L ogistics & T raceability planning & material management @ FOOD SAFETY SION 21h MARCH 2012

1. Logistics &Traceabilityplanning & material management @FOOD SAFETY SION21h MARCH 2012

2. agenda • presentation • traceability definition • supply chain elements • do you speak systems ? • performance management • anecdotes • keep an eye on

3. nicolas perrenoud project leader1998 - 2000 R&D operations & texturisation Nestlé PTC Orbe project manager2000 - 2003 industrialisaton & process engineer Nestlé Suisse SA - arômes industriels - fabrik Kempttal production manager 2003 - 2004 technological support group Givaudan Schweiz AG - Flavours Production Kemptthal project supply chain process manager2004 - 2006 global supply chain strategy Firmenich SA - Corporate Center Meyrin operation director2006 - 2008 head of operations LeShop.ch - Corporate Center Chavannes-de-Bogis founder azeo.ch2007 operation & business process Lausanne head of logitics2008 head of operations Huntsman - Monthey

4. traceability definition ISO definition traceability is the ability to trace the history, application, or location of that which is under consideration that which is under consideration - a truck or a grain of wheat ? a standard location - field, farm or country ? standard identification technology - pen and paper or computer ? does not specify that hamburger be traceable to the cow or that the wheat in a loaf of bread be traceable to the field

5. traceability definition the definition of traceability is necessarily broad because food is a complex product and traceability is a tool for achieving a number of different objectives and no traceability system is complete breadth: describes the amount of information collected depth: is how far and forward the system tracks the relevant information precision: reflects the degree of assurance with witch the tracing system can pinpoint a particular food product's movement or characteristics

6. traceability – what does it do ? firms have 3 primary objectives in using traceability systems: • facilitate traceback for food safety and quality • differentiate and market food with subtle quality attribute • improvesupply chain management benefits associated includes • reduced recall expenses • expanded sales of products with attributes that are difficult to discern • lower supply chain costs in conclusion traceability offers larger net revenues for the firms

7. what is logistics ? THE VERY WELL KNOW LOGISTICIAN GENOTYP: name : ROBERT passions : trucks and pirelli calendar prior employment : cook physical description : 1.87m - 138 kg - dark hair particularity: smells a mixture of transpiration, alcohol & diesel by chance logistics moved from this old vision to supply chain management

8. what is supply chain management ? supply chain management (SCM) is the oversight of : • MATERIALS • INFORMATION • FINANCES as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer the state of the art is to produce the right product with the correct quantity at the defined time with the better cost

9. supply chain elements the supply chain SCOR model

10. supply chain elements

11. supply chain elements

12. supply chain elements material management to obtain same results without optimisation, sales must increase to increasing business performance

13. supply chain elements product strategy

14. introduction & objectives production strategy

15. supply chain elements forecasting

16. supply chain elements delivery uncertainty

17. traceability and supply chain

18. how to support traceability ?

19. system elements - architecture

20. systems elements - barcoding definition barcode is an optical machine-readable representation of data, which shows certain data on certain products major standards UPC : Universal Product Code EAN : European Article Numbering ISBN: International Standard Book Number GS1-128 (EAN/UCC 128)

21. systems elements - barcode generator http://www.gs1.org/barcodes

22. date management systems elements - items attributes QC/QA description inventory& costs material management business analysis

23. where does start performance ?

24. performance definition performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner performance management can focus on performance of the organization, a department, processes to build a product or service, employees

25. performance quick time notion standard time time it would take a qualified operator working at a normal pace to do the job available time is the number of hours a work center can be used rated capacity is the result of calculated capacity, utilisation and efficiency demonstred capacity is the result of previous production records to determine work center capacity

26. performance goods reciept process process description process elements process indicators

27. example for all departement KPI's have been revisited, mainly for inbound, planning & intarnal services data capture have been automatised for warehouse our major measure is minutes/movement [total worked minutes per day] / [pallets movement recorded during the day] at the beginning first results were approx 17 min/movement actually results are structurally in average < 5 min/movementincluding following changes: • EHS • 5S program • 7 FTE less • cargo securing • check list protocol • raw material self sampling insourcing

28. anecdotes • lot traceability in sugar silo • lot traceability in tank farm • picking by lot in salad barcode • flavor kosher production

29. keep an eye on • product design • factory design • system data • business processes

30. thanks, for your attention for more information have a look onwww.azeo.ch or contact me nicolas@azeo.ch + 41 79 378 78 86

31. let's play ECONOMICAL SITUATION in our organisation total annual sales is 3 BUSD customer put in average an order 26 days before the requested delivery date our monthly average inventory is around 250 MUSD • 30 MUSD for raw materials • 50 MUSD for intermediate • 170 MUSD for finished goods average production lead time is about 5 days and strategy is MTO products shelf life is 2 years

32. let's play MY ROLE as supply chain project team you receive the job from board to reduce total inventory value up to 40 MUSD in average per month, and increase the service level to customer THE CURRENT SITUATION a kick off meeting is organised to share the project with major stakeholders – an open discussion is starting

33. let's play YOUR ROLE you are member of the board and you have to argue what are the advantage and risk of such a project organise your classroom in 4 groups - finance - supply chain - production - sales

34. let's play YOUR FOCUS AREA FINANCE : EBITDA – inventory turns – cashflow – time to cash PRODUCTION : campaign size – capacity – fullfilment rate SALES: customer service – customer satisfaction – supply performance SUPPLY CHAIN: prodcut segmentation – inventory target – service level

35. backup slides

36. other traceability definitions the ability to trace (identify and measure) all the stages that led to a particular point in a process that consists of a chain of interrelated events traceability refers to the completeness of the information about every step in a process chain the formal definition: traceabilityis the ability to chronologically interrelate uniquely identifiable entities in a way that is verifiable traceability is the ability to verify the history, location, or application of an item by means of documented recorded identification

37. traceability definitions food processing the term traceability refers to the recording through means of barcodes or RFID tags & other tracking media, all movement of product and steps within the production proces. one of the key reasons this is such a critical point is in instances where an issue of contamination arises, and a recall is required during customer audit, traceability has an high impact in term of business continuity and production visibility

38. other traceability definitions the ability to trace (identify and measure) all the stages that led to a particular point in a process that consists of a chain of interrelated events traceability refers to the completeness of the information about every step in a process chain the formal definition: traceabilityis the ability to chronologically interrelate uniquely identifiable entities in a way that is verifiable traceability is the ability to verify the history, location, or application of an item by means of documented recorded identification