International Logistics

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International Logistics 3PLs
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Contents

• Basics of International Logistics
• Trends in International Logistics
• Case Study

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International Logistics - Basics

• Definitionthat part of the supply chain
  process that plans, implements, and controls the
  efficient effective flow and storage of goods,
  services, and related information from the point
  of origin to the point of consumption in order to
  meet customers requirements.

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International Logistics - Basics

• Why is international Logistics necessary?
• - Reducing Cost
• - Improving Service (adding value for
  customers)
• - Competitiveness in Globalization
• Positive result of a liberal market?

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Difference int. Logistics SCM

• Logistics
• Focuses on transportation and storage of
  materials and final goods
• The 7 Rs ensuring the availability of the
  right product, in the right quantity and the
  right condition, at the right place, at the right
  time, for the right customer, at the right cost
• SCM
• Also includes the management of supplier and
  customer relations

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International Logistics - Basics
The key to making a companys international
Logistics work is information -gt how can this
information in an MNE be provided and supervised?
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International Logistics - Basics

• EDI (Electronic Data Interchange) - standardized
  format structure to exchange documents and
  financial flows
• ERP (Enterprise Resource Planning)
• - every process of a company can be exercised
  via one integrated Information System (SAP, Baan,
  Oracle, MBS Navision Axapta)
• e-Commerce / e-Procurement / Intranet
• Enterprise Portals for managing controlling
  the flow and storage of goods from any place at
  any time (part of ERP, or at least directly
  linked)

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International Logistics - Trends

• Government Trade Facilitation Systems
• - new trade facilitation systems support
  globalization of internat. LogisticsSingapore
  -gt trade permitting system allows traders to fill
  out one single form, a mainframe system routes
  form to 18 different agencies. Estimated savings
  for Traders 1 billion per yearMexico -gt
  Computerization reduced steps for Traders from 12
  to 4. Numbers of operations at 1 entry point from
  U.S. increased from 800 to 1200. The processing
  time was reduced from 3 days to 20 minutes!!
  Estimated savings for Traders 2 billion per
  year

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Globalization Logistics

• Globalization drives Logistics outsourcing
• Public and private companies are offering
  logistic services
• Complex business needs require specialization in
  logistics (eg. hazardous cargo)
• Companies doing business globally can benefit
  from outsourcing their logistics and supply-chain
  management needs
• Logistics is becoming an important source of
  revenue for MNEs (IBM offers IT Outsourcing
  since 1990, now shifting to logistics, takeover
  of PWC in 2002)

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International Logistics - Trends

• The extended Enterprise
• - Total real time connectivity between extended
  Enterprise Partners
• Global Third Party Logistics Providers(3PL)
• - avoid costs in IT-Systems and warehouse
  capacity
• - greater market leverage (air, ocean and
  surface transport)
• - volume purchasing discounts through
  aggregating its shipment base with those of the
  Providers other clients
• - higher flexibility in meeting customer needs
  because of access to more diverse channels
• eLogistics web based logistic portals which
  seek to bring together shippers, 3PLs and other
  interested parties to provide more effective
  collaboration

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Logistics Outsourcing 3PLs

• The 3PL market will grow 5 to 10 times faster in
  the next decade then the traditional freight
  forwarding market
• 3PLs include
• Engineers, business consulting, materials
  handling, material specific skills, change
  management, business modelling, IT and management
  consulting

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3PL Trends

• ¾ of MNEs use 3PLs
• Most important feature of 3PLs is RFID (radio
  frequency identification) e.g.. Wal-Mart, US Dep.
  of Defense

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3PL Trends
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3PL Pros Cons

• downsizing to core business
• longer experience in internat. Logistics
• reduce cost of ownership
• increase flexibility
• Lack of core knowledge during outsourcing process
• open, honest communication necessary
• Giving up of internal control of a business
  function and trusting others

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Case Studies

• Examples of 3 PLs and Business Solutions

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FILA / KUEHNENAGEL (KN).

• Situation.
• Increasingly complex supply chain ( Incr.
  markets, product line and clients)
• Centralised supply chain management
• PB
• delays and inaccuracy in customer order
• Lack of visibility
• Variety of product/services additional
  complexities.

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FILA / KUEHNENAGEL (cont 1.).

• KN Solutions Re-engineering supply chain
  model.
• optimising transportation, merging shipment
• Improve inventory management and services
• Web-based data and documentation collection

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FILA / KUEHNENAGEL (cont 2.).

• Results.
• Flexibility and visibility forward planning
• Cutting costs and increase space utilisation
• Adapting standard operating procedures to local
  requirements
• Build a direct info exchange with partners
• Automating massive amount of documentation.

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XEROX / KN.

• Situation Xerox need 3PL
• Manage 6 of its District Parts Centres (DPCs)
• Mobilise and assume operational control of the 6
  DPCs
• Provide accurate and reliable delivery of parts
  to engineers
• Maintain and improve defective material
  processing time at the DPCs

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• K N solutions
• Minimise service disruptions
• Focuses on staff retention
• Process improvement

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XEROX / KN (cont. 1).

• Results
• Improved service/shipping performance
• Reduce order cycle time
• Seamless logistics solutions

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CARREFOUR / PENSKE

• Situation
• To centralise logistics network
• Improve order accuracy
• Reduce inventory
• Increase stock assortment

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CARREFOUR / PENSKE (Cont.1)

• Penske Solutions
• New distribution facilities
• Warehouse technologies
• Load planning

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CARREFOUR / PENSKE (Cont.2)

• Results
• Single system
• ordering and shipping
• Manage inventory flow
• Incr. supply chain visibility
• Deliver value company, store, consumer level
• Reduce distribution costs
• Reduce delivery delays
• Increase variety of products for stores.

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General Motors Mexico (GMM)/ Penske.

• Situation
• 3 locations Pb
• Individual logistic decisions
• Lack of collaborations
• Complex transportation Network.

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General Motors Mexico (GMM)/ Penske (Cont.1)

• Penske Solutions
• New procedure for inbound transportation network
• Logistics management system software
• Establish accountability, procedures and measures
  for GMM.

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General Motors Mexico (GMM)/ Penske (Cont.2)

• Results (in the 3 plants)
• Transportation costs decr. 15
• Increase visibility throughout the supply chain
• Reduce inventory and freight premium costs
• Increase delivery of damage-free parts
• Decrease carrier base from 100 to 20 carriers.

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Thanks!
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Bibliography

• Logistics and the Extended Enterprise, S.
  Boyson
• TRANSPORT AND COMMUNICATIONS BULLETIN FOR ASIA
  AND THE PACIFIC, Report of UN
• Freight and Logistics, Dablanc, L. Gart
• The Role of Logistics in Stimulating Economic
  Development, The World Bank, M.H. Juhel
• Structuring Logistics Activities In
  Multinational Companies (MNCs), Yong Gao
• Business Intelligence and Logistics, Srinivasa
  Rao P.
• Supplier partnership essential to make new
  logistic concept work G. Butschek
• Latin American booming Logistics, InfoAmericas
  Report 10-06-2004
• Shaping tomorrows Logistics The Air Force
  Journal
• http//logistics.about.com/b/a/117614.htm
• http//www.fool.com
• http//www.manufacturing.net
• http//usco.kuehne-nagel.com
• http//www.penskelogistics.com/casestudies/gm.html
  
• http//www.penskelogistics.com/casestudies/carrefo
  ur.html