logistics breakout – cindi hane, elemica: “linking business strategies to logistics”
TRANSCRIPT
Linking Business Strategies to Logistics
The Value of Elemica’s Logistics Solutions
QuickLinkTM IntegrationConnections Inter-‐Co
Master DataElemica Client
ERP
Document Stream
Document Stream Client
Partner’s ERP
Mapping
Elemica Supply Chain Operating Network
Discovery
3rd Party ApplicationsSmartLinkTM Applications
On-‐Boarding
Collaboration
Universal Data Model
Universal Business
Documents
ELEMICA CONFIDENTIAL
Business Process Dashboard
Messaging Dashboard
Unstructured Data
SmartLinkTM Analytics + =Universal Business Concepts
Our Discussion Today
The Quest for a World-‐Class Supply
Chain
Linking Business Strategies to Supply Chain Objectives
Quantifying the Value of Logistics
Solutions
Commencing Your Journey
The Value of Supply Chain Excellence
Bottom 25%
Avg Pe
rfor
man
ce vs. In
dustry
Progressive 15% World Class 10%
Average 50%
0%
Source: Corporate Executive Board, Supply Chain Management Research Group, 2006
SCOR Level 1 Metrics
P&L: Top Line P&L:
Bott
om
Line
Bala
nce
Shee t
Metrics that Matter
Competing Supply Chain Metrics
Sources: “An Econometric Analysis of Inventory Turnover Performance in Retail Services”, Gaur, Fisher & Raman, May 2004 “TIME FOR A MEA CULPA?”, Lora Cecere, Supply Chain Insights, April 2014
“Nine out of ten companies are stuck at the intersection of
operating margin and inventory turns, but they do not know
what to do about it.” -‐ Lora Cecere
Supply Chain Objectives
Velocity (Responsivene
ss)
Agility (Flexibility)
Reliability
Efficiency (Costs, Assets)
Consume the fewest possible
resourcesCOGS
Increase Velocity of Product, Information,
& Cash FlowsC2C
Respond to Changes Quickly
Sales, COGSProvide Perfect
Orders to CustomersSales, COGS
What is your Competitive Strategy?
Cost • Provide comparable products and services at lower prices than your competitors
Quality • Provide comparable products and services that perform better, last longer, fewer defects than your competitors
Service • Provide faster lead times, flexibility to handle changes, more convenience, less restrictions than your competitors
Innovation • Provide unique features and better designs than competitors on similar products or be the first to market on new products
Source: Adapted from The Discipline of Market Leaders, Treacy & Wiersema, 1997, Basic Books
Prioritizing Supply Chain Objectives
Reliability Agility
Quality
Cost
Service
Innovation
VelocityEfficiency
2nd 3rd1st 4th
VelocityAgilityReliability Efficiency
ReliabilityAgility Efficiency Velocity
VelocityAgility Reliability Efficiency
Addressing the flat curve to world-‐class supply chain status
1. Design your supply chain to align with competitive strategy 2. Force-‐rank your acceptable metrics & targets based on these priorities 3. Set expectations with leadership as to these targets
Happy Path
Velocity (Responsivene
ss)
Agility (Flexibility)
Reliability
Efficiency (Costs, Assets)
Increase Velocity of Product, Information,
& Cash Flows
Respond to Changes Quickly
Provide Perfect Orders to Customers
Consume the fewest possible
resourcesCOGS
Sales, COGS
Synchronization
Connect supply to demand
COGS, Sales, C2C
C2C
Sales, COGS
The Value of Elemica Logistics Solutions
Velocity (Responsivene
ss)
Agility (Flexibility)
Reliability
Efficiency (Costs, Assets)
COGS
Sales, COGS
Sales, COGS
Time Slot Management Freight Cost Management Terminal & Whse Visibility
Global Shipment Visibility & Control
Transport Execution Time Slot Management
Logistics Sourcing Transport Execution
Time Slot Management Freight Cost Management
Synchronization
COGS, Sales, C2C
Global Shipment Visibility & Control
Time Slot Management
C2C
Real Value Realized
$265-‐$325Automation & Collaboration Savings Shipments & Freight Invoices
Lower Labor Costs Reduced data entry, paper handling Better POD visibility Reduced time fixing errors Lower freight audit effort
Lower Freight Costs Improved carrier negotiations Reduced detention charges Fewer premium, cancellation charges Better control over assessorials
Improved Cash-‐to-‐Cash Cycle Faster POD information Better terms with carriers Better inventory management Real-‐time visibility to LSP activities
$2356Cost/Shipment Before Elemica
$2061Cost/Shipment With Elemica
$32
$82
$181
Real Value Realized
€159-‐€195Automation & Collaboration Savings Shipments & Freight Invoices
Lower Labor Costs Reduced data entry, paper handling Better POD visibility Reduced time fixing errors Lower freight audit effort
Lower Freight Costs Improved carrier negotiations Reduced detention charges Fewer premium, cancellation charges Better control over assessorials
Improved Cash-‐to-‐Cash Cycle Faster POD information Better terms with carriers Better inbound control Real-‐time visibility to LSP activities
€1505Cost/Shipment Before Elemica
€1327Cost/Shipment With Elemica
€21 to €25
€25 to €31
€114 to €140
€
Continuing the Quest
Align the SC with strategy
Determine metrics & targets
Create roadmap
of initiatives
Prioritize &
Rationalize
Implement &
measure
Engage with Elemica at any step in this process!
Use Elemica tools for estimating value and
rationalizing opportunities
Cindi Perdue Hane Vice President, Logistics
[email protected] Phone: +1 404 477 5286
cindi.hane
@CindiHane
www.elemica.com
Appendix 1: Tools for Estimating Value
100%
Labor Savings
▪ Automated booking improves productivity and quality of logistics team’s activities
▪ Site resources are optimized with carrier appointments. Real-‐time visibility and POD eliminates tracking activities and dispute resolution
▪ Freight Cost Management eliminates post-‐audits and disputes
▪ Access to data in single system eliminates data gathering and streamlines analysis
$32 in Labor Cost Savings per Shipment
Freight Savings
▪ Logistics Sourcing activities improve negotiated rates
▪ Automation & Visibility reduce errors on shipment data and allow for proactive management to reduce expedited costs
▪ Time Slot Management dramatically reduces detention charges at load/unload locations
▪ Collaborating on assessorials improves accuracy, allows for passing charges to customers, reduces disputes
100%
$181 in Freight Cost Savings per Shipment
C2C Savings
▪ Automated shipment confirmations from LSPs reduces Days of Inventory by speeding up PGI.
▪ Time Slot Management reduces mean lead time and variation, which reduces inventory levels.
▪ Better in-‐transit inventory visibility throughout long supply chains promotes optimized inventory practices, reducing DOI.
▪ Multi-‐party shipments are more prone to delays in pick-‐ups at hand-‐off points. Visibility allows more pro-‐active management of these shipments. Reduces DSO.
▪ POD is required before customer approves invoice. Authenticated POD reduces DSO.
▪ Can negotiate better terms with (some) carriers because of electronic approval and payment -‐ lowers disputes and decreases variability of their DSO. Increases DPO.
$82 in C2C Improvements per Shipment
Value by Logistics Solution
Freight Cost Management $ 41.87
Time Slot Management $ 44.21
Terminal & Warehouse Visibility $ 17.81 Transport Execuaon
$ 96.10
Logisacs Sourcing $ 95.00
Savings per Shipment including Labor, Freight, and C2C costs
Appendix 2: Tools for Rationalizing Initiatives
Value of Transport Execution
Improved Productivity of Logistics Ops • How much does your company spend on booking & tracking freight?
Reduction in Freight Costs • What % of your shipments are expedited? Why?
• Could you eliminate
Reduction in Cash-‐to-‐Cash Cycle • On what % of shipments do you have authenticated Proof of Delivery
Value of Time Slot Management
Reduction in Detention Charges • What is your average detention charge?
• What %age of your shipments
Reduction in Cash-‐to-‐Cash Cycle • What is your variability of shipment lead times?
• How are you buffering this
Improved Site Operations • How do you handle surges in truck arrivals?
• If you could smooth the labor
Value of Freight Cost Management
Reduction in Audit & Pay Charges • What do you spend per shipment on Freight Audit & Pay activities?
Reduction in Freight Charges • Do you believe more discipline is needed in freight payment
Reduction in Cash-‐to-‐Cash Cycle • Could you negotiate better terms with carriers in exchange for reduced DPO
Value of Terminal & Warehouse Visibility
Accelerate Post Goods Issue • Do any of your LSPs provide shipment confirmations manually?
Reduction in IT Infrastructure Costs • Have you implemented ERP terminals at your LSPs’ facilities?
• What is your
Improved Data Quality & Security • Do you receive consistent data across your network of LSPs?