kuehne + nagel investor day schacht senior vice president, global seafreight kuehne + nagel...

Kuehne + Nagel Investor Day

April 27, 2007Otto SchachtSenior Vice President, Global SeafreightKuehne + Nagel International AG

27/4/07 p. 2Kuehne + Nagel Investor Day

• Market trends / challenges

• Customer and Kuehne + Nagel

• IT solutions

• Customers initiatives

Agenda


International Procurement, Production and/or Distribution NetworksInternational Procurement, Production and/or Distribution Networks

Rationalised & changing Procurement-, Production- and Distribution Networks

Rationalised & changing Procurement-, Production- and Distribution Networks

Reduced Product LifecyclesReduced Product Lifecycles

Increased Customer Demand (Time, Quality)Increased Customer Demand (Time, Quality)

Increased Supply Chain Reliability, Speed and VisibilityIncreased Supply Chain Reliability, Speed and Visibility

Increase Shareholder ValueIncrease Shareholder Value

Capital Efficiency Cost PressureCapital Efficiency Cost Pressure

Globalisation

Understanding the Market Place and TrendsOngoing trends / challenges


Increased Supply Chain Complexities (more parties involved, e.g. Contract Manufacturing)

Increased Supply Chain Complexities (more parties involved, e.g. Contract Manufacturing)

“Carbon Footprint” of the Supply Chain“Carbon Footprint” of the Supply ChainEnvironmental IssuesEnvironmental Issues

Globalisation

Globalisation Increasing Move from “Push” to “Pull”Increasing Move from “Push” to “Pull”

Understanding the Market Place and TrendsNew trends / challenges


• Demand for information and process integration is growing exponentially

• Next plateau to drive improvements• Financial

• Inventory, Cash-to-Cash Cycles, Efficiencies, Infrastructure, ROI

• Service• Fill rates, lead times

Driven by• ERP, Internet, ease of EDI, XML

Understanding the Market Place and Trends


Traditional 3PL value proposition

cost reduction

cost reduction

Customer Customer’scustomerSupplier • Transport cost reduction

• Operational efficiency

Enhanced value proposition by Kuehne + Nagel

Customer

Overall supply chain visibility and optimisation for the customer

Customer’scustomerSupplier

• Improved delivery performance

• Reduced inventory• Reduced fulfilmentcycle time

• Increased overall productivity• Lowered supply chain costs• Improved order fill rates• Improved capacity utilisation

Traditional and Enhanced Value Propositionby Kuehne + Nagel


Expediting costsExpediting costsLate deliveryLate delivery

High High logistics costlogistics cost

Lost revenueLost revenueLost revenue

Poor customer servicePoor customer servicePoor customer service

Asset costAsset costAsset cost

ReworkReworkReworkReturnsReturnsReturnsWarrantyWarrantyWarranty

Operating costOperating costOperating costLost customer loyaltyLost customer loyaltyLost customer loyalty RiskRiskRisk

LitigationLitigationLitigation

Excess inventoryExcess inventoryExcess inventoryProduction downtimeProduction downtimeProduction downtime

Long cycle timesLong cycle timesLong cycle timesFirefightingFirefightingFirefighting

ReplanningReplanning

Major impacts due to lack of transparency

are not visible –but nevertheless

MASSIVE

Need for VisibilityImpacts of lack of transparency


• Many points of entry (difficult management)• Detailed various ocean carriers

and/or• Various forwarders

• Different systems• Track & trace• Invoicing• Reporting

• Transfer of liability

Customer‘s Perspective


Seafreight – Consolidated ManagementAdvantages

• Fewer points of entry fora customer

• Simplified rate structure

• Simplified invoicing

• Single reporting system

• Single track & trace system

• Clear transfer of responsibilities

• Outsourcing of administration

• More control to warehousepartners

• Manage complete supply chain


Customer Solutions Traditional Model No common standard of

information and restrictedno. of carriers

Information / Contracts

CustomerCarrier II

Carrier III

Carrier IV

Carrier V

Carrier I


Customer Solutions Kuehne + Nagel‘s role

ContractInformation

Detailedinformation

Vendor IVendor II

Airline IAirline IIAirline III

Kuehne + Nagel

• Planning • Optimising• Monitoring• Controlling• Reporting• Execution

Customer

• Production• Production planning• Sales forecast• Marketing• Research and

development• Public relations

Carrier ICarrier IICarrier IIICarrier IVCarrier V


Integration with Carriers

• Schedules• Booking• Shipping instructions• Bill of Lading• Track & trace• Reports

Customers

Single access to multiple carriers reduces training,

mistakes, and time!•••••

http://www.mol.co.jp/index.html

http://www.kline.co.jp/index_e.html

http://www.maersk.com/default.asp

http://www.hapag-lloyd.com/de/index.html

http://www.hapag-lloyd.com/de/index.html


Reliability through People, Processes and Technology

KN Login – Enables carriers and supply chain partners to directly input information

CIEL (FA/FS) – First Generation Information directly interfaced to KN Login

CIEL (FA/FS) – Captures information from carriers and other supply chain partners to increase data quality and availability

CIEL (FA/FS) – Single Global Operational Platform to plan transportation, create documentation and post events. Driven by a standard workflow to ensure SOP conformance

KN Login – Web-based window to view and manage transportation across carriers & modes


• Provides online visibility to order lines across vendors and source channels

• Provides online integrated visibility to order line allocations to respective shipments across carriers and modes

• Enables reliable and efficient transportation and information flow management

Visibility

Monitoring

Collaboration

Information management

Kuehne + Nagel Global Logistic Network

KN OMS

Enabling Customers to Effectively Implement and

Manage Global Procurement Strategies

Activities

KN Login Visibility and Process Management Tools

Protocols

KN LoginVisibility and process management tools

kuehne + nagel investor day schacht senior vice president, global seafreight kuehne + nagel...

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