GRA 4303 Maritime Logistics Strategy

Session 1 & 2

GRA 4303 Maritime Logistics Strategy Session 1&2

Course introduction:
Relation to GRA 4301 and 4302 Lecturers Cases Definitions

Globalization of Markets Introduction to

Logistics Management Strategi Vision and Goals

Definitions (1)
Logistics: Logistics is that 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 Logistics management: The process of managing logistics to achieve the established logistics goals of the company Supply chain: The supply chain involves all processes that a company uses to conceive, design, produce and deliver products or services successfully to customers, including receipt of payment. It is a vastly broader term than logistics

Logistics outsourcing: The management of 2 or more interrelated logistics activities to an external provider, enabling the shipper to focus on core competencies and to receive enhanced cost and/or service value
3

Definitions (2)
International freight forwarder: Usually an asset light entity, it acts as the agent of both the shipper and the carrier (ocean or air cargo). Common activities are cargo rate referral and booking, arranging for cargo delivery to port or terminal, preparing and delivering private and government documentation, e.g. letters of credit, insurance, shippers export declaration, and for assuring regulatory compliance. Compensation is customarily a combination of fees paid by the shipper for specific services rendered and commissions paid by the selected carrier. Many forwarders have established a customs brokerage capability. Some have created or purchased NVOCCs, which permit them to issue their own bills of lading (with limited liability). Compensation for this service is the spread between whats billed to the customer and paid to the carrier. Traditionally each shipment represents a stand along transaction, where payment results when one or more of the service is provided.

Definitions (3)
3rd party provider: Acts on behalf of shippers, may possess some assets, especially distribution or transport equipment. Normally payment is directly from shippers, with few or no commissions paid by carriers. 3PLs stand apart from traditional providers as carriers and freight forwarders because of their ability to manage broad cross functional processes, e.g. order fulfillment. Many 3PLs provide an analytical and consulting capability as part of their service. The term logistics outsourcing became identified with 3PLs because 3PLs often took over selected activities within logistics departments and became responsible for managing process improvement. Generally compensation is in the form of management fees and performance incentives, e.g. increased order fill rates, reduced order cycle times, increased productivity, lower total costs, etc. Short and long term contracts between provider and user are sometimes employed

Definitions (4)
4th party provider: The 4PL term was first introduced and trade marked by Anderson Consulting in the mid 1990s. With the increasing popularity of using 3PLs to outsource broad transport and distribution management functions, Anderson concluded that a non-asset (few or no transport, equipment or distribution facilities) based entity would be needed to oversee and manage a wide variety of 3PLs and traditional providers engaged by large global shippers. 4PLs are expected to possess a comprehensive overview of logistics and its separate functions, understand the supply chain and and specific industry sectors, have process reengineering and consulting capabilities, and regularly employ state of the art technology and systems tools. Compensation is likely to be a combination of management fees, performance incentives and profit sharing with the shipper. Arguably no 4th party company exists today that can manage in the comprehensive manner and on a global scale described here. However, an amalgam of different types of alliances between consulting companies, E-logistics firms, asset providers and 3rd parties may result in the emergence of a bone-fide 4th party over the next several years.
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Provider Spectrum
Provider
Freight forwarder
Small, traditional Integrated forwarding Increasing: Process integration Management integration Performance metrics Risk/reward agreements Emerging global alliances Domestic, transport warehouse

3rd party

4th party

Technology driven, multimodal, globally capable

Responsible managing 3rd party & other providers

Fully integrated strategic supply chain issues

Customer

Group Work
Select a company who can be classified according to each of the definitions and explain why it fits to the definition
International Freight Forwarder Logistics Management Supply Chain Management 3PL 4PL Logistics Outsourcing
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Globalization of Markets

Trends: Consolidation and Globalisation

Mergers and Aquisitions: Reduction in number of automotive manufacturers:

Source: E-Business and the Automotive Supply Chain, London, 2000

10

Trends: Reduced Lead Times in Distribution

Reduction in lead time in European distribution:
30 25 20 15 10 5 0 87' 93' 98' 03' Plan
Source: E-Business and the Automotive Supply Chain, London, 2000

Reduction in time from order to delivery in automotive industry:

-33% -33%

-25%

Days

Source: European Logistics Association/A.T. Kearney

11

Trends: Focus on Core Business - Outsourcing

Investigation of 277 large US shippers: Current degree of outsourcing and future intent
Outsourced service Outbound transport Warehousing Freight bill auditing Inbound transport Freight consolidation/distr. Selected manufacturer act. Product marking/labelling Cross docking Traffic mgt./fleet operation Product returns and repairs Information technology Product assembly/install. Order fulfilment Inventory management Customer service Order entry/processing Current 9% 16% 17% 15% 20% 9% 10% 12% 16% 13% 11% 4% 7% 5% 7% 4% Future 63% 63% 53% 49% 38% 32% 31% 23% 23% 19% 13% 12% 10% 9% 8% 7%

Logistics

12

Source: Ernst & Young/University of Tennessee, 2000

Globalization of Markets

Growth in numbers and size of global companies Standardization of products and services on a global basis

Reduction of the number of players in each phase of the Supply Chain

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Globalization of Markets

Reduction in the number of competitors and increased market shares of the remaining Global division of tasks and skills

Transportation and logistics share of the value chain will increase significantly

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Globalization of Markets

The survivors in the future global markets

Customer Loyalty Production cost has to be equal or lower than competitors Control over supply and distribution Products and services must be differentiated from the competitors Customer awareness Supply Chain Integration
Process Management IT integration along the supply chain
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Formation of Strong Supply Chain Networks

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The Supply Chain Model

S U P P L I E R S

Plan
Planning and Forecasting

Buy
Procurement

Make
Manufacturing

Move Sell
Distribution and Logistics

C U S T O M E R S

. . . Organizations Buy, Make, Move, and/or Sell Goods . . .

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SCM Implication
Companies will in the future compete between supply chains and not within them
C o r e
C o m p e t e n c i e s

Supply Chain A

The Market

Supply Chain B

Supply Chain C

The Customer: Share, Loyalty, Retention

Customer Value
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The Integrated Supply Chain

Global ecommerce Integrators Product Flow
End Custom ers

Supplier s

Manufacturing

Distribution

Cash Flow

Spend

Spend

Spend and Collect

Collect

Organizational Flow
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The Supply Chain creates pockets of inventory

The challenge: to reduce inventory investment while still maintaining capacity utilization and achieving customer satisfaction.
Supplier

Stores Warehouse

Factory
In Transit Work-in-Process Finished Goods Inventory

Distribution Network

Customer

Components Raw Materials

In Transit Inventory

Raw Materials

Finished Goods

In Transit Inventory

VELOCITY Most companies have multiple product lines and many supply chains. Effective inventory management becomes more difficult and complex as products increase and service requirements expand.
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Trends: Supply Chain Development

1980s JIT (Automotive Industry)

Supply

Production

Distribution

Consumer

1990s

Supply
(Retail Industry)

Production

Distribution

Consumer

2000s Customer Sophistication Power of IT

Supply

Production

Distribution

Consumer

21 Kearney Source: European Logistics Association/A.T.

Future Challenges for the Customers of Maritime Services

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Cost of Distribution Typically Quoted as 30%

Dealer
Dealer margin 10-18% The black hole

Manufacturer or distributor

Marketing Organisation Warranty Logistics

8-15% 4-6% 1-2% 2-4%

Product development

Purchasing

Manufacturing

Distribution 25 - 35%

Total cost

Contracting
Platform Outsourcing Development Commonality Strategic sourcing Partnerships Lean manufacturing Outsourcing Network factory

Expanding

?
Source: WW ASA 2000

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Cost of Distribution Typically Quoted as 30%

Dealer
Dealer margin 10-18% The black hole

Manufacturer or distributor

Marketing Organisation Warranty Logistics

8-15% 4-6% 1-2% 2-4%

Product development

Purchasing

Manufacturing

Distribution 25 - 35%

Total vehicle cost

Contracting
Platform Outsourcing Development Commonality Strategic sourcing Partnerships Lean manufacturing Outsourcing Network factory

Deep Sea Transportation: Expanding

0,3 - 1 %

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Leading Factors in Awarding Logistics Contract

Price Potential cost/inventory savings Product/business expertise Technology capability Geographical scope Industry reputation

Breadth of service offerings

Financial strength Prior relationship Other Sales presentation
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Least important
Source: Lazard Frres & Co. LLC

Most important

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3 PL- Third Party Logistics Providers

Historical

Sender/ Passenger

Organiser

Air Transport Ground Transport Water Transport Intermodal Transport

Organiser/ Supporter

Recipient/ Passenger

Future

Sender/ Passenger

Organiser

Outsourced Logistics

Air Transport Ground Transport Water Transport Intermodal Transport

Outsourced Logistics

Organiser/ Supporter

Recipient/ Passenger

Future Transportation Firm Activities

= Potentially disintermediated Source. PwC analysis

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New entrants are approaching the market

+ Greater Functional Integration + Broader Operational Autonomy BOA Arrangement 1990s-2000s

Client
4PL
Shippers Service Providers

Outsourcing 1980s-1990s

Client

3PL Providers

Client

Internal Logistics Operations 27

Shareholder Value Growth

35 % 30 % 25 %

S&P 500: 20%

20 % 15 % 10 % 5% 0%

Overall Third-party Equipment Transportation Logistics Leasing Industry Services

Railroads

Air Parcel

Trucking Truckload

Ocean Carriers

Source: Mercer Analysis. All figures for US public companies only, except ocean carriers. Compound annual growth rate for market capitalization, 1993 - 1997.

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New Entrants Are Approaching the Market

Recent alliances between transporters and IT leaders:
Logistics Companies
Kuehne und Nagel Ryder Integrated Logistics Schneider Logitics New Holland Ryder Integrated Logistics FedEx/Caliber Logistics

IT-system Leaders
i2 i2/ Dell Computers Andersen Conculting i2 Andersen Consulting Andersen Consulting KPMG
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Retail Car Buyers Are Going To Use E-commerce...

Use of E-commerce in car buying process

70 60 50 40 30 20 10 0 US D Did use UK Will use J F
70 60 50 40 30 20 10 0

Would buy on Internet

UK

US

Source: FT World Motor Conference, Sept. 1999

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The Logistics rationale

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The Logistics rationale (1)

4%
The key components of logistics represent about 10 % of world GDP, or about US$ 4.0 trillion

1% 28 %

inventory carrying warehousing Transport Order entry Admin

Source: Cass Information Systems & ProLogis

59 % 8%

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The Logistics rationale (2)

In billions USD 1999/ 2000 921 In billions USD 1999 4000
Outsourcing represents 5.7% of total logistics Although global logistics outsourcing is a small % of global logistics today, it is still a significant number

Extrapolating U.S. data suggests size of global market

U.S. logistics & outsourcing market

1) Net

Third Party U.S. Based firms: Logistics revenues in the range of 28-29 billion USD in

Total logistics

531)

228 World logistics & outsourcing market

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Source: Cass Information Systems & ProLogis

The logistics rationale (3)

Logistics: Break-up of costs

Source: Cass Information Systems, Inc. & ProLogis 36

The logistics rationale (4)

Billion USD

The outsourcing market

According to Northeastern University and Armstrong & Associates, the outsourcing market is growing nearly 20 % annually

600 550

In billions US$

500 450 400 350 300 250 200 2000 2001 2002 2003 2004 2005
The difference between gross and net is that we take out the cost of transportation purchased for clients to calculate net revenue

125 billion USD in net revenue for 3PLs

Net revenue for 3PLs is approximately 53-55% (in the US), and profits before taxes are 6-8% of gross(?) revenues according to Cass information Systems Inc., ProLogic & Armstrong & Associates

5 year outsourcing potential

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The logistics rationale (5)

Outsourced service Outbound transport Warehousing Freight bill auditing Inbound transport Freight consolidation/distr. Selected manufacturer act. Product marking/labelling Cross docking Traffic mgt./fleet operation Product returns and repairs Information technology Product assembly/install. Order fulfilment Inventory management Customer service Order entry/processing Current 9% 16% 17% 15% 20% 9% 10% 12% 16% 13% 11% 4% 7% 5% 7% 4% Future 63% 63% 53% 49% 38% 32% 31% 23% 23% 19% 13% 12% 10% 9% 8% 7%

Growth in the outsourcing market

Survey Time frame

: 277 US shippers : 2000-05

Source: Ernst & Young/University of Tennessee, 2000

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The logistics rationale (6)

Different customer philosophies with respect to outsourcing of logistics
Movement towards more and more outsourcing to systems integrators
Lou Sorchevich, Director of international transportation, GM

Do not know whether VWT is profitable and feel it is probably irrelevant, since it is viewed as a strategic investment by senior management
Joe Manschke, Ken Fletcher, Chuck Domke, Logistics, transport processes, VWT/VW

Would like the carriers to provide more value-added services, especially in booking and control of various supply chain activities like point to point services and contracts where land side processes at both origin and destination are managed by the ocean carrier
Bob Frinier, Vice President, Logistics, Nissan

Our company intends to co-develop global process systems with our partners and integrate operations with a few of the best providers in the logistics area
Bill Carrigan, Manager Global Marine Transport, Ford

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The Logistics rationale (7)

Cost of Distribution Typically Quoted as 30%
Dealer
Dealer margin 10-18% The black hole

Manufacturer or distributor

Marketing Organisation Warranty Logistics

8-15% 4-6% 1-2% 2-4%

Product development

Purchasing

Manufacturing

Distribution 25 - 35% Expanding

Total vehicle cost

Contracting
Platform Outsourcing Development Commonality Strategic sourcing Partnerships Lean manufacturing Outsourcing Network factory

?
Source: A.T.Kearney

40

The logistics rationale (8)

The 3PL industry appears poised for significant growth
The worlds largest companies are heavy users (50% have used for more than 5 years) Based on all research we have done, logistics stocks over the next 5 years will continue to outperform stocks of other transportation companies. The crux of it is that we think the logistics sector is at an early stage, maybe in the first or third inning, of a secular (long-term) growth found in the outsourcing of transportation functions. Survey of 500 firms by Northeastern university & Andersen Consult, 2000 Lazard Freres (NY investment bankers, 2000)

Marine shipping business is mature. Logistics will be our focus, equaling 1999 container revenue of $4.2 billion within 3 years.

Flemming Jacobs, CEO of NOL/APL, 2000

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The logistics rationale (9)

Shareholder Value Growth
35 % 30 % 25 %

S&P 500: 20%

20 % 15 % 10 % 5% 0%

Overall Third-party Equipment Transportation Logistics Leasing Industry Services

Railroads

Air Parcel

Trucking Truckload

Ocean Carriers

Some of the large ocean carriers are familiy owned and controlled, implying that stocks are underpriced. Competitive advantages from capitalisation if owners sell down. Note that 3PLs have no problems in receiving funds

Source: Mercer Analysis. All figures for US public companies only, except ocean carriers. Compound annual growth rate for market capitalization, 1993 - 1997.

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The Logistics rationale (10)

Net logistics revenues for some 3PLs 1999, [million USD]: Ryder Penske Logistics UPS Logistics APL Logistics
Source: Armstrong & Associates

1287 959 488 406

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The logistics rationale (11)

Companies will in the future compete between supply chains and not within them
C o r e C o m p e t e n c i e s

Supply Chain A

The Market

Supply Chain B

Supply Chain C

The Customer: Share, Loyalty, Retention

Customer Value E.g. Ford/UPS/Exel

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Players in Maritime Logistics

45

Asset based logistics companies - Maritime

Logistics offerings can be seen as a continuum, ranging from single purpose offerings, to enhanced core business services to fully integrated separate profit centers Global physical, IT, analysis & risk sharing capabilities are built into providers competitive offerings.

Single purpose logistics firms

Some enhanced integrated logistics capability

Emerging profit driven logistics units

Fully autonomous physical & I.T. based logistics units

Future ??

Many container, break bulk and special purpose ships that provide high level maritime and even land transport services

ANZDEL K-Line NYK Mitsui WWL

OOCL
COSCO Hapag Lloyd Yang Ming

Maersk Logistics APL Logistics

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Maersk Logistics versus APL Logistics (1)

A comparison of the key logistics attributes of two of the most advanced marine logistics providers today is useful to benchmark ones own market position

Maersk Logistics
Strong endorsement from parent A.P. Moller, although appears less enthusiastic than APL

Key Attribute Attitude of parent company top management

APL Logistics
Per NOL top management and CEO future is in logistics. Sees liner shipping as mature industry, growing only if trade expands Independent profit center. May link more closely to parent goals, e.g. IS joint strategy, & exception management approach. Note McKinsey & Mercer roles today
47

Independent profit center & staff. Report direct to Moller not MS. Attempt to leverage liner investments and brand name

Relationship to parent & sister companies

Maersk Logistics versus APL Logistics (2)

A comparison of the key logistics attributes of two of the most advanced marine logistics providers today is useful to benchmark ones own market position

Maersk Logistics Revenues (net): $420m Margins: $12-24m

Key Attribute Estimated Financial status

APL Logistics Revenues (net): $406m Margins (EBIT): $28m

Handle all physical and information needs of key global industries and customers with strict accountability

Logistics mission

Link together all information from disparate operating units to enable end to end management of global customer shipments
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APL HomePort

From 10,000 to 67,000 Internet business transactions per month from Jan -98 to Sep -99 Types of transactions (Sep -99): Schedules 43% Tracing 32% B/L Print 8% Status 1% Other 14% Marine shipping business is mature. Logistics will be our focus, equaling 1999 container revenue of $4.2 billion within 3 years Fleming Jacobs, CEO, APL
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Asset based logistics companies Motor/air origins

Logistics offerings can be seen as a continuum, ranging from single purpose offerings, to enhanced core business services to fully integrated separate profit centers Global physical, I.T, analysis & risk sharing capabilities are built into providers competitive offerings

Single purpose logistics firms

10s of thousands of these firms exist today that provide single purpose capability

Some integrated logistics capability

Many firms claim to offer some level of multiple integrated services as part of core business

Separate profit driven logistics entity

Highly developed, technology rich company

Future ??

Potential UPS for conflict Fed Ex with goals RIL of parent & customers leads to separation: - Schneider - Menlo

50

Logistics outsourcing in auto industry

Large scale outsourcing has occurred in the auto parts sector in recent years, but now there is evidence of expansion to include finished units, e.g. Ford/UPS alliance:
Service related
Customer/dealer interface has shifted dramatically Goal to speed vehicle delivery to market by 40%

Cost related
Inventory carrying costs can be greatly reduced Inventory reduction versus customer satisfaction?

Technology related

Design and optimise network Goal is no excuse commitment to agreed metrics from UPS Logistics

UPS Logistics is capable of total analysis & redesign of network UPS has developed or formed various IS alliances UPS Logistics will add UPS has committed to long100 people while Ford will term systems support & cut to around 20 functionality UPS willing to be rewarded as % of cost savings Reduction of total cost including opportunity, 51 transport and inventory

UPS/Ford: North America

Current network versus new network transits
14,8

16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0

Transit time [days]

10 8 5,8

1999 Act (avg) Prior Plan (avg)

New Plan (max)

New Plan (avg)

Source: Global Automotive Logistics conference, 2000

52

UPS/Exel/Ford: Europe
Exel and UPS Logistics Group Europe have formed an alliance to review the effectiveness of all current inbound logistics processes for production parts and components for the Ford Motor Company in Europe. (10/24/00) Detailed process specifications will be jointly developed by Exel, UPS Logistics Group and Ford in an alliance that will provide supply-chain support across all Fords European plants. The deal follows the successful strategic alliance of the Ford Motor Company and UPS Logistics Group in the US and Exel's 20-year relationship with Ford, including established operations in Southern Europe, USA and Brazil. Ford's new inbound logistics network in Europe is designed to achieve significant improvements in transportation and distribution processes and inventory.
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Non asset based logistics companies

Logistics offerings can be seen as a continuum, ranging from basic forwarding firms to complex public and private solutions driven enterprises Who will emerge with sufficient IS content and SC skills to manage all or most customer logistics?
TPT Post

Small under capitalized firms

10s of thousands of these firms exist today that provide a wide variety of services

Niche focused intermediaries

Many firms in this category that survive by customizing their services to particular customers or industry sectors.

Hybrid relationships betwn asset and non asset firms

Examples: - Lufthansa Cargo Services - Cosco and Bolero alliance

2 types of mega global forwarders have emerged as result of acquisitions

Future ??

Type 1: Driven by public sector Type 2: driven by private FF expansion

Public driven expansion

Deutsche Post Private driven expansion ABX Logistics 54

Panalpina NFC/ Exel Schenkers

Competitor actions: Develop a competitor rating scheme

Example only

Logistics attribute
Parent company support Logistics vision

Key:
- Low - Medium

Current financial Marketing strat Operating strat

- High

55

E-logistics

56

Why e-logistics (1/2)

Increase value to customers, partners and suppliers through expanded service offerings Improve communication channel with established market, open to new segments/niches Improve efficiency, reduce costs (automate)
57

Why e-logistics (2/2)

E-logistics will bring three areas of functionality:
Increased pipeline visibility, e.g. global inventory management

Improved collaboration between all SC participants

Improved functionality in managing global SC, e.g. applications that can be downloaded, e.g. booking in transport, trade compliance in trade management, finance and duty paid landed costs, etc.

58

E-Logistics: Trends (1)

The significant increase ($1 trillion seems to be a consensus estimate) in global electronic logistics over the next 4 years will be driven by 3 forces:
Increase value to customers/partners/suppliers Lower cost Improved internet functionality

59

E-Logistics: Trends (2)

Supply chain visibility information transparancy
Internet open standard infrastructure Reduced IT systems cost (Internet/ASP) Customer core business focus outsourcing

Supply chains without fat impossible to hide & protect high profit activities over time Logistics capabilities of increasing importance

60

E Logistics: Implications
To compete globally shippers will focus on supply chain process improvement as a major source of competitive advantage. Increasingly this process improvement will be enabled by web-based information technology Carriers and other providers of logistics services must assess the impact these emerging logistics offerings have on their business and develop an appropriate strategic response
61

Group Work
What effect will the future competition between value chains have on traditional shipping companies? What effect will the future development in e-commerce have on traditional shipping companies? Which new fields of competence should shipping companies develop to participate in the new economy?
62

WW ASAs Logistics Strategy

63

The Need for Change

Customers Customers Value Chain
Customers Value Chain Planning and Forecasting Distribution/ Sales Procurement Manufacturing

WW ASAss Global Services (and Internal Processes)

WW ASAs s Organisation & Systems

64

Possible Project Approach

Understand the market development Identify core competencies Develop standardized products and services Develop global infrastructure Train organization Implement strategy (Balanced Scorecard)

65

Strategic Challenges
WW ASA has to develop a thorough understanding of both its customers and customers customers value chains

66

Strategic Challenges
Market developments
The customers and customers customers value chains Competitors value chain

Standardization of products and services Throughout identification of core competencies

67

The Strategic Processes in WW ASA

Market Analysis Scenarios Scenarios Scenarios Balanced Scorecard

GLM Concept Development

Pilot 1 Pilot 2 Pilot 3

Implement new services

68

WW Global Logistics Strategy

Physical cargo flow and WW focus WWL

Manufacturer

Land Transport

Port

Sea Transport

Port

Land Transport

Customer/ Dealer

BI BARWIL WW Chartering
69

WW Global Logistics Strategy

Develop cross-functional competence and cooperation in the WW Group:
- between the principal companies - between the principal companies and corporate - within the principal companies WW
50%

WWL

Wilship

Barber Int.

Barwil
Logistics Strategy

Logistics Strategy Logistics Strategy Logistics Strategy

WW Group Logistics Strategy

70

Logistics Strategy Project Structure

Feasibility Study
Dec 99 - April 00

Main Project

Implement new services

1999

2000

2001

2002
71

Global Logistics Strategy Project

Future Market/ Scenario Analysis Requirements Logistics Organisation Implications Competitor Analysis Knowledge Management Process Re-engineering Methodology Tools
Alliance Building Process

Logistics Services

Present & Future Customer Requirements

IT Solution

Alliance Agreements

Performance Measurement System 72

Supply Chain Reengineering

73

New Hollands Supply Chain Model

Credit check management Distribution Scheduling Markets forecast Demand capacity Reconcil (MOPs creation) Market allocation POCQA explosion Order inquiry (Locator) Order entry
Manufacturing Scheduling (W+7)
Schedules to suppliers

Shop Manufacturing floor Sequencing control (W+2) (W+0)

Supplier call-off

Shipment

Invoicing

Develop and Reporting Implement Improvements

Order tagging and specs change

2. Schedule

3. Execute

4. Report 5. Implement Improvements

1. Plan
Interaction between New Holland and WWL

74

Physical Cargo and Information Flow

Physical Cargo Flow
Manufacturer Land Transport Port Sea Transport Port Land Transport Customer/ Dealer

Land Transporter

Pre Booking

Pre Loading

Loading

Land Voyage

CustPost Disomer Evaludischarge Follow- ation charge up

WW

Pre Booking

Pre Loading

Loading

Sea Voyage

Post Disdischarge charge

Customer Followup

Evaluation

Land Transporter

Pre Booking

Pre Loading

Loading

Land Voyage

CustPost Disomer discharge Followcharge up

Evaluation

Manufacturer

Planning (orders/ prognosis)

Delivery/ production

Logistics follow-up

Customer Follow-up

Evaluation

75

Process Re-engineering
Map present state Reengineer distribution process/lanes Test & evaluate new distribution lanes Implement improved solution

Main deliveries: Detailed mapping of existing distribution process/lanes Proposed improved distribution process - validated and improved distribution process from WWL Identified possible improved IT solutions with; infrastructure, software and potential alliance partner(s)
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Germany - UK Dealer logistics chain

1 2 3 4

Pre-release

Load planning

Short-Sea voyage

UK distribution

Invoicing/Reporting
File

77

Germany - UK Dealer logistics chain

(Detail ed 1)
1.6 Rastatt 1.5 Dusseldorf 1.4 Graz 1.3 Bremen 1.2 Sindelfingen FR 1.7 Truck transport 1.9 Train transport 1.13 A-class Discharge Canada Quay 1.12 Sprinter Discharge Canada Quay 1.11 Cars & M-class Discharge Canada Quay 1.10 Cars & M-class Discharge Britannia dock 1.17 Surveyed ITS 1.18 Parked SeaRO 1.8 Truck transport

1.14 Washed SeaPARK

1.15 Surveyed ITS

1.16 Parked SeaPARK

Load sheets (electronic)

Vehicle record

Arrival to Zeebrugge report

Damage report

2.1 Build deliverable loads RL allocator

2.2 Print Load sheets Coblefret PL 2.3 Enter info details into vessel load planning Cobelfret

Load sheets (paper)

1.1 Create vehicle record DC X2

1.19 Enter arrival report into RL system ITS ZA

1.20 Enter damage report into RL system ITS 1.21 Advise RL for vehicle release DC Vehicle release advise (electronic) OK

2.4 Copy Load sheet to SeaPARK Cobelfret

Dealer Order

1. Pre-Release

2. Load planning

78

Germany - UK Dealer logistics chain

Total tim e: 60 hrs.

Immingham sailing
20 hrs.

Approx. 25 % of total shipped units

15

33%

40 hrs. 67%

10

5 Dead time

Hours

Active time 0 2.1 Build deliverable loads 2.6 Load lanes assembly 2.8 Move to berth 3.3 Load to vessel 3.5 Seavoyage 3.7 Discharge 4.1 Park in load lanes

-5

-10

-15

79

Time Mapping

Process 1

Pr 2

Process 5

Pr 7

Process 8

Process 3

Process 4 Process 6

Time
80

Cost Mapping

Costs

100 90 80 70 60 50 40 30 20 10 0

s 1 ss 2 ss 3 ss 4 ss 5 ss 6 ss 7 ss 8 s ce oce oce oce oce oce oce oce o Pr Pr Pr Pr Pr Pr Pr Pr

81