Hewlett-Packard. Logistics Outsourcing. -Competitive Advantage. Big is Beautiful Best in class Multiple 3PLs Plug and Play Opportunity in 4PL space?
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1 Hewlett-Packard Logistics Outsourcing -Competitive Advantage Big is Beautiful Best in class Multiple 3PLs Plug and Play Opportunity in 4PL space? Jimmy Khoo Director APeJ Logistics
2 Big is beautiful! Supply Demand Planning Supply Demand Planning Buy Make Distribution & Logistics Buy Make Distribution & Logistics Suppliers Buy Supply Demand Planning Make Distribution & Logistics s Suppliers Buy INBOUND LOGISTICS (4PLs) Supply Demand Planning DISTRIBUTION & Distribution Make LOGISTICS & Logistics (4PLs) s Supply Demand Planning Supply Demand Planning Buy Make Distribution & Logistics Buy Make Distribution & Logistics From independent market/business unit management to consolidated management of inbound, Distribution and Logistics Consolidation/simplification - at least lead to 10% to 15% savings Reduced 3PL partner base from 13 to 7 for Air freight, 7 to 3 global sea carriers 1
3 best in class service provider key to our success Characteristics of best 3PL HP s required World Class Performance Metrics quality quality consciousness consciousness global global reach reach cost competitive cycle time quality professionalism customer experience progressive best in class solutions volume leveragability system reliability risk taking sound financial standing IT infrastructure delivery performance 2
4 one best in class is not enough bridging the gap of World Class Services customer experience delivery options deliver per customer request Cost Competitiveness one face to customer Proactive communication one delivery, one invoice defect-free delivery responsive reverse logistics accurate invoicing need for multiple 3PL network optimization managed menu of services one global shipment visibility portal one global transaction processing systems integrated performance management system IT gateway solutions (B2B & A2A) HP Logistics as 4PL or value added Lead Logistics provider single 3PL pitfall localized weakness infrastructure overload cost optimization business contingency 3
5 Plug & Play - loosely coupled architecture best fit in today s dynamic environment FF/Carriers ERP, MRP ERP, MRP B BFT e-payment 2 B A 2 A 3PL e-visibility Internet Internet etracking front end portals 4
6 The Industry - The evolution of 4PLs Key Asset Soft IT Service + Consultants 4 PL Providers Forwarders 3 PL Providers Hard 2PL Providers Postal Operators Integrators Simple Tasks Modules System Leadership Complexity of Logistics Execution Complexity 5
7 The Industry - Characteristics of 4PLs and the Players today Industry Players Solution Orientation Logistics Know-how IT Strengths & organization Skill Independence Innovative 3PLs Consultancy Firms Real 4PL 6
8 Hierarchy of Logistics Core Competence - Opportunity in 4PL space? Value Added Core Competencies Level 1 Programs Logistics Leads Logistics knowledge Operation HP Logistics Level 2 One stop Logistics support Coordinate Mundane operations Reporting & data gathering Value Service HP Logistics Partner (4PL) Level 3 4 wall operations Transportation & forwarding Multiple 3 rd Party Logistics Resource Intensiveness 7
9 Logistic Core Competencies Outsource to 3PLs Value Added One Stop Logistics Support (VSP) H L Warehouse Operation (pick & pack, receiving, etc.) Physical Inventory (cycle counting) Hand Core Transportation & forwarding 8 BU & Logistics Program / Project Execution Logistic Network Design and Modeling Logistic Business Process Design and Analysis 3PL Carrier Relation and Performance Capacity and Forecast Planning Overall Operation, Prioritization and Decisions Freight Cost management Operation, Shipment, Status Report compilation BFTs Reporting Claim Processing Response to day to day logistics related Escalation Prevention and Expedites queries Freight Cost payment integrity monitoring & and requests (eg mode change, schedule) audit Coordinate container / cargoes / carrier booking in 3PLs Support BU & Logistics Programs on data gathering Competitive Advantage H
10 Full 4PL or Lead Logistics Provider Business Proposition: We offer One stop, World-Class and Competitive Logistics Services and solutions To our customers Complete 1 stop logistics services & solutions Centralized of physical fulfillment End to end visibility via proven track and trace Transaction management Freight Cost reduction (economy of scale) Best of the best services for competent 3PL partners Leverage on HP s global logistics network Key performance metrics management Supply chain consultancy Logistics B2B system implementation Constants developments of in-house innovative SC solutions Suppliers Enhanced 4PL Value Proposition s s Overall SC Optimization for the 4PL customer Improved delivery performance Reduce inventory Reduce fulfillment cycle time Increase overall productivity Lower SC cost Improve order fill rate Improve capacity utilisation 9
11
12 Target Market Analysis: ASIA (exclude Japan) - Opportunities for Logistics Outsourcing 1. Migration of manufacturing bases to Asia 2. Size of Asia Logistics outsource market US$9billions in 2002 to US$30billions in 2005 (IDC Research) 3. Emergence of Asia hubs development of WW manufacturing and logistics infrastructure (globalisation drive) 4. Fragmented and less competitive industry in the area of supply chain. 5. Diversity of market and inter-border regulations, 6. Proliferation of Logistics departments that manage the increased 3PL relationships and coordination.(up to 15 to 20 partners). 7. Pan-Asia and Global sourcing. 8. Increased investment in ERP and e-commerce 9. China WTO entry changing logistic landscape 11
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