the role of transport in the supply chain - ulisboa · pdf filecarrier rfi, rfp, rfq...

Lisboa, 26/05/2015

The role of transport in the supplychain

Agenda

I. Value chain

II. Supply chain

III. Logistics market

IV. GEFCO profile

V. Challenges in Transport Management

VI. Control Tower solution

i. Scope & components

ii. Target market

iii. Service levels

iv. Pricing models

v. Value proposition

vi. Economic value

VII. Appendix

2

Sources of differentiation in a construction value chain

3

e.g. construction supply chain network

4

Supply chain, logistics chain and transport chain

Source: adapted from Woxenius, J. and J-P Rodrigue (2011) "Detours in Supply, Logistics and Freight Transport Chains".

5

Supply chain, logistics chain and transport chain

6

Global trade 2011 and growth 2010-11

7

Global logistics share by region and market 2011

8

Development of contract logistics players

9

Evolution in Provider Relationships

Traditional Typical Leading Visionary

‘80’s ‘90’s Late ’90’s Millennium

Distribution of Responsibilities

Planning

Coordi -

nation

ExecutionFreight

forwar -

ding

Ware -

housing

Customer

3PL/contract logistics

Customer

Value

added

services

Freight

forwar -

ding

Ware -

housing

Value

added

services

Freight

forwar -

ding

Ware -

housing

Other

pro -

cesses(1)

Customer

Supply

Chain

OrchestratorSupply Chain

Manager

Customer

Value

added

services

Freight

forwar -

ding

Ware -

housing

4PL

3PL/ contract logistics

LLP

Core

competence

of customer

10

Largest contract logistics providers and global contract logistics market share 2013

11

Main players on the logistics market

12

Which industries/verticals are covered by which CL provider

13

Service profile of contract logistics providers

14

GEFCO – Company Profile

As a European leader in automotive logistics and

a global player in industrial logistics, GEFCO

provides its customers with comprehensive

solutions for optimising their flows, at each stage

in the supply chain, all over the world. With its

engineering offices and the expertise of its

teams in the field, the Group is able to meet the

most complex of logistics challenges.

With the backing of the JSC Russian Railways

(RZD) and PSA groups, GEFCO operates in every

continent and runs a global network. As one of

Europe’s ten largest logistics integrators, GEFCO

also has the biggest private land-based

multimodal transport network, consisting of 80

hubs and depots in strategic development zones

and 65 logistics platforms.

Thanks to its demanding standards in terms of

quality, its 4PL expertise and the appeal of its

services which are ever more advanced and

innovative – Finished Vehicles Logistics,

Overland, Warehousing & Reusable Packaging,

Overseas – GEFCO achieved a Turnover in 2013

of 4 billion euro of which 77% was in

international flows.

15

GEFCO – Facts & Figures

16

GEFCO in Portugal

Overland

Overseas

Warehousing & Reusable Packaging

Finished Vehicles Logistics

Porto

Mangualde

Pombal

Alverca

SetúbalAlgés

2013

TOP 5 in logistics

and transport

Turnover

€64,5 million

6 sites +

Headquarter in

Algés

168 employees

CertificationISO 9001

ISO 14001

AEO

17

Finished Vehicles Logistics

Multimodal approach transport by rail, sea and road.

PPO: window engraving, installation of fog lamps and alarm systems

PDI: dynamic testing, washing, quality control, mechanical tests

> Global network of centers devoted to vehicle inspections

FROM PRODUCTION LINES TO POINTS OF SALE

> Optimized distribution schemes

Distribution to dealerships in close collaboration with the dealerships and therental companies

OTHER VALUE ADDED ACTIVITIES

> Transformation of commercial vehicles

Customization of vehicle fleets: installation of tipping buckets, refrigerated

compartments, etc.

> Reconditioning of used vehicles

In addition to new vehicles, GEFCO reconditions used vehicles (mechanics, body work, painting, etc.)

18

OverseasBreaking down boundaries

19

• Global sea and air freight transport solutions

• A strong presence in Asia (Chinese International

Logistics Platform, or PLIC, in Shanghai)

> An international presence

Efficient management of the supply chain

• Customs engineering

• Tax representation

• Information systems performance (Isygo and I-Trek

portals)

> A comprehensive offer

> Special events logistics

GEFCO Events

Events logistics solutions to support exhibitors around the

world (sporting and cultural events, motor shows, etc.)

19

Warehousing and Reusable Packaging

Improving the reliability and the flow of the supply chain

> Reusable packaging

• Customized solutions for warehousing logistics

• A global specialist in inbound flow engineering

• Cross-docking, delayed differentiation, kitting customization,

etc.

> Warehousing

• Reusable packaging to sustainably increase productivity

• Range of eco-friendly solutions for the management of

industrial packaging flows

20

OverlandOptimizing logistics for land transport flows

3 business lines

• Groupage

• Transport of full/part loads

• Customized express delivery

> Global know-how

Customized value-added operations

• Control Tower

• Just-in-time transportation

• Customized dashboards

• Secured collaborative portals, etc.

> A high quality service

Customized logistics schemes

• Reducing transportation costs

• Reducing stocks

• Multimodal solutions, etc.

> Logistics engineering to boost competitiveness

21

Challenges in Transport Management

A need to reduce transport costs without

endangering quality and service levels

A need to reduce supply chain costs

within an already optimised supply chain

A need to outsource transport

management without losing control over

the transport costs

High complexity of managing transport

invoices because of a high number of rate

structures, carriers and transport modes

> More and more deliveries

directly to end customers

> More frequent deliveries

resulting in smaller shipment

volume

> High fluctuation and

unpredictable transport

demands over the year

> Optimize transports flows

across business units and

across sites

> Short delivery cycles with low

transport costs are requested

by shippers

> Lifetime of products get

shorter, the issues of

obsolescence in inventory

increases

Transport viewCosts view Product view

22

End-to-end Solutions & Advanced Logistics Services

Warehouse Management

Hours/Days Weeks/Months/Quarters

Network Design

Supply & Demand

Planning

Transport

Execution

Event Management

Strategic

Operational

Distribution Network

Planned Shipments

Performance

Shipment Schedule

Actual Shipments

Load Plans

Shipment Exceptions

Delivery Confirmation

Load

Confirmation

Dock

Scheduling

Transport

Planning

Source: Oracle

In Supply Chain Management Transport Management is the pivot point for Integrated Planning &

Execution, enabling integrated SCM

23

Control Tower description

The Control Tower is the one central

transport desk solution for several sites of

one customer or a group of customers

possibly with similar shipment profiles in

order to optimize transport planning over

the complete supply chain leveraging on

commonality of products, origins and end-

customers.

The supply chain optimization activities of

the CT range from strategic planning of

the network, the tactical logistics provider

management to the operational transport

planning. The CT controls the transport

execution and financial settlement

enabled by supply chain visibility.

Logistics service providers

(transport execution)

customercustomer customer

CT

as central transport

management desk

24

Logistics service providers

(transport execution)

How does it work

The CT combines centrally the transport management responsibilities, selecting the most optimal transport network, transportation mode, loads and routes for the combined customers shipments.

The CT is designing and managing the best transport solution based on the customer volumes. It can make use of own GEFCO transport execution services or third party services.

The focal point of the CT can vary per customer, from carrier selection based on price, lead-time and performance to routing and scheduling of dedicated milk-runs for the shipper


CT


management desk

25

CT – The components

Network Management

Flow Analysis

Transport Network

Design

Transport Management

Transport Planning

Documentation

Management

Transport Booking

Transport Event

Management

Financial Management

Consolidated

Invoicing

Freight Audit

Information

Management

Supply Chain

Visibility

Reporting

Contract Management

Carrier RFI, RFP, RFQ

Management

Carrier

Assessment &

Rationalisation

Carrier Quality

Management

operationaltacticalstrategic execution

hoursweeksquarters nowdaysmonthsyears

26

Target Market

The CT product is intended for customers who want to centralize and outsource their transport management functions in order to optimize the total costs for transportation. For a specific customer this could cover both inbound as well as outbound transport movements, all possible transport modes and direct shipments as well as usage of LTL networks.

The customers are looking for one single point of contact for their transport management.

Typical customer characteristics

Transportation demand from several sites

Not just usage of LTL and FTL networks of one carrier

Either usage of one or more carrier networks (LTL and / or FTL) to one destination or need to use different optimisation strategies like direct injections and milk runs (or to cut out hub points based on own volumes)

Need to reduce transport costs beyond just squeezing carriers with the risk of endangering quality

Requirement to take more control over transportation costs

Willingness to go for transport optimisation

27

Advanced transport planning and optimisation

Complexity

Volumes

Dynamic

planning

Static

planning

Usage of LTL networks Direct injections into

country networks*

Milk runs/ Multi-stop

Fixed milk runs with timetables

from e.g. different origins to a

postal code area or customer

with high volumes

Usage of predefined line

hauls into country

network hubs

Usage of a pre-selected

LTL network/ networks

Daily consolidation of the

actual shipments into as many

milk runs as possible by

checking close delivery and

pickup addresses, drop points

on the way etc.

Daily decision of using an FTL

line hauls into a country

network hub, based on the

volumes of that day

Selection of cheapest rate

based on volume/ weight

breaks of the single

shipments

* Different adaptations can be applied e.g. platform logistics

28

Service levels of CT

Complexity

Volumes

Dynamic

planning

Static

planning


country networks


Advanced

Light

29

Drivers for choosing the different service levels

Complexity

Volumes

Dynamic

planning

Static

planning


country networks


Low

volume

Low fluctuations

Complex rate structures

High fluctuations

Multi-carrier operations

Small shipment size Large shipment size

High

volume

30

Different Service Levels

Main

functionalities

Light Medium Advanced

Network

Management

Flow Analysis

Transport

Network Design

No network

optimization

Static network

analysis (trunklines,

milkruns)

Network simulation

Contract

Management

RFQ Mgmt

(Tendering)

Pre-defined rate

template

Carrier rates Rates as used by

carriers

Transport

management

Transport

Planning

Transport

Booking

Transport

Document

Management

Transport Event

Management

Mainly LTL

transports

Only a few carriers

Static trunklines/

Milkruns

Trsp Booking

manual/ e-mail/

phone

Trsp Documents by

carrier(s)

Mainly LTL

transports

Dynamic transport

planning -

Trunklines/ Milkruns

Trsp Booking e-

mail/ automated

interfaces

Dynamic transport

planning - routing &

scheduling of all

shipments

Trsp Booking via

automated

interfaces

Trsp document

printing

Financial

Management

Consolidated

Invoicing

Freight Audit

Manual Rate engine

Automated by TMS

Automated by TMS

Information

Management

Supply Chain

Visibility

T&T systems of

carriers directly

T&T system of

carriers/ Visibility

Visibility system

31

Pricing models: Main components

Various components can be differentiated in the different pricing models handled in the market:

> Transport Costs: cost of the transport execution

> Up-front fee: one-time fee charged for implementation e.g. installing the application/licence fee.

> Subscription fee: fee that allows the customer to receive a specific service independent from the number of transactions in a certain period

> Transaction fee: fee for the execution of the transport management function(ality)

> Value related transaction fee: fee based on the value created by the transaction. Commonly known as gain sharing. The value of a transaction might exceed the cost price of the transaction enormously. Transaction example could be freight audit check or a day of transport optimisation.

> Management fee: fee to ensure margin of LLP. Can be defined as % of margin for rendering the services, as a flat fee or as surcharge for rendering specific services

32

Pricing models for CT

The pricing model of the CT is build on different components in order to create a win-win situation for the customer as well as for the logistics service provider and to create the necessary transparency and trust between both partners :

Transport Costs

Transaction

costs

Management

fee (%)

Management fee as a % of the total

cost (transport + transaction)

Transaction cost as a flat fee per

shipment/delivery order

Transport cost : cost charged by

the 2PL/3PL to the CT for the

rendered transport cost. This can

be done based on fixed charges or

based on the actual costs.

Gain Sharing to

be split between

the 2 partners

Gain share : difference

between original base-line

transport costs and the

transport cost after CT

implementation

33

Value proposition of the CT

Value How to be delivered Product component

Better rates from the

carriers

By consolidating volumes better negotiation possibilities with the carriers

Possibility to make use of strong local networks by selecting local carriers with

best rates

Contract Management

Lower transport cost Central transport planning gives more possibilities to optimize transport by

– Consolidation from LTL shipments into FTL

– Generation of Milkruns, backloads, etc.

– Direct injections into domestic networks

– Optimization the routing of the single shipments

Use best rates per shipment (based on country, weight breaks, volume

breaks, etc.)

State of the art tools allow dynamic transport planning


Less damages Less handling by more direct deliveries Transport Management

Improved reliability of

the transports

Selecting the most reliable carriers and controlling constantly their

performance

More direct deliveries by generating more FTL shipments by consolidating

shipment volumes

Monitoring of the transport execution and pro-active exception management

Contract Management


Information Management

Improved leadtimes of

the transports

Improved leadtime by consolidating more shipments into FTL transports

versus the use of LTL networks


Reduced administration

cost

Automation of the process and economy of scale by centralizing transport

planning. Possibilities of sharing personnel, hardware, software, development

costs, telecommunications costs, etc.

Control Tower

34

Value proposition of the CT

Value How to be delivered Product component

Increased accuracy of

payment, less

overpayment

Full financial control through efficient invoicing and freight audit process Financial Management

Lower inventory Optimization of total supply chain network infrastructure with positioning of

stock holding points, inventory strategies etc.

Network Management

Improved customer

service

Full visibility on order status in the supply chain

T&T possibilities for end-customers on one platform


Single point of contact Centralization of transport planning activities and information platform

Simplified communication infrastructure (less interfaces)

Control Tower

35

How economic value is created through CT

Economic

Value

Revenue

Procurement

Cost

Management

Cost

Working

Capital

Cost of Capital

Profit

Assets

• Services Reliability

• Improved customer

service to end client

• Contract management

• Transport management

• Financial management

• Transport Planning

• IT

• Personnel

• Inventory

• In transit time

• Offices

Value LeversCT delivers to customer

• Reliable service

• Predictable lead-times

• On time delivery..%

• Decrease in transport rates

• Consolidation of shipments

• Selection of best transport mode

• Lower rate per cubic meter

• Improved Freight Audit

10%-30%

• Centralised planning

• Scale of economy

• State of the art IT

• Shared service5-10%

• Reduced pipeline

inventory

• Reduced safety stock5-20% *)

• Fewer transport

departments*) dependent on type of

business MTS to MTO

Inventory Cost

5-20%• Less inventory carrying cost• Inventory

36

Benefit Logic

Profit

Increase

revenue

Reduce costs

Improved

customer

service

Reduced

inventory costs

Reduced

management

(administration)

costs

Reduced

procurement

(transport)

costs

Information

Management

TMC

Contract

Management

Transport

Management

Financial

Management

Network

Management

Improved

transport lead

times

Improved

transport reliability

Optimized carrier

rates

Optimized flows

Increased

accuracy of

payment/ less over

payment

Less damages

Optimized network

(stockholding

points)

Better

replenishment

descisions

RFQ management

Carrier

assessment &

rationalization

Higher truck fill

rate

Optimal rate

selection

Closed

information loop

Usage of LTL/FTL

networks

Direct injection

into country

network

Milkruns (direct

deliveries)

Central transport

planning

Less handling

Single point of

contact

Centralized &

automated

transport

management

Economic

Value

Cost of

capital

Reduced

working

capital

Reduced

Assets

Reduced fixed

assets

Reduced work

captial

(inventory)

Reduced cash

to cash cycle

Faster invoicing to

the end customerElectronic POD

Reduced safety

stock

Reduced pipeline

inventory

Reduced number

of TM

departements

Centralized

transport

management

Reduced

collection period

37

Lisboa, 26/05/2015

Appendix

CT – The components

Network Management

Flow Analysis

Transport Network

Design


Transport Planning

Documentation

Management

Transport Booking

Transport Event

Management


Consolidated

Invoicing

Freight Audit

Information

Management

Supply Chain

Visibility

Reporting

Contract Management

Carrier RFI, RFP, RFQ

Management

Carrier

Assessment &

Rationalisation

Carrier Quality

Management

operationaltacticalstrategic execution

hoursweeksquarters nowdaysmonthsyears

39

CT components – Network Management

Network Management

Flow analysisTransport Network Design

Requirements

Design of strategic network

CT


management desk

• In Network Management the strategic

transport network is designed, based on the

historic and forecasted customer transport

requirements.

• In a flow analysis the transport movement

volumes are visualized and analysed. Future

demand changes and strategies are

considered.

• In the transport network design the optimal

network structure with locations of stock

holding points and distribution strategies are

defined.

• Potential strategic X-docks, air-ports and

ocean-ports are determined for this

customer.


40

http://www.ilog.com/industries/transportation/images/truck.jpg


CT components – Contract Management

Contract Management

Carrier ManagementCarrier AssessmentCarrier Quality Management

Logistics service providers (transport execution)

Requirements

Selection of Logistics Providers

RFQ

CT


management desk

• Contract Management are all activities to manage the

contracted logistics service providers in a cost-effective

way with the objective to have an optimised carrier base

with respect to cost and quality.

• The Carrier RFI- (Request for Information), RFP-

(Request for Proposal), RFQ- (Request for Quotation)

Management targets a selection of a carrier normally an

a long-/mid-term horizon based on a transportation

volume.

• The management process from RFQ initiation to provider

selection/awarding.

• The CT can own the transport contracts with the carrier

or act as an intermediate between the carriers and the

shipper.

• Carrier Assessment and Rationalization is consulting in

the area of the existing 3PL portfolio and its assessment

based on current and future customer requirements. It

covers the analysis of required services and the

identification of a requirements gap.


41



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http://www.google.pt/url?url=http://campaigns.gefco.net/overlandBe2014/GeFCo-overland-Solutions-.html&rct=j&frm=1&q=&esrc=s&sa=U&ei=Z-9ZVYWvKsPxUp2agaAD&ved=0CC0Q9QEwDA&sig2=nbKjuhrDiXN0YMOuKANopg&usg=AFQjCNF9YOcaXXp0fJZ4H_BcrwjsMtEElw

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Transport planningDocumentation ManagementTransport BookingEvent Management

• Transport management covers all transport

planning and optimization activities necessary for

the movement of goods in the supply chain between

the producer, its suppliers and consumers.

• Possible saving of spending can be up to 15% in the

optimal combination of modes

› Multi-tier shipments from customers

› Milk run/Multi-stops to common customers

› Platform logistics: cost saving mode for

customer specific requirements

› Direct injection in domestic networks

› Usage of LTL networks

› Time-merging for non time critical shipments

• Includes all transport modes.

Status

Pick

orderTransport

booking

Pre-

advice

Inbound

transport

Hub

facilityCarrierWarehouse Carrier Consignee

status

Status update


Delivery

notes Invoice

Status

update

Delivery

notes

CT


management desk


CT components – Transport Management

42

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http://www.google.pt/url?url=http://www.gefco.net/en/offers-and-services/strategic-activities/inbound-overland-logistics/improving-industrial-competitiveness/&rct=j&frm=1&q=&esrc=s&sa=U&ei=AfBZVdqcDMrxUryugdgL&ved=0CCEQ9QEwBg&sig2=49Bxuv9otMUil_Fn6AyEJA&usg=AFQjCNFpVtZ7-O861JbnQsTOrd-vqq-bPg


http://www.google.pt/url?url=http://www.transportintelligence.com/market-reports/report-the-gefco-company-profile/285/&rct=j&frm=1&q=&esrc=s&sa=U&ei=6SpaVYuWDsfuUsn0gNgG&ved=0CB8Q9QEwBQ&sig2=LWACURal6Ka_j7Gtk_vy2A&usg=AFQjCNE9zPl8wjVJiyqI02S4QNrojq34hw


http://www.google.pt/url?url=http://hirek.logportal.hu/tag/gefco&rct=j&frm=1&q=&esrc=s&sa=U&ei=PytaVfncEorSU_nwgNgN&ved=0CBkQ9QEwAjgU&sig2=LTonBVgxZX7VIC8f_oMKzw&usg=AFQjCNG2rmYuvTTTSOlbIehtNOEe4cBC1A


http://www.google.pt/url?url=http://www.baltic-course.com/eng/good_for_business/?doc=98089&rct=j&frm=1&q=&esrc=s&sa=U&ei=kytaVcPzKIGTU4PogcAF&ved=0CBUQ9QEwAA&sig2=CbKWjGWnTgo5ncdojiI7qQ&usg=AFQjCNGxWzd3OTRH2awySnaumlVvhH1EFQ


CT components – Financial Management


Consolidated invoicingFreight audit

Payment

Payments

Consolidated

Invoice

Claims

Claims

Financial

KPI &

allocation

Transport

invoicesFreight

Audit

CT


management desk

• Financial Management ensures the proper

payment of the used services.

• The different logistics service provider invoices

are consolidated towards our client.

• Freight Audit makes certain that the provided

services are invoiced correctly by the carriers

according to the agreed rates and service

levels.

• The invoices of the different logistics service

providers used, are aggregated on the

customer requirements, e.g. aggregated across

all modes, with subtotals, allocated to the site

or product group that bears the transportation

costs.


Inbound

transport

Hub



43











CT components – Information management


Supply Chain VisibilityReporting

Supply chain

information

Visibility

Database

CT

Supply chain

information

• Information management focuses on

business intelligence. It includes all

activities necessary to organize, analyse and

control the information flow and storage

needed in the business processes in order to

steer and optimise the supply chain

activities.

• Supply chain visibility provides inside into

status of orders and shipments on a timely

basis. It can be shown up to order line level.

• Reporting is used to manage carriers and

transports in the CT and to report back to

the shipper.

• Data and reports can be made available to

the shipper at any time via internet-based

visibility.


Inbound

transport

Hub



44











Value stream – Centralized Transport Management

Customer characteristics

> Centralized or decentralized

> Manual or automated transport planning

KPI’s

> Number of TM departments and locations

> % of orders already automated

> Reduction in planning effort per order

Overall savings

> 5-20 % in office space and equipment

Centralized

transport

management

Reduced

Management cost

Process

Centralisation

Reduced time per

transaction

Automated

Transport planning

Reduced cost per

employee by

Outsourcing

Reduced # of

Administration

personnel

Reduced overhead

Simplified IT

infrastructure

Reduced # of TM

departments

Reduced fixed Assets

(IT, building, etc.)

45

Value stream – Carrier Optimisation


> How often do they re-negotiate rates?

> How many carriers did they invite for tender?

> Corporate contracts or local contracts?

KPI’s

> New costs versus old costs

> Transportation cost versus number of shipments? E.g. per country

> Transportation cost versus transportation volume?

> Total cost for insurance?

> Number of claims?

> Number of different carriers?

Overall savings

> Between 13 - 20% on transport procurement cost (13% if one carrier is selected, 14% if cheapest carrier per country is selected, 20% if for every single shipment cheapest carrier is selected)

> 4-8% on trsp proc.cost (CGE&Y study)

> 3-5% on trsp procurement cost (???)

Contract

management

Reduced

Procurement cost

Continuous

performance

monitoring

Better rate per

shipment

RFQ management

Less claims

Less insuranceReduced transport

cost

Improved Customer

Service

Increased Revenue

46

Value stream – Transport OptimisationCustomer characteristics

> Does the shipper do transport planning?

> Is the transport planning manual or automated?

KPI’s

> Orders versus shipments (Consolidation)

> Rate per ton-mile per country, lane,…

> # damages in the transport network

> Average transport lead-time per lane

> Fill rate of FTL’s

> FTL/LTL ratio

> Average daily or weekly volume into country or region

> Reduced miles travelled

Overall savings

> 5-20% of Transportation Spend (CGE&Y)

> 5-25% of Direct Transportation Spend (Meta Group)

> 15-25% by inbound consolidation, scheduling and mode selection (???)

> 5 % on Total Inventory (Meta Group)

> 10-25% by dynamic consolidation (???)

> 8-15% by mode conversion (???)

> 6-20% on transportation spend (i2)

Transport

management

Reduced

Procurement cost

“Rate Engine”

Mode shift

LTL FTL

New consolidation

potential

Shorter transport

time

Optimal rate per

shipment

Lower safety stock

Less handling

Better rate per

cubic meter

Less insurance cost

Less damages

Higher reliability

and security of

supply

Reduced Inventory

cost

Reduced Working

Capital (inventory)

Reduced Cost of

capital

47

Value stream – Financial Management


> Complex auditing process by, many carriers, many transport modes, complex rate structures, lots of surcharges, many shipments

KPI’s

> % of incorrect invoices

> Amount of overpayments without audit

> # of auditing staff

Overall savings

> 10-50 % of administrative expenses (CGE&Y)

> 1-3% on Transportation spend by data capture, normalisation, audit and analysis (???)

> Reduced Days Sales Outstanding 12% (Electronics industry, Descartes)

Financial

management

Reduced Transport

cost

Process for invoice

auditing

Automated auditing

process

Less time auditing

invoice

Reduction in

incorrect invoices

Reduced

Administration cost

Reduced resources

Increased detection

of wrong invoices

Reduced

Procurement cost

Reduced

Management cost

48

Value stream – Information management (1/2)

Information

management

Reduced

Inventory cost

Closed information

loop

Better data for

simulation

Increased

transparency

Disaster recovery

Increased customer

satisfactionLess penalties

Improved strategic

decisions

Increased data

reliability

Less safety stock Less delay

Reduced

Procurement cost

Increased

Revenue

Reduced Working

Capital

(cash to cash)

Reduced Cost of

capital

Faster invoicing to

the end customer

Electronic POD

Reduced Working

Capital

(inventory)

Reduced Cost of

capital

Reduced collection

period

49

Value stream – Information management (2/2)


> Do they have a system in place, which is providing visibility (linking purchase order and transport information, combining information of all carriers used)?

> Do they have inventory in transit information available?

> How is safety stock calculated (security factor for possible delivery delays?)

KPI’s

> Number of orders resulting in claims

> Costs of safety stock

> Inventory turns

Overall savings

> Optimize & Reduce Inventory & Carrying Cost 5-10%

> Increased Inventory Turns from 5 to >8 (Electronics industry, Descartes)

> 15% reduction in claims (Electronics industry, Descartes)

> Improved Customer Service Levels OTIF level increased to >95% from 78-84% (Electronics industry, Descartes)

Information

management

Reduced Reduced

Inventory costInventory cost

Closed

information loop

Better data for

simulation

Increased

transparency

Disaster

recovery

Increased

customer

satisfaction

Less penalties

Improved

strategic

decisions

Increased data

reliability

Less safety

stockLess delay

Reduced Reduced

Procurement Procurement

costcost

IncreasedIncreased

RevenueRevenue

Reduced Reduced

Working CapitalWorking Capital

(cash to cash)(cash to cash)

Reduced Cost of Reduced Cost of

capitalcapital

Faster invoicing

to the end

customer

Electronic POD

Reduced Reduced

Working CapitalWorking Capital

(inventory)(inventory)

Reduced Cost of Reduced Cost of

capitalcapital

Reduced

collection period

50

Luis FERREIRADirector OVL & WRPBusiness Unit Manager for Overland & Warehousing and Reusable Packaging

GEFCO Portugal

Phone +351 21 41 69 832 – Fax +351 21 41 69 857 – GSM +351 91 210 25 36e-mail : [email protected]

mailto:[email protected]