Chad Mohr DHHS Program Coordinator/State of Nebraska Distribution Charges
TAKE LOOK AT THE BIG PICTURE The RFP is to create a competitive environment: Distribute popular items Simplify the terms Consolidate the system Increase volume; FFS processing goes through State warehouse Distribution Charges
Let RAs decide what is popular. Direct Delivery: Step one: Pick from Foods Available list. Step two: Survey how many case per month or year. Processed: Procure most acceptable end products Use JIT inventory management Distribute Most Requested Items
Starting in SY14-15 Improvised with Survey Monkey until we could use reallocated SAE for a “real” system. Use Survey Monkey with Food Available list. Then survey how many case per year. Benefit: no dead inventory = no losses = no wasted space = attractive contract Distribute Most Requested Items
SY15-16 Implemented an actual RDOS (SAE funded). Use Survey Monkey with Food Available list. Then survey how many case per month with the RDOS. Benefit: no dead inventory = no losses = no wasted space = attractive contract Distribute Most Requested Items
Typical survey page: Canned Peaches
Split trucks to your advantage. Get to know your neighbors! Split with other States as well as RAs. Small frequent deliveries conserve warehouse space. Less popular but unique items can still be distributed. – Limit delivery periods to avoid dwell time. Distribute Most Requested Items
Billing Method By the pound or by the case? Pound = error prone. Case = Benefit: simple terms = attractive contract Simplify the Terms
Billing Method Bill the State or the RA? State = more work for us. RA = more work for contractor. Benefit: simple terms = attractive contract Simplify the Terms
Delivery Zones One Zone = simple, even pricing. Multiple zones = complex pricing, small RAs in remote areas lose. Benefit: Economies of scale benefit all RAs under one zone. Simplify the Terms
Delivery Frequency Monthly = required Weekly = optional Allow contractor to integrate USDA Foods delivery with commercial deliveries. Benefit: Reduces costs and adds value. Benefit: Weekly delivery conserves RA freezer space. Simplify the Terms
Minimums Let the RFP bid process determine minimums. Score it like cost. Ended up with no minimum. Benefit: RFP produces the best value Simplify the Terms
Handling Frequency Multiple contractors = Costly In Nebraska consolidation = Economical Benefit: higher volume and fewer touches = more attractive contract Consolidate the System
Direct Ship About 50% of Direct Delivery in Nebraska is shipped to RAs. 100% TEFAP direct shipped to ERAs. Benefit: no state level costs for large RAs, but… it detracts from the volume of the state contract. Consolidate the System
Old System – multiple zones Consolidate the System
Old System – one warehouse
Consolidate the System Old System – three carriers
Consolidate the System Old System – USDA to state warehouse
Consolidate the System Old System – carriers picked up at S.W.
Consolidate the System Old System – carriers picked up at S.W.
Consolidate the System Old System – carriers picked up at S.W.
Consolidate the System Old System – carriers picked up at S.W.
Consolidate the System Old System – Carrier delivered to RAs
Consolidate the System New System – USDA to state warehouse
Consolidate the System New System – warehouse to RAs
Old System State warehouse charged $6.00 per hundred pounds Carriers charged $15.00 per hundred pounds average $21.00 per hundred pounds = $8.40/40# case Distribution Charges
New System State warehouse = $1.70 per case Delivery = $2.30 per case Total charge $4.00 per case vs. $8.40. Distribution Charges