The Disruption Starter Kit at Creation Gardens

TRACK 3: SESSION 4

Ron Turnier

Creation GardensPresident/CFO

Steve Inabnit

DematicAccount Manager

• Email: ront@creationgardens.com• Phone: 502-272-2100• Website: www.whatchefswant.com

www.creationgardens.com

• Email: Stephan.Inabnit@dematic.com• Phone: 859-912-0783• Website: www.dematic.com

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Abstract

3

Creation Gardens is a wholesale food distributor that operates a hub-and-spoke operation in the mid-south territory with a focus on providingunparalleled customer service, delivery, product offering and customersatisfaction. A growing and dynamic company, Creation Gardens, recentlytransitioned from conventional distribution and order fulfillment methods(paper based-picking) to automated order fulfillment utilizing voice-directed pick-to-pallet (full case picking) and voice-directed discrete orderpick to tote in a zone-route system (each picking). Discover how CreationGardens made the transition and the results, lessons learned and benefitsof moving to an automated distribution model.

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Agenda

• Company Overview• Business Challenges• Solutions • Results• Conclusions• Q&A with Ron Turnier

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Company Overview: Creation Gardens “What Chefs Want”

Company Overview• Wholesale food distributor – Founded 1997• Fleet of 80 Reefer Trucks• Regional customer base• Produce, gourmet, dairy, paper, staples, meat• $200M Annual Revenue / 350 Employees

Customers• 3,000 • Restaurants, Hospitals, Universities, Stadiums• Country Clubs, Convention Centers• 70% independent, 30% corporate• Buying decision made at user location• Region served: KY, IN, TN OH – Hub & Spoke Operation

Business Strategy-• Out service competitors for less• Ask customers what they want• Organic growth • Growth by Acquisition – Three new Acquisitions in 2017

Supplier to Restaurants & Institutional Food Service

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Company Overview: Business Model

Key Business Attributes:• Service oriented company culture• No minimum order size / Order less than full case • 99% of SKUs available in broken case quantities• Order 7 days / week - Next day / Same day delivery• Late order cut off - Varies by market• Appropriately portioned quantities / Check weight• Speciality & local produce – Largest purveyor in areas• Produce Alliance – Access to high quality farms & produce• Speciality / high quality meats• Relevant products customers want• Operates in dense urban areas • Spreads Operational Costs across multiple products• Chef Advisory Board

Specialized Services

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Company Overview: Customer Interface

IOS or Android Mobile Ordering APP• View and order items right from your custom Profile screen• Fast ordering made faster• Browse and order from our entire product catalog! 6,000+

items, with photos and descriptions• View past orders • Communicate directly with our staff via text• Online ordering with Chat @ www.creationgardens.com• Traditional Call center / Field Representatives • Paperless billing option

Mobile devices and the latest Ordering Technology

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Company Overview: Facility

• 90,000 square foot• Multiple temperature zones

– Frozen, 35F, 45F & 55F• Receiving• Storage• Split case pick module• Full Case Picking• Meat preparation• Shipping

Louisville, KY – Hub Operation

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Company Overview: FacilityFacility Layout – Louisville, KY - HUB

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Company Overview: Hub & Spoke Distribution Network

• Hub – All SKUs – Louisville, KY

Orders Start Here• Satellite / Spoke

– Evansville, IN– Nashville, TN– Lexington, KY– Cincinnati, OH

Re-distribute to Satellite warehouses

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Company Overview: Activity Profile

• 210 suppliers• 6,000 SKUs• 1,800 order per day (average)• 1- 50 lines per order• 25 lines per order typical

Order Fulfillment

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Challenge:

• Where we Started:– Each Picking from paper to push cart in a

batch / Full Case paper to pallet

– Each Picking required consolidation, re-packing to cartons & manual labeling

– Additional handling created opportunities for errors and product damage

– Required multiple touches and we were maxing out our operational capability

– Aisle contention / Adding operators reduced efficiency

Automation to streamline Order Fulfillment

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Each Picking

Case Picking

Challenge:Automation to streamline Order Fulfillment

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Challenge:

• Support business model:– Next day delivery with hub & spoke warehouses– Late order cut off time– Less than full case ordering– Acquisition growth

• Differentiate services w/o higher price to customer• Make difficult services affordable• Reduce wasted overhead space (temp controlled)• Inefficiencies & complexity of split case operation

– Long pick paths thru warehouse– Discrete order picking– Paper pick list

Order Fulfillment

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Solution: Areas of ResponsibilityFlow chart – Order Fulfillment

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Solution: Software

• Dematic iQ - WES• Interface to ProducePro WMS• Wave planning• Directs picking, voice

– English– Spanish

• Pallet audit check• Weight check, voice prompt• Shipping documentation:

– Route & stop– Orders by tote & case

• Real time monitoring– % order complete– Picker accuracy– Determine who made error

Dematic IQ (WES) & WMS

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ProducePro WMS

FulfillmentOrders

Status & Completion

- Order Management- Execution

Dematic iQ

- Order Entry- Inventory

Solution

• Pick to tote• One order per tote• Zone route conveyor• 5 zones• Diverts to zone with picks• Software directed• Voice devices• Mezzanine

Split Case Picking

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SolutionSplit Case Picking

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SolutionSplit Case Picking

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SolutionSplit Case Picking

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SolutionSplit Case Picking

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Solution

• Pick to pallet• From pallet • In rack• Software directed• Voice devices

Full Case Picking

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Results:

• 45,000 Picks per day• 18 Pickers (Same amount of Pickers /

Double the output)• 2500 Picks per shift Per Picker• 312 Picks per hour Per Picker• Reduced Picking Time in Hub / Easy

way for final run• Improved order tracking and Error

tracking and correction• Mistakes tracked back to picker / Coach

and Council

• Improved golden zone and Space efficiency

• Zone designation has created Zone Expertise

• 90min Breakdown of transfer trucks @ satellites improved by 60min

• 100% Accurate Pick Results• Helped business grow from 100M to

200M• Operations are now scalable• Easy to add new buildings / satellites• Increased efficiency

After Automation

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Conclusions:

• ROI achieved within 12 Months• Automation was key to enable growth while improving efficiency and quality • Automation was the single largest investment other than the building, and

definitely worth it.• Voice was key due to same/similar SKU profiles and providing operators with

instructions that help avoid picking errors.• Mezzanine was critical in saving space and utilizing “Refrigerated Vertical

Space”• Mezzanine was key to expanding golden zone picking• Moving to totes for picking and delivery was a huge time saver.• Initial work required to organize SKUs is challenging but necessary

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Questions?25