Expanding Partnership with Unilever Canada

News Item Entered: Monday, January 14, 2002

Unilever has awarded Schenker of Canada a long-term logistics services contract. This elevates Schenker's position as Unilever Canada's largest logistics service partner. Under this agreement, Schenker has consolidated Unilever Canada's Lipton and recently acquired Bestfoods brands into a central strategic logistics center.

An international leading supplier of foods and consumer goods, Unilever boasts well-known product lines, such as Bertolli, Becel, Lipton, Dove and Pond's. Every day, 150 million people around the world choose Unilever products to feed their families and clean their homes. In an effort to consolidate their Canadian food operation, Unilever Canada turned to Schenker for single source warehousing.

Schenker is operating the business at a newly constructed, state-of-the-art distribution center, located in Brampton, Ontario. The 300,000 sq. ft dedicated facility boasts 25,000 pallet positions and receives various Unilever-brand food products sourced from facilities in Canada, the US and Europe. Outbound loads are shipped to national grocery distribution centres and the direct-store delivery market across Canada.

"The project was a lot of hard work," says Mike Therrien, manager of logistics operations for Unilever Canada. "But when you look at what we were able to achieve--all the key performance indicators, the productivity and the efficiencies, we're actually exceeding our goals. It's no different than seeing a house being built--watching it go from a hole in the ground to seeing it slowly completed and fully operational. It was a great success."

A combination of strategic automation with leading technology tools is designed to deliver optimal efficiency and quality, providing for higher downstream value to Unilever's customers. "What we've been able to deliver are some really high standards," says Hugh MacDonald, director of special projects, Schenker Distribution. "We've seen a reduction in damages, accuracy is up and pallet qualities going out of the building are superb. It's potentially setting new industry standards."

The core mindset is not how to make the systems work, but how to make the processes work, engineering to six-sigma quality (less than 3 defects per million, or 99.9997%). Low cost is achieved through the low-cost design of these high-productivity processes, sustainability of the quality (no rework), use of systems that assure sustainability and information to focus improvements, a "cost-plus" financial arrangement that guarantees transparency, and finally, the use of targeted key performance indicators that ensure the control and accountability of the operator to deliver on their service level promise.

Schenker's SoliNet WMS manages the fulfillment to each customers' requirements, such as minimum shelf life remaining on all products shipped, or fulfillment rules such as fill & kill, hold backorders and hold orders for complete delivery. This is the "glue" that synchronizes the processes and along with the innovative algorithms, really is the secret formula behind the compelling success.

Eric Dewey, executive vice president at Schenker Canada, to whom this operation reports, sums it up this way: "For some time, we have seen large retailers investing in warehouse technology and automation to increase the speed and efficiency of their supply chains. For some of them, this has provided a competitive advantage. Schenker Value Based Warehousing now provides a proven, automated warehouse solution to manufacturers who want to achieve greater speed, efficiency and quality, without having to divert financial and human capital away from their core business."

At the official grand opening ceremony on July 12, 2002, Schenker AG Board Member, Dr. Thomas C. Lieb commented: "This new business is another important step on our way of expanding our logistics services in North America, efficiently combining our experience in warehousing and distribution with our worldwide network".

Heiner Murmann, CEO of Schenker Canada further elaborated: "The expansion of our relationship with Unilever is an important milestone for Schenker and strengthens our position as a leading integrated logistics solutions provider. Unilever shares our vision that a top performing logistics facility can be a strategic advantage. We are excited that they have selected our innovative solution."