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news from HAVI Logistics Showing a strong face worldwide HAVI Group and its three pillars Exceeding all expectations Our new customer Pizza Hut Driving into Future Worlds Onwards to new horizons with our innovations No.20 July 2009 The Global Lead Logistics Provider 02 Editorial Doing something different I nnovation is the main topic of this edition and also one of our most important and challenging management topics. It is important because in our competitive environment being “cutting edge”, meaning being innovative, is a prerequisite for a long term sustainable organization. HAVI Logistics always listens mindfully to its customers. We know their needs very well, and we were already aware of that when our company was founded 28 years ago. Our company's founding was the result of a business idea that was brilliant precisely because it was simple, but brought a quantum leap in customer benefit. Instead of supplying frozen goods separately from the non-frozen products, we delivered them all together using vehicles with separate sections for goods at different temperatures. That made the logistics for the restaurants both simpler and more efficient. This superior concept was innovative at that time and is innovative even today. What we call today “One Stop Shopping” is still the basis of our customers’ benefit. Of course since that time we have not rested on our laurels but rather developed further innovative concepts like for instance Ecosima or WebLog. Our innovations are based on a stable foundation - our incomparable Corporate Culture* which is and will remain also “cutting edge”. We are open-minded about new ideas and have a common and clear understanding of what successful innovations are. We are encouraged to develop a sense of passion for innovation that delivers tangible results: our multi-temperature trucks, our double-deck trucks and our Food Town concept are innovations increasing the efficiency in our customers’ entire supply chain. GAuDi, and for instance Pool&Push as service innovations, together with our innovations in environmental protection like using biodiesel or “freezing with the sun” conclude the picture of a “cutting edge” organization. Doing something different is the common element of all our examples of successful innovation. They can have totally different sources of innovation but the result of innovative ideas is always the same: increasing the performance of our services, increasing the efficiency four our customers, or both of these at the same time. Luca Gnecco, Chairman and CEO, HAVI Global Logistics *A reprint of the HAVI Logistics guideline to Corporate Culture was already presented at the European Management Meeting in June. table of contents COVER STORY: Innovations/Future Worlds 03 I Fishing in an ocean of ideas 04 I 05 Learning from the future 06 I 07 Interview with Jörg Erdmann 07 Rich in ideas Worldwide In this issue you can find out about many exciting HAVI Logistics innovations! 08 I 09 Showing a strong face worldwide company news 10 Wonderful new world 11 Stars of Germany I GAuDi on the go, Germany-wide New Customers 12 Exceeding all expectations! 13 It’s our pleasure! I Looking forward to the next Million! ENVIRONMENT 14 Great climate in Norway I Successful recertification according to ISO 14001 and 22000 15 Brand-new service for McDonald’s Belgium I Further environmental services 16 Hats off to our Turkish Top Performer! I Icy innovation Human Resources 17 Getting prepared for the future I Make an impact! NEWS IN BRIEF 18 New DC for Northern Italy I HAVI Logistics Managers of the future 18 I 19 Construction work in Duisburg 19 Team spirit inside 20 A great inventor retires I Duisburg, we have a problem I Did you know ... alphabet is printed on Aleo Silk 130 g/sqm. Aleo is produced using 50% recovered fibre with 50% virginfibre, and is an FSC certified product. Further more Aleo is climate neutrally. Imprint Proprietor: HAVI Global Logistics GmbH Publisher: Christoph Thünemann Content and Style Editor: Jasmin Schürgers HAVI Global Logistics GmbH, Geitlingstraße 20, 47228 Duisburg, Germany Phone: +49 (0) 20 65 695 258 Fax: +49 (0) 20 65 695 252 Email: [email protected] http://www.havi-logistics.com Publisher Council: Luca Gnecco, Haluk Ilkdemirci, Hans-Werner Krohn, Sven-Carsten Sachse Layout: Simone Lenth, denkmalfrei, Philosophen- weg 12, 47051 Duisburg, Germany Printer: Druck-Service Weirich GmbH, Industrie- str. 17, 41564 Kaarst, Germany This and the following editions would not be realized without the great help of our HAVI Logistics members and all the other System Players. Thanks in advance for sending interesting topics to be published in future. 03 Cover Story Fishing in an Ocean of Ideas “The Innovators are the people who drive the national economy.” According to the Austrian economist Joseph A. Schumpeter (1883-1950), innovation – i.e. entrepreneurial thoughts and actions – is the very heart of the economy, and in particular of a modern economy. However, the topic of innovation is much more varied and exciting than Schumpeter's definition might suggest. T he term “innovation” is derived from the The economy of the future will be an Latin word “novus” (“new”). Schumpeter “innovation economy.” This is generally acgreatly influenced the meaning of the term cepted today. Schumpeter gave new meanings “innovation” as we use it today – in the sense of to the terms “innovation” and “innovator,” actechnical and economic development. Among cording to which innovation is the application the general public innovations are principally per- of a new technical or organizational developceived as new products. Yet there is a lot more ment, not just its invention. Economic success innovation that the public never sees, deep in- will depend primarily on whether companies are side companies – things such as process inno- in a position to create new products, ideas and vations, application innovations and innovative procedures, and to adopt innovations rapidly. In forms of organization. So far other words, today companies already no one has come up with a need most of all the ability ″to anticiconcrete definition of innopate future trends and to shape them vation, yet the impact that themselves as far as possible. Here innovations have on the we find Schumpeter's famous idea of economy is plain to see: ina “process of creative destruction.” novation brings innovative This means that every economic decompanies, the innovators velopment builds on creative destructhemselves, a brief monotion. The destruction of old structures poly and an associated again and again leads to the reshuf“pioneer’s dividend.” That is fling of the factors of production. So Joseph Alois Schumpeter the innovators enjoy a finandestruction is necessary for reorgani(February 8, 1883 – January cial advantage arising from zation to take place. Companies thethe new development and 8, 1950) was an economist refore have to make a conscious inmaybe also higher produc- and political scientist born in vestment in researching trends and tivity, or an advantageous Austria. He popularized the future developments and possibly also term creative destruction. position on the market. expand their own capacities to do so. “Innovate, adapt or die!” – Those who do not create innovations themselves or react to them fast, will disappear. Innovation is regarded as the universal key to more growth. And in the long term it is actually the only key, because everything else is limited: the ground, the material, capital and people’s working time etc. Knowledge, however, is available to everyone. All of us can use it without causing detriment to anyone else. This special fact allows the economy to grow over the long term and not to fail when resources get scarce. But will human beings always go on developing enough knowledge for the global economy to continue growing? Innovators are often compared to fishermen fishing in an ocean of ideas. There will always come a time when it gets more difficult for them to find new ideas because the seas eventually become empty. The optimists, on the other hand, maintain that knowledge generates new knowledge. They say that every innovation is in some way a combination of existing ideas. And the more of them there are, the greater the chances of coming up with new combinations of ideas. A few examples of HAVI Logistics innovations 1981 Even the foundation of HAVI Logistics was itself an in- 1982 The commission for developing a tailor-made novation on the European logistics market: McDonald’s distribution and business software and the in- commissions us to take over the complete distribu- stallation of suitable computers goes to Kissels tion of frozen, chilled and ambient goods – at that time a GmbH. The seminal Kissels software com- unique concept in Europe. Right from the beginning, HAVI prises order management, receipt of goods, Logistics established standard costs accounting, which is warehouse accounting and financial accounting, otherwise rare in the food industry, as an important instru- ordering and above all standard costs account- ment by introducing the goods clearing account. ing to ensure transparent trading. 04 Cover Story Learning from the Future HAVI Logistics' success today has its origins in the innovations of the past. Customer benefit has grown out of the innovative services that we have been driving forward for the last 28 years. But is this sufficient for the future? Does it represent a quantum jump in customer benefit? Where does the innovator HAVI Logistics stand today? If we take a look at HAVI Logistics from the perspective of our customers, what do we see? We see that our business model is very well received and our customers feel that we understand them. HAVI Logistics brings them additional value, i.e. customer benefit. We do not burden our customers – on the contrary, we do everything to relieve them of burdens. In order to carry on doing this in the future, we also have to continue being innovative and always generating new benefit, new ways of adding value, and changes for our customers – all in the shortest possible time. This is the only way that we will be able to ensure the existence of our company. What happens if a company fails to innovate? One such example is the German company Dual. Dual became Germany's market leader with its record players and electronic entertainment devices. That was way back. In 1982 Dual went bankrupt. The traditional company, born out of innovation in the year 1906, was no more. What had happened? 1988 Together with the McDonald's Dual had failed to move with the times. Record players were replaced by CD players. Today we are right in the middle of a process of change that has even caught up with CD players. Now we get downloads from the Internet. I-Pods and MP3-Player are in demand and change will continue apace. The competition is not sleeping on the job and so even HAVI Logistics is not being spared. The world around us and the demands of our customers are changing all the time. Our task is therefore to continually extend the lifecycle of our service portfolio through innovation. Coming to a standstill or always looking in the rear-view mirror – however pleased and proud we are of our past achievements – is not going to help us here and now. Hermann Kahn, an American cyberneticist and futurologist, once said, “Anyone can learn from the past. Today the point is to learn from the future.” 1991 In cooperation with a vehicle Here is an example of how it works: PCs have conquered offices all over the world, making typewriters a thing of the past. Many typewriter manufacturers went bust – but not IBM. Why not? IBM recognized the potential of the PC. Together with Microsoft DOS, Windows and Word, IBM contributed to its resounding success. IBM carries out active lifecycle management. IBM is still going strong! If HAVI Logistics wants to remain in the competition in the long term, we will have to do what IBM does. We have to look for new, innovative services, processes, systems and structures all the time. But the key point is that we should look only for those that offer our customers a greater benefit than what is currently available on the market. But what is customer benefit? Customer benefit can be seen in three dimensions: time, costs and quality. As an innovator, HAVI Logistics is working on precisely these aspects. We keep on questioning how our processes and services can save our customers 1996 HAVI Logistics in Switzerland devel- 1997 ILOS arrives. The new busi- suppliers FSB Backwaren manufacturer, HAVI Logistics in ops the “mobile concept.” A special ness software replaces Kis- and Esca Food Solutions, Austria develops a special short swap body designed as a truck body sels after 14 years. The new HAVI Logistics puts the first trailer with a steerable rear enables the driver to load a container system developed in-house Food Town in Europe into axle. This technical innovation from a railroad car onto his truck is implemented as a standard operation. Today HAVI enables us to deliver even to single-handed. A crane is no longer at HAVI Logistics, largely har- Logistics is a partner in ten restaurants in inner-city areas needed. This environmental friendly monizing the ERP application European Food Towns. without any problems. solution saves time and money. right across Europe. Cover Story time and make their processes faster. One way we do this is to use Ecosima (Economic Store Inventory Management Assistance – introduced in 2005). When it comes to quality, the important thing is how our customers perceive our services. By introducing Pool&Push in 2005, for instance, we have created innovation in promotion management. This has considerably improved the key feature – the customer benefit – of our services. The customers no longer have to do the ordering. We have relieved them of that burden. And HAVI Logistics' outstanding IT generates added value for our customers, while also giving us the opportunity of expanding our horizons. The best example is the development of SCR (1999), which is now being used worldwide as Version 5. Such IT systems, which not only contribute to increasing transparency along the whole supply chain, but also contain highly advanced business intelligence solutions, are crucial requirements for the provision of our "all in one" services as “The Global Lead Logistics Provider”. So customer benefit arises from and through innovations. And for HAVI Logistics, innovations in their turn have two general types of effects: indirect or direct effects. To us, "indirect" means that we search internally for new, innovative ways of finding solutions relating to our own business system. This means that we must keep on asking ourselves the question of whether the service we offer today indicates the direction for the future. To this end, we regularly check up on our workflows, systems, structures and the resources we use, such as DCs and trucks. Innovations with "direct" effects, on the other hand, create innovation in the customer's processes. They affect the customer's business system directly. This is how GAuDi (2009) works, for example. HAVI Logistics is “The Global Lead Logistics Provider”. We plan, steer, control, and create innovations in the goods, information flows and finance streams for our customers. We continually optimize the logistics all the way from the supplier to the customer. In doing so we keep on asking and answering this one question: how do we come up with innovations that improve customer benefit all along 1999 SCR (Supply Chain Release) is the supply chain? That consequently increase the competitiveness of our customers? HAVI Logistics has three separate "think tanks:" a basic tank, a new-ideas tank, and a development tank. The basic tank contains our current portfolio of services, which has been developed from the innovations of the past. The new-ideas tank is full of services for which the initial development work has largely been completed. They are either service innovations with direct effects, such as Invisible Delivery (developed in 2005), or those with indirect effects, such as Tracking & Tracing (2005). Both of these services have enabled us to increase customer benefit and improve our customers’ competitiveness. These innovations secure our survival in the short term. The development tank contains innovation measures that are still at the testing stage. They are intended to form the foundation for our future potential success. All the ideas and innovations are passed on to the various HAVI Logistics companies. The Center of Competence (CoC) Operations was created especially for this purpose. nefit many companies, it can even be declared an international HAVI Logistics standard. This is what happened with the HAVI Logistics probe thermometer, which transmits the temperatures it measures via an infrared connection to a small, portable printer that then prints the labels on self-adhesive, colorfast paper. Whether HAVI Logistics successfully turns out innovations is determined solely by the company itself. The team has the strategic task of continually filling these three tanks by means of innovation processes and assisting with the implementation of new ideas. The foundation for this includes examples of best practices. If a HAVI Logistics company has resolved a problem particularly efficiently, the CoC Operations makes sure that this good example is passed on to all other HAVI Logistics companies. If it turns out that the idea will be- With our innovations we secure our future viability in a constantly changing world. We are aware of the major barriers and requirements for successful innovation management. HAVI Logistics would like to make its customers' business easier, better and more efficient through our services. The key qualifications of HAVI Logistics employees include the ability to shape the future by means of innovative ideas and to continually question day-to-day aspects. The high quality that HAVI Logistics' customers put their trust in grows out of this commitment, this “internal team spirit” maxim. Ultimately this is where the future of HAVI Logistics is decided. 2000 HAVI Logistics introduces biodiesel made from 2001 Introduction of WebLog. The McDonald's The CoC is a “special unit” within HAVI Logistics. developed. SCR is an extensive rape seed oil. First of all, the whole German Restaurants can work on their order proposals software package including fleet is converted to the new organic fuel. Other via the McDonald's Internet and then send ILOS as a solution for the HAVI Logistics countries follow successively. them back as orders, and in addition they can operating business processes That was the largest environmental project at post their goods received from the WebLog to and also covering the areas any time in the history of HAVI Logistics. The the RDS system. Furthermore, WebLog offers of requirements planning and trucks are regarded as the most environmentally our customers a function for writing emails to business intelligence. friendly in Europe. the HAVI Logistics sales department. 06 Interview Interview with Dr. Jörg Erdmann Anyone who develops ideas into innovative services that bring the customers business advantages will stay ahead of the competition. Not least for this reason is the topic of innovation of huge importance to a company like HAVI Logistics. Jörg Erdmann (JER) is Vice President Business Development & Innovations at HAVI Logistics. He focuses both on our new customers and on maintaining our competitiveness. alphabet: What is the situation regarding our ability to innovate as a pre-requisite for growth and market success? JER: Our business with McDonald's has set standards. I don't know any other organization of this size who leave the implementation of their supply chain to a logistics service provider as consistently as McDonald's does with us. Only customers who truly believe in their concept and work hand in hand with a service provider they trust implicitly can do this. We take our customers seriously and realize our agreements with them reliably and in high quality. However, where there is light, there is obviously also shadow. alphabet: And where exactly do you see the shadows? JER: Let me use an image to illustrate what I mean. Monocultures bring great benefits over a long period of time, until they are suddenly attacked from the outside and collapse because they are not resistant enough. They can no longer react appropriately to external influences. The simple solution for us is to open up consistently to more new customers. This will strengthen our customers and ultimately ourselves as well. alphabet: Do we offer the same portfolio of services to all HAVI Logistics' customers? JER: That would be impossible. Convenience stores, for example, have a completely different type of business than our customer McDonald's. All the customers have different structures and our work with them must prove itself over several years, until mutual trust has created a close partnership, and with it a deep level of integration. But we give our ideas and 2001 The HAVI Logistics double-deck trucks' our concept a particular orientation precisely because of these different requirements. That is real innovation. alphabet: How do we do that? JER: By listening to our customers. HAVI Logistics works in close contact with its customers – and that makes us successful. We are different than Apple or Xerox, for example, who aim for product leadership and operate huge research facilities with massive innovation processes. However we create great benefits for the customers through our Customer Intimacy strategy. Customer Intimacy aims to treat all customers individually and show them that they can have a greatly simplified service process. We see ourselves as our customers′ backbone, and as a logistics service provider we assume the responsibility for their success. I see this happening again at the new customers such as BP and IKEA, and also in current acquisitions. Even if changes at the customer are not always easy, we have the strong will to help our customers and continually make improvements in their business by providing our support. Our basic concept for all our customers is always very similar – and this is also very important. However, every customer poses different challenges for us. If we can do an excellent job of meeting these challenges, we are innovative. alphabet: Could you give us a couple of examples? JER: BP, for example, would like to control its own supply chain in the future. However, even after cutting the ties to wholesalers, BP must still be able to purchase supplies at favorable prices. Here we look for ways and means 2002 The complete fleet of HAVI of supporting our customer. The situation with IKEA is different again. In this case the challenge is to provide the logistics for each national assortment and the globally standardized international assortment simultaneously. On the other hand, IKEA has no problems with limited storage space at its stores. In turn nearly all restaurant chains meet these challenges, but here our Invisible Delivery concept really comes into its own. alphabet: And what does HAVI Logistics internal ability to innovate look like? JER: We have to learn to cope even faster with changes that the customer does not notice directly, but which are important for our internal structures and processes. We are on the way to becoming a company with several strategic customers in each country. That requires even more standardization of internal workflows. At the same time we must systematically make our best practices - that have been successfully introduced in one country - available to other HAVI Logistics companies, too. And we have re-oriented our Center of Competence (CoC), which belongs to HAVI Logistics Operations, precisely on achieving this goal. The CoC team supports the Business Process Sponsors for Trade, Transport and Warehouse in the preparation of important standardization projects. Moreover, the CoC is also keeping an eye open for best practices in the various countries where HAVI Logistics operates, and passes them on to where they are needed. Innovations are only successful if they are implemented as widely as possible. 2005 HAVI Logistics introduces Ecosima and develops “Invisi- new construction with single wheel sus- Logistics in Austria is con- ble Delivery.” Economic Store Inventory Management As- pension offers greater capacity that can be verted to AME biodiesel. sistance (Ecosima for short) standardizes all the processes utilized in the best possible way due to the This fuel is a methyl ester in the customers' warehouses. The practically identical separation of two temperature-controlled made from used cooking oil organization of the shelves in every restaurant and the loading levels: the upper one takes large- from McDonald's Restaurants. labeling of the positions on the shelves with pictorial labels volume, lightweight goods, while the lower are prerequisites for the success of Invisible Delivery, HAVI level is for small, heavy loads. Logistics' system for delivering and shelving goods. 07 Interview Rich in ideas There’s no future without the relentless pursuit of innovation. This long-standing belief is even more important today in view of the current state of the local and global economy. Ideas from committed employees are one of the most important factors in triggering and implementing innovations. HAVI Logistics in Italy started to exploit this important resource long ago and consistently rewards employees for good ideas. alphabet: What are the plans surrounding the topic of innovation for the coming years? JER: At this time the CoC is concentrating strongly on Trade, Warehouse and Transport. The team is going to draw up a structured analysis of the most important overarching ideas. The analysis will aid the preparations for actually implementing the ideas and also for adapting those ideas that have already been successfully realized in certain HAVI Logistics countries. There is some latent potential here. Wherever we already have a firm grip on ″mature″ ideas, we want to support HAVI Logistics employees in a consistent and structured fashion as they develop new ideas. The ideas submitted by employees are collected in a database set up especially for this purpose. They are then evaluated by a five-member Innovation Team in order to measure their real effectiveness and their potential to produce a considerable economic and quality improvement for HAVI Logistics and all our customers. An idea whose implementation appears to be realistic and beneficial is rewarded monetary. If the Innovation Team decides that the proposed idea merits testing, the employee receives an additional payment. Finally, HAVI Logistics Italy is willing to pay for any idea that is put into practice after testing. At the end of December 2008, 42 of the 150 ideas typed in the Idea Management database were deemed as innovative and rewarded. At present the database contains a total of about 200 new ideas. Among these ideas is one that has received strong appreciation from McDonald’s Italy: Thanks to his experience with the Field Service, Gianfranco Carrabetta understood that the management of salads inside restaurant cells could be improved. He asked several local artisans to create a very simple “dolly” on wheels into which the salad boxes fit exactly. A trial of the new dolly was held at several McDonald’s restaurants that had volunteered; within a few months more than 40% of the Italian McDonald’s restaurants had requested it as a standard product to be ordered from HAVI Logistics Italy. This innovation has advantages for McDonald’s crew in terms of picking time reduction and best FIFO management and for restaurant construction in term of a reduction of chilled space requirements. Sometimes simple ideas create major advantages! : The idea management carried out by our team in Italy is a good example of HAVI Logistics' efforts to accept suggestions for improvement put forward by our employees. alphabet: What innovations do you value and enjoy as a private person? JER: Basically I think that we should not be trying to re-invent the wheel. I value improvements that make things simpler or more enjoyable. Very often these days wine tastes better than it used to, guitars produce a better sound, and surfboards and sailing boats are now much easier to build and sail. 2005 The HAVI Logistics Tracking and Tracing “Listen more actively to the employee’s requirements and suggestions for improvement.” At this year's European Management Meeting, the top management of HAVI Logistics defined Idea Management as an important point to be evaluated by employees in our Employee Satisfaction Survey (see also page 17). Efficient Idea Management is a good way to mine the lode of valuable ideas in the heads of our employees. In this context, HAVI Logistics, as "The Global Lead Logistics Provider," can only win and secure its long-term growth. To guarantee Idea Management on a European level, our CoC Operations is responsible for collecting ideas with a group wide focus. With its open-minded approach CoC Operations supports the process of turning good ideas into practice. 2007 Photovoltaic technology is an environ- 2009 GAuDi roll-out. HAVI Logistics takes on total responsi- system is an IT innovation resulting from mentally friendly alternative for generat- bility for the McDonald's supply chain. This comprises EU Regulation 178/2002. As food safety ing electricity. HAVI Logistics adopts automatic delivery to the restaurants of all materials, re- is top priority at HAVI Logistics, we took this eco-innovation. In our Spanish- ceiving and shelving all the goods required in a restau- decisive action. Together with a Danish based Distribution Center we "freeze rant in accordance with the FIFO principle, inventories software house, we developed the HAVI with the sun," since we have been us- and warehouse optimization. Restaurant employees Logistics' traceability solution. ing 70% of the energy we get from the can now concentrate fully on their core competencies. sun to run our deep-freeze stores. (Please read also the article on page 11) 08 Worldwide Showing a strong face worldwide In 2002 HAVI Logistics made the transition from a strong European organization to a Lead Logistics Provider that is perfectly positioned worldwide. What had happened? The U.S. company HAVI Group, LP took over most of the shares in our company and thus paved the way for us to become the unbeatable successful logistics partner we are today. Together with two further pillars of our main shareholder, HAVI Logistics looks back on a successful history and forward into an extremely promising future. HAVI Group history: where it all began In May 1974 two men, Ted Perlman and Bob Rocque, decided to form a company to respond to the needs of the McDonald's restaurant system. Later that same year, the HAVI Group built Perlman-Rocque Lemont, its first permanent facility dedicated to providing distribution services to McDonald’s restaurants in the Chicago metropolitan area. The origin of the name derives from a joint effort as well. Since then HAVI has brought its operations up to a global scale. The company is comprised of fully functioning divisions specializing in logistics, distribution, food processing, packaging and administrative services, and promotional marketing. HAVI Group, LP strives to provide high-quality value-added services to its customers. The company’s philosophy “HAVI is a group of companies which strive to succeed by maximizing every individual’s potential in a positive work environment. As a group, our objective is to satisfy our customers and profitably grow our business while practicing ethical behavior. We will continue to prosper by embracing these principles while being sensitive to the cultures and diversity of those with whom we interact as a growing international company. Above all else, we will always “Deliver the Promise.” Theodore F. Perlmann Chairman and CEO HAVI Group, LP. The HAVI companies: Our experts in the field The global business environment is ever changing. In order to successfully “Deliver the Promise” to our global customers, the HAVI Group, LP has a structure comprising four main companies: HAVI Global Solutions, HAVI Logistics, HFS North America and The Marketing Store. Get to know The Marketing Store The Marketing Store is one of the world’s largest privately held integrated marketing communications companies. Acquired by the HAVI Group in 1998, the company has over 800 employees in 12 offices on five continents. The Marketing Store’s Mission is “to harness the creativity of all of their people to deliver great ideas that bring the spirit of their client’s brands to life.” It is with this mission in mind that The Marketing Store strives to be the best idea company in the world. Get to know HAVI Global Solutions HAVI Global Solutions is a dynamic, growing, customer-focused enterprise dedicated to providing leadership, innovation and a sustainable competitive advantage in Packaging, Strategic Sourcing, Promotions Management, and Supply Chain Analytics and Integration solutions for our customers. The Mission at HAVI Global Solutions is to be the customers’ expert partner in managed supply chain solutions delivering value and growth from source to consumer. .com gstore rketin hema www.t 09 Worldwide Get to know HAVI Groups' Logistics Pillar: HAVI Logistics and HFS North America HAVI Logistics is divided into the business areas of Europe and the greater Asian region. More than 6,200 employees worldwide work under the umbrella of our strong brand. Nearly 15,000 customer outlets worldwide are supplied from 72 Distribution Centers. HAVI Logistics is “The Global Lead Logistics Provider” for food and non-food logistics and one of the total of three pillars supporting the Havi Group, LP. erica.com www.hfsnortham ian, Harriette and Viv HAVI comes from ves. wi ’ ers the found the first names of HFS North America is the second part of HAVI Group's Logistics pillar. As well as HAVI Logistics, HFS is a team of supply chain solution experts that provides customized distribution and logistical services aligned to meet the customers’ needs. The company receives and consolidates shipments from multiple vendors, purchase inventory and distribute a broad range of SKU’s for its customers all with varying temperature and handling specifications. HFS North America has specialized capabilities to handle and distribute highly perishable products (“fresh to frozen expertise”) for its customers. Additionally, HFS North America can evaluate its customers’ systems to improve efficiencies and optimize consolidated distribution. The company aligns its business solutions to improve the supply chain, always delivering its legendary service. HFS North America ensures customer success by tailoring “distribution services” and “purchasing services” to meet the customer’s business needs. In January 2010, HFS will also change its legal form and company name to HAVI Logistics North America. It is an exciting time for HFS North America and the team is enthusiastic to take part in fulfilling the vision of a global brand. om www.havi-logistics.c .com avigs www.h IPLPerseco and ISIS have been rebranded as HAVI Global Solutions HAVI Global Solutions in Germany moves into new offices un ica tio ns At the beginning of 2009, the two HAVI Group divisions HAVI Logistics and HAVI Global Solutions were optimized and aligned their internal resources. The initial phase of this restructuring in Europe comprised the integration of ISIS Europe into IPLPerseco. At the beginning of June the next significant phase in this process, namely the full integration of IPLPerseco into HAVI Global Solutions, was started. As a result, IPLPerseco will be rebranded as HAVI Global Solutions. -C or po ra te Co m m The entire former IPLPerseco and ISIS organizations are looking forward to presenting their new brand to customers in a consistent manner around the globe. The move to the new Duisburg office in the “Looper” building took place on June 15, 2009. On the fourth floor of the s building the employees now occupy an ideal working environment covering ic ist g o over 1,941 square meters and including 92 working spaces. L I AV © H HAVI Social Awareness: making our world a better place! An important component of the philosophy embraced by all the HAVI Group, LP companies is sensitivity to the needs of the communities and environments in which we work. You may not be aware that at each HAVI company around the world there are individuals making positive impacts on their local communities and environments. These efforts range from volunteering in our local communities to constructing large-scale solar panel systems. Since May the HAVI Group, LP has a new website to educate, celebrate and share what all divisions of HAVI Group do to make our world a better, safer and greener place: www.havireach.com. “What sets HAVI apart from other corporate citizens is our proven commitment to our people, our desire to give back to the communities in which we operate, and our respect for our planet. Corporate Social Responsibility is at the very heart of our strategies and philosophy.” Chuck Schulman Chief Governance Officer and Trustee 10 Company News Wonderful New World "Home office," "Thin Clients" and "cloud computing" are buzz words familiar to everyone who lives and works in the modern world. Nevertheless, many companies are still skeptical about these IT innovations. While such companies wait for proof of the practicality of these innovations, HAVI Logistics has already been using the latest information technology – and deriving the associated benefits – for quite some time. H AVI Logistics is cutting edge. Video conferences; communicator; webcams, laptops and mobiles; applications such as virtualization software; and – last but certainly not least – we make first steps with techniques like cloud computing. HAVI Logistics provides what a global player needs and supports its employees by offering them up-to-date information technology "extra" empowering them to deal with overcrowded offices and traffic jams and establish a sound work-life balance. These tools are already widely used at HAVI Logistics and are especially valued by employees e.g. returning to work after maternity or childcare leave. They are one of the many reasons for the high employee retention rate at the company. In addition, implementing these techniques throughout HAVI Logistics offers possibilities for cutting costs for hardware, licenses and office space. Cloud computing is a good example of this trend. The basic principle is very simple: as Internet connections get faster and faster, more and more data and programs are now stored on central servers in the Internet instead of on computers at the individual work places. This means users can now access their data at any time and place per cellphone or PC; the computer user is surrounded by a "digital cloud" of data. The associated cost flexibility is another important advantage of cloud computing for HAVI Logistics. With cloud computing we could save up to 80 percent of space and 60 percent of electricity and air-conditioning costs at our computing centers. Furthermore, the company is charged only for the server capacity it actually requires at the cloud computing providers. This means that we do not have expenditures for resources we do not use. It is not only the HAVI Logistics employees working at home offices or in the IS sector who use cloud computing. The virtual workplace is also available, for example, to our Shared Service Center in Prague in the Czech Republic. Nor does the use of “virtual workspace” require a thin client; it is possible from every PC regardless of its location. Everyone benefits from this technology, which is expected to eliminate problems such as installation of updates at overly long intervals, applications that do not work right due to local circumstances, the need for on-site support, uncontrolled installations, and a failure to have all the right licenses in place. And when it comes to the preferred location and the particular PC in use, we can satisfy the preferences of our employees without running a security risk: in general all suppliers of online data storage space break down the data entrusted to them into non-readable fragments via a complicated encoding procedure. Only after the user has logged on with his or her user ID and password does the software reassemble the desired files. To achieve even more security, the data are distributed among several servers around the (wonderful new) world for storage. 11 Company News Stars of Germany At the beginning of this year, HAVI Logistics Germany and S.T.I. Freight Management transported a very delicate load to Los Angeles. The very fragile goods had to be delivered to L.A. at very short notice. Nothing special for our experts, you might think? Well, in this case it was, because the load was the eye catchers for a McDonald's ad starring Heidi Klumm. A stylish gala evening is just getting started. Everybody who is anybody has been invited. The photographers are lining up to get the best shot of the evening. A limousine glides up. All eyes are on the car as people wait with bated breath to see the next great star. The door opens and… a little dog jumps out. The onlookers are sorely disappointed and also puzzled: there’s no sign of a star anywhere. The next camera shot shows Heidi Klumm accompanied by Germany's next Top Models Sara, Mandy and Marie. They smirk about the trick they played on the photographers as they enter a McDonald's restaurant. Heidi and their three beauties are advertising the McDonald's campaign launched in Germany in June called "Stars of America." Maybe the advertising boards (called standies), a menu board and a panorama display that we flew in especially from Germany were not the center of attention, but they were definitely eyecatchers. On 12 February of this year, HAVI Logistics Germany was commissioned to transport the extremely fragile and bulky items to America. The advertising boards had to arrive in L.A. within only ten days, and this deadline was not negotiable because the ad was going to be filmed on a fixed date. While HAVI Logistics procured the standies, boards and displays within the shortest time, S.T.I. planned every aspect of the tricky airfreight operation and helped HAVI Logistics complete the customs formalities. To the great satisfaction of our customer, the advertising materials arrived on time for the start of filming. As usual, McDonald's could be sure that HAVI Logistics and S.T.I. would make an excellent job of transporting fragile materials, even at short notice. So for us, the real stars in this story are not Chicken Wrap & Co. but our colleagues in HAVI Logistics Germany and S.T.I. GAuDi on the go, Germany-wide! G AuDi is one of the most significant innovations in the history of HAVI Logistics. Starting out as a test in 2007, GAuDi has advanced steadily until it attained the status, at the beginning of this year, of one of the most important services offered by HAVI Logistics. GAuDi is now at the rollout phase in Germany. Over the years we have revised the concept several times to bring it into line with the requirements of our customers. The vision of GAuDi is to completely relieve the McDonald’s restaurants of all logistics tasks by providing one big service package. The restaurants do not have to order anymore since HAVI Logistics is taking over this responsibility. In addition, we handle goods reception and inventory management. We bring the goods into the restaurants, put them on the shelves, and carry out shelf-life rotation and even inventory counts. During our test phase in 2008, it finally became clear that there was a keen interest in all parts of the German franchisee community in taking over the responsibility for the store orders for all articles. It was decided that HAVI Logistics should handle this first element of GAuDi. Other elements of GAuDi – e.g. the provision of mere physical services for the restaurants such as goods reception and inventory management – are not appreciated by every franchisee. Therefore, we decided to back away from the idea of offering GAuDi as one big package only. We will go for a modular approach to meet our customers' needs even better. The module “GAuDi Push” was born. With the introduction of this module, order responsibility became part of our standard service and mark-up package. HAVI Logistics has committed itself and literally promised the franchisee community in Germany that we will take over the order responsibility for all inventory-controlled items step by step. For promotional items and Happy Meals, we have already been doing this for the total market for the last two years under the name “Pool&Push.” Now we will take over GAuDi The HAVI Logistics Solution frozen and chilled items and other article groups will soon follow. In-store logistics – the second module of GAuDi – is offered only to those restaurants which are ready to pay separately for it. Today we have about 110 McDonald’s restaurants in Germany which simply do not order frozen and chilled items anymore: we do that for them. Every week we increase this number by five to ten restaurants. Other material groups are expected to follow later. With today’s infrastructure we can only do frozen and chilled items for 500 McDonald’s restaurants at a maximum. This is why we plan to implement SCR5 in parallel. SCR5 represents the next generation of supply chain tools and was developed by our sister company HAVI Global Solutions. SCR5 is the planning tool which will enable us to push all inventory-controlled items for all restaurants in the market. However, the time frame is tight. We have to have SCR5 available in Germany before the end of 2009 in order to fulfill the commitment we have made to the German market. 12 New Customers Exceeding All Expectations! Since April 2009 HAVI Logistics has been performing all logistics services (including strategic sourcing) for Pizza Hut in Sweden. The move from a traditional wholesaler set-up to the transparency of the HAVI Logistics business model is an important step enabling Pizza Hut to sustain its high growth rate in the Swedish market and achieve improved profitability at the same time. T he $600 dollars' start-up capital was borrowed from their mother, the equipment was all second-hand, and the furnishings very basic. Despite these modest beginnings the restaurant the brothers Frank and Dan Carney opened at a busy intersection in Wichita, Kansas took off immediately and was the start of a successful restaurant chain. The name the brothers gave the new business, Pizza Hut, was an unmistakable reference to the unassuming appearance of that first pizza place. Today, 50 years later, Pizza Hut is represented in more than 100 countries around the globe, with more than 12,000 restaurants in Europe, the Americas, Africa, Asia and Australia. Since April of this year HAVI Logistics has been responsible for delivering the complete assortment of goods to a total of eleven Pizza Hut restaurants in Sweden. The contract with Pizza Hut – like the first contract with our customer McDonald's around 28 years before – was initially sealed with a handshake. This handshake took place at the end of December 2008. For Pizza Hut the main reason to switch from its previous supplier to HAVI Logistics was the transparency of our business model. “When you realize that the wholesaler solution leaves you without any clue whether the costs depends on the price of wheat or the price of diesel, you get the feeling that something’s not right …,” says Björn Källström, Managing Director of the Nordic Restaurant Group, the country licensee for Pizza Hut. The HAVI Logistics business model separates the purchase price of the goods from the distribution costs and thus makes all costs more transparent for the customer. Pizza Hut was also attracted by the additional advan- Pizza Hut Business Sweden FACTS & FIGURES Assortment and Volumes: • 156 SKU (ambient, chilled, frozen) • 88,000 cases p.a. Ordering and Delivery: • HAVI Logistics supplies 11 Pizza Hut stores in Sweden • Electronic ordering process via web interface • 36 hours. lead time • deliveries per site and week (average) • Automatic invoicing tages HAVI Logistics had to offer in comparison with its competitors: fewer deliveries, guaranteed quality, food safety and central management of the goods assortment. Between the handshake in December and the first delivery in April, our Swedish team had only three months to take all the measures necessary to achieve the lofty goal of a 100% successful takeover. After witnessing the outstanding commitment displayed by the entire HAVI Logistics team, the new strategic customer confirmed that it had made the right decision by selecting HAVI Logistics: "The start-up with HAVI Logistics has exceeded my expectations,” said Björn Källström. The cooperation with Pizza Hut has now been up and running for a couple of months, and there is still some fine-tuning to do before we are where we all want to be. The main challenge will now be to continue to exceed the customer’s expectations in Sweden, thereby proving to Yum! Brands - the concept owner of Pizza Hut - that HAVI Logistics is a reliable partner which can create competitive advantages for Pizza Hut all over Europe. 13 New Customers It's Our Pleasure! Gaining BP as a strategic customer in the Netherlands and in Poland represents not only another milestone in the history of HAVI Logistics, but also a real success story. P oland is not only the third-largest BP market in Europe, but also the fastest growing. Since the petroleum giant started doing business in Poland in 1991, it has opened over 350 gas station shops in the country. More than 200 of them are owned by BP and about 150 are dealer-owned. Following the implementation phase, we have now been working together with BP for several months on a joint approach to further optimize the Supply Chain processes and cost structure. On the agenda are important items such as: The ambient warehouse of HAVI Logistics in Poland. In here 1,153 items for BP Poland are stored. optimizing the delivery schedule flexible routing to enable us to react better to short-term volume fluctuations ■ closer collaboration with suppliers ■ developing a concept to support and improve the volume planning and optimal distribution of promotional articles ■ Since August 2008 HAVI Logistics in Poland has been supplying a large proportion of the total shop assortment to our customer. Our team in Poland soon reached a high level of performance, especially regarding punctuality and completeness of deliveries. Today we deliver about 1,200 articles to a total of 205 BP gas station shops and since very recently we also deliver an ice-cream assortment. We now transport five million cases for BP Poland every year. In addition, the whole ordering process and the invoicing is done through HAVI Logistics. ■ Our cooperation with BP is a success story. The customer is really satisfied; this development consolidates the partnership between BP and HAVI Logistics and strengthens our customer’s confidence in us. The warehouse employee Hubert Decyk from our DC in Tychy picks up the ambient goods for BP. Looking Forward to the Next Million! On May 9, 2009 RIMI and HAVI Logistics celebrated a fantastic jubilee. HAVI Logistics in Latvia performed the one millionth delivery to RIMI in the Baltics. I n 1996 our Latvian-based HAVI Logistics company was founded to serve McDonald's. Since 2001 we have been providing logistics services not only to McDonald's but also to the retail-chain RIMI. RIMI is represented in Latvia with 14 hypermarkets and 30 supermarkets offering a remarkable variety of food and non-food articles. The past eight years has been a real success story for HAVI Logistics in Latvia. In addition to the constant expansion of the delivery volume and the product assortment, in 2004 our colleagues moved into a new Distributions Center covering 28,000 sq. m. The "RIMI DC" is the largest of all the HAVI Logistics Distribution Centers and now the one millionth delivery was sent from there to our customer. What a great reason to celebrate! On 9 May our colleagues in Latvia picked the goods bound for RIMI’s "Mežciems" supermarket almost with reverence. Our driver Oskars Broks-Vitols had the honor of delivering the goods to the customer. Andris Dobulis, Managing Director of HAVI Logistics in Latvia, took the one millionth RIMI delivery as an occasion to award certificates to all his colleagues and to celebrate the many millions of deliveries to come with a large cake. Managing Director of HAVI Logistics Latvia Andris Dobulis presents truck driver Oskars Broks-Vitols with the certificate. 14 Environment Great Climate in Norway HAVI Logistics in Norway is following the lead of several other HAVI Logistics companies and running its trucks on AME biodiesel. The oil used to make French fries, for example, ends up in the tanks of the company’s trucks. Not only does this environmentally friendly alternative make a huge contribution to fighting global warming, but so do the trucks' new cooling aggregates, which use CO2. T he 565 trucks in the HAVI Logistics fleet are among the "greenest" on the roads anywhere in Europe. The fleet runs mainly on alternative fuels and since 2002 we have also been consistently using AME. Acid methyl ester is a renewable raw material containing a low percentage of sulfur. Using AME instead of mineral diesel reduces soot emissions by a good 50 percent. What's more, AME is biodegradable and non-toxic. Since May of this year HAVI Logistics in Norway has been operating two trucks on AME. The environmentally friendly fuel can be obtained at the company's own biodiesel filling station. With the successive conversion of our truck fleet from mineral-oil-derived diesel to AME, we are benefiting the environment and at the same time helping our customer McDonald's to get a firm handle on its CO2 emissions. The use of AME reduces emissions of greenhouse gases by 82 percent in comparison with conventional diesel. The two trucks, which distribute to the Oslo area, are at the same time equipped with another environmental innovation: cooling aggregates that use CO2. Using CO2 to reduce CO2 emissions might sound at first like a contradiction in terms, but the logic is fundamentally sound. The CO2 used in Norway comes from the exhaust from factories making artificial fertilizer. Instead of simply releasing the gas formed during fertilizer production into the atmosphere to the detriment of the environment, it is "captured" and re-used for such things as our truck cooling systems. So the cooling aggregates in our HAVI Logistics trucks in Norway stay completely CO2-neutral. And that‘s not all. They also have decisive additional advantages as compared to cooling systems that run on diesel: ■ ■ ■ ■ ■ ■ ■ practically silent extremely fast cooling of the loading spaces improved temperature management high performance ensures minimal cooling losses during loading and unloading long lifetime of cooling aggregates, greater reliability minimal maintenance costs for the aggregates no FCHCs/FHCs as coolants The Norwegian premier wants his country to be the global leader in climate policy by the middle of this century. Norway's emissions are to be so greatly reduced and neutralized by 2050 that they work out to be zero. Thomas Münchausen, Managing Director of HAVI Logistics Sweden in the mid of truck-driver Lars Westheim (left) and Transport Manager Arne Ihlen. Prime Minister Jens Stoltenberg wants pollution rights and countermeasures to balance out emissions to such a degree that, mathematically, the sum total is zero. Does Stoltenberg know about HAVI Logistics' commitment to the environment? Maybe those who criticize his ambitious target would suddenly fall silent if he presented environmental innovations such as those at HAVI Logistics as some of his measures… Innovative Equipment: Cooling aggregate (left) and the CO2 gas tank. Successful Recertification According to ISO 14001 and 22000 With respect to the standards of HAVI Logistics every sin- gle distribution company is well ahead of the regulations for the protection of the environment and food safety. Since 2003, however, HAVI Logistics in Hungary has been going one step further: it is the first logistics service provider in Hungary – and the first at HAVI Logistics – to achieve the food-safety ISO 22000 certification! Now the recertification audit has taken place and our Hungarian team did well again as expected. S ince February 2003 our Hungarian-based Distribution Center has been one of the first within HAVI Logistics to have its exemplary environmental protection activities certified according to DIN EN ISO 14001. Our team in Hungary thereby agreed to pursue the environmental goals set by this standard and to allow an annual inspection by an external consultant. In May of this year, the company was recertified for the second time. The environmental activities were rated as "superior" by the external auditor. The audit protocol stressed the importance of cleanliness and order in the warehouse, procedures carried according to the spirit of the law, separate collection of hazardous and recyclable materials, and documentation in general. Additionally, our Hungarian-based company was recently recertified according to another very important standard, the ISO 22000, which takes a very critical look at the wide field of food safety. In 2006 it was the first of all the HAVI Logistics companies, and also the very first logistics company in the whole of Hungary, to gain this certification. Our experience in the field of HACCP and our knowledge of procedures like FIFO or the overall tracking of goods paid off very well. We showed that HAVI Logistics in Hungary understands the requirements of this standard and applies its elements in a very expedient way – contributing to the highest standards we have implemented for food safety throughout HAVI Logistics. 15 Environment Brand-New Service for McDonald’s Belgium HAVI Logistics Environmental Services, (HLES) is responsible for collecting and recycling all kinds of sorted waste from the Dutch McDonald’s Restaurants. Starting in September 2009, however, HLES will be implementing its advanced waste management concept at our customer's Belgian restaurants as well. Further Environmental Services Besides taking care of the operational procedures and the administration of the McDonald‘s Recycling System in the Netherlands and Belgium, we also offer waste management and reverse logistics in other HAVI Logistics countries in Europe. Cardboard In various markets, HAVI Logistics companies collect used cardboard from McDonald’s restaurants and forward it for adequate recycling. Batteries The specially designed recycling truck is on the road seven days a week. S ix specially designed green recycling trucks are on the road seven days a week collecting sorted waste consisting of corrugated and dry paper, plastics, food waste, used cooking oil, residual waste and small chemical waste. HLES makes an important contribution to the protection of the environment by assuring that no type of waste from the McDonald’s restaurants is disposed of on dumps. From September on the McDonald’s restaurants in the Netherlands will not be the only ones receiving this service from our Netherlands-based company; in addition, 40 of the 59 McDonald's restaurants in neighboring Belgium have also subscribed to various environmentally friendly waste recycling services offered by HLES. Preparations already got underway at the beginning of March 2008; the operational start will take place in September 2009. At first one truck will be in service for Belgium. HLEs' most important task is to carry out waste collection in Belgium in a professional manner. After that, in the year 2010 to be exact, the recycling service will be extended to Belgium literally across borders: one of the two trucks in service for the Belgium restaurants will also serve McDonald's restaurants in the southern part of the Netherlands. This combined system will give our HAVI Logistics company the opportunity to create a genuine win-win-win situation. McDonald’s customers can return used batteries from Happy Meal toys to the restaurants in some countries. Our delivery drivers take the used batteries – collected in special boxes – back to the DC, where waste management companies collect them for recycling. Translites HAVI Logistics in Germany has introduced a system which allows the McDonald’s restaurants to return neon signs – so-called translites – to the HAVI Logistics drivers. Back at the Distribution Center, the translites are disposed of by special waste management companies. Organic Waste Neon Lamps Environmental Reporting In Switzerland, we also ensure, among other recycling services, the collection of organic waste from McDonald’s restaurants. In Hungary, a regulation classifying old neon lamps as hazardous waste has been in force since 2004. The neon lamps must be reprocessed separately. HAVI Logistics provides a valuable service by taking back the old lamps for reprocessing. HAVI Logistics supports McDonald's by preparing various environmetal reports, e.g.: ■ Local and European environ- mental reports ■ Drawing up packaging reports for various European countries ■ Waste of Electrical and Electronic Equipment reports Please read more about HAVI Logistics' Environmental Activities and Services in our "IT'S EASY TO BE GREEN" brochure - available under: www.havi-logistics.com/ News & Media / Publications / Brochures 16 Environment Hats Off to Our Turkish Top Performer! In this section of alphabet, we have in the past reported on the excellent results achieved by our HAVI Logistics companies and Distribution Centers in the DQMP and SQI audits. Much to our dismay, we overlooked a very special Top Performer in the last edition. By means of this regular feature, we plan to keep you, the reader, totally up to date on our accomplishments with respect to observance of all HACCP criteria and our continual efforts to guarantee food safety in all sectors of our organization. In the last issue of alphabet we were again able to present a large number of Top Performers at HAVI Logistics. One company we are also very proud of is HAVI Logistics Turkey. At the latest DQMP* (Distributor Quality Management Process) audit, our colleagues in Sekerpınar-Gebze achieved an amazing 97.45 %. Not only was our company in Turkey the first member of the HAVI Logistics family to be audited according to the new DQMP criteria; it was also the company that achieved the highest number of points in 2008. December 2008 and January 2009 were successful months for our Turkish colleagues in several respects. Apart from the excellent DQMP results, the company was certified for the first time in accordance with ISO 14001. Its outstanding environmental management system was accredited according to the Turkish standard and, on top of that, received a certificate from the German Accreditation Council. This means that our DC in S¸ekerpınar-Gebze upholds environmental standards that actually go beyond the Turkish requirements. mental protection is not yet a major issue. This is the only way we can achieve 100% customer satisfaction and an unmistakable customer benefit at all our HAVI Logistics companies. Thanks to the numerous standards defined by HAVI Logistics, the same regulations apply at all our Distribution Centers. With this policy, we achieve the maximum possible quality, hygiene and ecological awareness even in countries where environ- * DQMP: The intent of this process is to establish standardized requirements for distributors to McDonald's. Icy Innovation A dehumidifier that is unique at HAVI Logistics ensures that the cooling aggregates in the Duisburg deep-freeze store do not ice up and at the same time we fulfill HACCP-guidelines in a more energy-saving manner. T he HAVI Logistics DC in Duisburg supplies 299 customer outlets with ambient, chilled and frozen goods. To have all the picked frozen and fresh goods ready for loading at the cooldock, the gate on the deep-freeze store opens and closes up to 1,000 times a day. The constant coming and going means that the cooling aggregates have to run at full tilt, to guarantee the prescribed subzero temperatures in this area. Sooner or later this leads to the formation of ice on the aggregates, which have to be defrosted at regular intervals. Each defrosting operation is costly because it uses additional energy. The Dehumidifier is located at the cool-dock. The dehumidifier shows that HAVI Logistics has declared war on the ice. The 50,000 euro innovation simply sucks in the humid air, which occurs in the deep-freeze storage due to the continual opening and closing of the roller gates, out of the storage area. The air is dried and returned to the cooling circuit. So the cooling aggregates stay free of ice. In addition to the cleaning operations, we are now also saving a huge amount of energy, so the investment will have paid off in three years. Human Resources Getting Prepared for the future The company-wide employee satisfaction survey conducted at HAVI Logistics has underscored the importance of Training & Development within our organization. The survey has shown that there is room for improvement – especially with respect to management skills such as leadership and communication with employees. To be prepared for the demands of their present and future day-to-day activities, our HAVI Logistics middle-management employees have already taken advantages of the opportunity to participate in a specially designed Leadership Development Program since 2007. To support our entry-level leaders and top-management employees as well, HAVI Logistics has now decided to conduct a tailor-made leadership development program for these target groups, too. The program for our entry-level management is based on a training cycle consisting of three learning modules that build cumulatively upon one another and add up to a total of six days. The basic topics covered are recruiting & developing staff, agreeing on goals, organizing a team, making decisions, and carrying out control- ling. The concept of the training is based on a combination of learning-by-doing with inputs and theory provided by external trainers familiar with the special requirements of entry-level management. We also strive to develop the capacity of the senior managers at HAVI Logistics individually and collectively to make our ambitious strategy come alive, to address our strategic and leadership challenges and – more generally – to promote improved performance. The training program for our top-management has been designed as a two-year program consisting of six mandatory modules. The Leadership Development Program for our HAVI Logistics top management started in March 2009. A total of 50 senior managers are participating in two groups. By offering a customized and intensive trainings program of this kind, HAVI Logistics has once again taken the lead. “I do not know of any other company in the logistics business that has established such a comprehensive management training program in such a short time.” Christian Schulten, Human Resources Manager, HAVI Global Logistics Our leadership seminars are well attended. Today demand already exceeds supply in this area; as a result, additional training dates are planned for 2010. In this way HAVI Logistics is responding to the wishes of its employees for even more training and at the same time setting innovative standards on the European logistics market. Make an impact! Our employees are our most valuable resource The well being of our employees is a central concern at HAVI Logistics. Open lines of communication facilitating a continuous flow of information are an essential constituent of our corporate culture. We believe that employees should be allowed to express criticism and we actively solicit their opinions. For this reason, the Employee Satisfaction Survey conducted at regular intervals is of enormous importance. The Employee Satisfaction Survey 2009 was the first to be carried out simultaneously at all the European locations of HAVI Logistics. Around 70 percent of the 4,926 employees working at the 39 HAVI Logistics companies in Europe completed the questionnaire placed in the Internet; participation was voluntary and totally anonymous. This was an excellent turnout by any international comparison. The employees of HAVI Logistics expressed a high level of general satisfaction with their employer. The employees were asked to rate their general satisfaction with the company on a scale of one to five; the average score for this item was 4.3 points. Our efforts in the area of Corporate Social Responsibility were also given high marks: our employees evidently place great importance on the company's relationship with the environment and society and on good working conditions. The reorganization of the company under a new name also re- ceived a positive rating. Furthermore, the future prospects, corporate loyalty and customer satisfaction associated with our new uniform global brand were viewed as excellent. A high percentage of our employees feel they are part of the global HAVI Logistics family. Next to these strengths, however, the employees saw definite possibilities for improvement at the company. Additional communication instruments were needed, they said, to keep the workforce informed about management decisions and other developments at the company. The employees also complained that their suggestions and ideas had not been sufficiently adopted and put into practice. Requirements for further training seminars and events in the area of continued professional development were also reported. The results of this year's Employee Survey will be conveyed to the HAVI Logistics divisions and national companies by our top management along the fastest communication paths. At this year's European Management Meeting, the first joint Action Plans were already drawn up. These plans will enable us to realize the potential for improvement existing throughout the entire company at top speed. 18 News in Brief At the end of March 2009 the new DC in Lodi started serving our customers in the northern area of Italy. New DC for Northern Italy Sergey Shubsky, Managing Director of HAVI Logistics Ukraine in the middle of potential logistics At the end of March HAVI Logistics' new Distribution Center in Lombardy was already on stream. HAVI Logistics Managers of the Future The new DC is located in Lodi, in the region of Lombardy in Italy. Lodi, with its 42,000 inhabitants, was part of Milan until 1992, when Lodi gained recognition as an independent province. On June 19, 2009 a group of schoolchildren and teachers from Pechersk International School visited our HAVI Logistics DC in Kiev, Ukraine and enjoyed the experience of being “immersed” in food logistics. Following the DCs in Bomporto and Monterotondo, the DC in Lodi is now HAVI Logistics' third Distribution Center in Italy. The new DC has an area of 5,500 sq. m. and 1,996 pallet slots for ambient goods, 540 pallet slots in the fresh goods storage area, and 2,209 pallet slots for frozen products. Trucks dock at twelve ramps to load goods for a total of 122 McDonald’s restaurants and other Strategic Valued Customers (SVC). DC Lodi has a natural ventilation system made with a plastic hive that allows air circulation in all the directions. The hive is also drowned in concrete to be totally stable. managers of the future. The Pechersk School International a World IB School offering the International Baccalaureate Program, is part of a larger, global community of international schools. The growing expatriate community in Kiev has created a need for high-quality international education. This multicultural group includes diplomats and business people who are working at the embassies and large multinationals in Kiev. The visit was organized by Yolande Borden, wife of the Managing Director of McDonald’s Ukraine and Andrey Muguev, Supply Chain Director in Ukraine, Belarus, Georgia and Azerbaijan. The children and teachers were introduced to the basics of food distribution, temperature regimes, special transportation in multi-temperature modes, and the requirements for quality and cleanliness. Currently, the children are learning about the topic of “food” (i.e. how it is grown, processed and delivered to consumers) so the visit to our Ukraine-based Distribution Center was a real eye-opener. “It was not easy to explain complicated things in simple language that can be understood by 6/7-year-old students of logistics,” says Sergey Shubsky, Managing Director of HAVI Logistics, about this challenge. Nevertheless, the children promised to remember new words like Distribution Center, freezer and cool dock and Sergey has high hopes of having recruited a few logistics managers of the future. Construction Work in Duisburg The HAVI Logistics Distribution Center in Duisburg is one of six German DCs. The expansion, which involves adding 1,600 sq. m. to reach a total of 10,195 sq. m., enables us to continue meeting the high customer expectations and to create secure jobs. "It is a good investment, amounting to 7.5 million euros, and makes sense. This boosts our employees’ feeling that they have a safe job (f.l.t.r.) Warehouse employee Manfred Horn, Warehouse Manager Oliver Engelking, warehouse employees Ridvan Ayaz and Frank Brockerhoff and Hans-Dieter Hojnacki, Managing Director Operation HAVI Logistics Germany. News in Brief 19 The participants of the European Management Meeting 2009. Team Spirit Inside From June 4-6 2009, the top managers at HAVI Logistics met, for the 21st time already, to talk about the most recent development at the company and the prospects for the future. The annual Management Meeting of HAVI Logistics, previously known as the IAMM, was held this year for the first time under the name "European Management Meeting." The motto of this year's meeting was "Team Spirit Inside." This time the gathering of the company's top management took place in Ljubljana, Slovenia; as in the years before, a host of company-specific topics were on the agenda. The 2009 European Management Meeting, like every meeting before it, was a chance to reflect on questions such as: How much have we accomplished? How much have we and we continue to ensure the highest quality for our customers," says Hans-Dieter Hojnacki, Managing Director Operations. There are plans for extending the block storage, the ambient warehouse and the empties, constructing another frozen-goods high bay warehouse and expanding the existing cooldock by adding four more truck docking stations. Furthermore, HAVI Logistics Germany is creating new social facilities for moved forward? Are we satisfied with our successes? Do we acknowledge the many challenges that still lie ahead of us? How do we assess our progress towards the goals we have set for ourselves? 2008 was a year of change for HAVI Logistics The unanimous conclusion reached by the HAVI Logistics’ management is that 2008 was “a year of change” - a year like none we have seen before that casts the outlook for the future in more positive, i.e. stronger and brighter, light. With developments like our new branding, the functional re-alignment of the HAVI Group, the foundation of our Shared Service Center and the building of the S.T.I. Control Tower, we have mounted strategic infrastructural initiatives that lay a solid foundation for our future. vey which took place recently (please read also the article on page 17). But this was not only about sharing the results but also about having the opportunity to appreciate the strengths of HAVI Logistics and understand the areas where we need to improve. During the group work which is a traditional feature of the Management Meeting, the results of the Employee Satisfaction Survey were analyzed and viewed in the context of our Corporate Culture. All of this took place against the background of achieving a better understanding and appreciation of how much employee commitment and motivation matter and to what extent they are influenced by our behavior. The members of management spent a considerable amount of time identifying the issues which we, as a team, need to address. This is why this year' motto was: “Team Spirit Inside.” One of the key elements of this year's European Management Meeting was the HAVI Logistics' Employee Satisfaction Sur- its employees, bringing about a further improvement in the working conditions. The new building is scheduled for completion in mid-November of this year. The employees celebrated the grand bull-dozing kick-off. Hans-Dieter Hojnacki turned the spade for the groundbreaking ceremony. This was a reminder of the historical moment about 22 years ago when the founder of our company, Andreas Rost, did the same for the construction of the McDonald's Food Town in Rheinhausen – with the same spade! 20 A Great “Inventor” Retires News in Brief Duisburg, We Have a Problem… Farewell party for Kent. (f.l.t.r.) Luca Gnecco, Kent Zohnne, Hans-Werner Krohn and Haluk Ilkdemirci. Kent Zohnne (64), a native of Sweden, retired on March 31, 2009, after a career as a true HAVI Logistics pioneer. Since 1978 he had headed Frigoropa, the Frigoscandia subsidiary and predecessor of WLS (today HAVI Logistics Germany), in his capacity as joint Managing Director together with Andreas Rost. He was instrumental in guiding our company through its early years. From 1982 Kent Zohnne sat on the Advisory Board of WLS for our former major shareholder Frigoscandia. In the year 1997 he finally moved to our company, where he worked as General Manager with responsibility for "Internal Audit & Insurance." For 12 years Kent Zohnne worked for our company in loss prevention and claims settlement and on ensuring that internal audits ran smoothly. And all the while, he kept a little secret: he was actually the person who "invented" the letter codes for our HAVI Logistics employees. Kent Zohnne saw the principle of deriving a letter code for each employee from the first letter of the first name and the first and last letters of the surname as a rule, but he made exceptions for himself and for ARO (Andreas Rost). Because his middle name was Gunnar, he gave himself the code KGZ. Kent Zohnne did a great deal for HAVI Logistics in his twelve years with us. We wish him a happy, healthy and fulfilling retirement with his family and his vintage cars. After the explosion of the pipeline, 300 meter high flames shot up into the sky. On May 10 the Russian capital city of Moscow was rocked by a powerful explosion. A gas pipeline exploded about two kilometers from our Distribution Center, simultaneous shutting down all the information systems at HAVI Logistics' three Russian Distribution Centers for hours. The gas pipeline exploded in the early morning hours on Sunday. Five people were injured. The explosion ripped open a 10meter-wide and 3-meter-deep crater in the street. The force of the explosion tore down an approx. 100-meter-long concrete fence and severely damaged a building. A huge fire broke out. According to eyewitness reports, the flames shot up to 300 meters into the sky and were visible kilometers away. About 100,000 people were cut off from the outside world by the explosion, which knocked out both telephone and Internet connections. Our DC in Moscow was not the only facility hit: our Russian HAVI Logistics branches in St Petersburg und Nijny Novgorod were also affected. At all three DCs, the explosion severed the links to communication systems. ILOS, email, Internet and telephone connections were totally down. Our Russian colleagues were unable to contact customers, suppliers or other HAVI Logistics companies. The warehouse staff were unable to pick and distribute ordered goods. Our drivers waited to load their trucks and to be able to print out delivery notes again. The local IT experts worked round the clock and sent urgent requests for assistance to HAVI Logistics IS in Duisburg by cell phone. While everyone pulled together to find alternative communication routes, the Russian employees filled out delivery notes by hand to ensure that our customer McDonald’s would receive its deliveries on time. For everyone involved it was a long sleepless night and a very hard next day. The DCs in Moscow, St. Petersburg and Nijny Novgorod were not back to normal until the afternoon of May 11. It was thanks to the unbelievable team spirit displayed by our Russian colleagues, the rapid response of the responsible IT managers on site, and the strong support provided by HAVI Logistics IS in Duisburg that all of our deliveries to McDonald's arrived at the agreed time and with the correct contents. Did you know ... …that the introduction of biodiesel within HAVI Logistics is due to a frozen Passat? Before converting the entire fleet of trucks to biodiesel in 2000, the new fuel had to be tested for its resistance to frost. But how could a biodiesel-driven vehicle be tested at simulated Siberian temperatures in Germany’s rather mild climate, especially in springtime? Simple: As a logistics expert for frozen goods, HAVI Logistics owns quite a few mobile “test labs”, namely trucks and trailers. And the test candidate was located quickly, too. The former HAVI Logistics Germany Transport Manager Udo Ulbrich offered his VW Passat as the test vehicle, which had been running on biodiesel for quite a while already. When Udo – after the 44 hours the car’s temperature was -25° Celsius (-13° F) – opened the trailer and turned the ignition key, everyone breathed a sigh of relief. It started, the test was a success and HAVI Logistics now know that evensuch sub-zero temperatures wouldn’t be a problem for biodiesel-driven vehicles.