DHL Supply Chain

Consumer

Refrigerated Warehousing
Leading ice cream manufacturer enhances Mexico distribution by locating warehouse next to manufacturing
As the global market for ice cream and other frozen confections grows, leading manufacturers are competing to scoop up profits in developing regions such as Latin America and Asia. Supply chain agility and competitive pricing are keys to ice cream industry dominance, especially in Mexico, where increasing brand awareness is heating up the competition to deliver frozen treats. To protect and expand its market share in Mexico, a top ice cream manufacturer sought to trim distribution costs and speed time-to-market by locating a second refrigerated warehouse next to its manufacturing plant.

Challenge
Reduce product handling and transportation costs Support continuous operation and high plant production volumes Reduce project complexity Minimize manufacturing disruptions during transition

Solution
Single point of contact for end-to-end project management Seamless integration of functionality and design High-volume material handling Industry-first refrigeration system based on R507 gas State-of-the-art DLX Radio Frequency capability

The Challenge
The companys existing production plant was physically distant from its primary refrigerated warehouse which added material-handling costs and made it more difficult to adapt to seasonal demands. By building a new refrigerated warehouse next to manufacturing, peak demand needs could be met while substantially reducing transportation and material-handling costs. Expectations for the new warehouse were high. It would take on 60 percent of ongoing demand and handle the excess during peak season, while shipping to locations throughout Mexico City and much of the country. The manufacturer wanted to work with a single supply chain partner to manage project complexity. In addition to validating the business case, the partner would be required to manage the project from design and construction through continuing operations. The company chose DHL Supply Chain to transform the project from concept to reality. Although refrigerated warehousing would be a new addition to DHL Supply Chains services in Mexico, the manufacturer knew from prior experience that the company was vastly experienced in warehousing design and operations.

Results
Distribution costs Product Damages Product quality Energy-efficient refrigeration Inventory accuracy

The Solution
DHL Supply Chain quickly assembled an experienced, nimble team to develop the solution utilizing DePICT, a proprietary project management methodology. The task included strategy, planning and management through three distinct project phases: design, construction and ongoing operations.

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The design called for a 3,600-square-meter distribution center the size of 18 tennis courts to enable continuous receiving at the plant. To further support high production volumes, the warehouse was designed to accommodate the highest number of pallets on six levels with double-deep racks, and included seven docking areas for shipping and receiving. DHL Supply Chain evaluated several vendors to collaborate on the design and construction. It appointed and managed an industry leader, and the companies combined expertise led to development of an innovative, energy-efficient refrigeration solution using non-ozone depleting R507 gas. DHL Supply Chain planned for ongoing operations to support a high monthly throughput, currently 860,000 cases, with a new warehouse management system (WMS) and DLX Radio Frequency. While this was DHL Supply Chains first design of a refrigerated warehouse, the project team took the opportunity to deploy state-of-the-art technologies in the solution. It set a new industry standard for an energy-saving refrigerated system and employed DLX Radio Frequency at sub-freezing temperatures for the first time in Mexico, said Mauricio Mejia, Sr. Director Customer Development for DHL Supply Chain in Mexico.

The Results
DHL Supply Chain went beyond the traditional 3PL role and became the single point of contact for end-to-end project management, significantly simplifying the process for the customer. The refrigerated warehouse was completed in record time (eight months) before the seasonal increase in product demand began, and without disrupting existing plant operations. The distribution network was simplified, cutting the overall external product handling in half. Decreasing the handling of ice cream and popsicles and maintaining a steady low temperature translated into better product quality and extended shelf life. The new WMS combined with DLX Radio Frequency means additional information is available about the warehoused products, and orders are filled efficiently and accurately. DHL Supply Chains solution delivered the desired results for the manufacturer: Single point of contact for end-to-end project management Lower distribution costs Inventory accuracy of 99 percent Guaranteed product quality and extended shelf life

Efficient, cost-effective distribution is critical to a companys ability to maintain market leadership, particularly with a perishable product subject to high seasonal demand. By optimizing warehouse design to support the adjacent plant, the customer took time and money out of its finished goods distribution, ran production ahead of demand and achieved greater control over product promotions.

A true business partner will stretch beyond its limits. Thats often easier said than done. Contact DHL Supply Chain today for consulting and analysis services to help you improve your supply chain.

Contact our Consumer Industry Experts: 800.272.1052 consult.consumer@dhl.com www.dhl.com

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