Reinventing Weber by F1He58


									                                     Reinventing Weber
                                     California Site Visits
                                         April 10, 2008


                                       Richard Armstrong

Key Personnel:
Bill Butler, President & CEO
John Nutt, Vice President & COO
Bob Lilja, Senior Vice President
Carl Neverman, VP Business Development
Tom Wilkinson, VP Information Technology

Bill Butler and his team have doubled Weber Distribution's revenue since Butler returned to
Weber in 2004. In the process, Butler and Weber have brought in several younger, professional
managers including COO John Nutt.

Weber was traditionally a public warehousing company with local cartage and some regional
trucking. Butler and his team are reinventing it as a contract logistics operator utilizing modern
IT with an emphasis on its less-than-truckload (LTL) refrigerated network operating in California,
Oregon, Washington, Nevada and Arizona. Weber is a key part of the Network Distribution
Solutions (NDS) network, which consists of five regional LTL refrigerated carriers operating as a
single source refrigerated network throughout the U.S. As part of its contract logistics
expansion, Weber is developing more value-added logistics capabilities for its retail importer
customers. These customers are currently concentrated in the food and beverage, chemicals
and medical products industries.

As part of its redesign, Weber has computerized its Customer Service Compliance Management
Program run by the customer service representatives (CSR) group. Especially important for
Wal-Mart and other retail accounts, is the information is readily available from Weber's CSR
group. Making this information transparent helps to significantly improve key performance
indicators (KPIs), simplify claims and lower the number of chargebacks to vendors. There are
35 CSR employees on the warehouse management side and 17 on the transportation
management side.

Internally, Weber runs a warehouse incentive program (WIP) in its warehouses. The program
provides monetary incentives for productivity, safety and security.

We had a chance to look at several Weber warehousing locations. Building 2 in Redlands, CA
was opened in November 2006. Customers include Nestlé/Arrowhead Water (50-80 truckloads
(TLs) a day seasonally), Cadbury/Schweppes (80% pallet / 20% case pick), Mott’s Juices (80%
pallet / 20% case pick), Shell Lubricants (case pick), Elmer’s Glue and related products (3,500
stock keeping units (SKUs) per case and each picking). This is primarily a pallet storage
warehouse. It has 7,000 pallet positions. It’s a modern, leased building with 32' high ceilings.
Inventory is managed on an A, B, C basis using the Synapse warehouse management system
and radio frequency (RF) devices. There are 98 doors. Tow motors are primarily propane and
there are several which are “two-wide” and can handle two pallets at a time. The average
number of employees is 54.
Fontana is a 303,000 square foot warehouse with 40 plus doors on the back side (see press
release below).

The Rancho Cucamonga distribution center has 270,000 square feet. It includes 10,000 square
feet of frozen, 20,000 square feet of chilled and 80,000 square feet of temperature controlled
space. The principal accounts are Star Fine Foods, Mohawk Paper, Mitsui Foods, Croda
(cosmetic ingredients) and Mission Foods (tortillas). This warehouse serves as a loading point
for much of the reefer distribution network (Weber has 140 reefers). Mission Foods is a major
customer in this operation. Its chilled and frozen turnover is 20-25 loads a day (about 75
inventory turns a year).

Weber has also added 1,000,000 square feet of space in Redlands for Applica (George
Foreman grills, etc.). Applica and Weber are in the early stages of implementation.

Part of the change dynamic at Weber is to include four of the young execs including Butler, Nutt,
and Lilja in ownership of the company. Nick Weber, the patriarch, is still majority owner and
chairman of the board.

Butler and his team are now ready to move to the next level. Butler feels that the addition of
Wilkinson fills out the top management personnel for continued rapid growth.

   Press Release

   Weber opens new DC in Inland Empire               [American Shipper, March 16, 2006]

     Weber Distribution, a Los Angeles-based logistics and supply chain management
   provider, said Wednesday it has secured a new 302,622-square-foot facility in Fontana,
   Calif. to handle two new contract accounts: California Innovations, which manufactures
   insulated coolers; and Home Products International, which specializes in the design and
   manufacture of houseware products.
     Weber will dray containers from the ports of Long Beach and Los Angeles to its Fontana
   facility, and distribute the two companies' products to a variety of national and regional
   retailers, including Kmart, Wal-Mart, Target, Sears, Bed, Bath & Beyond, Linens 'N Things,
   Staples, Sam's Club, Home Depot, Lowe's, Costco, and Kohl's.

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