supply chains and private sector dynamics. 3- 2 major trends in freight logistics supply chains...
TRANSCRIPT
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Supply Chains and Private Sector Dynamics
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• Major trends in freight logistics
• Supply chains basics
• Implications for planning
Agenda
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• Productivity
• Congestion
• Input cost factors
Trends in Trucking
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Trends in Trucking - and More
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Mar-94 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 Mar-06
$ p
er g
allo
n
Pump Price for Diesel (U.S.)
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Trends in Rail Freight
• Intermodal growth
• Capacity constraint
• Capacity allocation
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Trends in Waterborne Freight
• Mega-ships
• All-water routes
• Transloading
• Short-sea
prospects
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Trends in Pipelines
• Weather risks
• Ethanol
conversion
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Trends in Air Cargo
• Ground substitution
• Global carriers
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Trends in Logistics
• Visibility
• Globalization
• Fast Cycle Logistics
Radio Frequency Identification Tag Applications
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Globalization: Trade Percent of US GDP
3%
6%
9%
12%
15%
18%
21%
1975 1980 1985 1990 1995 2000 2005 2010 2015
Imports Exports
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Supply Chain Basics
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Traditional Logistics
METHOD OF CONTROL SUPPLY CHAIN
MATERIAL OWNERSHIP
TRANSPORT SYSTEM
INFOSYSTEM
MATERIAL FLOW
WHOLESALEWHOLESALE
RETAILRETAIL
INTEGRATEDMANUFACTURER
PUSH TO CUSTOMER
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Fast Cycle Logistics
KEY: MATERIAL FLOWINFORMATION FLOW
MATERIAL OWNERSHIP
TRANSPORT SYSTEM
INFOSYSTEM
METHOD OF CONTROL
SUPPLY CHAIN
GLOBAL LOCATION
KNOWLEDGE SPECIALISTS
INTEGRATORINTEGRATORINTEGRATOR
PULL FROM
CUSTOMER
STAGING POINTSTAGING POINT
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Supply Chain Management
• Transforms non-valued added activities into strategic management functions
• “Just-in-time” transit replaces inventory
• Reliability surpasses cost as most important transportation consideration
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Advanced Manufacturing
• Reliable and timely
• Higher value shipments
• Just-in-time manufacturing
• Multi-modal, truck dominant
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Natural Resource Manufacturing
• Bulky goods
• Low damage, low cost
• Less emphasis on speed
• Rail and barge dependent
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Non-Durable Manufacturing
• Heavy or high cube
• Moderate to high value
• Moderate to high speed
• Local ends of long supply chains
• Truck dominant
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Service Industries
• Accessibility
• Reliability
• Smaller, more frequent trips
• Truck and express package dependent
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Global Supply Chain: High Tech
SPECIAL PRODUCT & DC
SPECIAL PRODUCT & DC
ASSEMBLY & DC
ASSEMBLY & DC
PARTS DC
PARTS DC
URGENTDC
URGENTDC
BUSINESSBUSINESS
CONSUMERCONSUMER
CONSUMERCONSUMER
BUSINESSBUSINESS
IMPORTAIRHUB
IMPORTAIRHUB
IMPORTSEAPORTIMPORT
SEAPORT
Modal KeyTruckloadIntermodalLess Than Load (LTL)
AirPackage
COMPANY CONTROL
COMPANY OWNERSHIP
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Global Supply Chain: Retail Office
RETAILOUTLETSRETAIL
OUTLETSLOCAL MARKET DIRECT
WAREHOUSEWAREHOUSE RETAILOUTLETSRETAIL
OUTLETS
WAREHOUSEWAREHOUSE RETAILOUTLETSRETAIL
OUTLETS
REVERSE LOGISTICS
( Multi-stop Loop )
PORTPORT
EXTRA- REGIONALVENDOR
EXTRA- REGIONALVENDOR
REGIONALVENDOR
REGIONALVENDOR
Truck – DrayTruck – LTL/Pkg.
Modal Key
STAGINGSTAGING
WHOLESALEREGIONAL
DC
WHOLESALEREGIONAL
DC
EXTRA-REGIONAL
DC
EXTRA-REGIONAL
DC
TruckloadIntermodal rail
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Regional Chain: Consumer Beverages
CLUBCLUB
MULTIPLE TRIPS
BULK ORDER DELIVERY1 – 3 Stops per TripTo Clubs & Grocery Stores
SMALL ORDER DELIVERY10 – 30 Stops per TripTo Convenience Stores, HotelsRestaurants, Bars, Offices
GROCERYGROCERY
GROCERYGROCERY
MULTIPLE STOPS MULTISTOPPOCKET
(3 Mile Radius)
STEM ( 5 – 15 Miles)
EXTERNALMARKETS
EXTERNALMARKETS
LOCAL PLANT & DC
LOCAL PLANT & DC
EXTERNALPLANT & DCEXTERNAL
PLANT & DC
Production Flow
Local Receivers
Modal Key
Production & Wholesale Flow
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High Service Chain: Health Care
REGIONALDC
REGIONALDC1 – 2 HOUR
SERVICE
OVERNIGHTSERVICE
4 – 6 HOURSERVICEHOSPITAL
CENTRALDC
CENTRALDCVENDORVENDOR
VENDORVENDOR
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Implications for Planning
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Planning Considerations
• The Supply Chain = the Business Enterprise
• Business competitiveness depends on transportation performance
• Chains are sensitive to time and disruption
• Chains cross jurisdictions
• Needs vary by chain
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Freight Planning and Economic Competitiveness
• Travel and vehicle operating costs LOS
• Inventory carrying costs Reliability
• Asset utilization costs Land use
• Access to markets Multi-jurisdictional
planning
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• Fuse information with technology
• Demand high performance transportation system
• Impacts supply chains and business models
Businesses Compete on Logistics Costs