Jerry Riordan discusses developing a culture of innovation at CEVA Logistics. Some key points: 1) CEVA has a balanced global portfolio across regions and sectors to drive value through innovation. 2) True innovation comes from small differences, like the 3% of DNA that separates humans from dinosaurs. 3) The logistics industry needs innovation to breakthrough fragmentation and inconsistency, as other industries like automotive and retail did through companies like Toyota and Walmart. 4) CEVA fosters innovation through operational excellence pillars like lean solutions, zero defect startups, and strategic partnerships that transfer best practices across sectors.

1. Develop a Culture of Innovation
Jerry Riordan, Chief Operating Officer Americas
CEVA

2. • CEVA
• Innovation driving value
• Operational excellence

3. Balanced global portfolio
Europe, Middle East, Africa
Employees: 39%
# Countries: 100+
Revenue ’09: 48%
The Americas
Employees: 41%
# Countries: 40+ Asia Pacific
Revenue ’09: 29%
Employees: 20%
# Countries: 30+
Revenue ’09: 23%
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4. Balanced sector portfolio
Other 12%
Automotive 28%
Energy 5%
Industrial 14%
Consumer & Retail 17% Technology 24%
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5. • Innovation driving value

6. A thought on innovation?
Human DNA and dinosaur DNA are 97% the same.
What matters is the 3% that separates the two species.
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7. Innovation
Many innovation opportunities exist within the
world of logistics…
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8. Some thoughts on innovation
• In the 1970s The automotive industry was fragmented and unprofitable
Industrial relations were poor
Car quality was worse
….and Toyota sparked a quality revolution
• In the 1980s The retail industry was national and fragmented
The customer proposition was narrow and limited
The prices were high (relatively)
…and Wal‐mart gave us “every day low prices”
• In the 1990s The PC industry was fragmented with multiple players
Sold high price products that were often out of date
Had sales channels full of inventory
….and Dell reinvented the “supply chain”
• In 21st century The global logistics industry was highly fragmented
The service suffered from inconsistency
The customer saw little innovation and pushed margins down
8 ….and how will our industry breakthrough?

9. Drivers of supply chain innovation?
• Globalization has increased the strategic and financial
significance of logistics
• Reducing product life‐cycles creates a state of almost continuous
change
• Global imbalance of human talent supply and demand is
challenging international business
• Consumers and governments force business to accept social
responsibility re‐shaping supply chain design
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10. Innovation in the supply chain – track record
Innovation and execution must be continuous
Accenture
4PL, adding a consultation/ strategic level to SC thinking
Toyota
LEAN techniques and approach to improve efficiency
Dell
Responsive manufacturing & 100% demand pull
Zara
Putting the supply chain at the heart of the company &
introducing global standardization
PODS
Bringing standardization to moving house and storage
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11. Prerequisites for 3PL innovation
• Customer confidence in the industry
• 3PL industry willing to invest in R&D
• Greater industry education and professionalism
Innovation fuelled by strong partnerships
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12. • Operations excellence

13. Operations Excellence culture in CEVA is built
on five pillars
Health, Safety
Smart Zero Defect
LEAN and
Solutions Start ups
Environment
Global Standard Metrics
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14. Process driven approach
Smart Solutions
• Leveraging
best‐in‐class
Integrated service
portfolio
Operational review
Sector
Leveraging
• Full LEAN expertise
scale
implementation Zero defect startup
• Ongoing continuous • Operations Excellence
Trained
improvement experts
Project
management
• Robust project management
• Trained experts
LEAN
Implementation review
• Identification of
improvement potential
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15. Application in the real world

16. 4PL for an international automotive supplier
By re‐engineering the supply chain and acting in a 4PL capacity, CEVA delivered a
productivity commitment over the five years of the contract and reduced total logistics cost
by 24%
Inbound
Outbound
17%
The LLP provided; TRSP
Delivering; cost
Centralised and standardised Reduced transportation
- Communication, Project Org, Account Mgmt
Reduced transaction cost 33%
- KPI Management and Reporting WHS
Reduced / variable transaction costs cost
‐ Blueprint specifications
Lower Inventory
(Processes in Material Flow and IT) 27%
Increased fill rates In‐Plant
Standards for local Sub‐Agreements cost
Reduced waste
Customer Commitment: global exclusivity 24%
Increased productivity Total
CEVA Commitment: productivity Logistic
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17. Transferring best practice across sectors – I2M

18. In summary
• Historically, an industry which has under‐delivered on customer
expectations
• Requires continuous innovation
• Innovation starts with Operations Excellence and
• Is fostered by an environment of strategic partnership
• There are several broad channels:
‐ economies of scale
‐ leveraging information
‐ transferring best practice
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19. Of course, there is an alternative ...
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