Logistics: what is it

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Logistics what is it?

• ETF Seminar
• How to recruit and organise in the logistics
  sector?
• Runö, Sweden 8-11 February 2009
• Paula Hamilton, ITF
• hamilton_paula_at_itf.org.uk

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What is Logistics?

• The work of logistics
• Logistics in Central and Eastern Europe
• Main Actors in Logistics (in the region)
• Gearing up to strengthen our unions

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Logistics
The work required to move and position inventory
throughout the supply chain which serves to link
and synchronise the overall supply chain as a
continuous process and is essential for supply
chain connectivity. (Bowersox et al, 2007)
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Logistics

• Logistics is a subset of and occurs within the
  broader framework of supply chains.
• Logistics activities occur within and between all
  companies active within supply chains.
• The rise of logistics is driving restructuring
  across the whole transport sector
• The new logistics industry plays a vital role
  in the global economy.

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Physical Flows, Nodes and Networks
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Global Gateways Container and Air Cargo
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Information and Communication Flows

• Enable faster and more consistent communication
  within organisations and between corporate actors
  in supply chains
• Enhances effective communication between
  logistics information systems and their physical
  operating environments

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ICT and Logistics

• Customers demanding real time information
• Used to reduce inventory, labour requirements and
  risk
• Improve timing/speed
• Increase reliability
• Increase transparency in supply chains

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ICT Systems

• Supply Chain Information Systems (SCIS) are
  responsible for linking all logistics activities
  into an integrated process
• These have four major components
• Enterprise Resource Planning systems
• Communication systems
• Execution systems
• Planning systems

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Information and Communication Technologies

• Types of ICT used
• Bar coding and scanning
• Global data synchronisation
• The Internet
• Satellite technology
• Image processing
• Extensible markup language

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The work of logistics

• Order Processing
• Inventory
• Transport
• Warehousing, Materials Handling and Packaging
• Facility Network Design

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Order Processing

• Order preparation
• Order transmittal
• Order entry
• Order filling
• Order status reporting
• Key customer interface

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Inventory

• Raw materials
• Work in process
• Finished goods
• Supplies

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Warehousing, Materials Handling and Packaging

• Many types of warehousing
• Traditional role has been to hold or store
  inventory but
• Today many value added activities occur in such
  environments, operations focus on customisation,
  velocity and movement
• Packaging serves to protect products during the
  logistics process
• Materials handling involves receiving, moving,
  storing, sorting and assembling.

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Facility Network Design

• A facility network is the number, size and
  geographical relationship of facilities used to
  perform logistical operations.
• Include manufacturing plants, warehouses,
  cross-docks, ports and retail outlets.
• Facility network design determines the number and
  location of all types of facilities used to
  perform logistics work
• Facility networks are in a constant state of flux

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Transport

• These are the operations which geographically
  move and position inventory
• Include road, rail, water, air and pipeline
• Is the largest element of logistics costs
• Reduces inventory, storage and materials handling
• Transports role is becoming increasingly
  important in supply chains

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Logistics Industry Markets

• Air Cargo
• Airports
• Contract Logistics
• Finished Vehicle Logistics
• Freight Forwarding
• Ports
• Express and Parcels
• Intermodal
• NVOCC

• Rail
• Road Haulage and Trucking
• Service Parts Logistics
• Temperature controlled logistics
• Warehousing and property development
• Information and Management Services
• Shipping

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Barriers Between Modes Disappearing

• Deutsche Post World Net
• Privatizing German Postal Service
• DHL
• Danzas
• Airborne Express
• Exel 1 US Warehouse Co.

• NOL/APL
• Singapore Based
• Steamship Line
• Terminal Operator
• 3 US Whouse Co.,
• Rail Liner Trains

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Logistics in Central and Eastern Europe

• Fundamental changes in the logistics market in
  recent years
• Production near sourcing in CEE
• Growing consumer markets
• Large LSPs new models to serve clients
• Few indigenous international companies operating
  on a global scale
• Pattern in most CEE countries strong local
  logistics presence serving the needs of small
  business large TNC providers providing services
  for the international incomers
• Possible restructuring with some CEE based
  companies grouping themselves together to provide
  services across the region

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CEE Contract Logistics Market Size and Growth

• 2007 grew to 991m, a growth rate of 24
• Highest growth rate in the Slovak Republic (39)
• Baltic States also experiencing strong growth,
  helped by proximity to Russian market
• 2011 market forecast 1956m (18.56)

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CEE Express and Parcels

• Still major differences between CEE and WE
  markets but likely to change as shippers demand
  specialist levels of service and pricing
• Growth is not homogeneous across the region,
  Baltic States and Slovenia show above average
  growth
• Automotive is particularly important to the
  express sector in Poland, Czech Republic,
  Slovakia and Hungary
• All major global express providers are well
  positioned in Poland and Czech Republic

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CEE Freight Forwarding

• 2007 grew to 2112m, a growth rate of 21.3
• 2007 - Air forwarding grew to 637m, a growth
  rate of 17
• 2007 Sea forwarding grew to 1475m, a growth
  rate of 23.3
• 2011 freight forwarding market forecast is
  3731m, a growth rate of 15.3

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CEE Road
By Type 2006 (m t km)
Source Eurostat
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Logistics Actors in the Region

• Include
• Manufacturers
• Retailers
• Local, regional and national Governments
• The European Commission
• AND Logistics Service Providers

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Wal-Mart is hard to do business with. I had a
cardiac episode while I was working for them.
- Former Exel manager of Wal-Mart DC
POWER
3PL
Ocean carriers
Inland transport
Manufacturers
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Logistics Industry Main Actors in the Region

• Deutsche Bahn
• CEVA
• DPWN
• DPD
• DSV
• Ewals Cargo Care
• FedEx
• Fiege Logistics
• FM Logistics
• GAC
• GEFCO

• GLS
• Geodis (SNCF)
• Kuehne and Nagel
• MM
• AP Moller Maersk Group
• NYK Logistics
• Panalpina
• TNT
• UPS
• UTi Worldwide
• Wincanton

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Logistics Industry Main Actors present in all
your home countries

• Deutsche Bahn
• DPWN
• DSV
• GAC
• Kuehne and Nagel
• MM
• Others (variable range of operations)

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MM Militzer Münch International Holding AG

• Owned by TransInvest Holding AG
• Headquartered in Switzerland
• Operations divided into 6 regional groups
• A major partner in the System Alliance
  organisation, a FedEx partner
• Products and Services include rail cargo, air
  cargo, sea cargo, groupage, customs service,
  warehousing and logistics

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MM Organisation
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MM Strategies for Growth

• Build its network in Eastern Europe
• Focus on developing its IT-aided processes
• Become more active in new and developing markets
  with a focus on Central Asia and China

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GAC

• Head office in Dubai
• Privately owned
• Operates in over 40 countries, with 250 offices
  and over 7000 staff
• Business areas include shipping, logistics,
  marine and solutions
• Target markets include oil and gas, retail,
  automotive to dry bulk and cruise liners

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GAC Strategies for Growth

• Aims to provide an integrated solution to its
  clients logistical needs
• Expansionist strategy, particularly in emerging
  markets
• Tends to enter new markets via partnerships
  first, then set up subsidiary
• Four hub agency centres London, Dubai, Singapore
  and Houston

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Logistics revolution
Road transport
Consolidator / freight forwarder, 3PL
Manufacturer
Ocean shipping
Air freight
Home
Small parcel delivery
Port trucking
Road transport
Road transport
Warehouse deconsolidator, 3PL, wholesaler, DC
Rail
Warehouse deconsolidator, 3PL, wholesaler, DC
Retailer
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How to get started
Union Strength
Geography/Market
Companies