9 Delivering Value Beyond A Traditional Definition Paolo Montrone ‐ SVP Sea Logistics TPM, Long Beach Convention Center March 03, 2013
9
Delivering Value Beyond A Traditional DefinitionPaolo Montrone ‐ SVP Sea Logistics
TPM, Long Beach Convention CenterMarch 03, 2013
04/03/2013 p. 2
Market Position• Global No. 1 in Seafreight Growth rates multiple of Market, +6% in 2012 Leading the industry with IT-based solutions Strong partnerships with preferred carriers
• Global Top 2 in Airfreight Well positioned in the top league Cargo 2000 certified (first mover!) Strong partnerships with preferred airlines
• Global Top 4 in Contract Logistics Global infrastructure for global contract logistics coverage Dedicated and shared warehousing & distribution management Transportation management solutions
• Top 6 in European Road & Rail Logistics Focus on network services, LTL & FTL business Pan-European coverage of 38 countries Innovative intermodal solutions
04/03/2013 p. 3
3PL’s have gained significance over the last thirty years
3PL vs Direct (All Trades)1980ies 2012
40% 3PL’sDirect60%
10 % 3PL’sDirect90%
• Asset Intensive / High Capital• Supply / Demand Driven• Focus on providing efficient and “green” transport
• People, Process & Technology • Visibility / Flexibility• Focus on Supply Chain optimization
Carriers NVOs/3PLs
04/03/2013 p. 5
Other Costs
TransportCosts
Total International Supply Chain Costs
Working Capital Costs
Sales Effectiveness Loss
Handling & Processing Cost
Emergency Airfreight
Demurrage/Detention
Storage Costs
Administrative CostsCargo value depreciation
FMCG Industry case study
04/03/2013 p. 6
Challenges to Supply Chains
• Constant changes of vessel network
Maximize supply chain flexibility and responsiveness
• Diverse schedule reliability
Robust Carrier Management and Carrier Selection
• Lack of industry standards
• Data quality/lack of information
Push the Boundary for Data Availability and Accuracy
Specialists Tracking Shipment Status with Carriers for Our Clients
• Disruption from natural events/ strikes
• Proactive Information Sharing• Effective Risk Management
• Full Visibility• Flexibility (Divert in Transit)• IT Infrastructure in 3 Severs
04/03/2013 p. 7
Delivering Value Beyond A Traditional DefinitionSupply Chain as a Competitive Advantage
Source – KN Insight, The State of Logistics Outsourcing – Capgemini Consulting, and 23rd Annual State of Logistics Report – CSCMP
• End-to-end visibility
• SC Value Roadmap
• Supply chain design
• Dem/detention reduction
• Inventory rationalization
• Sourcing support
Shippers Realized Measurable Benefits through 3PL’s partnerships
Case Study: Global Supply Chain Optimization
About the
Client
Fortune 50 US Manufacturer & Marketer with global footprint in the FMCG industry
Challenge• Intense competition• Decline in sales of key trade customers/retailers• Increasing cost of raw material• Drive cost productivity improvement• Insufficient supply chain visibility
The Solution
• Consult, Collaborate & Implement
• Dedicated teams from both Orgs
• Robust framework & methodology
• Identified +USD20 mio savings
04/03/2013 p. 10
Case Study: Last Mile Logistics & Cost Control
About the Client
Challenge
The Solution
Leading automobile manufacturer operating more than 100 production plants globally
• 10,000+ containers, USD1.5 mio demurrage and detention charges• Inefficient delivery communication processes• Inability to identify ETA of a specific part to the Regional DC• Visibility solution consisted of manual spreadsheets & outdated info
• Defined the critical milestone path and accountable parties• Implement Interactive Delivery Planner, enabling planning, approval of appointments and capture milestones by customer’s DCs & appointed truckers
The Result
• Eliminated +98% of demurrage and detention costs• Eliminated overtime shifts (Mon-Fri) at the DC’s• Provided detailed visibility of inventory in-transit