Supply Chain & Logistics InstituteSupply Chain & Logistics InstituteEngineering Tomorrow’s Supply Chains

Global Logistics Trends & Challenges

H. Donald RatliffUSP and Regents Professor

Executive Director – SCL

don.ratliff@gatech.edu 1

Warehousing & Distribution

Global Transportation

ManufacturingLogistics

Health CareLogistics

ResourceScheduling

Supply ChainStrategy

HumanitarianLogistics

Supply Chain & Logistics Institute Research

International Food Chains

Proposed

TIP CentersNetwork

SingaporeCosta Rica

Logistics Trends/Concerns

• New generation of software– Service Oriented Architecture (SOA)

– Software as a Service (SaaS)

• Tight credit– Cost to carry inventory

• Excess transportation capacity• Variable fuel prices• New US regulations

– Carbon emissions– Fuel efficiency– Food traceability– Import documentation

• Security– Inspection

• Need for better integration3

4

Logistics Mega Trend

Time

Logistics Complexity

Ability to Overcome Complexity

• Complexity drivers– Variability and uncertainty– Size– Lack of visibility and control– Lack of logistics education/knowledge

• Where does performance need improvement?• How can performance be improved?

Complexity Gap

Supply & Logistics Performance Drivers

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Time

Time

Cost

Cost

Quality

Quality

Variability

Variability

Supply Chains/ Logistics

Supply Chains/ Logistics Most Difficult

Ocean Transit Times

0

5

10

15

20

25

30

1 2 3 4

Days

Min

Ave

85%

90%

95%

99%

Variability in Container Transit Times

•Livorno/NY •Livorno/Sav •Genoa/NY •Genoa/Sav

Shipping Lines Quote “Average” Times

Houston Long Beach Port Everglades Pt ElizabethSan Antonio 31 days 13 days --- ---San Vicente 31 days 14 days 16 days 16 days

San Antonio San VicenteHouston 20 days ---Port Everglades --- 17 daysPt Elizabeth --- 16 days

CSAV

CSAV - Chile and USA West Coast

Variability at each port call

CSAV - Chile and USA East Coast

Variability at each port callVariability in canal transit

10

Variability for New Cars Waiting for Rail Shipment

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

3B 3M 3W DC EA FF HL JX LR MM NV RA RO SD SO UU VO XX

Day

s

Average Days

85% Waiting

90% Waiting

95% Waiting

99% Waiting

Variability in Air Transit Times

0

5

10

15

20

25

1 3 5 7 9 11 13 15 17 19 21

Months

Days

Ave

85%

90%

95%

99%

Synchronization

• What is the impact of planning based on average lead time?

Lead time distribution

Inventory

Run out point

Days

Average lead timeOrder point?

• How can we reduce lead time variability?• How should we deal with remaining lead time variability?

Wine Supply Chain Council

13

Shipping routes

14

15

Lead Time to Baltimore

What is the impact of variability?What is causing the variability?What can/should we do about variability?

Temp History: South Australia to Baltimore

Shippers typically have limited “forward” visibility

Improving Logistics Performance

• Critical to know where to focus• Major areas to consider

– Infrastructure improvement• Physical infrastructure

• Information and decision technology

– Eliminating waste– Reducing variability– Alignment and synchronization – Technology modernization

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Questions for Chile Industry

• How important is logistics to your business?• How good is your logistics performance?• How much performance improvement is within

your control?• What are you doing to continuously improve?• How can you stay current with regard to logistics

concepts and technology?

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