Logistics Survival Guide June 2009


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learn how business process outsourcing has become very essential for logistics companies today for their survival in uncertain times.

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Logistics Survival Guide June 2009

  1. 1. A survival tool for logistics companies in uncertain times Business Process Outsourcing:
  2. 2. The Bleak State Of Logistics Industry <ul><li>According to Association of American Railroads (April 2009) </li></ul><ul><ul><li>Carload traffic on U.S. railroads fell by 23 percent </li></ul></ul><ul><ul><li>Intermodal car traffic fell by 17.9 percent, as compared to April 2008 </li></ul></ul><ul><ul><li>Combined cumulative volume for the first 17 weeks of 2009 on 12 reporting U.S. and Canadian railroads was 5,573,088 carloads, down to 19.0 percent(1,308,562 carloads) from last year </li></ul></ul><ul><li>According to FTR Associates </li></ul><ul><ul><li>Year-over-year tonnage freight is expected to bottom at -10.3 percent in 2Q09 before beginning a slow rise to a still stressful of 6.6 percent in 4Q09 </li></ul></ul>
  3. 3. Why Business Process Outsourcing (BPO) For Logistics Companies? <ul><li>Rapid Cost reduction </li></ul><ul><ul><li>Outsourcing these processes to a logistics industry-savvy service provider can deliver cost saving of 40-50 percent. </li></ul></ul>Source: WNS <ul><li>BPO delivers benefits which extend far beyond cost savings </li></ul><ul><ul><li>Moving costs from fixed to variable </li></ul></ul><ul><ul><li>Maintaining focus on the customer and retaining them in the face of operating cost reductions </li></ul></ul><ul><ul><li>Placing focus on knowledge rather than intuition to increase revenue </li></ul></ul><ul><ul><li>Consolidating delivery operations to standardize business processes </li></ul></ul><ul><ul><li>Getting even more out of shared services costs and delivering continuous improvement </li></ul></ul>Process In-house, onshore cost range Offshore BPO cost range Bill of lading processing $5.00 - $8.00 per each $2.00 - $4.00 per each Airway bill manifesting $0.30 - $0.40 per each $0.10 - $0.20 per each Account payable $0.90 - $1.33 per each $0.52 - $0.83 per each
  4. 4. Clearing The Decks For Success Seven Simple Rules For Logistics Companies To leverage BPO <ul><li>Ensure BPO is a CEO priority </li></ul><ul><li>Approach outsourcing with an open mind </li></ul><ul><li>Keep it simple </li></ul><ul><li>Move fast </li></ul><ul><li>Develop a realistic deployment plan </li></ul><ul><li>Insight on alignment </li></ul><ul><li>Debit budgets in advance </li></ul>
  5. 5. Advantage Logistic Companies Gain By Moving To A BPO Model <ul><li>Commercialize the approach to operations </li></ul>Rapidly reduce cost by Sourcing processes with scale Standardize business process Rationalize the delivery model 1 2 4 3
  6. 6. Which Logistics Processes Are Ripe For Business Process Outsourcing? Outsourcing processes to a logistics industry-savvy service provider can deliver cost saving of 40-50 percent. Sales/marketing Operations Finance Tariff updates Marketing collateral Campaign Management Rate quote Sales reports Import/export manifest PO entry Drivers logs Fuel tickets EDI gateway exception management Tracking status updates Vendor performance reports Operations planning Cargo de-stuffing Customers clearance Vessel performance Vendor contracts Account Payable AR/credit and collections Disbursement accounting Agent reconciliations General ledger Bank reconciliations Management reporting Customer services Origin/destination agent Service/rate inquires Customer advisory Pre-advice/arrival notification Cargo tracking Web help Cargo claims Complaints Bookings Export manifest Collect charges Invoicing Import manifest Import charges Documentation BL/AWB/FCR processing Billing and invoicing Freight audit Traffic/contract filing Data transmission Compliance checks Landed cost
  7. 7. Case study Rapidly Reducing The Cost Structure For A European NVOCC <ul><li>A leading European Non-Vessel Operating Common Carrier (NVOCC) looked to reduce its mounting staff costs in Europe, Latin America and Asia. </li></ul><ul><li>WNS' deep logistics industry knowledge contributed to a solution which standardized and migrated the NVOCC's entire import bill of lading and import manifest preparation processes among all its locations to one of WNS‘ offshore delivery centers, resulting in a 50 percent cost reduction. </li></ul><ul><li>Further, the standardized processing environment created for them has dramatically improved information dissemination among its network of offices. </li></ul><ul><li>The NVOCC is now experiencing minimal rework when moving shipments around the globe, and negligible to no customs delays or fines. </li></ul>
  8. 8. Case study Moving From Fixed To Variable Costs For A Global Express And Logistics Company <ul><li>A global Top 3 express and logistics company had to decrease the expenses associated with its mission-critical airway bill manifesting process. </li></ul><ul><li>With specialist operations centers serving the logistics industry, WNS was able to establish a 350-person operation for the company in less than 90 days, and is handling an annual volume of over 9 million airway bills. </li></ul><ul><li>WNS not only reduced airway bill manifesting expenses by 60 percent, but significantly increased the accuracy of data input to 99+ percent. </li></ul><ul><li>As the delivery is priced on a unit transaction basis, the client gained the benefit of variable cost pricing, with WNS assuming the volume risk. </li></ul>
  9. 9. <ul><li>After reaching steady state, the U.S.-based shared services operations of a Fortune 500 logistics company hit a plateau in its ability to optimize its cost structure. </li></ul><ul><li>By engineering a rapid transition to offshore delivery, and seeding the offshore operations team with industry and functional experts, WNS was able to attain an additional 40 percent cost savings for the company. And by applying Six Sigma and Lean principles to the client's processes, productivity gains of 10 percent were achieved within the first three years of the engagement. </li></ul><ul><li>Pleased with the results of this partnership, the client is now tracking business outcomes, as opposed to transactional metrics, delivered by WNS, and is poised to weather this economic storm in relation to its competitors. </li></ul>Case study Delivering Continuous Improvement For A Fortune 500 Logistics Company
  10. 10. To learn more - Listen to podcast : http://www.wns.com/Insights/Podcasts/BPOistheliferaftforshippingandlogistics/tabid/44175/Default.aspx Download Survival Guide: http://www.wns.com/Insights/Articles/tabid/81/Default.aspx Read the Blog: http://www.wns.com/Insights/Blogs/tabid/44163/entryid/48/default.aspx Visit website: www.wns.com