London Boroughs Consolidation Centre (LBCC) Project Demand Management Webinar – 1 st July 2014 Kevin Churchill – Head of Procurement. London Borough of Camden. www.lamiloproject.eu/
London Boroughs Consolidation Centre
(LBCC) Project
Demand Management Webinar – 1st July 2014
Kevin Churchill – Head of Procurement.
London Borough of Camden.
www.lamiloproject.eu/
Agenda.
• Project Vision & History.
• Concept Trial Outputs.
• The Consolidation Centre Solution.
• Target Reduction Metrics.
• Behavioural Change.
• Learning so far.
• Discussion.
• Contact Details.
Project Vision & History. The Vision
• A new method of managing and co-ordinating deliveries of goods in London.
Project History
• Started in Summer 2012 at a London Boroughs ‘Heads of Procurement’ meeting in
Camden.
• Agreement between Camden, Enfield and Waltham Forest to start a multi-Borough
consolidation centre concept trial for ‘everyday’ product lines to test the consolidation
concept in London Boroughs.
• LAMILO funding secured Spring 2013. Mayors Air Quality Fund funding secured
Spring 2013.
• Procurement process started in Summer 2013 to appoint a logistics partner for a 6-9
month project concept trial, which DHL won.
• LBCC opened on 13th January 2014, for 9 months.
• 4 supplier partners, 2 product lines – stationery and cleaning products.
• Approx. £1m of business per annum, across 3 Boroughs.
Concept Trial Outputs.
Outputs
• Business Case – that summarises results and makes case for long term solution.
• Procurement exercise for long term solution – subject to Business Case approval.
Environmental Operational
Financial
Why Consolidate? – the benefits are…
The LBCC Consolidation Centre.
Office Depot Banner
Greenham Trading
LBCC
Camden End Users
Enfield End Users
Waltham Forest End Users
Supply Chain Model.
Janitorial Express
The Infrastructure. Operating Facility Vehicles
• Two 7.5t Euro 5 emissions standard
• 2 vehicles in use Mon-Fri.
• Deliveries occur between 0930 -1600.
• Serves 300 council buildings across 3
London Boroughs.
• 143km2 area to be covered.
• DHL are a bronze member of the ‘Fleet
Operators Recognition Scheme’.
Handled 3000 parcels so far.
Ideally located near strategic road network.
2,000sq ft warehouse space.
Suppliers deliver into the LBCC at pre-agreed
time slots between 0630-0800hrs.
15-20min turnaround time for suppliers’ vehicles.
Goods are delivered to council buildings as per
the operational plan.
Target Reduction Metrics.
Summary Emmisions Reduction
No of
Vehicle
Trips
KMCO2
(g)
NOX
(g)
PM
(g)
No of
Vehicle
Trips
KMCO2
(g)
NOX
(g)
PM
(g)
60 2880 2022 873 49 3120 149735 105145 45408 2567
26 987 731 285 5 1352 51345 37995 14807 261
57% 66% 64% 67% 90% 57% 66% 64% 67% 90%% Reduction LBCC Model
Current Supply Chain Model
New Supply Chain Model
Weekly Annual
Behavioural Change.
Who?
• Procurement Staff - Procurement Policy led. Challenge Demand. Change tender
documents.
• Ordering Staff - Challenge Demand. Work with less product, fewer deliveries
& plan ahead for remainder.
• All Staff - Challenge Demand. Reduce use of product. Personal items
to be delivered at home.
• Suppliers - Offer pricing transparency & more del. Choices e.g. to
LBCC.
• Logistics Companies - Support local & regional transport strategies.
What we would like them to do?
Learning so far… Financial/Savings
• Consolidation must Save or at least
Break-Even.
• Savings expected to come from primarily
Delivery Time savings by suppliers.
• Delivery costs not transparent to buyers.
• Suppliers ‘delivery to desk’ is high cost.
• Suppliers differentiate on a same day or
next day delivery service and build in
margin.
• Suppliers are reluctant to pass on
logistics savings mid-contract.
• Cost reduction is expected for new
contracts.
Environmental
• Environmental benefits are achievable.
• Consolidation model likely to have a greater overall positive impact than converting existing fleet to zero emissions.
• Collecting from suppliers on return leg and/or back-hauling waste has positive impact.
• Need to maximise the drop size of loads inbound and outbound.
• Electric vehicles are not available on a short term hire basis.
Learning so far…cont 1. Operational/Customer Experience.
• Positive experience of consolidation.
• Now 1 delivery not 20, per day.
• Need good understanding & clarity of the current delivery arrangements.
• Need to understand parcel labelling requirements – for consolidation.
• Need to understand returns process and how this works for each supplier – impact on ordering systems.
• Need to understand customer issues process – how does this work for each supplier.
• Emergency deliveries are not needed if stock & orders are planned ahead.
• Councils do not always keep an operational database of site information.
Procurement Process.
• Consolidation model should be
procurement policy-led and in tender
documents.
• Market development needed – only 2
bidders.
• Have a bespoke, good quality specification
like LBCC.
• Get the contract right - resolve issues on
title, insurance, liability. Council standard
terms need bespoking.
• A number of council supply chains fall
outside of procurement due to being of
relatively low value.
Learning so far…cont 2. Communications
• Staff behaviour change is critically
important – put time into
comms/messaging to get understanding &
behaviour change to stick.
• Use a number of comms channels
(intranet, targeted emails, phone calls,
work-shops).
• Some staff may perceive a consolidation
centre will lead to delays – be ready.
• Don’t try to change too much process at
the same time (e.g. min order
volumes/values).
Other
• ‘Logistics’ does not have a strong
presence with local government
compared to procurement.
• Suppliers are reluctant to forego the
control associated with performing their
own logistics & reducing delivery
frequency.
• Council business systems do not cater
well for logistics/operations information.
• Collaboration with other partners and
using an existing third party facility is
working well.
• The End.
• Thank you.
• Feedback/Comments/Discussion?
Contact Details
• Kevin Churchill
• Head of Procurement – London Borough of Camden
• T: + 44 (0) 207 974 4342.
• E: [email protected]
• W: www.lamiloproject.eu/
• Supporting Information.
Inside the LBCC • Over 3000 orders consolidated by DHL.
• Focus on integrating more volume into the centre.
• A no. of different product categories have been consolidated/stored so far….inc: library books,
public health docs, bulk paper.
Mailroom and Libraries have started
using the interim storage solution……..
Distribution of Public Health Packs to
68 Pharmacies in Camden….
Boxes located in the
Underground car-park
Labelled, moved
to the new
holding area and
collected by DHL
Delivered by DHL over
a course of a few days
LBCC operated by DHL in Edmonton
Multi-Borough, multi-supplier
Transport
Diagram
NO OF LBCC
BOOKING IN
SLOTS REQD DAY
Office 06:30
Depot
Bunzl
Greenham
17:00 (Day 1
for Day 2) Banner 07:00
Janitorial
Express 07:30 NO OF 7.5 TON
VEHICLE TRIPS DAY
LB CAMDEN
BUILDINGS
LB ENFIELD
BUILDINGS
LB WFOREST
BUILDINGS
4 Monday 2 Monday 1 1
2 Tuesday 2 Tuesday 2
4 Wednesday 2 Wednesday 1 1
2 Thursday 2 Thursday 2
4 Friday 2 Friday 1 1
0 Saturday 0 Saturday
OUTBOUND VEHICLES FROM LBCC TO LB BUILDINGS
ES
TIM
AT
ED
LO
AD
SIZ
E/N
O O
F O
RD
ER
S
LARGE
ES
TIM
AT
ED
VE
HIC
LE
UT
ILIS
AT
ION
FULL 80-100%
LARGE/MEDIUM HIGH 60-80%
MEDIUM
INBOUND VEHICLES INTO LBCC
MEDIUM 50-60%
MEDIUM/SMALL MEDIUM/LOW 30-50%
Deliveries - Operational Plan
Site Address:
LBCC c/o Heal’s Distribution Centre
10 Ardra Road
Edmonton
N9 0BD
The Service