Exchange Board Members Get Close-Up Look at LG Operations
Members of the Exchange Board of Directors got a firsthand look at the service and support provided by the Exchange’s Logistics Directorate during a tour of the Dan Daniel Distribution Center, the largest DC in the Exchange system.
“Dan Daniel and LG associates are a shining example of the teamwork that is a hallmark of the Exchange,” said Exchange Director/CEO Tom Shull, a member of the Exchange’s Board. “Team LG did an incredible job of highlighting to the Board how they are leveraging technology to improve operations while keeping the focus on serving the ‘best customers in the world.’”
In addition to Shull, the Exchange’s Board of Directors includes 11 Army, Air Force and Space Force senior leaders including the Board’s Chair Lt. Gen. Caroline M. Miller, Deputy Chief of Staff for Manpower, personnel, and services for the United States Air Force. The board convened its first quarterly meeting of 2023 at the DDDC prior to touring the 1.4 million square-foot facility.
Fleet Operations Manager Jonah Thomas briefs members of the Exchange Board of Directors during a tour of the Dan Daniel Distribution Center. The 1.4 million square-foot facility is the Exchange’s largest distribution center.
“The DDDC team showed the board members how a product, an Exchange Select razor in this case, makes its way from receiving to PX and BX shelves” said Karen Stack, Executive Vice President and Chief Logistics Officer. “The speed and efficiency of the distribution center team’s work, as well as their passion for serving those who serve, really came through.”
The board members followed the razor’s journey from receiving, where it arrives from the manufacturer to storage (where it remains until an order is generated), through order selection (where processing and delivery are set in motion), to shipping and transportation and e-commerce.
David Hill, manager of the distribution center, said the tour was designed to convey what makes the Exchange great.
“And that’s what our associates do every day,” Hill said. “They do the work the behind the scenes to get the products to the shelves. People come here and they say, ‘Wow—I can’t believe you are doing all this.”
The Exchange’s Vice President of Contingency Plans Col (Ret) Roger Neumann shared an up-close look at a mobile field exchange, a store on wheels that deploys during certain situations and is usually ready for deployment within 72 hours of command’s request.
Exchange Vice President of Contingency Plans Col (Ret) Roger Neumann shares an up-close look at a mobile field exchange as members of the Exchange Board of Directors tour the Dan Daniel Distribution Center.
At the outset of the tour, storyboards in the conference room showcased the Exchange’s worldwide footprint, with a map illustrating the organization’s reach across five continents. The board members were told about the organization’s status as the third-largest shipper in the Defense Transportation System, with nine distribution centers supporting Exchange retail and food operations, with 42 million cases shipped in 2022 alone.
Board members were also briefed on the Exchange’s transportation fleet, the 13th-largest private retail fleet in the U.S. in 2022, with 12 million miles driven last year. The tour described how the Exchange’s nine distribution centers support operations and partner agencies to improve Quality-of-Life for Warfighters worldwide.
Even during the challenges of the peak COVID era, the distribution network enabled the Exchange to maintain mission-essential work without interruption, supporting commands and delivering personal protective equipment and supplies during the worldwide pandemic.
The board was also provided a supply chain overview that showed how logistics teams work closely with other directorates, sister exchanges and outside partners to minimize disruption and overcome the supply-chain challenges of the past few years.
A significant portion of the tour detailed the Exchange’s transportation operations, including how the fleet realizes 98% on-time delivery and saves millions by coordinating outbound deliveries from the DC with inbound vendor shipments on return trips to the DC. Board members were also told about technology that ensures a continuous workflow to drivers for improved productivity, and equipment that ensures driver safety such as collision avoidance, auto-braking and lane-departure warnings.
And that’s just on the roads. The transportation portion also detailed how the Exchange uses USTRANSCOM capabilities along with its own internal systems to find delivery solutions in a global transportation network that employs ocean, air and rail routes. The Exchange coordinates its ocean transportation through the Army’s Surface Deployment and Distribution Command, which is essential in the ocean transport of the Exchange’s nearly 30,000 TEUs (20-foot equivalent units), a measure of a unit of cargo capacity used for container ships.
Since late 2021, Dan Daniel has used robots to assist in picking, packing and shipping items at the DC. Board members learned how these new process have significantly reduced training time for new associates (from two weeks to one day) while increasing productivity, reducing labor and saving on transportation costs.
The tour concluded with stops at the DC’s SPA (scan, print and apply) operations and its fashion operations, which shipped 7 million units in FY22.
“We received lots of positive feedback from everyone who took the tour,” Hill said. “All of them were truly impressed with what we do here every day.”
