Post on 25-May-2015
Develop a Culture of Innovation Jerry Riordan, Chief Operating Officer Americas CEVA
• CEVA • Innovation driving value • Operational excellence
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Balanced global portfolio
Employees: 39% # Countries: 100+ Revenue ’09: 48%
Europe, Middle East, Africa
Asia Pacific Employees: 20% # Countries: 30+ Revenue ’09: 23%
The Americas Employees: 41% # Countries: 40+ Revenue ’09: 29%
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Balanced sector portfolio
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Automotive 28%
Technology 24% Consumer & Retail 17%
Industrial 14%
Other 12%
Energy 5%
• Innovation driving value
A thought on innovation?
Human DNA and dinosaur DNA are 97% the same.
What matters is the 3% that separates the two species.
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Innovation
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Many innovation opportunities exist within the world of logistics…
Some thoughts on innovation • In the 1970s The automotive industry was fragmented and unprofitable
Industrial relations were poor Car quality was worse
….and Toyota sparked a quality revolution
• In the 1980s The retail industry was national and fragmented The customer proposition was narrow and limited The prices were high (relatively)
…and Wal‐mart gave us “every day low prices”
• In the 1990s The PC industry was fragmented with multiple players Sold high price products that were often out of date Had sales channels full of inventory
….and Dell reinvented the “supply chain”
• In 21st century The global logistics industry was highly fragmented The service suffered from inconsistency The customer saw little innovation and pushed margins down
….and how will our industry breakthrough? 8
Drivers of supply chain innovation?
• Globalization has increased the strategic and financial significance of logistics
• Reducing product life‐cycles creates a state of almost continuous change
• Global imbalance of human talent supply and demand is challenging international business
• Consumers and governments force business to accept social responsibility re‐shaping supply chain design
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Innovation and execution must be continuous Accenture 4PL, adding a consultation/ strategic level to SC thinking Toyota LEAN techniques and approach to improve efficiency Dell Responsive manufacturing & 100% demand pull Zara Putting the supply chain at the heart of the company & introducing global standardization PODS Bringing standardization to moving house and storage
Innovation in the supply chain – track record
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Prerequisites for 3PL innovation
• Customer confidence in the industry
• 3PL industry willing to invest in R&D
• Greater industry education and professionalism
Innovation fuelled by strong partnerships
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• Operations excellence
Operations Excellence culture in CEVA is built on five pillars
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LEAN Smart Solutions
Zero Defect Start ups
Health, Safety and
Environment
Global Standard Metrics
Process driven approach
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Project management
Leveraging scale
Integrated service portfolio
Trained experts
LEAN
Sector expertise
Smart Solutions • Leveraging best‐in‐class
Zero defect startup • Operations Excellence • Robust project management • Trained experts
Implementation review • Identification of improvement potential
Operational review • Full LEAN implementation
• Ongoing continuous improvement
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Application in the real world
Inbound
Outbound
The LLP provided; Centralised and standardised
- Communication, Project Org, Account Mgmt - KPI Management and Reporting
‐ Blueprint specifications (Processes in Material Flow and IT)
Standards for local Sub‐Agreements
Customer Commitment: global exclusivity
CEVA Commitment: productivity
4PL for an international automotive supplier
Delivering; Reduced transportation Reduced transaction cost Reduced / variable transaction costs Lower Inventory Increased fill rates Reduced waste Increased productivity
17% TRSP cost
33% WHS cost
27% In‐Plant cost
24% Total Logistic cost
By re‐engineering the supply chain and acting in a 4PL capacity, CEVA delivered a productivity commitment over the five years of the contract and reduced total logistics cost by 24%
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Transferring best practice across sectors – I2M
In summary
• Historically, an industry which has under‐delivered on customer expectations
• Requires continuous innovation
• Innovation starts with Operations Excellence and • Is fostered by an environment of strategic partnership • There are several broad channels: ‐ economies of scale ‐ leveraging information ‐ transferring best practice
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Of course, there is an alternative ...
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