SiteLink 2015 v final

© Foremost Quality Logistics Confidential 1

Tim FeemsterManaging Principal

Foremost Quality Logistics469-554-9873 O214-693-7689 C

[email protected]@gmail.com

What is our 2015 experience telling us about the future in Industrial ED?

August 19-21, 2015

mailto:[email protected]



What Will We Talk About Today

• Who is Tim Feemster and Foremost Quality Logistics• Trends impacting the US related to

Industrial/Manufacturing development & expansion• Case Studies• How do you tell the difference and how do you tell if you

should:– Bid on the project with a "cut and paste" because you won't win– Pass because you know you are not going to make the short list– Put on a full court press to win the project because you can

• Q&A throughout


If you use the right color, nobody will ever know


TIM FEEMSTERMANAGING PRINCIPALForemost Quality Logistics6005 Calm Meadow RdDallas, TX 75248O 469-554-9873C [email protected]@tsfeemster on TwitterFollow on LinkedIn

YEARS OF EXPERIENCE35+ Years

AREAS OF SPECIALIZATION Facility Master Planning Lean Six Sigma Process Improvement Project Management Distribution Center Consolidations and

Greenfield Design Economic Development Business

Planning Keynote Speaker Meeting Facilitation Network Design and Planning Operations Management Real Estate Portfolio Strategy Supply Chain and Distribution Strategy Supply Chain Cost Reduction

PROFESSIONAL BACKGROUNDWith over 35 years of industry and consulting experience, Mr. Feemster specializes in supply chain and distribution network strategy, operations management in manufacturing and distribution environment, supply chain cost improvement, distribution center master planning, and economic development business planning.

Before establishing Foremost Quality Logistics, Mr. Feemster was a senior manager in three manufacturing companies, a consultant, an executive in two third-party logistics providers, and a practice group leader in two real estate companies.

Mr. Feemster has been exposed to the economic development, manufacturing, logistics and supply chain issues facing many industries and involving both refrigerated and dry channels. These experiences include specific assignments in over 40 project start-ups, operations management, Lean Six Sigma quality management, project management, strategic planning, marketing, site selection, inventory planning and deployment, as well as transportation & private fleet management. He has been responsible for warehouse facility layout and design, logistics systems development, purchasing strategy, business planning, carrier rationalization, warehouse network analysis, and third party qualification and selection. In addition, Mr. Feemster is quoted frequently in both supply chain and real estate industry press and makes over 25 presentations a year to professional organizations, university students, and economic development groups. He was honored as one of the 2010 Rainmakers by DC Velocity magazine.

Past clients include Alpo Pet Foods, Cisco Systems (US & Mexico), Coke, Disney, Federal Express, Frito Lay, Georgia Pacific, GM (US and Mexico), HP (US & Canada), Ingersoll Rand (US & Europe), NCR (US & UK), Nike Golf (US & Europe), Nissan, Philip Morris, Ricoh, Quaker Oats, CentrePort Canada, City of Dallas ED, Midwest Inland Port of Decatur, Regional Growth Partnership- Toledo, Team Texas, Tulsa Chamber of Commerce, Duke Realty, AEP-SWEPCO, Colliers International, and Liberty Property Trust.

EDUCATIONMr. Feemster holds an M.B.A. with distinction, in Marketing and Operations Research from the Ross School of Business, University of Michigan in Ann Arbor, MI. He received his Bachelor’s degree in Mathematics from DePauw University, Greencastle, IN.

PROFESSIONAL ASSOCIATIONSWarehouse Education Research Council (WERC) – Past President, frequent speakerCouncil of Supply Chain Management Professionals (CSCMP) – Registration Committee, frequent speakerInternational Economic Development Council (IEDC)- Frequent speakerIndustrial Asset Management Council (IAMC)- Frequent speakerIntermodal Association of North America (IANA)- Member, case judgeDePauw University- National Alumni Board of Directors; North Texas Regional Alumni Board of DirectorsUniversity of North Texas Center for Logistics Education & Research Advisory BoardUniversity of Houston Logistics & Technology Department Advisory Board

Tim Feemster Professional Profile & Qualifications

from: Jeff Metersky

https://www.linkedin.com/profile/view?id=9243&authType=name&authToken=PKZq&trk=hp-richmedia-name

https://www.linkedin.com/profile/view?id=9243&authType=name&authToken=PKZq&trk=hp-richmedia-name


What Does Foremost Quality Logistics do?

• Site Selection for Users of Industrial and/or Manufacturing Space

• Economic Development Strategy Consulting

• Supply Chain Optimization- Freight, Network Design, & Facility Master Planning

• Project Management of Start-Ups• Training/Speaking- How the Supply Chain

Impacts the Real Estate Location Decision• Meeting Facilitation

© Foremost Quality Logistics Confidential

Trends in Logistics

6

Source: Tim Feemster, Foremost Quality Logistics

Impact / Response• Energy independence• Build lots of ecommerce facilities• Redefine networks for

transportation optimization• Reduce transportation costs- Mode

shift to less expensive water, rail intermodal, and/or truckload, driverless trucks

• Maximize supply chain efficiency and mitigate interruption risk

• Optimize warehouse operations• Green initiatives- LEED, Lighting,

Solar, CNG/LNG, & other green options

• Communicate & Collaborate

Supply Chain Challenges• Transport driver capacity• Rising transportation costs, #1• Supply chain disruption, risk• eCommerce, mCommerce, sCommerce• Winter shuts down massive

Geographies• Nearshoring/Reshoring• Infrastructure funding• Energy boom• Sustainability- buildings & SC

© Foremost Quality Logistics Confidential


Newer Intermodal Hubs

• CSX- Cordele (150 miles S of Atlanta), 2011• BNSF- Kansas City, 2013• NS- Greer SC (212 miles to Port of Charleston), 2013• CSX- N Baltimore OH (S of Toledo), 2013• UP- Santa Terisa NM (16 miles NW of El Paso TX), 2014• KCS- Wylie TX (NE of Dallas), July 2015• NS- Fort Wayne IN, conversion of TripleCrown, 2016• CSX- Chatsworth (100 miles NW of Atlanta), 2018


Port of Tianjin Explosion on August 12, 2015

















Blast site 8/15/2015



Buildings damaged over 2 miles away from the blast site


Loaded Container Traffic E vs W Coast


Panama and Suez Canal Throughput

Source: Transpacific Stabilization Agreement & JOC


New Lock Roller Gate for the Panama Canal

Source: Rafael Ibarra / Reuters


Panama Canal Lock Design Using Roller Gates


Panama Canal New Lock Design Saves Fresh Water


Capacity Comparison for 19,224 TEU MSC Oscar

130 miles nose to tail


Nearshoring/Reshoring

• Cost of manufacturing in Asia is rising• Supply chain interruption risk

– Port congestion/disaster– Weather- Tornados, Floods, Hurricanes, Typhoons, etc.– Natural disasters- Volcanos, Earthquakes, Tsunamis, etc.

• Speed to market– Reduce inventory– React to market changes faster– Existing buildings and/or certified sites– Auto companies are moving a lot of production to Mexico and some to the US

• Energy costs moderate & less volatile– Lower energy costs makes US more competitive– Natural gas powered electricity generation



B2C ecommerce Sales Worldwide- 2013- 2018 est. trillions and % Change, eMarketer


US Retail ecommerce sales- 2013-2018, $billionsSource: http://www.statista.com

http://www.statista.com/

http://www.statista.com/


“Rapid and Surprising” Things in the Retail Space in June ‘15

The top 5 “Rapid and Surprising” events for Walmart, Amazon, and Alibaba:

WALMART:

• Neighborhood Market opened with fresh, deli, pizza, bakery, etc• Both Sam’s Club and Walmart debuted new grocery “click & collect”• ShippingPass mimics Amazon Prime• Increased salaries of store associates• Announced a new Chairman, the first since 1992

AMAZON:• Expanded Prime, 2 hour free delivery in Manhattan, NY• The debut of Canadian online clothing and shoe store• Closed Amazon Supply and integrates offering into Amazon Business• Announced FBA Small & Light for non-Prime free delivery• Announced plans for private label milk, cereal, baby food, coffee, etc

ALIBABA:• Announced a major expansion of Alibaba Pictures• Made aggressive move via Ilium with US cloud outreach• Explained cross-border commerce thrust is global entrepreneurship• Presented 5-8 year Cainiao delivery goals• Presented an additional partnership to pursue wholesale business Source: Jim Tompkins, Tompkins International


Now Let’s Discuss ecommerce Deliveries


OmniChannel Distribution- Walmart/Macy’s Chasing Amazon

Mega Import DCs/Manufacturer

Retail Stores

Customers

Product Flow Information Flow

Regional DCs

Retailer Website



UPS & FedEx Ground Delivery Maps- Toledo, 43604

Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

http://www.ups.com/maps?loc=en_US


http://www.fedex.com/grd/maps/ShowMapEntry.do



UPS & FedEx Ground Delivery Maps- Columbus, 43215







UPS & FedEx Ground Delivery Maps- Indianapolis, 46204







UPS & FedEx Ground Delivery Maps- Grand Rapids, 49503







UPS & FedEx Ground Delivery Maps- Bolingbrook, 60490







UPS & FedEx Ground Delivery Maps- Louisville, 40202







UPS & FedEx Ground Delivery Maps- Memphis, 38103







UPS Delivery Optimization- 10 DCs

Source: UPS; Uses US Census data and UPS’s Ground Network, & 10 DCs

Site selection assumes 10 DCs:• Albany, NY 12202• Austin, TX 78701•Birmingham, AL 35203• Des Moines, IA 50316• Fresno, CA 93728• Grand Rapids, MI 49503• Indianapolis, IN 46268• Orlando, FL 32824• Portland, OR 97217• Richmond, VA 23173

Average Transit Time- 1.16 days

Transit Days: 1 Day 84.7% 2 Day 14.5% 3 Day 0.7% 4 Day Plus 0.0%


Transportation Costs Continue to Rise

• Shortage of drivers– New hours of service– Driver safety records– Demographics

• Equipment costs going up- EPA standards• Port congestion driving up transit times & lowering the

option for multiple trips• Air Freight coming back


Total Logistics Cost Breakdown- 2014

Source: Tim Feemster, FQL Consulting & CSCMP.org

14.4%


Fuel Consumption by Freight Mode

FREIGHT MODE

Source: Global Insights & Tompkins Associates

Less Than Truckload

Small Package


Transportation Cost Impact 2015


US Spot Market Rates: 4 Week Trendlines- DAT

$1.90 $1.88 $1.87 $1.89

$2.20 $2.19 $2.19 $2.18 11$2.23 $2.22 $2.21 $2.22


Estimated Average Daily Truck Traffic- 2020

Source: U.S. Department of Transportation, Federal Highway Administration, Office of Freight Management and Operations, Freight Analysis Framework.


Highway Funding is in Trouble

• Federal highway trust fund model is not sustainable– Structural revenue stream change– Disallow funds transfer to other departments

• Issues to deal with– Deteriorating bridges and interstates– Population growth– Increased traffic– Funding methods


American Business Act on Climate Pledge- White House announcement 7/27/2015

• $140 billion in new low-carbon investments• More than 1,600 megawatts of new renewable energy• 13 Leading Companies

– Alcoa, Apple, Bank of America, Berkshire Hathaway Energy, Cargill, Coca-Cola, General Motors, Goldman Sachs, Google, Microsoft, PepsiCo, UPS, and Walmart

https://www.whitehouse.gov/the-press-office/2015/07/27/fact-sheet-white-house-launches-american-business-act-climate-pledgehttp://www.supplychain247.com/article/13_top_us_companies_pledge_140_billion_to_slash_carbon_emissions

https://www.whitehouse.gov/the-press-office/2015/07/27/fact-sheet-white-house-launches-american-business-act-climate-pledge




http://www.supplychain247.com/article/13_top_us_companies_pledge_140_billion_to_slash_carbon_emissions

http://www.supplychain247.com/article/13_top_us_companies_pledge_140_billion_to_slash_carbon_emissions


Greening the Supply Chain

• Facility- Industrial and manufacturing properties– Construction– Energy– Water– Waste

• Material Handling Equipment- Forklifts and trucks– CNG/LNG trucks– Walmart WAVE Truck– Hydrogen fork lifts

• Operations- Changing the way things are done– Hybrid network– Transportation mode shift– Network optimization



Environmental Impacts of Industrial/MFG Facilities

• Energy Consumption– Lighting– Heating/Cooling/Refrigeration– Power for Processing, Automation Equipment, Forklift Charging– Transportation for Inbound and Outbound shipments

• Water Consumption/Conservation– Irrigation– Process– Occupant Use– Reclamation

• Waste Generation– Packaging, Pallet, and Process waste– Paperwork– New Construction Waste

• Operations– Chemical Use in Cleaning and Maintenance– Transportation mode shift Source: Tim Feemster, Foremost Quality Logistics


Green/$$ Transportation Mode Shift Examples

• Freight Optimization Software- 3PL Outsource– Combine orders delivering on the same day using technology

• Small Package to LTL (Less than Truckload) if possible• LTL to TL (Truckload), “Pool Points”

– Move TL on major volume lanes and then drop off for LTL delivery• Truckload to Domestic Rail Intermodal Container, long haul

– Shipments over 400 miles with on/off ramps in close proximity• Air Freight to Small Package or LTL, short haul

– Shipments less than 400 miles, maybe longer• International Air Freight to Container via Ship

– Ship “generic” product and customize in the DC for orders


Walmart & Daimler Focus on New Truck Concepts

• http://www.ttnews.com/articles/basetemplate.aspx?storyid=38980&utm_source=express&utm_medium=newsletter&utm_campaign=newsletter

• http://news.walmart.com/news-archive/2014/03/26/walmart-debuts-futuristic-truck

http://news.walmart.com/news-archive/2014/03/26/walmart-debuts-futuristic-truck




Hydrogen Fork Lift Equipment


Companies are Switching to CNG Trucks/Buses


America’s Natural Gas Highway of CNG/LNG Fueling Stations

Source: DOE Alternative Fuels Data Center

845 CNG + 73 LNG stations in the United States Excluding private stations

http://www.afdc.energy.gov/




Make Sure to Plan for the Unexpected


Top 10 Site Selection Criteria Warehouse/Distribution

1. Transportation costs – both inbound and outbound2. Logistics infrastructure – highways, intermodal, rail, FTZ3. Available buildings/Certified sites4. Labor costs & availability5. Supply Chain interruption risk

6. Business climate- is there love7. Green buildings8. Taxes & incentives9. Utility rates10. Access to public Transportation- Have you done a drive time

study for your workforce? Source: Tim Feemster Foremost Quality Logistics


Top 10 Site Selection Criteria- Manufacturing

1. Labor costs & availability2. Available buildings/Certified sites3. Transportation costs – both inbound and outbound4. Utility rates5. Logistics infrastructure – highways, intermodal, rail, FTZ6. Supply Chain interruption risk

7. Business climate- is there love8. Taxes & incentives9. Green buildings10. Access to public Transportation- Have you done a drive time

study for your workforce? Source: Tim Feemster Foremost Quality Logistics


Companies are Switching to CNG Trucks/Buses


Do You Have a Better Answer to This Question?

• How do you respond to your next Industrial/MFG RFP?– Bid on the project with a "cut and paste" because you won't win– Pass because you know you are not going to make the short list– Put on a full court press to win the project because you can


Are You Prepared for When Branding Goes Wrong?What questions do you have?????

Tim FeemsterManaging Principal

Foremost Quality Logistics469-554-9873 O214-693-7689 C

[email protected]@gmail.com



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SiteLink 2015 v final