Creating Lean, Agile and Demand Driven Supply Chains Kuehne + Nagel Integrated Logistics

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1 Creating Lean, Agile and Demand Driven Supply Chains Kuehne + Nagel Integrated Logistics

2 Content 1 Introduction 2 Integrated Logistics Infrastructure 3 Engagement Approach 4 Pricing 5 Sustainable Competitive Advantage Kuehne + Nagel Integrated Logistics 03/02/2014 p. 2

3 A Snap Shot of the Global Logistics Market Growing Demand for End-to-End Services Globalized and fragmented supply chains get predominant in the market Market volatility drives the need for synchronization that results in end-toend visibility Customers tend to source logistics management to avoid technology investments and learning curve Industry wants to access best practices, cost variabilization and accelerate time-to-value Supply chains are progressively following end-to-end industry/company specific standards Kuehne + Nagel Integrated Logistics 03/02/2014 p. 3

4 Kuehne + Nagel A Global Logistics Network Did Facts you & Figures know? Worldwide Network 1000 locations in more than 100 countries Integrated Service Portfolio ~ 63,000 employees Warehousing Space 6.5 Million m2 Turnover ,753 mchf Seafreight Top 1 Airfreight Top 3 Contract Logistics Top 3 Road & Rail Top 6 Integrated Logistics Top 3 Sustained year-on-year double digit growth in managed freight Strong partnerships with extensive range of preferred ocean carriers Well positioned in the top league Leader in innovative cargo management concepts Global Cargo 2000 Phase II certification Strong partnerships with preferred airlines Top 3 global contract logistics provider Worldwide network of warehouse & distribution facilities Dedicated and shared warehousing & distribution management European Top 6 Provider Focus on network services, LTL & FTL business Pan-European coverage of 38 countries Innovative intermodal solutions Top 3 Global Lead Logistics Provider (LLP) Industry specific solutions for end-to-end supply chain Worldwide organization with dedicated teams and shared Logistics Control Centres Kuehne + Nagel Integrated Logistics 03/02/2014 p. 4

5 Kuehne + Nagel Integrated Logistics Value Proposition Kuehne + Nagel Integrated Logistics provides managed services tailored to meet customer challenges, with an emphasis on simplifying supply chain complexity through integrated end-to-end solutions, reducing total cost of ownership and maximising service levels. Integrating these managed services with collaborative concepts into a cohesive model creates a competitive advantage for our customers in the marketplace. Kuehne + Nagel Integrated Logistics 03/02/2014 p. 5

6 Integrated Logistics Covers All Transport and Service Modes Along Customers Supply Chain Inbound Logistics Supplier Manufacturer Reverse Logistics Receiving Customer Outbound Logistics End Consumer Kuehne + Nagel Integrated Logistics End-to-end Management across the supply chain True one-stop shop and integrated global IT solution Compliance & Documents Sea Freight Air Freight Road & Rail Warehousing & Distribution Last Mile / Integrators Kuehne + Nagel Integrated Logistics 03/02/2014 p. 6

7 Reducing Costs and Maximising Service Levels Focus Areas of Cost Optimization Transport Inventory Import Duty, Customs & Taxes Warehousing Rates Capital Duty on Transport Equipment Modes expenditure & Broker fees capacity Equipment Financing Value Added Tax Storage space utilization Obsolescence Documentation Blue collar Special handling Damage Perishability Management and Information Systems Kuehne + Nagel Integrated Logistics 03/02/2014 p. 7

8 Integrated Logistics Creates Additional Value Key Benefits for Customers End-to-End Visibility Managed end-to-end solution integrating all transport and service modes across the supply chain Visibility and comprehensive information Monitoring Performance management and cost control One-face Single point of contact Technology Integrated global IT solution including centralized billing Synergy Synergies from Logistics Control Centre environment Kuehne + Nagel Integrated Logistics 03/02/2014 p. 8

9 Content 1 Introduction 2 Integrated Logistics Infrastructure 3 Engagement Approach 4 Pricing 5 Sustainable Competitive Advantage Kuehne + Nagel Integrated Logistics 03/02/2014 p. 9

10 The Integrated Logistics Infrastructure is Supported by 600 Employees and 6 Logistics Control Centres Birmingham Wroclaw Luxembourg Raleigh, NC Delhi Logistics Control Centre Singapore KN IL s regional capabilities and resources are globally aligned. We support our customers in virtually any location. Kuehne + Nagel Integrated Logistics 03/02/2014 p. 10

11 Results Delivered Through a Combination of Customer Dedicated Services and Shared Services Customer dedicated services Business Management Continuous Improvement Logistics Partner Management Customer Analytics Shared services Order Management Transport Planning Customer Service Visibility & Event Management Security Monitoring & Control Freight Audit & Payment Network Engineering Kuehne + Nagel Integrated Logistics 03/02/2014 p. 11

12 Business Management and Continuous Improvement Strategic and Tactical Services Manage: Controlled end-to-end logistics fulfillment at variable cost through KN Control Tower Manage Evaluate: Capture and analyze exhaustive KPI s to drive objective decisions Optimize Evaluate Optimize: Cost-to-serve minimization under service level constraints delivered by dedicated re-engineering teams Kuehne + Nagel Integrated Logistics 03/02/2014 p. 12

13 Logistics Control Centre (LCC) The Service Menu Covers the Lifecycle of an Order Visibility & Event Management Order Management Transport Planning Customer Service Freight Audit & Payment Received / generated Transport order Freight Audit forecasts and Revision of consolidation Freight Invitation inventory windows Routing, rating and Freight Payment Replenishment Proposals equipment forecast Reception & completion of Customer service requests, order data with master data non conformity Mgmt & PoD augmentation Mgmt Priority Freight Authorization Document Mgmt. Back order management Security Monitoring Merge in transit/order line Insurance Services consolidation Harmonized communication lines / Daily Interaction / Scalable & globally aligned process architecture Kuehne + Nagel Integrated Logistics 03/02/2014 p. 13

14 Information Systems Provides a Service-Oriented Architecture Partner Application Layer Customer ERP Customer OMS Customer CRM 3PL TMS Master Data Other Systems 3PL WMS KN Enterprise Service Bus KN Application Layer Transport Mgmt. Services Order Mgmt. Services Inventory Opt. Services Whse Mgmt. Services Master Data Services Reporting Visibility KN Data Warehouse The Integrated Logistics enabler approach is operated as a fast track plug-in to existing customer systems using KN s Global Enterprise Service Bus. Scalable and flexible architecture allows for seamless template integration with multiple external system and data sources Kuehne + Nagel Integrated Logistics 03/02/2014 p. 14

15 Content 1 Introduction 2 Integrated Logistics Infrastructure 3 Engagement Approach 4 Pricing 5 Sustainable Competitive Advantage Kuehne + Nagel Integrated Logistics 03/02/2014 p. 15

16 The Think Big, Start Small and Scale Fast Approach Drives Improvement Think BIG Start small Scale fast Organisational support Scope, actual metrics and competitive requirements Business case Verification of electronic data provision and standard processes Sustainable proto-version with reduced functionality and integration Deploy Value Adding Projects (low dependency on additional software) Learning / adaptations Functional enhancements, if required Deployment to full scope sequenced per market, factory or supplier Extended Value Adding Projects Approval to proceed First success propelling further changes Improvements as envisaged Kuehne + Nagel Integrated Logistics 03/02/2014 p. 16

17 Risk Control Based on Defined Gateways along the Engagement Cycle Underlines KN s Commitment to Quality Sales Phase Opportunity Assessment Solution Design seamless handover Negotiation & Contract Initiation Implementation Phase Plan & Design seamless handover Realisation Validation Deployment Operations Gates Defined Gates from Sales Phase to Operations ensure: Documented and auditable sign-off process with clear roles, accountabilities and approval levels Pre-alert indications of potential risks Systematic escalation paths Early execution of corrective actions On-time monitoring and reporting Kuehne + Nagel Integrated Logistics 03/02/2014 p. 17

18 Implementation Management with Dedicated Teams Follows Proven Methodology to Set-Up Your Business Migration Go-Live & Hand-Over Post-Go-Live Support Hand-Over & Kick-off Project Setup Business Requirement Gathering Process-, Solution and IT- Architecture Design Operational Setup & Trainings User Acceptance & System Integration Testing Operational Setup Interface & IT-Enabler Configuration Kuehne + Nagel Integrated Logistics 03/02/2014 p. 18

19 Content 1 Introduction 2 Integrated Logistics Infrastructure 3 Engagement Approach 4 Pricing 5 Sustainable Competitive Advantage Kuehne + Nagel Integrated Logistics 03/02/2014 p. 19

20 Pricing Structures Focus on Management Fee or All-In Prices Management Fee Transport Rates All-In End-to-End Rates Warehousing Cost Kuehne + Nagel Integrated Logistics 03/02/2014 p. 20

21 Gain Share to Synchronize Incentives The less you pay, the more we earn Present Future Logistics Management Cost Client Savings KN Gain Share Management Fee Logistics Operating Cost Optimised Logistics Operating Cost Kuehne + Nagel Integrated Logistics 03/02/2014 p. 21

22 Content 1 Introduction 2 Integrated Logistics Infrastructure 3 Engagement Approach 4 Pricing 5 Sustainable Competitive Advantage Kuehne + Nagel Integrated Logistics 03/02/2014 p. 22

23 Sustainable Competitive Advantage Cumulatively Encompasses All Features Customized and modular approach Gain sharing models Transparency & Control Continuous improvement and innovation Zero disconnect in customer engagement cycle Management and integration services Integrated plan-build-run phases Independent from execution services modes Capabilities in business process (out)-sourcing field Strong Change Management Industry Expertise Experience, hands-on, scalability and speed Kuehne + Nagel Integrated Logistics 03/02/2014 p. 23

24 Thank You!

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