1. Centralized Distribution Solutions 2007 ACI-NA Concession Conference
Presented By Dan Bent
HMSHost
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Topics
Internal Distribution Challenges
Critical components
Differences in an airport environment
Models In Use
Direct
Cross-Docking
Redistribution
3rd Party (Cross-docking and/or redistribution)
Strategies To Ensure Success
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3. Components Of Internal Distribution
Quality/
Freshness
Terminal
Storage Space
Shrink/Loss
Prevention
Invoice
Requisition
Inspecting
Inventory
Ordering
Purchase
Order
Bill Of Lading
Bonded
Facilities
Picking Ticket
Receiving
Credit Memos
Temperature/
Time Control
Recovery
Drops
ServSafe
Certification
Recalls
Returns
Pars
HAACP
Tailgate Delivery
In-Store Delivery
Distributors
Redistribution
Development
Concealed Damage
Hot Shot
Deliveries
Cross
Contamination
Cross Docking
Manufacturers
Time-sensitive
Deliveries
Cold Chain
Commissary
Delivery Window
Chain Of Control
Production
Space
Labeling/
Nutritionals
Product
Tampering
Substitutions
Fill Rates
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4. Key Differences In Airport Environment
Security Requirements
Key Drop Deliveries Not Allowed
Background Checks/Badging
Importance Of Chain Of Control
Significant Space Constraints
Volumes Much Greater Than Streetside Operations
Remote Production Needs Due To Limited Concourse
Space
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5. Internal Logistics Process - Direct Delivery
In Direct Delivery, the commissary or store:
Places order with the vendor.
Order is delivered directly to the store.
Store inspects, receives and stores the products.
Store makes any adjustments to invoices and sends invoices to accounting for processing.
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6. Internal Logistics Process - Cross Docking
In Cross Docking, the commissary is a “Pass Through.”
Commissary or store places order.
Order is delivered on pallets to the commissary.
Commissary inspects fresh perishable items & spot-checks rest of the order (e.g., temperature, counts) and then sends to store.
Receiving associate at store checks in delivery.
Store manager makes any adjustments to invoices and sends to accounting for processing.
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7. Internal Logistics Process – Redistribution
In Redistribution, the store places orders with commissary using a Requisition Form.
Commissary orders from vendors.
Commissary inspects, receives and stores products.
Commissary makes any adjustments to invoices and sends invoices to accounting for processing.
Upon receiving a Requisition from a store, commissary picks, packs, and delivers the products to the store.
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8. Internal Logistics Process – 3rd Party
In 3rd Party, the store places orders and a 3rd Party receives them and either cross docks (most common) or redistributes.
Commissary or store places order.
Commissary or store provides documentation of order to 3rd Party.
3rd Party inspects fresh perishable items & spot-checks rest of the order (e.g., temperature, counts).
3rd Party may X-ray product if have equipment.
3rd Party delivers the products to tenants’ commissary and/or stores.
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9. Each Model Contains Trade Offs
Direct
Delivery
Cross
Docking
3rd
Party
Redistribution
Pros
Efficient labor
Less handling
Relationship with distributor
Cons
Excess inventory
- Not adequate concourse storage space
Pros
Centralized receiving
Cons
- Excess inventory
- Not adequate concourse storage space
Pros
Less trucks on tarmacs
Cons
- Quality Assurance issues
Additional layer/costs
Pros
Greatest control
Improved buying
Cons
More labor than direct or cross-docking
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10. Optimal Model Dependent On Airport
Different models help meet the unique needs of the airports - any model (or hybrid) can act as a “Central Distribution Solution”
Assign central responsibility
Implement clear processes
Centralize expertise for QA and par management
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11. Strategies To Ensure Success
Make Quality Assurance Job #1
Inspect product
Maintain the cold chain
Designate a centralized resource
Proactively Manage Your Vendors
Understand brand requirements (may vary)
Monitor and document (e.g., fill rates, etc…)
Create a regular dialogue
Process Makes Perfect
Develop, document, train & inspect standards
Become a Learning Organization (e.g., HMSHost has
Commissary Group from branches meet on best practices).
Development
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