Harry Drajpuch Executive Vice President

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  • Distribution pros must have an effective, economical solution to managing changing volumes and needs. To do this, you must think more like design engineers and design flexibility INTO the solution, rather than make changes on the fly to react to company and marketplace changes.
  • USCO is an integrator of full-service logistics management solutions. While we may not carry out each logistics function (e.g., drive the trucks), we integrate and take responsibility for the total solution as the lead logistics provider. A recent Mercer Management study placed us in the top 10 logistics providers in service quality. That fits with our vision. We do not aspire to be the biggest. We do aspire to be the best. A recent report by Kurt Salmon and Associates named USCO as the leading provider of customized logistics solutions -- underscoring our ability to diagnose clients’ logistics challenges and propose unique solutions. We manage nearly 10 million square feet of shared and dedicated space across North America. We have or are developing relationships with operating partners in distribution hubs throughout the world that enable us to integrate a global logistics solution.
  • The needs of someone looking for strategically located warehouse space differ from the needs of someone looking to reengineer their supply chain. USCO has deployed expertise and resources where they make the most sense for our customers’ needs. We are structured into four divisions. Click once on each box to see brief pop-down descriptions of the USCO divisions. If you want more detail on each division, wait for the arrow to reappear after the pop-down appears and click once more on the relevant box. This will take you to one or two additional slides on this division. Shared Logistics Key customers: Bayer, Sears, AAA Dedicated Logistics Key customers: Glaxo Wellcome, Roche, IBM, Nortel, BF Goodrich Call Center Services Key customers: Pepperidge Farm, Hallmark, AAA, Sun International Includes operating partners in a growing number of worldwide distribution hubs. Also includes our Mexican affiliate, Almacenadora Santander USCO Key customers in Mexico are Honda, IBM, Bayer, Pioneer, Glaxo Wellcome, Novartis, Duracell, Sunbeam, Compaq, Sony and Toshiba
  • The needs of someone looking for strategically located warehouse space differ from the needs of someone looking to reengineer their supply chain. USCO has deployed expertise and resources where they make the most sense for our customers’ needs. We are structured into four divisions. Click once on each box to see brief pop-down descriptions of the USCO divisions. If you want more detail on each division, wait for the arrow to reappear after the pop-down appears and click once more on the relevant box. This will take you to one or two additional slides on this division. Shared Logistics Key customers: Bayer, Sears, AAA Dedicated Logistics Key customers: Glaxo Wellcome, Roche, IBM, Nortel, BF Goodrich Call Center Services Key customers: Pepperidge Farm, Hallmark, AAA, Sun International Includes operating partners in a growing number of worldwide distribution hubs. Also includes our Mexican affiliate, Almacenadora Santander USCO Key customers in Mexico are Honda, IBM, Bayer, Pioneer, Glaxo Wellcome, Novartis, Duracell, Sunbeam, Compaq, Sony and Toshiba
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  • Central to the 4PLs success is the "best of breed" approach to providing services to a client. The development of 4PL solutions leverages the capabilities of 3PLs, technology service providers, and business process managers to provide the client organization with greater cross functional integration and broader operational autonomy. Two key distinctions make the concept of 4PL unique and set it apart from other supply chain outsourcing options available to the market today. First, a 4PL delivers a comprehensive supply chain solution, and secondly, a 4PL delivers value through the ability to impact the entire supply chain…
  • Distribution pros must have an effective, economical solution to managing changing volumes and needs. To do this, you must think more like design engineers and design flexibility INTO the solution, rather than make changes on the fly to react to company and marketplace changes.
  • Harry Drajpuch Executive Vice President

    1. 2. Harry Drajpuch Executive Vice President & General Manager USCO Logistics Logistics: 21 st Century Competitive Advantage How good are you?
    2. 3. USCO Logistics Overview <ul><li>Business unit of Kuehne & Nagel International AG </li></ul><ul><li>Leading provider of supply-chain solutions </li></ul><ul><li>35 years’ experience </li></ul><ul><li>Manage 15M sf in 70+ facilities </li></ul><ul><li>Process 1.9M lines monthly </li></ul><ul><li>Integration with 75+ client enterprise systems </li></ul><ul><li>Partner to 36 of top 100 global companies* </li></ul>*BusinessWeek Global 1000 , 7/9/01 USCO Corporate Hamden, CT Distribution Center Reno, NV KN Corporate Schindellegi, Switzerland KN Global Reach Pacific Rim
    3. 4. KN Global Contract Logistics Reach Locations: 70 Logistics Space: 15 M sq ft Employees: 3,000 Locations: 150 Logistics Space: 15 M sq ft Employees: 3,600 Locations: 100 Logistics Space: 10 M sq ft Employees: 3,100 Locations: 320 Logistics Space: 40 M sq ft Employees: 9,700 Global reach & local know-how
    4. 5. USCO Core Services   Integrated Supply Chain Management Solutions Global Logistics Order Management Transportation Management Warehousing Solutions Information Logistics <ul><li>Dedicated & shared </li></ul><ul><li>Flexible & scalable </li></ul><ul><li>Largest NA network of distribution centers </li></ul><ul><li>Delivery solutions </li></ul><ul><li>Non-asset based </li></ul><ul><li>Optimized service & savings </li></ul><ul><li>Online order placement </li></ul><ul><li>Fulfillment & call-center services </li></ul><ul><li>Supply chain visibility </li></ul><ul><li>Kuehne & Nagel </li></ul><ul><li>180 multi-client DCs in 90 countries </li></ul><ul><li>Lead logistics service provider </li></ul><ul><li>Information driven </li></ul><ul><li>Collaboration & visibility </li></ul>010010110011100
    5. 6. North American Network Ontario CA Cerritos CA Reno NV Hayward CA Portland OR Denver CO Lenexa KS Dallas TX Lewisville TX Shakopee MN Chicago IL Memphis TN Nashville TN Lakeland FL Miami FL Dorval, Quebec Port Clinton OH Sheffield OH Franklin MA Guadalajara Mexico City Louisville KY Charlotte NC Durham NC Zebulon NC Jersey City NJ Bridgeport NJ Joppa MD Gaithersburg MD Atlanta GA Ventura CA Calgary, Alberta Monterrey Baltimore MD Ottawa, Ontario Montreal, Quebec Allentown Independence, MO Edmonton Winnipeg Toronto Shared Distribution Centers Dedicated Distribution Centers
    6. 7. Industries & Customers Integrated Supply Chain Management Solutions Retail Consumer / Industrial Healthcare / Pharmaceuticals High Tech
    7. 8. <ul><li>Link world’s businesses & people through globalization </li></ul><ul><li>Connect North America </li></ul><ul><li>Reduce economy-wide inventory </li></ul><ul><li>Lower business-cycle risks </li></ul>While information technology makes global & national linkages virtually possible -- companies like USCO make them physically possible. Impact of Companies Like USCO
    8. 9. Brush-Fire Management <ul><li>Typical focus is on daily operating problems, sales & marketing promotions, & service issues, etc. </li></ul><ul><li>How often do you review logistics functions? </li></ul><ul><ul><li>What’s overall impact & interaction with rest of business? </li></ul></ul><ul><li>Does logistics function: </li></ul><ul><ul><li>Respond directly to present & future needs? </li></ul></ul><ul><ul><li>Support primary business mission? </li></ul></ul><ul><ul><li>Drive most cost-effective & customer-service support? </li></ul></ul><ul><li>How can you find out? </li></ul>
    9. 10. Recommendation <ul><li>Conduct a self analysis of your logistics strategy </li></ul><ul><ul><li>Focus on what your logistics activities should be doing to support your business </li></ul></ul><ul><ul><li>Consider the following 7 key areas </li></ul></ul>
    10. 11. Logistics Strategy – Self-Analysis <ul><li>Company Markets </li></ul><ul><ul><li>Have you moved into new markets? </li></ul></ul><ul><ul><li>Has there been shift in customer shipments? (I.e., wholesalers, distributors, retailers, etc.) </li></ul></ul><ul><li>Company Products </li></ul><ul><ul><li>Have you added or deleted product lines? </li></ul></ul><ul><li>Customer Service </li></ul><ul><ul><li>Has representative customer survey indicated service problems? </li></ul></ul><ul><ul><li>Have there been any systems or order processing changes that have affected order cycles? </li></ul></ul>
    11. 12. Logistics Strategy – Self-Analysis <ul><li>Logistics Operations </li></ul><ul><ul><li>Have labor or facility costs resulted in changes to location or operations? </li></ul></ul><ul><ul><li>Have type, quality or size of product packaging changed? </li></ul></ul><ul><ul><li>Have you reached capacity in existing distribution facilities? </li></ul></ul><ul><li>Transportation Operations </li></ul><ul><ul><li>Has the profile of product shipments changed? (i.e., UPS, full truckload, less-than-truckload) </li></ul></ul><ul><ul><li>Do you move inbound & outbound products across common shipping lanes? </li></ul></ul>
    12. 13. Logistics Strategy – Self-Analysis <ul><li>Product Operations </li></ul><ul><ul><li>Have you changed or introduced new source points for products? </li></ul></ul><ul><ul><li>Has product capacity changed at existing production locations? </li></ul></ul><ul><li>Other </li></ul><ul><ul><li>Have distribution & transportation costs increased as percent of sales? </li></ul></ul><ul><ul><li>Have there been internal structural changes? </li></ul></ul>
    13. 14. Assembling the Jigsaw Puzzle Supply chain collaboration Transportation planning & management ASP Internet All freight – All modes – All over the world e-Logistics Portals + TMS Single command &control center Merge-in-transit, diversions Global in-transit visibility Order Management Customer relationship management Warehouse management Int’l trade & compliance Event management LLP 3PL Private vs. public exchanges EAI ERP e-Fulfillment
    14. 15. Develop In-house? Outsource? Significant investment & development required to support evolving supply chain. Best source of your $? Real-time logistics management capabilities Predictable, reliable & rapid transport Scaleable, Variable-cost infrastructure Common (global) processes Integrated logistics network
    15. 16. Why Outsource? <ul><li>Manufacturers are now embracing third-party logistics providers (3PLs) </li></ul><ul><ul><li>Alternative to running their own distribution operations </li></ul></ul><ul><li>3PLs have been providing distribution operations to companies for years </li></ul><ul><ul><li>Most have roots in transportation, warehousing or freight forwarding </li></ul></ul><ul><li>Providing 3PL logistics services a $56B industry* </li></ul><ul><ul><li>Increasingly seen as distribution option by companies in range of industries </li></ul></ul>* Armstrong & Associates “Logistics Management & Distribution Report” 7/02
    16. 17. 3PL Benefits <ul><li>Although not right answer for every company, where it’s “right” it can provide cost, service & strategic benefits </li></ul>Cost <ul><li>Lower cost warehousing (scale economies) </li></ul><ul><li>Lower cost transportation </li></ul><ul><li>Flexibility — pay for what you use </li></ul><ul><li>Network optimization — wring costs out of all supply-chain links </li></ul><ul><li>Specialized services at lower cost </li></ul>Service <ul><li>Quicker delivery </li></ul><ul><li>Increased geographic reach — closer to customer or manufacturing site </li></ul><ul><li>Access to leading-edge information technology </li></ul><ul><li>Customization to specific needs </li></ul>Strategic <ul><li>Allows management to focus on core business </li></ul><ul><li>Rapid ramp-up (and ramp-down) capability </li></ul><ul><li>Minimizes company assets tied up in non-core operations </li></ul><ul><li>“ Best of Breed” applications can provide competitive advantages </li></ul>
    17. 18. 3PL Usage Rates Growing Percent Using or Considering 3PLs “ What’s ahead for 3PLs?” Modern Materials Handling, 4/01
    18. 19. Evolutionary Cycles Continuing Internal Logistics Operations Source: Adapted from John Gattorna 1998 <ul><li>Greater Functional Integration </li></ul><ul><li>Boarder Operational Autonomy </li></ul>Client In-sourcing 1970s-1980s 3PL Provider Client Outsourcing 1980s-1990s Business Process Management 3PL Provider LLP Client Client Client IT Service Provider LLP 1990s-2000s
    19. 20. QUESTIONS?
    20. 21. Example: “Designed In” Flexibility Sampling of Wal-Mart’s own distribution centers 3PL 3PL 3PL 3PL Seasonal Overflow Disaster Relief Forward Buys Seasonal Overflow
    21. 22. <ul><li>Rapid marketplace changes </li></ul><ul><li>“Time to money” </li></ul>Example: “Designed In” Flexibility

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