Ultra Logistics Bill Stankiewicz Copy 2010 Scs 2010

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Best Regards,

Bill Stankiewicz
Vice President and General Manager
Shippers Warehouse of Georgia
Office: 678-364-3475
Williams@shipperswarehouse.com
http://www.linkedin.com/in/billstankiewicz2006
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“Change doesn\'t start on the surface. It\'s generated from consciousness.”
Deepak Chopra

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Ultra Logistics Bill Stankiewicz Copy 2010 Scs 2010

  1. 1. Supply Chain Survey Report  March 2010
  2. 2. Ultra Logistics Supply Chain Survey March 2010   Contents  Executive Summary....................................................................................................................................... 3  Method ......................................................................................................................................................... 3  Profile of our respondents ............................................................................................................................ 4  Industries .................................................................................................................................................. 4  Annual Revenue ........................................................................................................................................ 4  Production Facilities.................................................................................................................................. 5  Distribution Facilities ................................................................................................................................ 5  Supply Chain Employees ........................................................................................................................... 6  Domestics versus International ................................................................................................................ 6  Transportation Modes .............................................................................................................................. 7  Most Significant Goal .................................................................................................................................... 7  Detailed Questions Summary ....................................................................................................................... 8  Detailed Questions Cross References ........................................................................................................... 9  Responses by Industry .............................................................................................................................. 9  Responses by Revenue.............................................................................................................................. 9  Responses by Production Facilities ........................................................................................................... 9  Responses by Distribution Facilities........................................................................................................ 10      Page 2 
  3. 3. Ultra Logistics Supply Chain Survey March 2010     Executive Summary  Due to the extraordinary economic climate of the past few years, it is our belief that supply chain priorities have shifted in response. By directly surveying supply chain managers and executives at companies across numerous industries, our goal is to provide an analysis of these shifts in management behavior. As such, the Supply Chain Survey was commissioned by Ultra Logistics in early 2010 to gauge the supply chain priorities of US companies. While we strive to maintain the highest level of accuracy and objectivity from the data gathered and analyzed, this report should be considered general guidance rather than a definitive interpretation of current market conditions. As the US economy recovers from the worst recession in decades, we have found that companies have generally opted to maintain focus on increasing operational efficiency. Our analysis indicates that 44% of companies surveyed view improving Supply Chain management as their number one priority. A further 39% of our respondents view cost cutting as the most important goal for 2010. Exploring these goals further, our data indicates that improving flexibility, improving inventory management and optimizing shipping and routes are the three most critical areas of focus for many of the respondents. It is important to note that while much of the attention is paid towards tactical improvements, mid to longer term activities such as strategic sourcing, network restructuring and strategic balancing of in-source vs out-sourcing are also on many Supply Chain managers’ minds today. Through this report, we will show what supply chain managers have identified as prioritized objectives as well as provide insight on opportunities in our time ahead. Method  This survey was distributed to over 3,000 select supply chain managers and executives across industries ranging from the service sector to heavy manufacturing. The survey was conducted entirely online between January 5- 26, 2010. All responses were kept anonymous and confidential. The survey consisted of 22 optional questions with 9 questions relating to the general characteristics of the respondent’s organization. For the remaining 13 questions we asked our participants to rate on a scale of 1 to 5 the importance of each stated supply chain related objectives. The results were thoroughly analyzed for error and duplication. If a respondent did not provide an answer for a particular question, the results are identified as a “no-response”.   Page 3 
  4. 4. Ultra Logistics Supply Chain Survey March 2010     Profile of our respondents  Industries  Of the companies that responded, Consumer Goods Manufacturers represent 42% of the total. Other industries represented are Food and Beverage, Home Furnishings, Service, Consumer Packaging, Retail, Sporting Goods and Construction Material. Annual Revenue  Ultra Logistics wanted to target a wide range of supply chain needs with an emphasis in high volume shippers for this survey. Up to 40% of the companies we surveyed reported annual revenue of over one billion dollars. The other heavy concentration of respondents (34%) is between $11M-$100M in annual revenue.   Page 4 
  5. 5. Ultra Logistics Supply Chain Survey March 2010     Production Facilities  The vast majority of our respondents have fewer than 50 production facilities. We made no distinction between domestically or internationally located facilities. Distribution Facilities  Over 50% of our respondents reported 5 or fewer distribution facilities. We made no distinction between domestically or internationally located facilities.   Page 5 
  6. 6. Ultra Logistics Supply Chain Survey March 2010     Supply Chain Employees  Roughly two-thirds of the companies surveyed have fewer than 100 total supply chain employees. This result was somewhat surprising considering the distribution of responses by revenue. It indicates through the use of technologies such as TMS, WMS, Labor Management, etc. and general process improvements, companies are finding ever more creative ways to do more with less. Domestics versus International  Based on the responses received, we observed an imbalance in the percentage of domestic versus international moves between inbound and outbound transportation. According to our analysis, 64% of our respondents ship up to 100% of their outbound volume domestically. In contrast, 44% of our respondents receive up to 100% of their inbound volume domestically.   Page 6 
  7. 7. Ultra Logistics Supply Chain Survey March 2010     Transportation Modes  LTL shipments are by far the most common shipment method utilized by our survey respondents at 94%. Truckload and ocean shipments are also very common among the survey takers. Please note the survey only allowed for yes/no answers, therefore the analysis does not reflect shipment volumes. Most Significant Goal  When we asked our survey participants what their most significant goal is, the responses clearly gravitated towards two categories: Supply Chain Cost Cutting (39%) and Improved Management of your Supply Chain (44%). The remaining two categories “Supply Chain Risk Planning” and “Better Alignment of your Strategic Goals” combined accounted for 17% of total responses. This is an indication that companies are currently more focused on short to medium term operational/financial control rather than longer term strategic planning. It is our thought that this notion is also supported in the Detailed Questions section below.   Page 7 
  8. 8. Ultra Logistics Supply Chain Survey March 2010   Detailed Questions Summary  We asked our survey participants to rate the following categories according to the importance of each statement: Category Description Speed Speed of adaptability and flexibility of your current supply chain in the event of a necessary increase or decrease in volume Shipping Optimal setup of shipping and routes to respond to today's volatile market conditions Inventory Actively managing inventory at different points of your supply chain based on timing and product flow characteristics Fuel Flux Managing your transportation resources adequately to manage fluctuations in fuel prices Sourcing Optimize sourcing strategy to provide the lowest cost solution while minimizing time delivery risks Restructuring Restructure your network based on changing cost and service requirements Outsource Right balance of in-source and/or outsource operations, allowing you to focus on your core strategies Allocating Accurately allocating supply chain costs at a SKU level Distribution Optimizing number, size, and location of distribution facilities Simulate Ability to simulate changes in network setup via software to gauge the effects Benchmarking Benchmarking current network against industry norms Manufacturing Optimizing number, size, and location of manufacturing facilities Not Somewhat Very Extremely Weighted Category Rank No Response Important Important Important Important Important Score Speed 1 0% 3% 3% 11% 33% 50% 4.25 Shipping 2 0% 0% 11% 8% 28% 53% 4.22 Inventory 3 6% 6% 6% 6% 29% 53% 4.18 FuelFlux 4 0% 3% 14% 25% 17% 42% 3.81 Sourcing 5 9% 0% 3% 18% 42% 36% 4.12 Restructuring 5 6% 0% 6% 15% 53% 26% 4.00 Outsource 7 0% 8% 3% 44% 25% 19% 3.44 Allocating 8 6% 6% 15% 12% 50% 18% 3.59 Distribution 9 3% 17% 14% 14% 23% 31% 3.37 Simulate 10 6% 6% 24% 26% 21% 24% 3.32 Benchmarking 11 3% 9% 17% 29% 37% 9% 3.20 Manufacturing 12 6% 29% 15% 15% 18% 24% 2.91 Based on our survey results, Speed of Adaptability and Flexibility is the most important factor in our respondents’ supply chain with 50% rating this category extremely important. This is unsurprising given the current economic climate and associated volume changes experience in many industries. Along with Flexibility and Adaptability, our survey participants also indicated to us that inventory management and optimal routing play a big factor in where they are currently focusing their efforts. We believe the trend in supply chain management in 2010 falls heavily towards tactical objectives such as improving execution, reducing operating costs, improving working capital efficiency and better managing short term risks. Long term goals are not ignored however as companies that operate in less volatile markets maintain strong interest in categories such as Strategic Sourcing, Network Planning, and Benchmarking, etc.     Page 8 
  9. 9. Ultra Logistics Supply Chain Survey March 2010     Detailed Questions Cross References  The following section illustrates importance broken down by Industry, Revenue and Number of Facilities. Importance in categories are indicated a scale of 1 to 5 with 5 being the most importance. Each metric is derived by averaging the set of numbers matching both the category and the noted variables. Responses by Industry  ri ng i ng g ct urin uti on ma rk urce fa ctu ati ng tory F l ux pi ng ci ng la te ib ru h d o Manu I nven Be nc Al loc S im u S pee S ou r Di st r Outs Re st S hip Fuel Industry Construction Material 5.0 5.0 5.0 3.0 4.0 0.0 3.0 4.0 4.0 4.0 4.0 4.0 Consumer Goods 4.1 4.1 3.3 3.6 3.4 4.0 3.5 2.8 3.9 2.9 3.2 3.7 Consumer Packaging 4.7 4.7 3.3 3.7 3.3 3.5 4.5 4.0 4.0 3.7 3.0 4.7 Food/Bev 4.4 4.4 3.6 4.8 4.4 4.6 4.4 4.2 5.0 4.0 4.6 4.6 Home Furnishings 4.3 3.8 3.0 3.3 2.3 4.0 2.3 2.0 4.0 2.5 4.7 4.0 Retail 4.3 4.0 2.7 3.3 1.7 4.7 2.0 1.0 3.7 2.7 2.7 3.3 Sporting Goods 3.5 4.5 4.5 5.0 4.0 3.5 5.0 4.5 4.5 3.5 4.5 5.0 Service 4.7 4.3 4.0 4.0 3.3 4.3 2.3 2.3 4.7 3.7 3.3 3.7 Total 4.3 4.2 3.4 3.8 3.3 4.1 3.4 2.9 4.2 3.2 3.6 4.0 Responses by Revenue  ring ing g ct urin uti on ma rk urce fa ctu ati ng tory Fl u x pi ng ci ng la te ib ru h d o Manu Inven Be nc All oc Sim u Spee S our Dist r Outs Re st Ship Fuel Revenue $1.1M-$10M 4.3 5.0 4.3 4.7 3.7 4.7 4.0 3.3 5.0 3.7 3.3 3.7 $11M-$100M 3.9 3.6 2.7 3.3 2.8 3.9 2.3 2.1 3.8 2.3 3.3 3.7 $101M-$1B 4.5 4.5 3.8 3.7 3.5 3.5 4.2 4.0 3.8 3.7 3.8 4.3 $1B+ 4.4 4.4 3.6 4.1 3.5 4.3 3.7 2.9 4.4 3.7 3.8 4.1 Responses by Production Facilities  ri n g i ng g ct urin ution ma rk urce fa ctu ati ng tory Fl ux pi ng ci ng la te ib ru h d o Manu Inven Be nc All oc Sim u Spee S our Dist r Outs Re st Ship Fuel Production Facilities 0 4.3 4.0 2.7 3.7 1.7 4.7 2.0 1.0 4.0 3.0 3.7 3.3 1-50 4.2 4.2 3.4 3.7 3.4 3.9 3.4 2.9 4.1 3.1 3.5 4.0 51-100 4.0 5.0 3.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 101-200 4.0 4.0 4.0 4.0 3.0 5.0 5.0 5.0 5.0 3.0 4.0 4.0 201-500 5.0 4.0 4.5 5.0 3.5 5.0 3.5 3.5 4.5 4.5 3.5 4.0   Page 9 
  10. 10. Ultra Logistics Supply Chain Survey March 2010     Responses by Distribution Facilities  ring ing g n ution ma rk ct uri urce fa ctu ati ng tory Fl u x pi n g cing la te ib ru h d o Manu Inven Be nc Alloc Sim u Spee S ou r Dist r Outs Re st Ship Fuel Distribution Facilities 1-5 4.2 4.0 3.2 3.5 2.8 4.2 2.8 2.6 3.9 2.8 3.2 3.7 6-10 3.5 4.5 3.5 4.3 3.8 3.5 4.3 3.5 4.0 3.3 4.0 4.5 11-20 4.4 4.6 3.4 3.9 3.6 4.3 3.9 2.6 4.4 4.1 4.3 4.3 21-50 4.5 4.0 4.0 5.0 4.5 3.5 4.5 3.5 5.0 3.0 3.0 4.5 51+ 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0   Page 10 

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