Rethinking the Supply Chain: successful experiences in times of crisis<br />Milano, 16.09.2010<br />Univ.-Prof. Dr. Thorst...
Hamburg University of Technology<br />Technische Universität Hamburg-Harburg (TUHH)<br />1978<br />  Founded<br />Increase...
 interdisciplinarity
 innovation
 regionality
 internationality</li></li></ul><li>Institute of Business Logistics and General Management<br />Aboutus<br /><ul><li>At th...
Application-oriented research and teaching in the areas of logistics, supply chain management and business management</li>...
Preparation of graduates for the subsequent acquisition of management positions in logistics, manufacturing and order proc...
Supply Chain Security
Complexity  and Variety Management
Technology and Process Innovations in Logistics</li></li></ul><li>Agenda<br /><ul><li>The logisticsmarket in Germany
The effectsoftheeconomiccrisis on the  German industry
Economicoutlook
Crisis-drivenchanges in supplychains
Supplychaininnovations – Who isthedriver?</li></li></ul><li>The logistics market in Germany<br />
Trade Relations between Italy and Germany<br />Italian - German Trade Relations<br /><ul><li>Trade with EU countries did n...
Italyisthethirdmostimportanttradingpartner in the EU for Germany
ForItaly Germany isthemostimportanttradingpartner</li></ul>German Trade 2009<br />Imports<br />(674 Mrd. Euro)<br />Export...
Joint undertaking with Contship Italia
Eurogate operates sea terminals  in the regions of North Sea, Mediterranean Sea and the Atlantic
Strong through the crisis – drop in container handling very small</li></ul>[www.egim.eu]<br />
The logistics market in Germany<br />Germany isthebiggest national logisticsmarket in Europe. <br /><ul><li>total turnover...
 absolute transportvolumeof 3.6 billiontons</li></ul>strong marketpositionresultsfrom: <br /><ul><li>economicstrength
 large population
 large shareofeconomybased on industryandtrade
centralgeographiclocation in Europe</li></ul>[www.mygeo.info]<br />Top 10 Logistic Service Providers<br /><ul><li>combined...
railways: 41 896 km (99,3% standardgauge)
waterways: 7 467 km (Rhine river, Main-DanubeCanal)
pipelines: 31586 km (gas 24 364 km, oil 3 379 km, refinedproducts 3 843 km)
airports: 549 (330 withpavedrunways)</li></ul>[www.cia.gov]<br />
The effects of the economic crisis on the German industry<br />
The effects of the economic crisis on the German economy<br />Gross domesticproduct<br />Percentagedchangestothepreviousye...
The effects of the economic crisis on the German economy (cont.)<br />Gross domesticproductand IFO - economicclimate<br />...
The effects of the economic crisis on the German logistics sector<br />„Due totheeconomiccrisis, a dropofupto 9% ofthelogi...
German companies affected by the economic crisis<br />"We are far from overcoming the financial crisis, in particular with...
<ul><li>The stock marketvaluesofthetransportsectorhavesufferedsomeseveresetbacks in thepastmonths.
Freightratesdeclinedsignificantly in 2008 and 2009. In thecourseof 2009 the Baltic Dry Index slowlypickedupagainand a futu...
A significant drop in the German logistics market<br />The Nine-Percent-Drop in Logistics - Fraunhofer SCS-forecastconfirm...
The forecastoftheCenter for Applied Research on Supply Chain Services (SCS) of the Frauenhofer Institute for 2009 becametr...
Container business in times of the crisis<br />Container handling (in million TEU)<br />The influence of the crisis on the...
The Port of Hamburg experienced at 28% drop in container handling, which translates to 7,01 Million TEU.
Transport costs for standard containers  dropped dramatically.</li></ul>[http://www.hafen-hamburg.de/content/view/32/33/la...
Placing the hopes on increasing transport volumes, especially on Asian shipping routes, no other country has ordered the n...
Only when the Asian economy picks up again, transport volumes will also increase.</li></ul>South East Asia<br />Rest ofAsi...
Economic Outlook<br />
The end ofthedescent<br />DAX and Dow Jones<br />Original value, trend, seasonallyadjustedvalue<br />(adjustedforprice; ch...
Numberofincomingordersofthe German producingindustryincreasedby 3,2% in June 2010 comparedtothepreviousmonth
The GDP hasrecovered; comparedtothesecongquarterof 2009, the GDP hasgained 4,1%</li></ul>changescomparedtopreviousyear‘ qu...
Logistics sectorisexpectingeconomicupswing<br />The BVL Logistics Indicator<br />questionsexpertsofthe<br />logisticssecto...
Expertslookconfidentlyintothefuture.
The free fall of 2008 fortunatelydiscontinued.</li></ul>BVL Logistics Indicator<br />indexpoints<br />normal level<br />cu...
Logistic service providers (LSP) are optimistic about the future<br />Situationalanalysisby LSP<br />Future expectationsof...
The futureexpectationsarebyfarmoreoptimisticthanpreviousonesand a positive outlookremains.</li></ul>„Sincethebeginningofth...
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Prof. Thorsten Blecker - Rethinking the Supply Chain: Successful Experiences in Times of Crisis

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Prof. Thorsten Blecker - Rethinking the Supply Chain: Successful Experiences in Times of Crisis

  1. 1. Rethinking the Supply Chain: successful experiences in times of crisis<br />Milano, 16.09.2010<br />Univ.-Prof. Dr. Thorsten Blecker<br />
  2. 2. Hamburg University of Technology<br />Technische Universität Hamburg-Harburg (TUHH)<br />1978<br /> Founded<br />Increase the technical and scientific competence in the metropolitan region of Hamburg due to the needs of structural changes<br />Aim<br /> Principles<br /><ul><li>priority given to research
  3. 3. interdisciplinarity
  4. 4. innovation
  5. 5. regionality
  6. 6. internationality</li></li></ul><li>Institute of Business Logistics and General Management<br />Aboutus<br /><ul><li>At the interface of engineering and economics
  7. 7. Application-oriented research and teaching in the areas of logistics, supply chain management and business management</li></ul>Teaching<br /><ul><li>Application-oriented and scientifically founded lessons based on the latest findings in research and practice.
  8. 8. Preparation of graduates for the subsequent acquisition of management positions in logistics, manufacturing and order processing. </li></ul>Research [Selection]<br /><ul><li>Logistics and Supply chain management
  9. 9. Supply Chain Security
  10. 10. Complexity and Variety Management
  11. 11. Technology and Process Innovations in Logistics</li></li></ul><li>Agenda<br /><ul><li>The logisticsmarket in Germany
  12. 12. The effectsoftheeconomiccrisis on the German industry
  13. 13. Economicoutlook
  14. 14. Crisis-drivenchanges in supplychains
  15. 15. Supplychaininnovations – Who isthedriver?</li></li></ul><li>The logistics market in Germany<br />
  16. 16. Trade Relations between Italy and Germany<br />Italian - German Trade Relations<br /><ul><li>Trade with EU countries did not dropasmuchas extra EU-trade
  17. 17. Italyisthethirdmostimportanttradingpartner in the EU for Germany
  18. 18. ForItaly Germany isthemostimportanttradingpartner</li></ul>German Trade 2009<br />Imports<br />(674 Mrd. Euro)<br />Exports<br />(808 Mrd. Euro)<br />EUROGATE – a successfulItalian - German cooperation<br />containerhandling<br /><ul><li>Europe’s leading container-terminal and logistics group
  19. 19. Joint undertaking with Contship Italia
  20. 20. Eurogate operates sea terminals in the regions of North Sea, Mediterranean Sea and the Atlantic
  21. 21. Strong through the crisis – drop in container handling very small</li></ul>[www.egim.eu]<br />
  22. 22. The logistics market in Germany<br />Germany isthebiggest national logisticsmarket in Europe. <br /><ul><li>total turnover € 218 billion
  23. 23. absolute transportvolumeof 3.6 billiontons</li></ul>strong marketpositionresultsfrom: <br /><ul><li>economicstrength
  24. 24. large population
  25. 25. large shareofeconomybased on industryandtrade
  26. 26. centralgeographiclocation in Europe</li></ul>[www.mygeo.info]<br />Top 10 Logistic Service Providers<br /><ul><li>combinedturnoverof € 29 billion (13% of total marketvolume)</li></li></ul><li>Key figures of the German logistics market<br />Transport service in 2008 (in million ton-kilometer)<br />Quantity of goods transported in 2008 (in 1000 tons)<br />[www.destatis.de]<br />[www.destatis.de]<br />Germany‘slogisticssectorcan fall back on reliableand extensive infrastructures<br /><ul><li>roadways: 644 480 km (12 600 km expressways)
  27. 27. railways: 41 896 km (99,3% standardgauge)
  28. 28. waterways: 7 467 km (Rhine river, Main-DanubeCanal)
  29. 29. pipelines: 31586 km (gas 24 364 km, oil 3 379 km, refinedproducts 3 843 km)
  30. 30. airports: 549 (330 withpavedrunways)</li></ul>[www.cia.gov]<br />
  31. 31. The effects of the economic crisis on the German industry<br />
  32. 32. The effects of the economic crisis on the German economy<br />Gross domesticproduct<br />Percentagedchangestothepreviousyear‘svalue(adjustedforprice; chainindex)<br />Original value, trend, seasonallyadjustedvalue<br />(adjustedforprice; chainindex)<br />Export and Import<br />Real Exports<br />(seasonallyandworkingdayadjusted)<br />Real Imports<br />(seasonally andworkingdayadjusted)<br />Current Rate1(right-handscale)<br />Billion Euros <br />(left-handscale)<br />Annual Average²<br />1 Change frompreviousquarter in %<br />² Figures: Changesfrompreviousyear in %<br />[www.destatis.de]<br />
  33. 33. The effects of the economic crisis on the German economy (cont.)<br />Gross domesticproductand IFO - economicclimate<br />GDP (quartely), real, % compared with previous year<br />Business situation<br />(industrial economy), <br />seasonally adjusted balances <br />Business expectations <br />(industrial economy), seasonally adjusted balances<br />Business climate <br />(industrial economy), seasonally adjusted balances<br />GDP (annual average), real, % compared with previous year<br />[www.bundesfinanzministerium.de]<br />The strong exportfocusofthe German industryandthespecialization on capitalgoodsoutstandinglyincreasedtheimpactofthe global economiccrisis. <br />[Monthlyreportofthe German Federal FinanceMinistry, August 2009]<br />
  34. 34. The effects of the economic crisis on the German logistics sector<br />„Due totheeconomiccrisis, a dropofupto 9% ofthelogisticsmarketwas expected.“ [Peter Klaus, authorof TOP 100 in European Transport and Logistics Services 2009/2010]<br />The economic crisis had a negative impact on all transport modes<br />Development of quantity of goods transported<br />changescomparedtopreviousyear<br /> Hundreds of orders in shipbuilding (vessels, tankers, etc.) have been <br /> cancelled during 2009 <br /> Rail freight dropped considerably (e.g. Deutsche Bahn freight volumes decreased with 19% over 2009, with peaks of 40%)<br /> Truck traffic decreased (e.g. Deutsche Tollcollect income dropped with 18% over 2009) <br /> IATA numbers over recent months are showing double the downturn that we saw after 9/11! (Spohr, Lufthansa Cargo) <br />air<br />rail<br />inlandnavigation<br />maritime traffic<br />road<br />[www.destatis.de]<br />
  35. 35. German companies affected by the economic crisis<br />"We are far from overcoming the financial crisis, in particular with respect to its consequences on the real economy in 2009” <br />[Norbert Reithofer, Chairman of BMW; Nov 4, 2008]<br />"Following the dramatic drop in our global business in the fourth quarter of 2008, demand for chemical products has not picked up since the start of 2009. A reversal of the trend is not yet in sight“ [Jürgen Hambrecht, CEO and Chairman of the Board of BASF; Feb 26, 2009]<br />"Our business is an early indicator, but we have no backlog, so I cannot say how things will develop“ <br />[Frank Appel, Chief Executive of Deutsche Post DHL; Jun 19, 2009]<br />“…because of the financial crisis parts of Siemens' business had experienced a decline of orders of as much as 70% … it will take a long time until there will be an expansion of our capacities again” [Peter Loescher, Chief Executive of Siemens; Oct 25, 2009]<br />
  36. 36. <ul><li>The stock marketvaluesofthetransportsectorhavesufferedsomeseveresetbacks in thepastmonths.
  37. 37. Freightratesdeclinedsignificantly in 2008 and 2009. In thecourseof 2009 the Baltic Dry Index slowlypickedupagainand a futureupswing was tobeexpected.</li></ul>The effects of the economic crisis on the transport sector<br />Dow Jones Transportation Average<br />Baltic Dry Index<br />2008<br />2009<br />2006<br />2007<br />2010<br />2008<br />2009<br />2006<br />2007<br />2010<br />[http:/www.bloomberg.com/ ] <br />[http://www.bloomberg.com/ ] <br />
  38. 38. A significant drop in the German logistics market<br />The Nine-Percent-Drop in Logistics - Fraunhofer SCS-forecastconfirmed:<br /><ul><li>The Worst-Case-Scenario occured
  39. 39. The forecastoftheCenter for Applied Research on Supply Chain Services (SCS) of the Frauenhofer Institute for 2009 becametrueandthe German logisticsmarketdroppedby 11 percent</li></ul>[Press release , Frauenhofer IIS; 22. Februar 2010] <br />The Deutsche Bahn AG temporarywithdrawed 8 percentoftheirfreightcarsfromcirculation in December 2008.<br />In containershipping in August 2009 upto 10 percentofthecontainerfleetlyingemptyatanchor.<br />[DB]<br />[http://www.spiegel.de/img/0,1020,1494030,00.jpg]<br />[www.dnbgermany.de]<br />
  40. 40. Container business in times of the crisis<br />Container handling (in million TEU)<br />The influence of the crisis on the<br />container business was enormous.<br /><ul><li>The amount of goods transported declined significantly.
  41. 41. The Port of Hamburg experienced at 28% drop in container handling, which translates to 7,01 Million TEU.
  42. 42. Transport costs for standard containers dropped dramatically.</li></ul>[http://www.hafen-hamburg.de/content/view/32/33/lang,de/]<br />Container handling on specificshippingroutes<br /><ul><li>The decline in consumer demand had a strong effect on the amount of goods transported. This effected container handling on all shipping routes.
  43. 43. Placing the hopes on increasing transport volumes, especially on Asian shipping routes, no other country has ordered the number of container vessels Germany has.
  44. 44. Only when the Asian economy picks up again, transport volumes will also increase.</li></ul>South East Asia<br />Rest ofAsia<br />North East Asia<br />Baltic Sea<br />LatinAmerica<br />Rest of Europe<br />North America<br />Other shippingroutes<br />
  45. 45. Economic Outlook<br />
  46. 46. The end ofthedescent<br />DAX and Dow Jones<br />Original value, trend, seasonallyadjustedvalue<br />(adjustedforprice; chainindex)<br />[www.bundesfinanzministerium.de]<br />Indicatorssignalizeeconomicupswing<br />Gross domesticproduct<br />Incomingorders (producingindustry)<br /><ul><li>Values of German Stock Index (DAX) and Dow Jones are on theuprise
  47. 47. Numberofincomingordersofthe German producingindustryincreasedby 3,2% in June 2010 comparedtothepreviousmonth
  48. 48. The GDP hasrecovered; comparedtothesecongquarterof 2009, the GDP hasgained 4,1%</li></ul>changescomparedtopreviousyear‘ quarter<br />changescomparedtopreviousquarter<br />[www.destatis.de]<br />quarter<br />quarter<br />quarter<br />quarter<br />quarter<br />
  49. 49. Logistics sectorisexpectingeconomicupswing<br />The BVL Logistics Indicator<br />questionsexpertsofthe<br />logisticssectorconcerning<br />theirevaluationofthecurrent<br />situationandtheireconomic<br />activitiesfourtimes a year.<br />Thereisreasonforhope:<br /><ul><li>The economicdevelopmentofthepastyeardoes not fall shortoftherisenexpecations.
  50. 50. Expertslookconfidentlyintothefuture.
  51. 51. The free fall of 2008 fortunatelydiscontinued.</li></ul>BVL Logistics Indicator<br />indexpoints<br />normal level<br />currentsituation<br />climate<br />expectations<br />The willingnesstoinvestisincreasingandemploymentispickingupagain.<br />[BVL, Logistik-Indikator, Institut für Weltwirtschaft (IfW), 2010-Q2] <br />
  52. 52. Logistic service providers (LSP) are optimistic about the future<br />Situationalanalysisby LSP<br />Future expectationsof LSP<br />bad<br />capacityutilization<br />good<br />decrease<br />investment<br />materials<br />bad<br />good<br />general order situation<br />decrease<br />investment<br />employmentofstaff<br />rising<br />dropping<br />incomingorders (abroad)<br />rising<br />incomingorders (inland)<br />dropping<br />better<br />worse<br />general order situation<br />worse<br />businessdevelopment<br />better<br />better<br />businessdevelopment<br />worse<br />bad<br />businesssituation<br />good<br /><ul><li>The quarterly BVL-studyshows a continuingimprovementofthebusinessclimateamonglogisticserviceproviders. All aspectofthesituationalanalysishaveimprovedcomparedtothepreviousquarter.
  53. 53. The futureexpectationsarebyfarmoreoptimisticthanpreviousonesand a positive outlookremains.</li></ul>„Sincethebeginningofthisyear, all businessdevelopmentindicatorsclearly<br />signalizeexpansion in the German logisticsmarket. <br />[Dr. Stefan Kooths, Professor andeditorofthe BVL LogisticIndicator]<br />[BVL, Logistik-Indikator, Institut für Weltwirtschaft (IfW), 2010-Q1] <br />
  54. 54. Learning from the crisis at the Port of Hamburg<br />Container handling<br />Business situation<br />in Million TEU (1st half ofeachyear)<br /><ul><li>8% growth in total throughputforthe Port of Hamburg
  55. 55. Freightratesareincreasing, however, theeconomicrecoveryis still uncertainandfeederservicesare still down</li></ul>Lessonslearned?<br />Port of Hamburg launchesnewstrategy<br /><ul><li>Improvedtrafficconnectiontogrowthregionlike Eastern Europe andAsia
  56. 56. Increase in efficiency
  57. 57. New environmentallycompatibletechnologies
  58. 58. Addedvaluethroughindustrycooperations</li></li></ul><li>Crisis-driven changes in supply chains<br />
  59. 59. Business development in times of a crisis… <br />“Only a crisis leads to a change of routines and changing routines means changing structures.” [Marc Borremanns, Head of Logistics industryatFinPro]<br />Drivers for long term structural change in logistics:<br />currentdrivers<br /><ul><li>modularization and dematerialization
  60. 60. globalization, foreign investment & local content
  61. 61. consumerdemand</li></ul>futuredrivers<br /><ul><li>increase of continental trade
  62. 62. lowerspeedofglobalization
  63. 63. climate change fight
  64. 64. increaseoflocalcontent</li></ul> [www.bmvbs.de]<br />Strategiesfordiversification[Ansoff-Matrix]<br />Existingproducts&services<br />New products &services<br />Market penetration<br />Existingmarket<br />Product/ servicedevelopment<br />New market<br />Market development<br />Diversification<br />…comes in many forms!<br />
  65. 65. Study (1)<br />„2010-2012 – Global Supply Chain Trends – Are Our Supply Chains able to support the Recovery? Lessons Learned from the Global Recession“<br />
  66. 66. Key Supply Chain Trends … Challenges <br />Survey by PRTM Management Consultants „2010-2012 – Global Supply Chain Trends – Are OurSupply Chains abletosupporttheRecovery? LessonsLearnedfromthe Global Recession“. <br /><ul><li>Nearly 350 participantsfrom diverse industriesandthreemajorgeographicregions (America, Europe andAsia)</li></ul>Challenges<br />Measures<br /><ul><li>Demand volatility
  67. 67. Poor forecastaccuracy
  68. 68. Lowercustomerloyalitythroughmarkettransparencyandgreaterpricesensivity
  69. 69. Productcommodization
  70. 70. Price asthemaincriteriaforthecustomer</li></ul>IncreasedSupply Chain VolatilityandUncertainty<br /><ul><li>Improve SC response time andvisibility
  71. 71. Deepeningcollaborationwithkeycustomers (e.g. „real-time planning“)
  72. 72. Real time insteadof ex post reporting</li></ul>Global Customer and Supplier Networks Required<br /><ul><li>Globalization will continue
  73. 73. Future trends will come from international customers
  74. 74. Product variation will increase to fulfill customer expectations
  75. 75. Outsourcing toexternalpartners
  76. 76. Contractingstrategicsuppliers
  77. 77. Increasingfacilitiesformanufacturing, distributionandinventory
  78. 78. Regionallyconfiguered SC </li></ul>Regional tailored SC forcost-optimization<br /><ul><li>Globalization and outsourcing are critical for controlling costs
  79. 79. Reductionof end-to-end supplychaincosts
  80. 80. Outsourcing mainlyofproductdevelopment, strategicaland operational sourcingand SC planning</li></ul>[Global Supply Chain Trends; Annual Survey by PRTM Management Consultants, 2010]<br />
  81. 81. Key Supply Chain Trends … Challenges (cont.)<br />Challenges<br />Measures<br /><ul><li>Riskas a managementchallengeacrosstheentire SC
  82. 82. Trend ofshiftingrisksupstreamthe SC tothesuppliers</li></ul>Risk Management in the End-to-End Supply Chain<br /><ul><li>Vendor-managedinventories
  83. 83. Saleand lease back programs
  84. 84. Outaourcingandexternalpartners
  85. 85. Riskmanagement on eachnodeofthe SC</li></ul>Need oftruly Integrated andEmpowered SC Organizations<br /><ul><li>Numerous different challenges
  86. 86. Lack of integration between SC functions
  87. 87. Inability to respond fast to changes
  88. 88. Trulyintegrated SC
  89. 89. Focus on End-to-end optimization
  90. 90. Training top talentwith SC knowledge</li></ul>Top 8 Challenges to Logistic Service Providers: <br /> No mention of technical innovations, but for most of the measures are new technologies needed!<br />0%<br />20%<br />40%<br />60%<br />[Global Supply Chain Trends; Annual Survey by PRTM Management Consultants, 2010]<br />
  91. 91. Study (2)<br />Green-Logistics – Great importance even in times of a crisis [BME-Study]<br />
  92. 92. Reactions of German companies to the crisis<br />“We have used the crisis year in 2009 to carefully review our processes, structures and management concepts.” <br />[Bernhard Simon, spokesman of DachserGmbh & Co. KG]<br /> “Actively driving change, exploiting talent and innovation; <br /> and ensuring continuity in the provision of services and quality to the customer – <br />these are the new post-crisis requirements for logistics service providers” <br />[Dr. Detlef Trefzger, DB Schenker Board of Management Contract Logistics & Supply Chain Management]<br />adjusting internal processes<br />Whatactions do companiestaketoencountertheeconomiccrisis?*<br />human resource management<br />reassessing service provider relationships<br />increasing outsourcing activities<br />establishing networks and co-operations<br />* BME-Survey of 171 German companiesoftheindustralsectorbytheGerman Association for Materials Management, Purchasing and Logistics (BME), 2009<br />
  93. 93. Actions taken: adjustment of internal processes<br />“Many companies use the economic crisis to optimize their internal processes and increase the efficiency of procedures.” <br />[Prof. August-Wilhelm Scheer, PresidentoftheFederal Association for IT, Telecommunications and New Media]<br />BME-survey<br />“An increasing number of logistics companies and shippers use the break forced by the economic crisis to make targeted investments in internal IT-processes.” <br />[Holger Schmitt, Chairman of AXIT AG]<br /><ul><li>reducingcosts
  94. 94. increasingrentability
  95. 95. promote sustainability</li></ul>Professional logisticsand IT-basedprocessmanagamentplay an essential rolefor:<br />
  96. 96. Actions taken: human resource management<br />BME-survey<br /> Development ofshort-time (2006-2009)<br />Thausandpersons<br />„The person, whoexploits all optionstomakecostsmore flexible before a staffreductionis in order, proveshimselfas a trueleader.“<br />[Andreas Wiele, Springer Vorstand]<br />[www.bundesfinanzministerium.de]<br />2008<br />2009<br />2006<br />2007<br />
  97. 97. Actions taken: relationship to service providers<br />BME-survey<br />Almost 60% of all respondents would like to the time of the crisis to <br /> re-evaluate their relationships with their logistics service providers to possibly consolidate their relationship.<br /><ul><li>75% of all respondents thinks that by developing a strategic relationship with their service provider will help them reduce total landed costs
  98. 98. 58% of the respondents would like to increase the operational flexibility and become more demand driven
  99. 99. Another 58% aim at reducing capital costs, head count and operational expenses</li></ul>* 2009 Study „'The Hidden Opportunities of Economic Crisis” by CapGemini, Panalpina and Oracle questioned logistic service providers and users concerning the effects of the crisis on their relationsship.<br /> Essentials forimprovingbusinessrelationships<br />Knowledgeandexpertise<br />Incentives<br />Joint investment<br />Willingnesstochange<br />
  100. 100. Actions taken: outsourcing activities<br />„The shareofoutsourcedservicesisestimatedatapproximately 50% ofthe total German logisticsmarket“<br />[Peter Klaus, authorof TOP 100 in European Transport and Logistics Services]<br />BME-survey<br />Companies focus on theircorecompetencies<br /><ul><li>The rate of 50% outsourcingis a relativelyrecentdevelopment in Germany
  101. 101. unlikethethe UK orBeNeLuc countries, theadvantagesofoutsourcingwere not recognized in Germany untilthe end ofthe 1990s, andthemajorityofoutsourcingprojectswereonlylaunched in the last fiveorsixyears.</li></ul>Tomeetthecustomersneedswhenprovidingoutsourcingservices, a broadknowledgebaseisneeded. <br />The successofoutsourcingactivitiesisstronglyrelatedtothequalificationsof<br />ouremployees. [Dr. Detlef Trefzger, DB Schenker Board of Management Contract Logistics & SCM]<br />
  102. 102. Actions taken: networks and co-operations<br />For Renault Nissan Europe the crisis has been a key factor <br />for extensive restructuring of logistics and supply chain <br />Management into an alliance between the two OEMs.<br />Merging the supply chain divisions from each OEM has <br />created a single logistics function for the extended Europe region.<br />“In putting together the two models, we are not saying that ‘one is right’, and ‘one is wrong,’ but it is the mix that is essential. We will take what is best from each.”<br /> [Francesca Gamboni, head of inbound logistics for Renault Nissan Europe]<br />BME-survey<br />
  103. 103. Study (3)<br />transport logistics 2009<br />
  104. 104. <ul><li>216 participantsincludinglogisticexpertsandserviceproviders, representativesfromindustryandtradingcompanies
  105. 105. Focus on supplychainvisibility, restructuring, increasingefficienyandcooperatingwith innovative logisticserviceproviderscrisismanagement in thecenterofinterest
  106. 106. Future trends: focus on greenlogistics, securityandcooperationwithserviceproviders</li></ul>Relevant supply chain topics and trends<br />Survey on thetrade fair „transportlogistics 2009“<br />Today<br />2015<br />Fields of innovation: security, green logistics, supply chain visibility<br />[DB Schenker Laboratories, 2009]<br />
  107. 107. Additional trends<br />
  108. 108. Trends: Investment in new markets<br />Emerging markets – an opportunityforlogisticserviceproviders<br />“There is tremendous growth in new markets and threshold countries, particularly in China and India, but also in Vietnam, Brazil and the Middle East. This is not simply due to the fact that these regions were not severely affected by the economic crisis, but because economic recovery is taking place far more quickly.” <br />[Bernd Weiler, <br />Head of Communications Transportation and Logistics of DB Schenker]<br /> [www.mygeo.info]<br />Liner servicefromthe Port of Hamburg<br />BLG seekingopportunity<br />“It's a golden opportunity for Chinese<br />automakers to enter the European market.”<br /> [Manfred Kuhr, vice-chairman of BLG’s executive board]<br /><ul><li>BLG Logistics is actively seeking business opportunities in China as local automakers gear up to sell their cars in European markets.
  109. 109. BLG is contacting automakers including Great Wall, Chang'an, BYD and Huatai to provide logistics services.
  110. 110. With an increaseof 6 linershippingservice in thefirst half of 2009 thebiggestimprovementscanbefoundatthe Asian shippingroutes</li></li></ul><li>Trends: Green logistics<br /> “Over the past two decades [the transport sector is] the only<br /> sector in which CO2 emissions have gone up”<br /> [PawelStelmaszczyk, head of unit at the transport & energy department of the European Commission]<br /><ul><li>choosing between different modes of transport is not enough
  111. 111. an integrated transport system based on flows, not modes, is needed</li></ul>“We need to focus less on CO2 emissions of trucks and ships and focus more on integrated and bundled services within a common logistics network”<br /> [Egon Christ, head of transport logistics for Daimler]<br />[www.logisticsit.com]<br />Benefitsofgreenlogistics<br /><ul><li>standard data on carbon emissions provides the user with valuable resource data about corporate supply chain activities
  112. 112. enables the user to make more environmentally-sound decisions and comply with certain regulations (e.g. Kyoto Protocol)
  113. 113. provides the ability to set a cap on carbon emissions in the supply chain by forcing  a non-negotiable constraint on carbon footprint while evaluating logistics costs and service  trade-offs [David Simchi-Levi,Ph.D.]</li></li></ul><li>Supply chain innovations – Who is the driver?<br />
  114. 114. Supply chain innovations - Who is the driver?<br />Innovations of the Supply Chain - industry-driven or driven by the logistic service provider (LSP)?<br />Customer-driven (industry)<br />Logistic service provider (LSP)<br /><ul><li>Motivation:
  115. 115. Cut down costs
  116. 116. Improvevisibility
  117. 117. Staycompetitive
  118. 118. Strengthenmarketposition
  119. 119. Developnewmarkets
  120. 120. Enlargeportfolio
  121. 121. Becomemoreresistantagainstdemandfluctuations
  122. 122. DecisiveFactors:
  123. 123. Price, Time, Quality
  124. 124. Problem:
  125. 125. Are the customers willed to bear any additional costs through the value adding activities e. g. in R&D, security…?
  126. 126. High price sensivity of customers
  127. 127. Collaborative vs. competitive customer- supplier relation
  128. 128. Potential:
  129. 129. high innovation potential through the knowledge of the whole SC
  130. 130. Existing mechanisms for knowledge transfer from end-to-end in the SC
  131. 131. Trade off between</li></ul>Proactive actions meeting customer requirements<br />Innovationsare a must <br />tomaintain a competetiveposition in themarket – forbothsides!<br />
  132. 132. Customer-driven innovations, e.g. RFID<br /> In 2004, METRO GROUP was one of the first retailers to start rolling out RFID its logistics and warehouse management.<br />Main objectives<br /><ul><li>Improve logistics processes
  133. 133. Optimize goods flow
  134. 134. Improve in-store goods availability </li></ul>Outcomes thanks to the use of RFID<br /><ul><li>Streamlining of processes while cutting costs (esp. labor costs)
  135. 135. Annual cost savings around 8.5 million € </li></ul>Pilot study: “Cross borderVisibility“ (From Hong Kong to Unna)<br /><ul><li>Metro Group cooperation with partners like Intel, the logistics service provider Fat Kee Stevedores Ltd. and the standards organization GS1 Hong Kong
  136. 136. Fat Kee Stevedores Ltd. pools products from different manufacturers, prepares them for shipment and tags them with RFID transponders.
  137. 137. An RFID reader at the outgoing goods portal of the exporter records the consignment and automatically checks that it is complete.
  138. 138. Once the goods have arrived at the METRO GROUP distribution center in Unna, they are again checked using RFID. In a matter of seconds, a reader at the incoming goods portal checks whether all products ordered have arrived. [www.future-store.org]</li></li></ul><li>Innovations driven by legislation, e.g. legislator-defined processes: Inspection methods<br />screening<br /><ul><li>targeting and risk management process
  139. 139. screen 100% of all information of inbound containers</li></ul>additional inspection of high risk cargo<br />scanning<br /><ul><li> inspection of shipping unit without unloading
  140. 140. X-Ray, Gamma-Ray or nuclear detection</li></ul>additional inspection of high risk cargo<br />physicalinspection<br />[Donner & Kruk]<br />[Rapidscan Systems]<br /><ul><li>opening and unpacking of cargo shipping unit
  141. 141. visual inspection of contents
  142. 142. Container scanningis a time-consumingandcostlyprocess
  143. 143. The Port of Hamburg scanslessthen 0,6% of all containers (per year)
  144. 144. A newlawenactedbythe US governmentmakesthescanningof 100% of all containersdestinedtothe USA, mandatoryby 2012</li></ul>[www.zoll.de]<br /> Endurance tests for the ports, but opportunities for new technologies, e.g. Neutron Bombardment instead of x-raying<br />
  145. 145. Innovations driven by logistics service providers, e.g. SkySails<br />The fact that most supply chain innovations are industry-driven, explains the excitement of the following press release: <br />“…a [logistic service provider] from the ocean shipping sector counts on new, intelligent solutions. The Company developes – mind you as logistician! – new innovations for its customers on its own.”<br /> [Press release, Fraunhofer IIS, 15. April 2010]<br />Beluga Shipping GmbH<br /><ul><li>worldwide leader in the project and heavy-lift shipping segment
  146. 146. developing future-oriented projects for the maritime industry in Germany
  147. 147. Constantly works on innovations and their effective implementation. </li></ul>Research and Innovation Department:<br /><ul><li>Developing new propulsion systems or fuels that are more efficient and protect the environment:</li></ul>  towing kite propulsion system<br />  innovative coatings for ship surfaces<br />
  148. 148. Innovations driven by logistics service providers, e.g. Container Security Box<br />ID der CSB<br />Innenraum-<br />Sensor<br />CSB® Container Security Box ofKühne+Nagel<br />
  149. 149. Important Fields of Innovation<br /><ul><li>New product development & supply chain management
  150. 150. Improved methods for process optimization
  151. 151. Modularization of logistic processes
  152. 152. Industrializing service providers
  153. 153. Renaissance of networks and collaboration</li></li></ul><li>A First Step<br />GIC PRODESC 2010 <br />– <br />German Italian Conference on theInterdependenciesbetweenNew Product Development andSupply Chain Management<br />November 18-20, 2010 in Hamburg, Germany<br />
  154. 154. Conclusion<br /><ul><li>Logistics andsupplychainmanagement will profitfromthecrisisandthefutureeconomicuprise.
  155. 155. Forecastsoffuturetrendsdiffer, criticalsituations will havetobemastered in thenearfuture.</li></ul>[www.hafen-hamburg.de]<br /><ul><li>Logistics and supply chain management are already important competitive and locational advantages and will become even more important.
  156. 156. Logistics service providers must be the driver of innovations in supply chains.</li></ul>[www.hafen-hamburg.de]<br />
  157. 157. Contact<br />Univ.-Prof. Dr. Thorsten Blecker<br />HLI – Hamburger Logistik Institut GmbH<br />Weidestr. 134<br />22083 Hamburg, Germany<br />Ph.: +49 (177) 3009340<br />http://www.hli-consulting.de<br />blecker@hli-consulting.de<br />Hamburg University of Technology (TUHH)<br />Institute for Business Logistics and General Management (W-2)<br />Schwarzenbergstr. 95<br />21073 Hamburg, Germany<br />Ph.: +49 (40) 42878 - 3524<br />blecker@ieee.org<br />For further information or specific inquiries please contact:<br />
  158. 158. Addendum<br />
  159. 159. Cited studies (1) <br />„2010-2012 – Global Supply Chain Trends – Are OurSupply Chains abletosupporttheRecovery? LessonsLearnedfromthe Global Recession“<br /><ul><li>Annual surveyby PRTM Management Consultants
  160. 160. ParticipantsfromacrossEurope, the Americas, and Asia.
  161. 161. Composed of organizations from a diverse set of industries 
  162. 162. While nearly two-thirds of survey participants are companies with annual revenues greater than $1 billion, more than 10% have revenues lessthan $100 million.
  163. 163. The surveyprovidescritical insight into management efforts to recover from the recent financial crisis and position supply chains as an enabler of revenue and margin growth</li></li></ul><li>Cited studies (2) <br />„Green-Logistics – Great importanceeven in timesof a crisis“ [BME-Study]<br /><ul><li>German Association Materials Management , Purchasingand Logistics e.V. [Bundesverband Materialwirtschaft, Einkauf und Logistik e.V., BME]
  164. 164. Survey periodfrom September 7, 2009 untilOctober 16, 2009.
  165. 165. The majorityofparticipantsareindustrialcompanies. Amongothersthegroupofparticipantsiscomposedoftradingandservicecompanies (38%), logisticserviceproviders (23%), chemicalsandpharmaceuticalscompanies (10%) andengineeringcompanies (9%).
  166. 166. All participatingcompaniessumupto a total turnoverof 453 billion Euro.
  167. 167. Altough 68% of all participants find thesubjectofgreenlogisticsimportant, thestudy also focused on actionscompaniestaketoencountertheeconomiccrisis.</li></li></ul><li>Cited studies (3) <br />„transportlogistics 2009“<br /><ul><li>Thissurvey was carried out duringthe 2009 trade fair „transportlogistics“ in Munich, Germany by DB Schenker Laboratories.
  168. 168. DB Schenker Laboratories is an affiliatedinstituteofthe Technical University of Berlin.
  169. 169. 216, randomlyselectedtrade fair participantswereaskedto rate theimportanceofcurrentandfuturelogistictrendsandto express theirexpectations.
  170. 170. The groupofparticipantsconsistedofmanagersandspecialistsfromthelogisticssector, researchandteachingrepresentativesas well asjuniorstaff.</li></li></ul><li>Examples: Collaborative Projects<br />Efficiency Cluster LogistikRuhr<br /><ul><li>Members: morethan 130 participatingcompaniesand 30 researchandeducationinstitutions
  171. 171. Goal 2015: exploitationofthetwobillion € market potential as well as securingjobsandcreatingnewones</li></ul>„The objectiveistosolvetheeconomicchallengesoftomorrow: individual supplyofgoods, mobilityandproduction, with just 25% oftheresourcesfromtoday in an ecologicalandsocialway.“ <br />[Prof. Michael tenHompel]<br />European FullLoad Network of international carriers (Elvis AG)<br /><ul><li>About 8500 truckfleet
  172. 172. More then 80 partnersofeuropeanforwardingandcarriercompanies
  173. 173. Objective: Tofulfillthefuturerequirementsof a growingeuropeanfulltruckloadmarketbyconsolidatingtruckloadsandadditionallyproviding individual transportsolutionsforcomplexlogisticalrequirements</li></ul>[VisAvis Economy, 02/2010]<br />

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