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1 Amcham Ho Chi Minh City Mark Ketelaar, Managing Director, DHL Exel Supply Chain Vietnam Delivering Excellence Together!
2 Deutsche Post World Net 2006!"#$ Page 2
3 One Stop Logistics Provider - DHL Same day, Express, Parcel, Freight Shipment Europeanwide Transport, Specialties Air Freight and Ocean Freight Services Contract Logistics & Spare Parts & Industry-specific Solutions Same Day Services European Community Express Worldwide Document Express Worldwide Parcel Expr. Full Truck Load Customs service Special Transports Air Freight Ocean Freight Industrial Projects Customer Program Management Supply Chain Management Warehousing Distribution Value Added Services Europack Europremium Euroconnect Logistics Outsourcing 4PL Services * This is only a selection from the portfolio Page 3
4 DHL Exel Supply Chain in Vietnam Contract Logistics: Warehousing, Distribution, Supply Chain Consultancy and Value Added Services like kitting, labeling, co-packing, POS, etc. Exel (Vietnam) Ltd. 100% FDI Warehouse operations in HCMC, Hanoi, DaNang & Haiphong Bonded and non bonded warehouses (total 12) Most facilities fully racked. Others block stacking Multi user and dedicated warehouse operations Customers in FMCG, Electronics, Industrial, etc. Page 4
5 Outsourced Logistics Services 2006 Logistic Activities in demand tend to be generally consistent with 2005 study findings with a focus on traditional 3PL services Page 5
6 Factors contributing to success with 3PLs Today, more and more customers are price sensitive, but are also demanding a high quality. To be successful within the 3PL Logistics market you definitely cannot focus on one or the other, you have to have both and above all create real value for the customers Page 6
7 Quantifiable Measures of 3PL Success 3PL users are receiving quantifiable benefits such as reduced logistics costs, fixed assets and shortened average order cycle time. More efficiency gain seems to be available in Asia-Pacific and Latin-America Page 7
8 Outsourcing Key Drivers Reasons for outsourcing are: To gain greater flexibility To reduce costs To improve service to customers To focus on core business To reduce capital from sales of existing assets To provide a clearer view of distribution activities (costs, service levels) The opportunity to apply performance related incentives To gain access to leading edge technology To gain access to wider management experience and knowledge beyond their own industry Page 8
9 4 Requirements for successful outsourcing Outsourcing - requirements for success A company must evidence four major characteristics that in combination make logistics outsourcing viable. Low Low Company need Tangible value High Successful Logistics outsourcing opportunity High Low Supplier credibility Management commitment Low Page 9
10 Business Strategy is driving the Supply Chain Strategic importance First and foremost it is the overall business strategy that must drive your customer service and supply chain strategy Business Strategy Customer Service Strategy Supply Chain Strategy Go to market decisions Resource utilization Management priorities Channel selection Product/market allocation Service offerings Number and location of facilities Inventory positioning Transportation solutions Partner selection Page 10
11 Business Strategy is driving the Supply Chain Value proposition A different strategic focus leads to a different supply chain configuration. Value discipline Perception characteristics Product leadership Operational excellence Customer intimacy Customer s perception of you as a provider of products and services Innovative A great price Leading edge No hassle firm Constantly pushing They never make new products mistakes Unique services Exactly what I need Responsive Supply chain characteristics Short pipeline Focus on eliminating tiers from the chain Robust Capable of dealing with high volumes Focus on cost Flexible Individualized solutions Linked to customer process Agile Lean Responsive Page 11
12 Skills & People Delivering Key Success Factors Professional approach Higher Service Levels Global Consistency across all services Better Customer Understanding Strategic Partnerships Program & Key Account Management proven management skills for effective 3PL & LLP solutions key players in Customer satisfaction and retention Project Implementation strong implementation skills to deliver minimum risk to business continuity practitioners of DePICT, focused on standard implementation methodology worldwide Supply Chain Consultancy expertise in developing optimal supply chain solutions global / regional / country level experience Industry Focused Teams global / regional industry heads with specific country support leverage on existing operations and knowledge across Customers within same industry Logistics Information Systems Expertise development of management systems for warehousing, inventory and transportation needs scaling IT recommendations for operations needs Page 12
13 Centralized vs Decentralized Explanation of dynamics The choice between a more de-centralized or centralized supply chain configuration can have significant impact on the cost structure. RDC Customer Vendor Plant 3. Regional DC RDC Customer Cost item Decentralized Centralized Inbound transport Outbound transport Inventory Warehousing Vendor Plant NDC Customer 2. National DC Page 13
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