Supply Chain Solution Leads to Increased Profits, Efficiency for Convenience Leader Sheetz

Tompkins Associates provided plan for supply chain and self-distribution

Raleigh, N.C., February 10, 2003—Just 14 months after opening its new facility in Claysburg, Pa., Sheetz, the convenience store industry leader, announced that it is realizing a 1% addition to the bottom line as a result of running its own supply chain operations. Taking control of distribution operations is part of a complete supply chain strategy designed for Sheetz by Tompkins Associates, the global leader in providing total supply chain solutions. After moving to self-distribution in December 2001, Sheetz continues to bring lower costs to customers at all of its 283 stores.

"Switching to a self-distribution supply chain was the single largest investment that Sheetz had ever made," says Ray Ryan, vice president of purchasing/distribution services for Sheetz Distribution Services. "In just a year, we have already been able to realize the payoffs-reduced costs and higher value to our customers, not to mention increased profits."

Because Sheetz knew that it would need to manage its anticipated growth over the next several years, Tompkins Associates was brought in to look at the company's supply chain and determine the savings and growth opportunies available. After conducting an extensive supply chain analysis—looking at distribution channels, technology systems, facilities and transportation—Tompkins determined that self-distribution was more than just an option for Sheetz—-it was the best way to go.

"We understood that Sheetz succeeds with quality, especially with its fresh food products, because the organizations in Sheetz' industry compete on quality and service as much as they compete on price," says Dale Harmelink, partner, Tompkins Associates. "That makes quality and service core competencies. We were able to show Sheetz that taking its distribution operation inside from a 3PL situation let them take full responsibility for critical quality control as well as making financial sense."

The Sheetz supply chain solution includes integrated supply chain technology: a warehouse management system (from Retek), order-entry management/purchasing/demand-forecasting/financial transaction systems (from Advanced Food Systems), inbound freight software (from BGI International), an outbound routing package for Sheetz's private delivery fleet (from Roadnet) and an onboard truck computer system (from Mobilecast). Integrated material handling equipment inside the facility completes a cohesive package that merges Sheetz' distribution operations and interfaces with all of its systems. For example, each store's point-of-sale system interfaces with the DC systems so that inventory levels are kept current and easily monitored.

Tompkins designed and implemented Sheetz' new supply chain hub—a 315,000 square foot distribution center—to accommodate all the unique elements that make up a convenience store—for example, the facility's handling includes ambient, cooler and freezer areas, a refrigerated dock, and a state-of-the art cigarette stamping sytem.

The changes have had long-range impacts on Sheetz' supply chain. The logistics network has enabled them to more quickly bring new products and services to the stores. And, as Sheetz commands both product selection and costs negotiations for purchasing and distribution, controlling their distribution leads to more efficient buying, the ability to get products to market more quickly and reduced costs throughout their supply chain.

About Sheetz
Sheetz is a leading convenience store retailer headquartered in Altoona, PA. With over 280 locations in five states, Sheetz is a privately owned, family operated business. Sheetz was recently listed in the Forbes 500 List ofTop Private Companies.

For more information on Sheetz visit www.sheetz.com.

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