Centralized Distribution Solutions
2007 ACI-NA Concession
Conference
Presented By Dan Bent
HMSHost
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Topics
 Internal Distribution Challenges
 Critical components
 Differences in an airport environment
 Models In Use
 Direct
 Cross-Docking
 Redistribution
 3rd Party (Cross-docking and/or redistribution)
 Strategies To Ensure Success
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Components Of Internal Distribution
Invoice
Quality/
Freshness
Requisition
Terminal
Shrink/Loss
Storage Space Prevention
Inspecting
Inventory
Purchase Ordering
Bill Of Lading
Bonded
Picking Ticket
Order
Facilities
Credit Memos Receiving
Temperature/
Recovery Time Control ServSafe
Recalls
Pars
Returns
Drops
Certification
HAACP
Tailgate Delivery
In-Store Delivery
Distributors
Redistribution
Concealed Damage
Hot Shot
Development
Cross
Deliveries
Cross Docking
Manufacturers
Contamination
Time-sensitive
Cold Chain
Deliveries
Commissary
Delivery Window
Chain Of Control
Production Product
Labeling/
Substitutions
Space
Fill Rates Nutritionals
Tampering
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Key Differences In Airport Environment
 Security
Requirements
Key Drop Deliveries Not Allowed
Background Checks/Badging
Importance Of Chain Of Control
Significant Space Constraints
Volumes Much Greater Than Streetside Operations
Remote Production Needs Due To Limited Concourse
Space
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Internal Logistics Process - Direct Delivery
In Direct Delivery, the commissary or store:
Places order with the vendor.
Order is delivered directly to the store.
Store inspects, receives and stores the products.
Store makes any adjustments to invoices and
sends invoices to accounting for processing.
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Internal Logistics Process - Cross Docking
In Cross Docking, the commissary is a “Pass
Through.”
Commissary or store places order.
Order is delivered on pallets to the commissary.
Commissary inspects fresh perishable items &
spot-checks rest of the order (e.g., temperature,
counts) and then sends to store.
Receiving associate at store checks in delivery.
Store manager makes any adjustments to
invoices and sends to accounting for processing.
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Internal Logistics Process – Redistribution
In Redistribution, the store places orders with
commissary using a Requisition Form.
Commissary orders from vendors.
Commissary inspects, receives and stores
products.
Commissary makes any adjustments to invoices
and sends invoices to accounting for processing.
Upon receiving a Requisition from a store,
commissary picks, packs, and delivers the
products to the store.
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Internal Logistics Process – 3rd Party
In 3rd Party, the store places orders and a 3rd Party
receives them and either cross docks (most common)
or redistributes.
Commissary or store places order.
Commissary or store provides documentation of
order to 3rd Party.
3rd Party inspects fresh perishable items & spotchecks rest of the order (e.g., temperature, counts).
3rd Party may X-ray product if have equipment.
3rd Party delivers the products to tenants’
commissary and/or stores.
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Each Model Contains Trade Offs
Direct
Delivery
Cross
Docking
3rd
Party
Redistribution
Pros
Pros
-Efficient labor -Centralized
-Less handling receiving
-Relationship
with distributor
Pros
-Less trucks
on tarmacs
Pros
-Greatest
control
-Improved
buying
Cons
-Excess
inventory
- Not adequate
concourse
storage space
Cons
- Quality
Assurance
issues
-Additional
layer/costs
Cons
-More labor
than direct or
cross-docking
Cons
- Excess
inventory
- Not adequate
concourse
storage space
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Optimal Model Dependent On Airport
Different models help meet the unique needs of
the airports - any model (or hybrid) can act as a
“Central Distribution Solution”
 Assign central responsibility
Implement clear processes
Centralize expertise for QA and par management
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Strategies To Ensure Success
Make Quality Assurance Job #1
Inspect product
Maintain the cold chain
Designate a centralized resource
Proactively Manage Your Vendors
Understand brand requirements (may vary)
Monitor and document (e.g., fill rates, etc…)
Development
Create
a regular dialogue
Process Makes Perfect
Develop, document, train & inspect standards
Become a Learning Organization (e.g., HMSHost has
Commissary Group HMSHost
fromConfidential
branches
meet on best practices).11
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