Bumble Bee and its strategic partners.

Bumble Bee is responsible for maintaining the customer’s inventory levels

and for generating the customer’s purchase orders guided by mutually

agreed upon objectives and measures.

Bumble Bee receives data electronically that advises a customer’s sales and

stock levels allowing us to view every item carried and potentially true point-

of-sale data.

Detailed data of the entire supply chain of both partners allows for

collaboration at multiple levels in order to drive the success of the brand.

Opportunities for Bumble Bee to have traditional collaboration with customers

is limited with priority going to larger partners. VMI is the way for Bumble Bee

to open the door to partnerships that will be beneficial for all.

Current Situation

Limited collaboration

Little to no visibility of customer’s inventory resulting in

additional safety stock required

Limited control over customer’s buying behavior

– Customers “rush” orders for promotional events impacting future

sales and promotions

– Warehousing and transportation services are at the customer’s

request and not optimized

Rebills and lump sums created to capture funding missed

during promotional periods resulting in financial hits that are in

future months rather than the period the activity actually took

place

Response: Implement VMI with strategic partners

VMI Benefits Collaboration/Communication

– Preferred Vendor/Strategic Partner status

– Improves forecasting for both partners

– Streamlines new item intros / exit of items

– Improves promotion execution

– Aligns with customer’s scorecard to achieve KPI targets

– Increases sales

Inventory Control – Prevents out of stocks

– Improves fill rate

– Improves turns

– Reduces periods of supply for both partners

– Improves on-time delivery

Order Smoothing – Case picking to full layers or pallets to expedite the shipping/receiving process

– Load leveling opportunities/Smooth dock activity

– Co-loading collaboration opportunities

– Improves order/load planning for promotions

– Potential opportunity to shorten order cycle times

VMI Review Bumble Bee implemented SAP in 2008 which streamlined

operations and provided the platform for a successful VMI

program

Bumble Bee conducted extensive research into VMI solutions

– Collaborated with other CPG companies

– RFPs with four of the top VMI software suppliers

– Variety of solution types (SaaS and License Install)

Bumble Bee selected Datalliance

– Leading provider of VMI and related services

– Manages more SKUs/locations than any other independent VMI

system in the world

– No software installed, fully hosted SaaS

– Solution is always current with three updates per year

– All Customer Care support services are included

Implementation Build VMI solution with Fred’s, Inc.

– Dollar store customer that is favorable to VMI

– Customer is focused on best practices and continuous

improvement initiatives

– Customer willing to “train” new suppliers

– Provides Bumble Bee team the opportunity to learn VMI in a

controlled environment Datalliance software

Customer KPI review and reporting

Buyer weekly conference calls

Process flow for internal departments

Next Steps

– Build on success of pilot

– Focus on strategic partnerships

Learnings Clean Data

– Item Master synchronization between parties

– TI x HI accuracy for proper ordering patterns

Forecasting – Customer On Hand/On Order inventory status

– Customer’s required safety stock days

– Base vs. Event (promotional) sales

– Customer’s system forecast vs Bumble Bee’s

Lead-Time Components – Customer’s lead-time from PO generation to PO receipt into warehouse

– Customer appointment scheduling days

– Transit time from Bumble Bee warehouse to customer warehouse

– Customer’s fiscal calendar

People – Commitment throughout your organization

– Experienced people are key to success

Conclusion

Visibility in the Supply Chain

– Supply Chain Optimization Project

– Global TMS

– VMI

Visibility in the Supply Chain leads to faster data, faster

product movement which = Customer Satisfaction + Cost

Effectiveness

Thank You!

Andrew Lam, Vice President Global Planning

Andrew.Lam@bumblebee.com

Jill Donoghue, Vice President Logistics

Jill.Donoghue@bumblebee.com

Ruby Popp, Vice President Sales Support Services

Ruby.Popp@bumblebee.com