GMA 2012 Logistics Benchmark Survey Q&A


Overall questions


Page 3: Supply Chain Background & Performance (I/II) questions


Page 4: Supply Chain Background & Performance (II/II) questions


Page 5: Logistics costs questions


Page 6: Simplification questions


Page 7: Collaboration questions




Overall questions

Should I include Foodservice operations in my responses?

We excluded Foodservice for the purpose of this study and companies are only asked to report their retail data. To keep responses comparable across companies, please do not include any foodservice operations.

Should our data reflect sales to grocery stores only, or should we also include other retail channels such as mass merchandisers, discount stores, club stores, and convenience stores?

Retail sales data should include all of retail channels (grocery stores, mass merchandisers, discount stores, club stores, convenience stores, etc.).


Page 3: Supply Chain Background & Performance (I/II) questions

Should annual sales be reported as gross sales or net sales?

Please report gross annual sales.

Should annual sales and total deliveries represent "customer deliveries" only, or also include "inter-company" or "inter-facility" shipments?

These questions refer to customer shipments only.

For average LTL truck capacity utilized, should we use weight or cubic volume or equivalent FTLs?

The aim behind the question is to understand how much efficiency is lost through LTL shipments. A ratio representation of equivalent FTLs would be appropriate, but whether you use weight or volume to calculate this should depend on whether you typically reach a weight or volume limit for your FTL shipments.

Does total pallets shipped refer to palletized SKU's, or the actual number of "wood" pallets (Chep/Peco etc.) shipped?

The purpose of this question is to assess overall throughput, so it refers to the actual number of pallets shipped. The same holds for total cases, weight and volume shipped annually. In the Simplification section of the survey, we ask a separate question about the number of different SKUs produced and delivered, which addresses SKU variety as well.

In the Outbound shipping method section, what is the difference between a plant-based warehouse and direct from plant shipment? Does direct from plant imply that cases are never inventoried?

A plant-based warehouse is co-located with the plant, but products have to be transported at least a short way to be stored. Direct from plant shipments could still have been inventoried (on-site), but they only include inventory that is shipped directly from the point of manufacture to the customer.

In the Vehicle / carrier type section, does 3PL service providers only include direct brokered? Some of our common carriers may broker our freight, but we do not necessarily have visibilty to it.

Please go by the service you purchase (either common carrier or 3PL) irrespective of what they do with the order subsequently. Therefore, if you use 100% common carrier services, please indicate that (even if they may be sub-brokering some of the freight in the capacity of a 3PL / broker)


Page 4: Supply Chain Background & Performance (II/II) questions

How do you define an intermediate warehouse? Does a DC (mixing center) or overflow warehouse count? What about upstream warehouses, such as plant-based warehouses that may also ship to customers?

Intermediate warehouses would typically be warehouses that store finished goods (downstream from plant) and are also not the retailer DC / warehouse at the store. Both a DC and an overflow warehouse would be considered an intermediate warehouse. However, there is one question on page 6 that specifically asks how much of your warehouse space is overflow space.

For plant-based or upstream warehouses, only include those warehouse where finished goods shipments to customers comprise a significant proportion of their activity.

How do you define warehouse space if we have flexible use arrangements? How should we define utilization if we do not "buy" fixed warehousing space?

For flexible use agreements, please estimate the average amount of space (square feet) flexibly-leased throughout the year in a typical warehouse. We understand that this may vary considerably month-to-month.

Utilization should be defined as how efficiently flexibly-leased space is used, on average, throughout the year. For example, if leased space scales up and down perfectly with needs, then utilization should be ~100%. If on average, you are paying for ~5% more racks than you are actually using (due to product turnover, etc.), utilization should be ~95%.

In the Warehouse performance section, do cases and pallets picked per hour refer to a typical warehouse, or across our entire network?

As the goal is to understand the total capacity of your network, we would prefer a network-wide figure. However, if you do not track this metric across your entire Supply Chain and can more readily determine a "typical" warehouse / DC estimate, please multiply this estimate by your total number of DCs and warehouses and respond with the resulting Supply Chain-wide approximation.

We have finished goods inventory staged at multiple locations (e.g., at plant warehouses and regional DCs). Which portion(s) should I include in Days finished goods inventory on hand?

As the aim of this question is to understand system-wide inventory across your Supply Chain, please include the finished goods inventory staged at all locations.


Page 5: Logistics costs questions

Considering the breakdown of costs across logistics functions, in which line item should we include the cost of loading / unloading trucks?

Where there is a clear distinction (e.g., a third-party freight company handling outbound shipping that is contractually-obligated to load the trucks), please include this cost in the appropriate line item. If your company is responsible for both the warehouse / DC ops and the shipping and the labor is reasonably split between the two, please split the cost 50 / 50 between the two line items. Either way, please be sure these costs are not double-counted.

Please define custom / special packaging. How should I break this out if it occurs as a part of normal warehouse operations?

Custom / special packaging includes the cost of any specializations or customizations in final packaging due to customer request. This could include, for example, the cost of shelf-ready packaging or store-ready pallets. Where you are able to break this out, please include it on the Custom / special packaging line item, but please ensure these costs are not double-counted in any other line item (e.g., DC / intermediate warehouse operations or Other management activities / Overhead)


Page 6: Simplification questions

What should be included in overflow warehouse space?

Overflow warehouse space is the space that you lease beyond your standard warehouses, either to meet excess space needs during periods of higher seasonal demand, or to increasing ad hoc space needs associated with new product launches / increasing complexity / growing inventories. One way to think of this is the "short-term" space that you use seasonally or temporarily, have not committed to lease for longer than 1 year, or may plan to vacate within 1 year. "Permanent" increases in warehouse space associated with growth in distribution or geographic coverage should not count toward this.

What is your definition of spoilage? If we do not make a profit on the product but receive a tax benefit (e.g., donated product), is it still considered spoilage?

Spoilage is defined as the expensed cost (as % of sales) of all unsaleables due to spoilage or expiry. Code date, by contrast, is defined as the reduction in margin (also as a % of sales) due to mark downs intended to increase sales shortly before expiry. In the context of this survey donated product should be considered as spoilage, as we aim to benchmark the effectiveness and efficiency of the Supply Chain.


Page 7: Collaboration questions

What is your definition of sharing daily retailer scan data?

Sharing daily retailer scan data refers to data interconnectivity with retailers' point of sale (POS) systems.

What is your definition of sharing distribution centers?

Sharing distribution centers refers to co-utilization of distribution centers (DCs) with retailers to reduce costs. This may involve holding manufacturer-owned product in retailer DCs or retailer-owned product in manufacturer DCs in order to optimize inventory / logistics across the Supply Chain.




If you have any additional questions regarding the survey, or if you would like to participate in an interview, please contact Elfrun von Koeller.