PROPOSAL Hewlett Packard HHO Warehouse RFQ December 9, 2016
Best-in-class fulfillment and distribution solutions for manufacturers, product marketers and trading partners to seamlessly integrate with today’s Omni-Channel world.
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Date:
December 9, 2016
For: Attn: From: Subject:
Hewlett Packard Inc. Darryl Smith and team Greg Welchans, President & CMO DM|Supplies Network HP HHO Warehouse RFQ
All, Based on the HP HHO requirements, we believe DM|Supplies Network is perfectly positioned to seamlessly assist Hewlett Packard transition their HP.com business. Our infrastructure has the capacity to handle the increased volume and we are eager to earn your business. We hope our response is comprehensive, but if you should have any other questions, do not hesitate to call. I can be reached at my direct line 636-720-3135.
Sincerely,
Greg Welchans President/CMO Distribution Management Inc.
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TABLE OF CONTENTS The Benefits
Page 4
Pricing
Page 5
Freight
Page 6
Why DM|Supplies Network
Page 8
Capabilities Overview • • • • •
Omni-Channel Capabilities Distribution Capabilities HP’s Brand & Marketing Tools On-Boarding & Transition IT-Technology & Automation
Wrap-up
Pages 9-12 Page 13 Page 14 Page 15 Page 16 Page 17
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THE BENEFITS Benefits of Distribution through DM|Supplies Network* 1. Unmatched Omni-Channel expertise for current HP.com business and future endless-aisle partners. 2. Distribution Centers geared specifically for ink, toner and hardware e-commerce, small-package fulfillment. Established return order process that provides individual tracking consolidated to one distribution center. Order accuracy of 99.5%. 3. HP brand support, big-data and marketing tools not available from any other distribution partner. 4. Experienced on-boarding staff and project management for ease of transition. 5. Custom operating system, operating on current IT programming languages. Flexible and responsive to HP’s programming needs. Our infrastructure is fully redundant with disaster recovery systems and plans in place. 6. 99% of US population covered in 1-2 day ground delivery 7. Same day shipping with late cut-offs * See pages 9-16 for expanded description of capabilities
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PRICING Option #1 – Full Distribution Model HP product markup: Order fee:
3.37% On all products $1.20 On all orders
Assumptions: • DM purchases all necessary SKU’s from HP • Order fee covers program cost, EDI fees and supplies cost
Option #2 – Hybrid Model HP product markup: Order fee: Picking fee:
3.37% only on products that are DM-owned $1.56 on all orders $2.05 per unit of HP-owned inventory
Assumptions: • DM continues to purchase current SKU’s and sells back to HP with no service fees. • HP pays per unit fees that include inbound handling, storage and picking of HP consigned product. • Order fee covers program cost, EDI fees and supplies cost.
This pricing is designed to achieve a specific net profit. If there are other ways you would like to see this presented, please tell us. 5
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FREIGHT Our goal is to provide the best freight rates possible for your business. We believe that leveraging both Supplies Network’s and HP’s freight accounts will accomplish this. We will accomplish this through absolute transparency of our rate structures. Until we have a clear understanding of both freight programs, it is virtually impossible to predict freight for this program. Our strategically placed distribution footprint will provide the lowest cost of warehouse overhead in combination with an outstanding reach and time-to-customer.
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CAPABILITIES OVERVIEW The following slides further explain our capabilities.
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WHY DM|Supplies Network A stable partner you can trust. DM|Supplies Network is a subsidiary of Distribution Management (DM), a privately held organization based in St. Louis, Missouri. Since its founding in 1972, the DM management team has launched and grown numerous businesses including Supplies Network, a leader in the distribution of IT consumables for vendors such as HP, Canon, Lexmark, Xerox, Brother and IBM. One provider for all your needs. Today’s Omni-Channel world provides endless opportunity. And, for some, endless challenges. Seamlessly integrate with one partner for all your needs. Direct-to-consumer drop-ship, ecommerce, marketplace, retail or all of the above, we have you covered, now and into the future as your needs grow. Highly scalable. With five distribution centers, DM is well positioned to support the needs of the consumer, and medium to large-sized businesses. National footprint with competitive costs. Our highly automated Distribution Centers strategically located to reach 99% of the U.S. in one or two days through economical ground shipping. Our system will optimize every order to select the best origin and carrier for the lowest freight cost and time-in-transit. *Achieved when utilizing all four Distribution Centers. Subject to carrier cut-off times and is scope dependent.
Technology integration. Our technology group can integrate our order entry system with your order management or ecommerce platform. DM has in-house development staff and partnerships in place to receive electronic orders (EDI) with national providers. Information is real-time and all orders are 100% RF scanned for accuracy and efficiency. Secure automated facilities. Our facilities and systems are state-of-the-art when it comes to security, inventory accuracy and real-time visibility to order information. Experienced team and leadership. Our Client Services Team is a dedicated group of professionals focused on our customers. The team includes individuals experienced in the onboarding of new customers and works to quickly transition your account with little or no disruption to your business. Each account has a dedicated customer support representative and a senior management advocate.
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OMNI-CHANNEL CAPABILITIES Direct to Customer
You work hard to create a positive online shopping experience. We make sure you don’t disappoint after the order is placed. More than ever, delivering a positive experience to your customer is mission critical. What happens after the order is placed is a significant factor in the customer satisfaction equation. Our drop-ship expertise ensures the highest possible customer satisfaction levels. Drop-ship expertise and reach. • Integrate with a single source with a national distribution footprint • Reach 99% of the U.S. within 1 to 2 days via ground *Achieved when utilizing all four Distribution Centers.
• Same-day shipping with late cut-off *Achieved when utilizing all four Distribution Centers.
• Custom packaging and brand-building, in-box marketing capabilities
Your brand is important. We are committed to superior fulfillment and distribution, but we are equally committed to faithfully representing your brand in every shipment. Significant resources have been developed to ensure we are delivering a positive customer experience on your behalf.
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OMNI-CHANNEL CAPABILITIES HHO (Future Expansion) Marketplace
Don’t let poor fulfillment lead to bad customer reviews. DM/Supplies Network delivers an outstanding customer experience with every order. Your direct connection to the world of online marketplaces. E-Commerce is changing the way people do business. Online marketplaces, once primarily a B2C domain, are now also a force in the B2B landscape. No matter what your market, the impact of online marketplaces continues to accelerate, representing a significant part of the Omni-Channel mix. We make it easy. Our marketplace integration allows you to partner with one provider while automating order management for many relevant online marketplaces.
What you can expect: • Integration supporting critical data exchange including P.O. receipt, P.O. acknowledgement, tracking/ASN and inventory levels • Invoicing on your behalf • Real-time account visibility • Automated reporting
Plus the same exceptional fulfillment experience: • Integrate with a single source offering a national distribution network • Reach 99% of the U.S. within 1 to 2 days via ground *Achieved when utilizing all four Distribution Centers.
• Same-day shipping with late cut-off *Subject to carrier cut-off times and scope dependent.
• Custom packaging and brand-building, in-box marketing capabilities 10
OMNI-CHANNEL CAPABILITIES HHO (Future Expansion) Retail - Online Don’t let the complex requirements of online retail keep you from reaching your potential. Our technology can open the door to the universe of major online retailers. Two paths, one comprehensive solution. Direct Integration. We understand how to implement with your specific online retailer(s) and we interface with the most common retail data exchange platforms including Electronic Data Interchange (EDI), File Transfer Protocol (FTP) and Applicability Statement 2 (AS2). Our dedicated staff of experts take you through a comprehensive step-by-step process to ensure we are set to ship the moment we go live. Partner Integration – CommerceHub: Our integration and partnership with CommerceHub provides a comprehensive solution to all of your online retail needs now and into the future, as you expand.
Drop-ship expertise and reach. • Integration with a single source with a national distribution network • Reach 99% of the U.S. within 1 to 2 days via ground *Achieved when utilizing all four Distribution Centers.
• Same-day shipping with late cut-off *Subject to carrier cut-off times and scope dependent.
• Custom packaging and brand-building, in-box marketing capabilities
What you can expect: • EDI transaction compliance, visibility and automation with most accounting systems or ERPs • A single point of contact for your retail partners • Eliminate the need to support multiple versions of specific EDI requirements • Point-of-sale analytics and automated reporting
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OMNI-CHANNEL CAPABILITIES HHO (Future Expansion) Retail – In Store Are retail requirements causing pain or preventing you from reaching your growth goals? DM/Supplies Network understands retail requirements from frontend integration to out-the-door compliance. Two paths, one comprehensive solution. Direct Integration. We understand how to integrate with your specific retailer(s) and we interface with the most common retail data exchange platforms including Electronic Data Interchange (EDI), File Transfer Protocol (FTP) and Applicability Statement 2 (AS2). Our dedicated staff of experts take you through a comprehensive step-by-step process to ensure we are set to ship the moment we go live. We maintain retailer routing requirements and comprehensively update and train our DC teams on carrier and labeling requirements. Partner Integration – SPS Commerce: Our integration and partnership with SPS Commerce provides a comprehensive solution to all of your retail needs now and into the future, as you expand. We are prewired to SPS Commerce’s retail business network, the industry’s largest retail EDI network available. By combining our national distribution capabilities with the SPS Commerce network, our clients can automate the sharing of purchase order information and leverage certification to send any ASN for any order management model to any of the 2,200 retailers in the SPS commerce network.
Results! Retail scorecards matter. Our dedicated team reviews all scorecard information ensuring the best possible results.
What you can expect: • EDI transaction compliance, visibility and automation with most accounting systems or ERPs • Eliminate the need to support multiple versions of specific EDI requirements • Streamline and simplify inventory management and distribution • Point-of-sale analytics and automated reporting 12
DISTRIBUTION Our national distribution network reaches 99% of the U.S. population within 1-2 days via UPS ground delivery with 99.5% order accuracy *Achieved when utilizing all Distribution Centers.
DM|Supplies Network is currently in complete compliance with the HP Global Logistics Security requirements and the HP in-transit security requirements. 13
HP’s BRAND & MARKETING TOOLS The Hewlett Packard brand is important. We are committed to superior fulfillment and distribution, but we are equally committed to faithfully representing your brand in every shipment. Custom Packaging Premium brands seek to deliver an experience that reinforces their brand position at every customer touch point. Custom packaging and product presentation at the point of delivery can have significant influence on the perception of your brand. Our custom packaging experience ensures every detail of your package will meet and exceed your requirements. Big Data We will data-mine your customer information to uncover the most valuable customers and create targeted marketing campaigns to GROW HP’s business. Instant Inserts High-impact, customizable, branded flyers delivered with your products. DM|Supplies Network’s Instant Insert program offers unlimited messaging opportunities. With versatile, print-on-demand technology, you can drive customers back to your website, promote new products or upsell an item based on the product category or SKU ordered. In addition, our marketing department can help design your insert. Branded Pick Tickets Reinforcing a branded customer experience at every touch point. The pick ticket serves a simple, yet extremely important purpose in the shipping process. It’s used in the warehouse to confirm the order, then it’s placed in the box with your product and ultimately lands in the hands of your customer, reinforcing your brand. Product Customization DM|Supplies Network will customize product based on your needs.
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ON-BOARDING & TRANSITION The mission of the Account Management Team at DM|Supplies Network is simple – achieving the highest possible service levels and delivering the best possible experience to both our customers and their customers. Our Client Onboarding Specialists ensure the smoothest transition experience. • Fully dedicated to onboarding • Development of detailed account scope and requirements • Minimize service disruption • Detailed account setup • Freight program setup • Defined shipping details and preferences Dedicated Account Managers know you and your needs. • Overall account management and primary point of contact • Committed to providing the best possible client experience • Focused on finding cost-savings opportunities • Oversee all necessary planning • Channel development and support • Perform customer reviews and retailer scorecard reviews to ensure optimization Our E-Commerce Business Operations team will lead the integration process. • Handle integration with all business partners • Channel development and expansion • Perform integration/EDI updates • Reveal connectivity and efficiency opportunities
Freight is complex and challenging. We have resources to help you simplify. • Our specialists are dedicated to optimizing your freight program • Our Freight Rating Tool allows you to get accurate, advanced shipping estimates and can be added to many shopping carts 15
IT - TECHNOLOGY & AUTOMATION World-Class Technology to Automate and Simplify Order automation through integration is the key to providing same-day shipping and a best-in-class order accuracy rate of 99.9%. DM/Supplies Network offers many options to connect via EDI and web-services either through direct integration or through industry-leading EDI and web providers. An in-house IT development staff ensures the integration process is streamlined. Seamless Integration DM has multiple options to connect via EDI and web services for order automation. Whether you have a provider you are currently working with or need a recommendation for a new one, we are here to help. Not only will orders flow electronically, but you will receive real-time freight quotes ensuring that you’ll charge the correct freight to your customer. You will also enjoy web services for real-time QOH that will feed into your system.
Security Many technologies are used to keep our mutual information secure. Redundant Cisco Firewalls are maintained with current versions of IOS software. In addition, an intrusion prevention system deters unauthorized access. Connections to our Distribution Centers are done through private MPLS connections providing greater security than traditional VPN tunnels. Our fulfillment portal uses SSL technology to secure client log-in and passwords protecting against unauthorized access. • Scanned packing slips allowing you access to data any time. • Full order management system with automated cross-shipping. • Multiple invoicing options with as much or little detail as you want. • Detailed work order tracking.
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We pride ourselves on not being an offshored, revolving door of outsourced programmers. We have a dedicated team of internal, high-level software engineers dedicated to our customer, state-of-the-art WMS. We are nimble and can develop new functionality quickly and accurately.
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Michelle Kaufman, VP of Information Technology
• Custom reports delivered to you automatically. • Detailed routing labels to ensure your product gets to the right building and the right person within that building for B2B shipments. • Precise tracking track what units came in on any given shipment. • Comprehensive documentation and analysis • for continual improvement of your ordering and tracking. 16
WRAP-UP Over the years, DM|Supplies Network has clearly demonstrated our loyalty to HP in many different ways:
Partnership • • • • • •
Authorized Distributor for Ink (1N), Toner (5T), Large Format Ink (UK), Enterprise Ink (XX), Specialty Papers (AU), and Parts (65) Full offering of TAA compliant product (G SKUs) Leading Tier 1 CMPS Partner Volume Big Deal Bid support and Supplies Metered Program (SMP) support Channel leader in Clean Sweep First mover in HP serialization initiative
Infrastructure • • •
SPS (Specialty Printing Systems) Master Distributor – Industrial printing supplies HP PMPS supplies/LLC fulfillment partner HP Enterprise MPS supplies/LLC fulfillment partner
Growth • • • • • •
Market leading growth in the supplies category 16.3% (2016) Double-digit hardware growth 30.6% (2016) Double-digit growth in managed print/contractual sales 22.4% (2016) Growth and engagement in the HP parts category 10% (2016) Channel CRM Partner – Average program ROI 494.4% (2015) Aggressive Promotion Strategy – Average sales lift 24% (2015)
We thank you for the opportunity to serve HP and look forward to the next steps! 17
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