Exceeding The Standard

Hershey and Exel create a winning formula at the candy maker's Eastern Distribution Center III.


People. Process. Performance. These are the three elements behind the success of The Hershey Co.

Hershey is the largest producer of quality chocolate in North America and a global leader in chocolate and sugar confectionery. Headquartered in Hershey, PA, the company has operations throughout the world and more than 12,000 employees.

With revenues of more than $5 billion, Hershey offers such iconic brands as Hershey’s, Reese’s, Hershey’s Kisses, Kit Kat, Twizzlers, Ice Breakers and Hershey’s Bliss. Hershey is a leader in the fast-growing dark and premium chocolate segment, with such brands as Hershey’s Special Dark and Hershey’s Extra Dark. In addition, Artisan Confections Co., a wholly owned subsidiary of Hershey, markets such premium chocolate offerings as Scharffen Berger, Dagoba and Starbucks Chocolate.

In 2007, the candy maker embarked on a three-year Global Supply Chain Transformation (GSCT) program to enhance its manufacturing, sourcing and customer service capabilities. The transformation program is resulting in a flexible, global supply chain capable of delivering Hershey’s brands in a wide range of items and assortments, across the retail channels in the company’s priority markets.

Hershey’s Eastern Distribution Center III, or EDC III, is contributing to the success of the GSCT program. The facility consistently delivers productivity goals averaging above 100 percent—thanks to the extraordinary efforts of the company’s 610 full-time associates that work there. It also boasts an inventory accuracy rate of 99.9 percent.

You won’t find a lot of automation in this facility, but what you will find is a strong commitment to superior customer service, a great working relationship between Hershey and Exel, its third-party logistics provider and—most importantly—a hardworking group of dedicated associates.

For these reasons, the EDC III has received Food Logistics’ Golden Pallet award in the manufacturer category.

The Golden Pallet Awards, sponsored by Food Logistics, are the first industry awards to recognize excellence in warehousing. Three more Golden Pallet award winners will be profiled in upcoming issues of FL.

The EDC III is located close to Hershey’s five manufacturing plants in Pennsylvania. The 1.2 million-square-foot-facility was built in 1999 to accommodate growth in the Hershey’ network. While the building is owned by Hershey, the facility is operated by Westerville, OH-based Exel.

This is the largest of the company’s five distribution centers in North America and has the highest throughput. The EDC III serves other Hershey distribution centers as well as more than 1,600 retail locations.

The facility is divided into two areas—the distribution operation and a 167,000-square-foot co-pack area, where product is converted into merchandising and promotional displays. There are also two identical pick tunnels for case handling. While both operations are overseen by the general manager, each is staffed separately.

“The dedication and motivation of the associates who work here is exceptional,” says Wil Richardson, Exel’s general manager. “The facility boasts an attendance record and an annual turnover rate that exceeds industry standards. Based on internal employee satisfaction surveys, the EDC III associates indicate that they are ‘very satisfied’ with their jobs, which translates into a higher quality performance and a direct linkage to profitability and reduced costs.”

Hershey’s and Exel’s management teams have worked very closely with the associates to achieve these results. The team has implemented the Performance Management Process (PMP) program, which is a structured approach to planning, execution, follow-up and reporting of site activities. It facilitates two-way communication between associates and managers and provides consistent alignment of business and associate objectives, while allowing for further development of the workforce.

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