SUPPLY CHAIN OVERVIEW NORTH AMERICAN SUPPLY CHAIN OVERVIEW Scott Grady Sr. Vice President Landstar...
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Transcript of SUPPLY CHAIN OVERVIEW NORTH AMERICAN SUPPLY CHAIN OVERVIEW Scott Grady Sr. Vice President Landstar...
SUPPLY CHAIN OVERVIEW
NO
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Scott GradySr. Vice President
Landstar Supply Chain Solutions
North American Supply Chain Trends
Early 2000’s Globalized Focus
– One Product fits all Auto Industry
Clothing
Agricultural
Consumer Electronics
– Inventory Floats could be as much as 60 days
– Industry carried “Back up inventory” Velocity was Slow
NAFTA– North American Focus
Limited Global Impact
Premature for Infrastructure 2
North American Supply Chain Trends
Today Globalization Comes Home
– Consumer trends are changing more dynamically Auto Industry Clothing Agricultural
– Supplier Trends Near Shoring Campus Environment Tier 1’s are more sub-assemblers than Manufacturing based
– Auto– Electronics– Industry carried “Back up inventory”
Velocity Extremely Fast and agile Supply base has “right Sized” no excess Capacity
NAFTA– Today NAFTA is bringing Manufacturing to the Consumer– Mexico Has Advantage
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MEXICO Today
Mexico Seaports
– Intermodal– Strong Infrastructure focus in past 10 years
Highway– Infrastructure Upgrades and Rapid improvement– Can Source Regionally Today
Growing Consumer Demand Supplier Capacity Workforce Downside
– Security Issues– Political Strife– Limited Logistics Expertise (Growing)
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Changes in Strategy
Manufactures Campus Environment (Near Sourcing)
– Tier 1’s (sub Assembly) on Campus Parts are sequenced Inventory owned by Tier More capacity at Manufacturing sites Forced Suppliers to Tier 1
– Consumer Electronics
Consumer Driven Velocity– Trends drive sourcing choices– Time to Market
Consumers tastes change and they want more for their $ Retail-no longer seasonal, but stores are updated every 45-60 days Automobiles, used to be 36 to 48 months concept to dealer floor
– Dodge Dart 18 Months
Green Environment Risk Mitigation Sustainability
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Changes in Strategy
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Collaborative Suppliers:
Increased LTL Frequency Decreased Lead Time Decreased Inventory Reduced Transportation Spend
Customer
SupplierSupplier
Supplier
Supplier
Supplier
NOWCustomer
Supplier
Supplier
Supplier
Supplier
Supplier
THEN
Current Supply Chain Issues Cross Border
Visibility Security
– High valued cargo– Merchandise easy to sell– Merchandise that is not traceable
Expedite – Mexico– US
Vendor set-up Very little exchange still of capacity
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Supply Chain
Brief DiscussionDesign
Why Outsource
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Total Enterprise Solution
Air
Ocean
Truck
Rail
Reducing Supply Chain Costs and Increasing Visibility
Level 2 Shipment
Planning & Optimization
Shipment ExecutionGlobal In-Transit
Inventory Visibility
Master Data,Customer
Order
Financial Settlement
PerformanceReporting
Supply Chain Event
Mgmt
Level 1 SKU Level Planning
Transportation Management
System
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The Supply Chain Network
The Design Complexity drives the solution
– Size and volume does not drive complexity Forecasting integrity
– A changing forecast drives Mode change Deviation and route fall off Expedite
Visibility is the key– Multiple touch points need to have event marks
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Operational StrategicTactical
Basic Network Dynamic
Simple Optimization Evaluation of Cost & Service Options
Full Network Optimization
Shipment Level Shipment Level Daily / On Going
Excel / Access Transportation Modeler Enterprise
Network Design Types of Optimization
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1. Loading 2. Warehouse receiving. Storage as required
3. Container stuffing
4. Customs - origin
7. Customs -destination
6. International transport (Land, Sea and/or Air)
8. Port services - destination
9. Container de-stuffing and warehouse receiving. Storage as required
10. Truck loading
5. Port services - origin
11. Final delivery
• Route• Mode
OptimizedDecisions
• Timing• Equipment
• Consolidation• Service Provider
Service Time Calculation 3-Dimensional Container
Optimization Itineraries & Profiles Carrier Capacity Throughput Rating
Multi-Leg Multi-Mode Consolidation
Common Leg Consolidation
Multi Stop Consolidation Multi-Tier Networks LTL Consolidation Continuous Moves
Support a wide range of optimization needs
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Shipment Planning and Optimization
Shipment View– All Ship Units– By Item– By Commodity– By Stop
Change View Perspective– Nose– Tail– Top– Side
Manipulate, at the ship unit level – Sequence of loading– Orientation
Increase effective cube utilization Provides detailed loading instructions Reduces failed loads – loads that can not be loaded as planned Inputs to drive utilization include SKU level detail
– Stack ability, dimensions (LWH), dunnage13
Load Configuration
TOP 10 REASONS TO OURSOURCE
Global Reach– Leverage critical functions– Global resources
People, Process and Systems
Operating Expenditures (OpEx) Rules– No capital expenditures– Fees are operating costs– No need to show return on equity
Innovation and Interoperability– Outsources spend billions a year integrating new technology– Companies can tap into these resources
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TOP 10 REASONS TO OURSOURCE
Service Transparency– As outsourcing has matured however, metrics have become a key indicator
of the success– Organizations can benefit from best practices
Savings in Labor Cost– The cost of labor in developed countries for high level activities is
extremely high– Shifting the location where this work takes place is definitely advantageous
depending on the skill set. Centralized Management of Resources and Functions
– The ability for outsourcers to consolidate these functions is a core competency that many companies look to leverage.
– Commonality across divisions and regions in process
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TOP 10 REASONS TO OURSOURCE
Improving Regulatory Controls– Achieving, measuring and maintaining compliance is a complex and capital-
intensive endeavor. Companies with limited compliance resources look to outsourcing for the design, execution and auditing of controls, while allowing companies to retain requisite internal oversight
Accelerating Process Maturity– Outsourcing can often become the catalyst to drive business maturity– Outsourcing can drive a set of best practices and recommendations that can be
applied across the organization– Process integration is a key enabler to the improved delivery of services, and
provides a comprehensive framework for aligning resources to deliver business value and repeatable processes across the Supply Chain
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TOP 10 REASONS TO OURSOURCE
Increased Resources– Companies that need access to new skill sets for project work, mergers and
acquisitions and/or to support expansion into a new region, outsourcing can offer a solution.
– Leading outsourcing companies can support Strategic direction and develop new capacity as well as having a global reach to a broad talent pool
Improving Company Strategic Focus– Letting an outsourcer focus on managing operational functions allows
companies to focus more strategically on their core business, saving time and improving efficiencies
– Outsourcers today are in the business of driving innovation, managing data centers and applying non-disruptive technologies to help businesses succeed in an ever changing market
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Operational StrategicTactical
Tools
Focus
Horizon
3 to 6 Weeks 3 to 6 Months
Solutions Environment
Shipment / Load Management
Evaluation of Cost & Service Options
Full Network Analysis & Design
Daily / Weekly 6 Months to 1 Year 1 to 3 Years
Transportation Mgmt. Systems
Transportation Modeler
Supply Chain Strategist
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Order Optimization
ModeOptimization
CarrierOptimization
OrderVisibility
Business Intelligence
Reduce Shipments Least-cost Mode Least-cost Carrier Inventory Reduction Savings Validation
5 -15%Savings
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Cost Reduction and Value Creation
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Ripple Effect…….
The issues cause a …….
Capacity shortage predicted by mid 2013– Capacity down 7% from 2008 (Source Credit Suisse) – ATA predicts a loss of capacity with CSA as cash strapped companies
cannot afford in cab technology TT Asset utilization poor Empty miles are still high Customer leverage deteriorates as rates increase with shortfall
– Platform already strained in 1st and 2nd quarter 2012 Natural Disasters
– 2011 The year was telling
North America Capacity Market Issues
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3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
Shipments(Numbers)
Expenditures(Dollars)
Jan 2011 Jan 201222
Capacity
Cass Freight Index
Transportation Industry Today
How far down the Supply Chain does your provider manage Can you use the process to let you know
– Event Management Business Intelligence Manage the exceptions Utilization
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Planned for the Un-Planned
Value Proposition
Benefit Category Explanation
Improved Shipment Visibility Many companies report a reduction in high cost shipments due to better transportation planning and shipment visibility
Optimize Carrier & Mode Selection Reduced costs due to automating the selection of the lowest rate carrier
Identify Transportation Invoice Discrepancies
Discrepancies are found at the individual shipment level prior to invoicing
Improved Carrier PerformanceUsing carrier performance information will help in the negotiation of better rates and the reduction in service related failures which impacts shipper’s bottom line
Lower Administrative Costs By automating the tendering, shipment creation, and consolidation process, firms can redeploy staff to more value added functions
Contract Savings By standardizing carrier tariffs and leveraging the buying power of Landstar, companies have received significant reductions in carrier rates
Utilize Carrier Assets More Efficiently
By leveraging technology of the carrier marketplace, customers are able to take advantage of backhaul pricing on many lanes
North American Supply Chain Trends
Thank You
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