An Introduction to Third Party Logistics. Panama - September 20, 2012

Transcription

1 An Introduction to Third Party Logistics Panama - September 20, 2012

2 If you don t like change, you will probably enjoy irrelevance even less

3 CHAOS - OPPORTUNITY Before the beginning of great brilliance, there must be chaos. Before a brilliant person begins something great, they must look foolish to the crowd.

4 Overview What are 3pl s Why use them Tips for 3pl implementation Adding 3pl value Locative Logistics Vested Collaboration

5 The line between disorder and order lies in logistics. - Sun Tzu

6 Types of 3PL Providers Transportation Based Leveraged 3PLs use assets of other firms. Non-leveraged 3PLs use assets belonging solely to the parent firm. Examples: Ryder, Schneider Logistics, FedEx Logistics, UPS Logistics Warehouse/Distribution Based Many have former warehouse and/or distribution experience. Examples: OHL, Genco, Exel, Caterpillar Logistics, Uti, and CEVA

7 Types of 3PL Providers Forwarder Based Very independent middlemen with forwarder roles. Non-asset owners (NVO s) that provide a wide range of logistics services. Examples: Kuehne & Nagle, Panalpina, DHL, C. H. Robinson, and APEX. Financial Based Provide freight payment and auditing, cost accounting and control, and tools for monitoring, booking, tracking, tracing, and managing inventory. Examples: CTL, Data2Logistics, GE Information Services, FleetBoston. Information Based Significant growth and development in this category of Internet-based, business-to-business, electronic markets for transportation and logistics services. Examples: Transplace, GT Nexus, nvision Global Technology.

8 Why Use 3PL s? Save time Limit your CAPEX and HR investment: Trucks Training Development Help expand New markets, verticals International Narrow your focus Allows you to focus on your core activities Don t get spread too thin Reach more customers more effectively Ensure measurable benefits in delivery times, inventory levels, returns Leaner, meaner company, embrace change

9 Levels of Outsourcing Transactional Outsourcing: Based on transactions, with no long term contracts and no bonding between the 3PL and the outsourcing company. Tactical Outsourcing: Outsourcing on a long term basis with negotiated contacts and integrated IT systems to facilitate free information flow and create supply chain visibility. Strategic Outsourcing: Based on long-term relationships with successful outcomes, 3PL companies become partners in supply chain management and establish transactional transparency.

10 3PL Definition Can be ambiguous as there are many definitions Some say all or a significant part Some say at least one part Best definition is a combination: Businesses that provide one or many of the following logistics services: Transportation Management Public/Contract Warehousing Distribution Management Freight Consolidation Information and visibility

11 3PL Definition A 3pl is a firm which provides multiple logistics services for use by customers. Preferably, these services are integrated, or bundled together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufactures, and finished products from manufacturers to distributors and retailers.

12 Successful Implementation of a 3PL Why you want to select the right provider the first time Only about 65% of companies believe their provider is doing a good job. 55% of logistics outsourcing contracts end in three to five years Some sources list as many as 14 key tips for success, but we are going to focus on the five most important issues.

13 Tips for Successful Implementation 1) Have an outsourcing strategy Know what your outsourcing strategy is. It needs to be well thought out and measured against in house solutions and capabilities. SWOT analysis. As a company you should understand the strengths, weaknesses, opportunities and threats of outsourcing logistics, rather than keeping them in house. 2) Do your homework Do a comprehensive study Clearly document advantages, challenges, costs and benefits. Document expectations Set down expectations in clear terms and include current costs. Create a robust selection process. Invite companies in to give a formal presentation without giving requirements. This can help document their strengths and weaknesses. Make a site visit to the 3PL, and talk with its existing customer.

14 Tips Continued 3) Measure and review performance Have a efficient and accurate measurement system. Qualitative measures that focus on effectiveness and quantitative measures that focus on efficient utilization. Have an efficient costing system This will help you to understand the costs involved in outsourcing. Are we making money doing this? 4) Create an Implementation Strategy Create a project plan road map Be clear who does what, create a project management team with members from both organizations and review progress vs. planned milestones. 5) Nurture the Relationship Collaborate so the relationship develops outsourcing success Create mutual trust, respect and a sense of integrity.

15 However beautiful the strategy, you should occasionally look at the results. - Winston Churchill

16 Adding 3pl Value: Three Success Drivers Collaboration Innovation Locative Logistics

17 Collaboration Working jointly with others, especially in a cross-functional, intellectual endeavor. Equal parts people and technology Deepening and aligning relationships Suppliers, Customers, or Partners? Creating visibility and trust early Leveraging relationships for lower costs

18 Innovation The introduction of something new; an idea, method, device or technology. Game Changers Differentiate one company from another Market makers vs. share takers Scalability Innovation cannot be successful if it is not scalable One-off solutions add complexity to large operations Involves risk often personal risk

19 Locative Logistics Locative logistics is a scalable supply chain platform based on application programming interfaces (API) and geographic information systems (GIS) applications, which supply specific information about the physical presence, strategic importance, and economic impact of products or cargo in-transit. This is a situational assessment of a location, or locations in a supply chain. Note: The technologies that will be become more prevalent will be GPS, iphones/ipads, GIS, API, augmented reality, Google Maps based platforms and social media apps that layer data on a location.

20 There is nothing so useless as doing efficiently that which should not be done at all. Peter Drucker

21 To be successful in this new knowledge economy, empathy and collaboration need to focus on the same horizon toward the mutual destination of innovation. Collaborating creates value, and executive empathy makes mutual innovation possible.

22 We are moving into the conceptual age of business, where the right price is not necessarily the lowest price. It is no longer enough to be a great numbers person metrics scorecards dashboards or technology We now expect more of our leaders, with empathy (being attuned) and collaboration skills among those qualities most desired.

23 Not everything that counts can be counted, and not everything that can be counted, counts. - Albert Einstein

24 Traditional Supply Chain Partnerships Supply Chain Partner Traditional Leading Visionary STRATEGIC SERVICES PLANNING & OPTIMIZATION SERVICES MANAGEMENT SERVICES CORE SERVICES Transportation Management Freight Forwarding Air & Ocean Transport Material & Production Planning Network Optimization Partner Management Materials Management Common Carriers Transport Services SC Consulting Services Integration Services Strategic Sourcing & Procurement Inventory Optimization Supply & Demand Planning Information Optimization Financial Management Warehouse Management Dedicated Contract Carriage Order Management Public or Shared Warehousing 3PL Customer Customer Lead Logistics Provider (LLP) Customer Supply Chain Partner (SCP) Customer needs: Supply chain transformation Operational excellence Agility Increase shareholder value

25 Vested Collaboration Tenants Speed (Perception) Cloud Based (Open) People & Process (Collaboration) Empathy (Alignment) API, GIS, & AR (Individual) CiP & Training Locative Logistics Less Ego (Leadership) 25

26 I don t want to sell anything, buy anything, or process anything as a career. I don t want to sell anything bought or processed, or buy anything sold or processed, or process anything sold, bought, or processed, or repair anything sold, bought, or processed. You know, as a career, I don t want to do that. - Lloyd Dobler (Say Anything 1989)

27 Questions? Michael J. Stolarczyk Ports America 525 Washington Blvd 16th Floor, Suite 1660 Jersey City, New Jersey W E T michael.stolarczyk@portsamerica.com

28 Ports America Introduction Ports America is the largest independent port-terminal operator in North America, handling more than 12.7 million TEU, 4.3 million vehicles, 8.9 million tons of general cargo and 1.6 million cruise ship passengers. Owned by Highstar Capital, and is responsible for port development, investment, operating and stevedoring activities for the last 89 years. Ports America currently operates over 80 terminals in over 42 port locations in the United States, employing more than 12,000 people at its operations through its wholly owned subsidiaries, concessions, or joint venture partners. 28