The Global LOGISTICS FORUM March 15, 16 2010 Fairmont Bab Al Bahar, Abu Dhabi, UAE Understanding Drivers, Success Factors, Challenges & Enablers of Growing.

The Global LOGISTICS FORUMMarch 15, 16 2010 Fairmont Bab Al Bahar, Abu Dhabi, UAE

Understanding Drivers, Success Factors, Challenges & Enablers of Growing Logistics Markets for Dedicated Countries

Dr. Thomas W. Speh, Director of Strategic Initiatives, CSCMP,

and Senior Director of MBA Programs, Miami University (Ohio), USA

Evolution of Logistics Service Providers in the US

Pre-1980: Transportation Highly regulated environment stifled creativity, high cost, poor service De-Regulation fostered new environment, which lead to massive changes in the 3 PL environment, at least in Transportation Lessons learned

Pre-1980: Warehousing & other 3PL Services Heavy focus on private warehousing, little integrative 3PL companies 3 PL industry: small, unsophisticated players, small capital base, focused on real-estate, storage vs. service was the focus Lack of trust by potential users, unsophisticated marketing Emergence of larger 3PL companies with professional management Demonstrate the value of decreasing asset investments and managing a labor force, achieving shipment consolidation Trust fostered by successfully operating DCs and serving the customer’s customer

Evolution of Logistics Service Providers in the US, continued

Key elements to the development of a healthy Logistics Service Provider industry in the US

1. Hands-off by government

2. Attraction of top management talent

3. Provision of effective IT solutions for managing logistics

4. Offering an effective value-add: asset and headcount reduction along with consolidation opportunities

5. Effective marketing: changing top management mindsets on using 3 PLs

6. Significant expansion of service offerings: forwarding,packaging, reverse logistics, kitting, assembly, etc, etc

8. National, if not global operations

7. Sophisticated skills to manage a network: people, IT, systems integration with transportation

9. “McDonald’s Concept:” Ability to offer standardized, high quality service anywhere

10. Partnership mentality: collaboration and gain-sharing

11. Understanding costs: users and providers use common costing approach

Key elements to the development of a healthy Logistics Service Provider industry in the US……. continued

12. Move to non-asset, 4PL base: manage an entire network and major segments of the supply chain

To Be Effective, Logistics Service Providers Need To Be…..

Technologically state-of-the art

Possess market knowledge

Have 6-Sigma operations

Be able to recruit & manage people

Have excellent performance metrics

Know their costs exactly

Have a collaborative attitude

Have a global focus and presence

Understand customer needs