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Core-Mark Express-BestofBest 2013

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Best of the Best 2013 The holidays are behind us and a new year has begun. It is at this time I sit back and take stock of our Company and the industry we service. The number of C-Stores in the U.S. grew by 1.4%, to over 151,000 stores in 2013. C-Stores account for over 36% of all retail stores in the US. Keep in mind our market share is only 5% of all the products purchased and sold in the industry. At the end of the day, Core-Mark has a small share of the C-Store Industry with great opportunity to grow. 2013 was also a year of growth for the Company. We continue to be the supplier of choice to the major convenience retailers in the US and Canada. We had three large chains select Core-Mark to be their supply partner. We offer a sustainable competitive advantage which helps our customers achieve their goals and grow their sales profitably. In addition, our more recent acquisition, JT Davenport, became our 30th Core-Mark division (the Carolina division) and embarked on the successful completion of converting their systems and work processes onto Core-Mark’s platform. I am, as always, very optimistic about our future. We will continue to Grow our Market Share by differentiating ourselves from our competitors, focus on Making our Independent Retailers Relevant and More Profitable and at the end of the day, by doing the above, we will grow our Income Faster than Expenses. We do this by executing our Core-Strategies, Vendor Consolidation Initiative, Fresh Initiative, Focused Marketing Initiative and Acquisitions. All of the above sounds easy when you say it fast, but it takes the dedication, commitment and desire for Excellence from each and every member of the Core-Mark family. A perfect lead in to our theme for 2014: Cultivating Excellence. At the recent Division President meeting, we broke from tradition and had a guest speaker, Coach Bob Ladouceur (“Coach Lad”). Coach Lad coached football at De La Salle High School located in Northern California for over 30 years and holds a record 151 game, 12 year run of consecutive wins. Coach Lad is a humble and soft spoken gentleman (unusual for a coach). His leadership style is not about winning but about a desire to Cultivate Excellence within his players and his team. At the end of the day, by Cultivating Excellence throughout his organization he compiled the winning statistics mentioned above. Core-Mark is a very large team with each “player” fulfilling a role which is critical to the success of the total Company. From maintaining a safe and clean environment, to ordering the right product, to selecting the right product, to delivering the right product, we strive to provide Excellent and Unparalleled Service to our customers, day in and day out. We can only do this if we are all committed to making this the best Distribution Company in the industry. We must continue to develop ourselves and each other so we can all provide the best products, solutions and services to our customers. The future is bright for your company and I look forward to our journey together. With Deepest Regards and Respect, Tom Perkins A MESSAGE FROM THE PRESIDENT 2014 Excellence CULTIVATING
Transcript

Best of the Best 2013

BEST OF THE BEST 2013The holidays are behind us

and a new year has begun.

It is at this time I sit back and

take stock of our Company and

the industry we service. The

number of C-Stores in the U.S.

grew by 1.4%, to over 151,000

stores in 2013. C-Stores account

for over 36% of all retail stores

in the US. Keep in mind our

market share is only 5% of all

the products purchased and

sold in the industry. At the end

of the day, Core-Mark has a small share of the C-Store Industry with

great opportunity to grow.

2013 was also a year of growth for

the Company. We continue to be

the supplier of choice to the major

convenience retailers in the US and

Canada. We had three large chains

select Core-Mark to be their supply

partner. We offer a sustainable

competitive advantage which helps

our customers achieve their goals and grow their sales profitably.

In addition, our more recent acquisition, JT Davenport, became our

30th Core-Mark division (the Carolina division) and embarked on

the successful completion of converting their systems and work

processes onto Core-Mark’s platform.

I am, as always, very optimistic about our future. We will continue

to Grow our Market Share by differentiating ourselves from our

competitors, focus on Making our Independent Retailers Relevant

and More Profitable and at the end of the day, by doing the above,

we will grow our Income Faster than Expenses. We do this by

executing our Core-Strategies, Vendor Consolidation Initiative, Fresh

Initiative, Focused Marketing Initiative and Acquisitions.

All of the above sounds easy when you say it fast, but it takes the

dedication, commitment and desire for Excellence from each and

every member of the Core-Mark family. A perfect lead in to our

theme for 2014: Cultivating Excellence.

At the recent Division President meeting, we broke from tradition

and had a guest speaker, Coach Bob Ladouceur (“Coach Lad”).

Coach Lad coached football at De La Salle High School located in

Northern California for over 30 years and holds a record 151 game,

12 year run of consecutive wins. Coach Lad is a humble and soft

spoken gentleman (unusual for a coach). His leadership style is not

about winning but about a desire to Cultivate Excellence within his

players and his team. At the end of the day, by Cultivating Excellence

throughout his organization he compiled the winning statistics

mentioned above. Core-Mark is a very large team with each “player”

fulfilling a role which is critical to the success of the total Company.

From maintaining a safe and clean environment, to ordering the

right product, to selecting the right product, to delivering the right

product, we strive to provide Excellent and Unparalleled Service to

our customers, day in and day out. We can only do this if we are all

committed to making this the

best Distribution Company in the

industry. We must continue to

develop ourselves and each other

so we can all provide the best

products, solutions and services

to our customers.

The future is bright for your

company and I look forward to our

journey together.

With Deepest Regards and Respect,

Tom Perkins

A M ESSAG E FROM TH E PR ESI D E NT

2014Excellence

CULTIVATING

BEST OF THE BEST 2013

Each year, we recognize the “Best of the Best”. From Driver of the Year to Controller of the Year to Division President of the Year, it is very important to not only give recognition but to take note of what great performers do and how they do it.

Carl Parker, Corona, Division President of the Year

Carl Parker was named the Division President of Corona in January 2010. He was living a very comfortable life in Bakersfield, where he had already earned a Division President Best of the Best award in 2004, but accepted the challenge of running “the Mothership”. He accepted this challenge largely due to the company’s need, rather than his family’s. Carl’s family stayed in Bakersfield for his children to not have to change schools and Carl began a 4 year sojourn of commuting “home” on the weekends, while living in an apartment in Corona. To make

matters worse, at least initially, Corona had taken a significant unplanned price reduction to their largest customer at about the exact same time as Carl’s arrival.

2010 was a tough year for Corona and the other California divisions that shared this customer. Staff Meetings were replaced by Margin Meetings. It was virtually impossible to recover the margins that were lost and very difficult to cut expenses when the sales and work were still there. Corona finished 2010 at 43% of their business plan. Carl had to have been second-guessing his decision to accept the challenge of running Corona.

Flash forward to 2013.

• Corona has grown their non-cigarette sales by 31% since 2010, 10% of this was in 2013 alone

• Corona grew their margin NSI 53 basis points in 2013

• Despite a $483K negative swing in Worker’s Comp charges vs PY, Corona grows it’s PTNP by 25.8% and finishes the year over 16% above Plan

All of this was accomplished with a new Purchasing Manager, who in fact contributed half of the margin gain, and significant expenses incurred in preparing to onboard a major new customer. Carl led the team in Corona to reassert themselves not just among Core-Mark’s top operating divisions, but to once again be the flagship of the fleet.

The company salutes Carl Parker’s dedication in assuming the Captaincy of Corona and congratulates Carl and his team on an outstanding 2013.

Before being named 2013’s Best of the Best, Carl accepted an opportunity to return “home” to Bakersfield. Job very well done!

Bryan Alger, Salt Lake City, General Sales Manager of the Year

Bryan Alger, this year’s Best of the Best General Sales Manager, wasn’t originally nominated by his Division President. That’s because, as of December 15, 2013, upon Bryan’s promotion to Division President, modesty prevented him from nominating himself. However, when the results were analyzed, the conclusion was undeniable.

Bryan and his team had an outstanding year finishing almost 100% to plan in overall sales and growing their non-cigarette sales by 13% to prior year. As stated in our mission statement of being

the most valued marketer in “fresh”, the SLC division believes growing fresh sales is one core-strategy that will differentiate us and ultimately help our customers be more relevant in the marketplace. By partnering with both the local fresh vendor

community and with their customers, Bryan and his team grew their fresh sales to 11.4% of their overall non-cigarette sales which exceeded plan and is the second highest in the company. A second core-strategy they believe will help them sustain long-term sales and profits are the Vendor Consolidation Initiatives. They added almost $8M in incremental VCI & Fresh sales this year which was also among the best results in the company. A third core-strategy and a key driver of their overall 2013 sales came from market share growth. SLC added 92 net new accounts in 2013 or 11% market share growth. Bryan also understood the importance of managing his selling expenses finishing at 95% to plan. With the contributions of the SLC division’s sales team under Bryan’s leadership, the division finished the year with their highest PTNP ever and one of the best overall PTNP in the company. It is no surprise that he was promoted to be the new Division President of the Salt Lake City division in January of 2014, when Jim Thompson retired. We know he will do an outstanding job leading a great SLC team into the future.

Randy Wayland, Portland, Purchasing Manager of the Year

Randy Wayland is this year’s Purchasing Manager of the Year. Once again, Randy has had an exemplary year. He was also awarded Best of the Best in 2000 and 2007. He truly manages the purchasing for both the Portland and Grants Pass divisions by actively seeking ways to improve merchandise income opportunities through forward purchasing, deal buying and marketing while managing inventory control. In addition, Randy is an intricate contributor in the relationship with Portland’s largest customer, Plaid Pantry.

Randy has a great relationship with all departments at both divisions. He attends sales meetings, rides with sales people, and negotiates with vendors to provide optimum marketing and promotional opportunities. Randy works diligently with operations, always keeping in mind the limitations associated with a finite space. As usual, Randy’s fill rate was exceptional. NSI has increased by $1.3M from prior year. Also, Non-Cig DCOS has improved by 1 full day since 2012.

This year Randy improved his non-cigarette MI percentage by 23 basis points in Portland and by 10 basis points without the help of inflation. Randy accomplished this by attending the Candy Show, the DOT Show and doing non-traditional promotions with vendors which enhanced their sales and distribution of product in ways that had not been tried before.

Congratulations Randy!

Janine Brooks, Tampa, Controller of the Year

We always have a number of quality candidates who stand out for many different reasons or in particular areas of influence. In evaluating the nominations this year, the tipping point came down to Leadership and Attitude, traits that cultivate excellence throughout the organization. Tampa’s metrics were solid as well, DSO 0.8 days less than plan and Inventory 2.5 days less than plan driving interest to 57% of plan. SG&A labor 93% of plan, bad debt 62% of plan, AR 97% in terms, and dry room only 0.61% of inventory – all supporting PTNP that was 270% over plan and 146%

over prior year, not to mention a 500 basis point RONA improvement over prior year. Based on feedback from those that interact with Janine – what people said

about her resonated with our current year theme of cultivating excellence. Janine has a passion to work with managers to control expenses. She is detailed and thorough, providing timely analyses to set priorities or make course corrections. She runs sensitivity reports and scenario analyses to base pricing decisions and support presentations when looking at customer profitability. Forward thinking and thoughtful about reducing potential exposures. She holds herself and her team accountable to excel in every company objective, always available to help her peers become successful and work at their optimal level. Dedicated, loyal, responsive, resourceful, courteous, helpful, enthusiastic, professional and smart. Excellence is not a skill. It is an attitude. Congratulations to Janine Brooks, Controller of the Year – 2013!

Stacy Kuntz, Portland, Operations Manager of the Year

Stacey Kuntz assumed the Operational Management of the Portland division at the end of March 2013, after performing a remarkable job in our Grants Pass division. At that time Portland’s operational results were sub-par, suffering from excessive warehouse overtime and shrink. He sought employee input and “needs” versus “wants”. With his staff he educated them on Snapshot and P&L statements while concentrating on creating a safe and efficient warehouse.

The result was a total operating (Warehouse, Delivery & Facility) expense of 94.6% to Plan or $571,826 better than planned expectations. A decrease in Shrink of $91,165 versus prior year and a better than half the reduction of OSHA Recordable Incident Rate which created an additional $331,244 to the Portland PTNP versus prior year.

Stacy’s work ethic, job knowledge, determination and charismatic leadership has created an environment where success is expected and superb execution is delivered.

Congratulations, Stacy, on being awarded Best of the Best!

Fred Sisneros, Albuquerque, Merchandising Manager of the Year

We are very excited to announce that Fred Sisneros has been chosen as the Merchandising Manager of the Year. Fred began his career with Core-Mark International, Inc. in October 2004 as a Route Delivery Driver. In October 2006, Fred moved into an Operations role as a Supervisor and soon after as the Day Warehouse Manager. In February 2011, Fred entered into the Sales side of the business as Merchandising Manager. Fred has proven his leadership abilities while managing over 85 Merchandisers and leading

one of the largest SmartStock® Divisions throughout Core-Mark.

This is evident in the 2013 measurable results summarized below:

• 128 merchandised dairy, fresh and bread accounts added in 2013

• 2nd largest division for SmartStock Sales at approx. $1.2m in 2013

• 2nd largest division for SmartStock Merchandising Funds at approx. $101k in 2013

• 3rd largest division for SmartStock GP at approx. $120k in 2013

• SmartStock merchandising income 7.4% of Food/Non Food NSI not including local service funds generated in mark ups totaling approx. $150k

• Total Spoil Dollars equal to prior year while adding 128 guaranteed product accounts

• Service Salaries 85% to plan

• Helped manage re-sets for over 350 accounts in 2013

Thank you, Fred, for your contributions and congratulations on a well-deserved award.

Merrill Rasmussen, Salt Lake City, Foodservice Manager of the Year

Merrill is now a two time winner of this award and well deserved. In 2013, Merrill worked extremely well with the sales department by collaborating to find ways to increase marketing programs and drive additional food service and fresh sales. Merrill and the sales team grew fresh and food service marketing programs by adding a net new 188 total programs which was 125% of their goal. Some key program additions in 2013 were 28 new Coffee Programs, 60 new Quick Eats Grill and 31 new Grab Heat & Eat programs. Another successful program

that Merrill added in 2013 was the Champs Chicken program. Currently, we have 20 customers on the Champs Chicken program with annual sales of over $1M. The success in the overall program additions helped the division grow fast food sales and GP by 113% to prior year. Merrill was also instrumental in helping present FMI’s with the TM’s and assisting in the FMI follow-up. As part of the FMI follow-up, Merrill and the TM’s helped develop and conduct a mini fresh and food service trade show in several of the territories inviting FMI customers and potential new customers to attend. They set up fresh and food service programs so that customers could sample products and view the programs before signing up. As a result of these mini-shows, the team added 43 new fresh and foodservice programs in 2013.

Congratulations, Merrill, on being the best of the best in the company and we look forward to another stellar performance in 2014 and beyond.

Barbara Canard-Raymond, Los Angeles, Office Employee of the Year

Having Barbara J. Canard-Raymond in LADC is like having an encyclopedia of Core-Mark’s history going back to her time with Glaser Brothers in 1970. Barbara started out as a Key Punch Operator with the Glaser Brothers at Leonis Blvd, a few streets away from our current LADC location. When the Leonis facility closed down, Barbara moved to the LA division. She worked as an AR clerk for chain accounts until the AR functions were relegated to the divisions. Barbara is currently the AP clerk in the LADC.

As a senior lead member of her team, Barbara has played many roles, vis-à-vis - mentor, trainer, coach, motivator, and even a confidante. She is accessible to all levels of management, gets along well with everyone, conscientious, and always keeps things in perspective. She has tremendously good rapport with her peers in LADC, as well as those of other divisions. The younger generations, as she likes to put it, are quickly drawn to her maternal embrace, not just as co-workers but also someone whom she cares about as a person. She definitely cares about her work and more importantly, about Core-Mark. These qualitative attributes sets her apart from a lot of employees in LADC, if not in Core-Mark as a whole.

Quantitatively, Barbara’s contribution to the AP department is significant too. LADC’s aged CDUs as compared to other divisions has always been one of the cleanest and most current. The monthly average cdu reserve in 2013 is only at $4.9K and the year-end DPO is at 7.63 days vs a plan of 7.72 days. Unmatched Inventory Reconciliation Transaction Listing has always been current throughout the year in 2013.

Barbara, thank you for your 44 years (and counting) with Core-Mark. You are a Core-Mark icon in your own right. Congratulations!

Ted Hanson, Salt Lake City, Warehouse Manager of the Year

Ted Hanson is the Warehouse Manager of the Year for 2013. He started his Core-Mark career in 2006 and has made his mark in both the Salt Lake City and Hayward divisions. Ted’s strong suit has always been his attention to detail with extremely successful results. Last year, Ted oversaw a 14% increase in sales while only realizing a 6% rise in expenses.

Ted has adopted the Core-Mark philosophy of leveraging his assets and his numbers consistently prove this. His attention to detail is his hallmark, maintaining a clean and productive

warehouse. This year, Ted has focused on revenue generation and has been an important player in an expanded lumping program that, in a few short months, has seen additional income approaching $100K.

Ted has been married to Julie for seventeen years and has 4 children and 2 grandchildren, whom he enjoys spending his time with. In addition to his family, Ted enjoys the Utah climate and spends his free time out in his garden.

Congratulations, Ted!!

Michele Walter, Spokane, Credit Manager of the Year

Michele Walter is Core-Mark’s Credit Manager of the Year for 2013. Michele just celebrated 20 years with Core-Mark in August of 2013. She does more to support the Spokane organization than just manage the credit function. Michele is at her desk, with a smile, at 4:30 every morning to run Warehouse end of day and to ensure any credit issues are resolved in time for the customers to receive their deliveries. In addition, Michele is the first to volunteer when someone needs assistance and is always willing to share her knowledge. Michele and her

AR team were able to improve DSO to 8.79, compared to Plan of 9.81 and prior year of 9.90. The division’s bad debts in 2013 were minimal and in fact Michele assisted in the significant recovery of a previously written off account resulting in a pick up to the division.

Spokane is proud to have Michele Walter as the Credit Manager of the Year. Congratulations Michele!

Eve York, Salt Lake City, Human Resources Manager of the Year

Eve started at the Salt Lake division five years ago and has worked in Human Resources most of her career. Eve’s greatest qualities are her positive attitude and willingness to help others succeed. Eve has been charged with the training and development of the division and has worked with Career Management of Organizational Effectiveness (CMOE) to help provide employees with the skills necessary for succession planning. Our employees know that Core-Mark is a place where they can receive proper training and advance their careers. As a result, our

attrition rate is the lowest it’s been in years. Eve also played an active role in our worker compensation claims to ensure we achieved maximum return. We had zero lost time claims in 2013 which can be contributed to our safe working environment and safety bonus program that Eve helped develop. Eve makes sure we all remember safety first and conducts meetings often to go over areas of safety concerns and follows up.

We would like to congratulate Eve on being selected as the “Best of the Best” in her respective field and know she will continue to look for opportunities to make the SLC Division the best place to work.

Oscar Morones, Bakersfield, Driver of the Year

Oscar Morones started with Core-Mark Bakersfield in October of 2004 as a driver in our northern region including the Tulare, Visalia, and Fresno areas. During his 9 years of service, Oscar has developed a very successful, customer service driven approach to the delivery of our products, which has allowed him to develop positive customer relationships. He is very organized and his accuracy is unchallenged when dealing with customer issues. Oscar has earned the respect and admiration of his customers, peers and managers with his can do positive approach when

dealing with challenging situations. Oscar is a professional at all times and meets or exceeds the expectations of our customers on a daily basis. While maintaining perfect attendance, Oscar delivers 1000+ cubes a day during our peak season and is able to safely stay on course with on time deliveries. Oscar’s dedication and work ethic are the two key components that have propelled him to the Driver of the Year for 2013. Congratulations, Oscar, on a job well done, you deserve it!

Billy Andonaras, Tampa, Territory Manager of the Year

Billy Andonaras joined the Tampa division in April 2012, coming from the Dr. Pepper/Snapple group. From day one, Billy has had endless energy and passion to grow his territory. His confidence, decision making, and his ability to articulate the Core-Mark message is paying dividends for the division. Billy started with 63 total stores in January 2013 and 1 full time merchandiser covering a third of the state of Florida. With a divisional focus to gain market share Billy excelled. He drove from one end of the state to the other developing

relationships, gaining new business and putting together market strategies for continued growth. In 2013, he kicked it into overdrive when it came to picking up new business and growing his team. Billy ended December of 2013 netting 33 new accounts, adding 2 more merchandisers and 1 SDR to his team. He hit his FMI, sales and profit plan. Here are some of Billy’s impressive stats for 2013: sales YOY at 169.10% and 101.10% to Plan with profit YOY at 181.90% and 108.5% to plan. Billy has great work ethic, good understanding of our business, and has a great future within the Core-Mark organization.

We are proud to have Billy as part of the Tampa division and enjoy watching him mature into one of our top performing TM’s.

Shaun Cretsinger, Tampa, Transportation Manager of the Year

Shaun is an exceptional manager, who leads by example, setting and maintaining high standards of conduct, performance, efficiency, and productivity. He built the department with a common mission of efficiency, driver support, and customer service, emphasizing teamwork and driver retention over driver attrition. Shaun instituted a personalized driver recognition program that includes performance, training, division assistance, and even birthdays, that has brought a professional feel with a family touch

to the Transportation Department. In 2013, transportation cost per cube was $1.15 vs. a planned $1.25. Shaun and his department accomplished this while absorbing a 21.2% increase in overall cube, and 9,719 additional deliveries over prior year. Shaun’s team successfully coordinated and executed a backhaul program that increased revenue by 210% over prior year, and surpassed Tampa’s 2013 planned backhaul income by $54,848! Shaun’s management of the department resulted in OTD of 95%; the organization, planning, and successful execution of several special delivery projects for our largest customer; assimilation and delivery of diverse new products such as wine and fresh flowers;

Continued on page 5

THEPresidents’ Club

and the delegation of responsibilities amongst his supervisory staff to ensure that no customer request is denied. Shaun also saw to it that our own sister divisions in PA, NC, and CO – were supported with drivers and management team members when needed. Shaun has set the standard in training, DOT and safety policy compliance amongst his staff and drivers. This resulted in no DOT reportable vehicle accidents in 2013, and an outstanding internal DOT audit score of 990 /1000 in 2013. Through his personal and departmental performance, the Tampa division has enjoyed improved customer service, and a greatly recharged and cohesive transportation team. This team is the face of our Company to our customers at every delivery, and Shaun, as well as the Tampa division, is proud that they are.

Chio Saelee, Sacramento, Warehouse Employee of the Year

Chio joined Core-Mark Sacramento in June 2005 as an Order Selector. Today, he continues to assemble orders, assist the operations in tote order stacking, and load trailers. He is enthusiastic about his job and looks forward to coming to work each day. He prides himself in being a role model for others by demonstrating collaborative teamwork and proactively seeking opportunities to assist his coworkers with completing daily assignments. His manager is very pleased to have Chio on his team and shared the following statement:

“Chio can be counted on to make excellent decisions. He is capable of working at a high level of productivity within all warehouse positions and he shows great initiative toward accomplishing goals.”

Chio enjoys spending his time outside of work with his son and nephews. He enjoys watching professional football and is very happy that his favorite team won this year’s Super Bowl, the Seattle Seahawks. He credits his parents for his work ethics and family values.

From the Sacramento team, “Congratulations Chio! Great Job and Thank You!”

Top Row, Left To Right: Matt Gerhard, Darrell Hall, Shawn Morgan, Daniel Williams, Scott Clark, Brian Barry, Jerry Bell

Front Row, Left To Right: Mike Dunn, Chad Beck, Tom Perkins, Carl Parker, Alan Thomas

Not Pictured: Jim Thompson (retired)

The Core-Mark Advantage

Grow customer sales profitably.

Make it easier for our customers to do business with us.

Do the fundamentals well.


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