Multi-Channel Challenges for Logistics - PowerPoint Presentation

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Multi-Channel Challenges for Logistics

How to manage ever smaller, ever more frequent Shipments?

GS1 Event Rome, October 2014Presenter: Jaco Voorspuij

4 Mega Trends moving Logistics Markets

Emerging trends (still smaller scale):

Production (especially SME operating through Amazon or AliBaba) is more and more located outside cities (reducing the urbanisation trend).Even (very) small companies now have “global” Supply Chains.World Economic Forum: Well over 50% of world population in cities and increasing.By 2050 appr. 70% of population will live in cities.

Big Business now needs Small Logistics

The Long Tail (C. Andersen; 2006) has finally hit even the biggest of businesses

Major Impacts on Logistics:

Number of Large Consignments droppingNumber of small consignments rapidly increasingDelivery any place, any time (through wide range of option)Logistics Speed and convenience standard features.Ever increasing complexity of end-to-end chainsNOTE: Trends most evident in B2C but increasing in B2B also.

Consumers demand ever more “customised” product

Consumers buy more often in smaller quantities with lots more “Sellers”.

FMCG will continue to exist;

fewer though

Break-Through change of Approach necessary

Total Volume Transported increasing rapidly.Total Number of Shipments growing even more rapidly.OTIF (on Time In Full) essentialFlexibility in Delivery; changes during execution.Increasing demand Real-Time transparency End-to-end (even to Consumers)Transport efficiency stagnant for over a decade.Logistics Fragmentation is horrendous(Top 10 LSP cover <15% of Logistics market)>10,000 Transport SP in NL aloneShippers (LSC) working with multiple LSP (and determined to use ever more).Current Urban Logistics is already failing.5000 trucks per day into Amsterdam.Continuing past behaviours will surely fail to deliver future SC needs.

Collaboration is the Key to Delivering Future SC needs

Consumer Goods Forum Vision:Share Physical Logistics Transport (all stages)Warehousing incl. Cross DocksPalletsInformationIdentification and LabellingDemand Fluctuation Managementjoint planning, execution and monitoringIn-Store visibilityEfficient assets e.g. switching mode.Joint scorecards and business plansIntegrate Reverse Logistics Bundling Flows (leg-by-leg)Synchronise production with demand

“Improved collaboration among all parties in the value chain will be

essential

in order to achieve a more efficient and effective Value Chain to better serve the needs of the Consumer

Building blocks for Collaboration

Several initiatives already started.

Several “Best Practice” examples available (Metro; Philips; Wal-Mart; reverse logistics HP, Braun,

Gilette

, Sony, Electrolux ).

LSP offering various (value added) services enabling shared / multi-user utilisation of infrastructure (warehouses, cross-docks)

LSP offering services enabling redesigning the Supply Chain configuration

(changing the Customer Order Decoupling Point, moving work to other locations).

Several initiatives to help companies find collaboration partners

(GCI project, CO3 and STRAIGHTSOL).

New / Emerging technologies that enable easier collaboration (information capture and sharing). E.g.

Access Points as used by PEPPOL, e-Freight and

iCargo

.

Mobile Technologies (smart phones …)

Increased use of RFID.

Increasing need for Neutral Facilitator role in logistics

Independent Facilitators play a major role in enabling Collaborative Inclusive Networks by:Creating a trustworthy environment for competitors to collaborate “safely”.Providing Services e.g. (software) solutions, intermediary services etc. that individual Network Participants cannot provide for various reasons (including Legal). Use of open systems of standards (GS1) “mandatory” to avoid “Tower of Babel” confusion.Allows a much wider community (including Medium and Small enterprises) to easily enter and participate in inclusive networks (often making the BC for some of the above Logistics models).Enables “Connect Once; Collaborate Infinitely” through emerging Open Integration Platforms.Eliminates ID-number confusion by using globally unique (GS1) ID keys for fundamental objects in Logistics (e.g. Shipments, Consignments, Logistic Units etc.).

Production

Customer

All products / Orders

All Outlets / Channels

Neutral

Facilitator

Infeasible

for single

Logistic

Service

Provider

Infeasible

for single

Manufacturer

Why Bother?

Very impressive improvements that LSC will vigorously pursue (LSP for).

For a collaboration of 8 manufacturers and 4 retailers GCI calculated

Transport cost per pallet down >30%; Handling cost per pallet down ca. 20%

Lead time down ca. 40%;

Carbon emissions down per pallet down 25%;

Improved On-Shelf-Availability

Collaboration Carrefour,

Bénédicta

et alia delivered

34% increase in delivery frequency;

115% increase in load size per delivery.

Philips CPFR with several Customers delivered

forecast accuracy increased to better than 80%;

Stock levels reduced by ca. 30%;

On-shelf-availability increased to better than 95%.

3M changing the Customer Order Decoupling Point delivered

>100% increase in vehicle utilisation (long haul);

>50% long haul truck trips eliminated

resulting in >50% carbon emissions reduction;

Total Logistics costs reduction >35%.

Acknowledgements

CO3 project (‘Collaboration Concepts for Co-modality’, or CO3 in short).www.co3-project.euConsumer Goods Forum reports (amongst others)“2016 Future Supply Chain; Serving Consumers in a Sustainable Way”.“Future Supply Chain 2020; Building strategies FOR the new decade”.http://www.futuresupplychain.com/Cap Gemini Consulting report“Are You Ready? How to Create an Always-On, Always Open Shopping Experience”.http://www.capgemini-consulting.com/are-you-readyhttp://www.efreightproject.eu/knowledge/defaultinfo.aspx?areaid=47&index=2http://www.peppol.eu/http://www.straightsol.eu/http://www.i-cargo.eu/

THANK YOU!

Jaco Voorspuij

DHL Supply Chain

Jaco.voorspuij@dhl.com