Insourcing v Outsourcing - the jury is still out!

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A seminar on insourcing versus outsourcing - current trends and industry comment

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  • The only certainty is uncertainty!!
  • Jonathan Weekes – Don’t ask me what can you do for me tell me what I should be doing - 1997
  • Introduce myself Declare my interest!!
  • So what’s the general perception of outsourcing? Many see the capabilities of 3pls in simple terms of trucks and sheds management and a bit of efficiency improvement (lane by lane etc) Many 3pls are pretty good at this, we are pretty good at this ….. If this is all you want from a 3pl that’s fine but your are not exploiting, exploring and explaining all the opportunities that working with a 3pl can offer you … Just in the areas of trucks and sheds, the right logistics partner can offer far more than just a commodity at a price - access to shared networks - flexible solutions that can grow with your business - supply chain and logistics experience and best practice from difference sectors and from around the world If you get your relationship right, your logistics provider can help in the creation of significant value - in the right circumstances 2 + 2 can equal 5
  • The only constant in business is change Look how business has changed over the past two decades, in terms of Geography (Far East), Technology (e-commerce, tracking), Political (EU harmonisation) and Business (Supermarkets providing Insurance, Woolworths, 24/7 culture) LSP’s have adapted to meet the changes and challenges your businesses require and supported your onward growth agenda’s
  • Today’s challenges are placing pressure on everyone The effects of these challenges make supply chain management even harder However, you can create value from your supply chain to ease the pressure, e.g lower inventory,
  • When Should You Stay In House When business is stable and controllable When should you Outsource To support growth/consolidation Change programmes e.g mergers/acquisition Require Logistics Expertise Cost Savings – typically 20% cost savings achieved when switching from Inhouse to Outsource for cost reasons Service Challenges Geographic Location Reduce Risk/Finance Strategy – asset light on Balance Sheet Concentrate on core activities IR issues Benefits of Outsourcing Cost Efficiency Improved Productivty, Shared User Networks, Synergy Service Capability Quality Service, Breadth of vision globally; leverage of customer base; Total Services Provided Expertise Innovation, Environmental, Engineering -automation Experience DHL will probably have existing logistics solution somewhere in the world; IT WMS Capability; BCP Skills e.g Bunsfield People Logistics Professionals; TUPE; Implementation Skills
  • As per the quote, value isn’t about hammering down prices For e.g if you deliver 20,000 pallets pa and negotiated a £1 reduction in your transport rates you would save £20,000. However, iy you re-engineered you moved to an Integrated Transport Control Tower you may save £100,000’s pa The more experienced/professional the LSP, the more potential value you can unlock However, value doesn’t come through negotiation, it comes through working together partnership
  • Think about what you are wanting to achieve What service issue are you trying to address Don’t choose a local haulier to solve your Far East Consolidation problems
  • The CILT Survey results clearly show that many companies use outsourcing to support their business The results also show that there is no trend back towards in-sourcing At DHL we also survey our customers, through our First Choice programme c90% of customers renew their contracts with DHL Therefore, we must be delivering value and justify our fee through outsourcing, as customers continue to outsource and renew their contracts.
  • Value can be generated across the supply chain Don’t just look at warehousing and transport How do you manage your Inbound Supply Chain, or do you leave that to Procurement, do Procurement leave it to the Supplier? Co-Packing Services How do you manage your after sales and Reverse Logistics Services? These areas can make a difference and add value to your own business If you choose the right partner, they can provide you with sector experience Cross fertilise knowledge and practices between sectors
  • In Summary? Should I outsource - the answer is – it depends – look at circumstances in your business Do LSP’s justify fee? - well - we listen to customers we understand business environment we adapt to changing landscape Think about how too maximise value in the outsourcing process If you want value creation work with a partner who can help you with this….
  • Buncefield incident happened in December 2005 Explosion occurred on the Sunday morning The nearby Gillette warehouse was damaged Operation back up live on the Tuesday evening New warehouse location WMS transferred and operating Staff transported to the site
  • Significantly increasing warehouses and transport productivity But the real value comes from the procurement skills we bring to the overall NHS Supply Chain Delivery €1.2bn to the NHS over 10 years
  • I2M – Inbound to Manufacturing
  • Insourcing v Outsourcing - the jury is still out!

    1. 1. Is in-sourcing the new outsourcing? 12 th May 2009
    2. 2. Programme 0930 hrs Coffee and Registration 1000 hrs Welcome, Introductions and Forum survey results Gwynne Richards FCILT O&P Forum Chairman 1030 hrs The pros and cons of in-sourcing – has logistics become a core competence again? Ian Stansfield Distribution Director Asda Walmart 1115 hrs Coffee 1130 hrs Having outsourced could I be tempted back to running my own fleet? Matthew Woodcock CMILT Logistics and Distribution Manager Aggregate Industries, Building Materials 1200 hrs Are we adding value and justifying our management fee in our customers’ eyes? – A Third Party Logistics View John Boulter FCILT Managing Director DHL Home & Specialist Retail 1230 hrs Panel discussion 1300 hrs Lunch and networking 1400 hrs Close
    3. 3. Outsourcing and Procurement Forum <ul><li>Forum Mission Statement: </li></ul><ul><li>To initiate original thinking and discussion in areas of outsourcing and procurement, relating to the supply chain </li></ul><ul><li>To produce papers and reports and set up events and workshops on subjects identified by the membership of the Forum and other CILT(UK) members </li></ul>http://www.ciltuk.org.uk/pages/oandpforum
    4. 4. In-sourcing v outsourcing “ Outsourcing has been the dominant trend in logistics over the past two decades and examples of contracts being taken in-house are rare. The fact that the UK's largest retailer believes it can manage logistics operations more profitably and efficiently itself is particularly noteworthy”. “ As the economy tightens, companies are taking a hard look at areas they maybe really should be keeping internal, and actually, maybe shouldn't have outsourced in the first place (or maybe out sourced to the wrong firm). In these times, companies need service providers (both internally and externally) that fully understand the company's needs”. “ At a time when companies are trying to convert fixed costs into variable costs to gain scalability I don't think there was ever a time when outsourcing made more sense”. “ the outsourced logistics industry is poised for strong expansion because of the growing trend toward outsourcing by manufacturers so they can focus on their core competencies”. “ It is easier to outsource than to define the problem and solve it”. “ The global contract logistics market grew at 5% in 2008 according to the latest report published by Transport Intelligence, Global Contract Logistics 2009 . This represents a significant weakening of the market after several years of growth of around 10%”.
    5. 5. Third party penetration in UK retail industry (number in % volume) Source: IGD 2007 report; IGD 2008 report; IGD 1998 report, cited from Pach é , 1998 1998 2007 RETAILER Warehousing Transport Warehousing Transport Asda 64 64 4.1 - Boots 50 (2003) 100 (2003) 10 100 Iceland 45 45 100 100 Sainsbury 64 74 51 51 Somerfield 50 100 100 100 Tesco 38 0 19 41 The Co-operative 11 (2004) 12 (2004) 6.5 6.5 Waitrose 48 48 46.5 42 Wilkinson 0 100 0 100
    6. 6. Results of Outsourcing Questionnaire 2009 Comparison with 2008 survey
    7. 7. What % of your supply chain activities do you currently outsource?
    8. 8. What % of your supply chain activities do you currently outsource?
    9. 9. How have these figures changed over the past 5 years?
    10. 10. How have these figures changed over the past 5 years?
    11. 11. How are these figures likely to change over the next 5 years?
    12. 12. How do you see your outsourced logistics provider? &quot;A necessary evil“ “ They are only in it to make money these days”. “ Deliver poorer service for disputed financial advantage”.
    13. 13. What changes have you experienced in the past 3 years regarding your 3 PL relationships? <ul><li>Closer relationships (25%) </li></ul><ul><li>Shorter contracts </li></ul><ul><li>Cost reduction </li></ul><ul><li>Increased arms length relationships </li></ul><ul><li>More effective KPI and cost controls </li></ul><ul><li>Fewer skills </li></ul><ul><li>No change </li></ul>
    14. 14. Has the length of your outsourced contracts increased or decreased over past 3 years? 2008 Maximum = 7 years; Average = 2.65 years; Median = 3 years 2009 Maximum = 10 years; Average = 3.57 years; Median = 3 years
    15. 15. Which of the following do you prefer in your transport outsourcing relationship?
    16. 16. Which of the following do you prefer in your transport outsourcing relationship?
    17. 17. Which of the following do you prefer in your warehousing outsourcing relationship?
    18. 18. Which of the following do you prefer in your warehouse outsourcing relationship?
    19. 19. Which of the following do you prefer in your Warehouse outsourcing relationship?
    20. 20. Benefits of outsourcing Advantage Position 2009 (2008) % % Cost reduction 2 (1) 21.5% 15.3% Access to greater expertise 1 (2) 16.9% 16.8% Concentration on core competencies 4 (3) 15.4% 8.4% Flexibility 3 (4) 12.3% 11.6% Less risk 7 (5) 4.6% 3.7% Less capital expenditure 5 (-) >3% 7.9% Variable costs 6 (-) >3% 5.3% Consolidation - (8) 3.1% <3% More professional - (9) 3.1% <3% Effective resource management 8 (10) 3.1% 3.2% Improved service 8 (-) <3% 3.2% Access to new technology etc 8 (-) <3% 3.2% Others e.g. ‘One stop shop’; purchasing power 20% <20.0% Someone else to blame! Challenging the status quo None No need for consultants!
    21. 21. Outsourcing or In House? ? Old question…New Era...Same answers
    22. 22. Grangemouth (Always In-house) Wakefield (Always In-house) Dartford (Christian Salvesen) Wigan RDC (Glass Glover/Wincanton) Lutterworth ADC (W/H = Tibbet & Britten, T/P = Lloyd Fraser) Lutterworth RDC (Lloyd Fraser) Bristol (Tibbet & Britten) Warehouse 28% Asda The Original Asda Network Transport 28% Asda
    23. 23. Grangemouth (Always In-house) Washington (Glass Glover/Wincanton) Wakefield (Always In-house) Dartford (Christian Salvesen/Wincanton) Wigan (Glass Glover/Wincanton) Lutterworth ADC (W/H = Tibbet & Britten, T/P = Lloyd Fraser) Lutterworth IDC (Always In-house) Chepstow (Lloyd Fraser) Didcot (Always In-house) RE-SITE 2009 Rugby Relief (Always In-house) PROPOSED CLOSING Warehouse 100% Asda Current Network - ADC Transport 97% Asda
    24. 24. Current Network – GM,Imports and New Business Doncaster (Wincanton) Teesport (always in-house) Ollerton (CLIPPER) Liverpool (DAMs) Warehouse 50% Asda 50% 3PL Transport 20% Asda 80% 3PL Warehouse 100% 3PL Transport 100% 3PL GM New Business
    25. 25. Falkirk (Always In-house) Washington (Always In-house) Wakefield (Always In-house) Erith (Always In-house) Skelmersdale (Always In-house) Lutterworth (Was Lloyd Fraser) Bristol (Was Tibbet & Britten) Bedford (Always In-house) Larne (Wincanton) Warehouse 89% Asda Current Network – CDC Transport 88% Asda Transport from UK to Northern Ireland 100% 3PL
    26. 26. NDL – Christian Salvesen/ Norbert Dentresangle Warehouse 100% 3PL Current Network – Asda Service Centres Transport 100% Asda Falkirk (NDL) Washington (NDL) Wakefield (NDL) Lutterworth (NDL) Bedford (NDL) Erith (NDL) Skelmersdale (NDL)
    27. 27. Washington (Always In-house) Lymedale (Was DTS) Brackmills (Was Tibbet & Britten) Warehouse 80% Asda Current Network - Clothing Transport Trunk 100% 3PL Store 100% Asda Teesport - Boxed Darlington (CLIPPER)
    28. 28. Current Network - Petrol Aberdeen (1 truck) Grangemouth (5 trucks) Stockton (2 trucks) Immingham (5 trucks) Nottingham (1 truck) Purfleet (10 trucks) Birmingham (3 trucks) Eastham (1 truck) Milford Haven (3 trucks) Plymouth (2 trucks) Avonmouth (3 trucks) Transport 100% 3PL Dedicated national contract managed by DHL
    29. 29. Consolidation Network Wakefield (International Produce) Boroughbridge (Reed Boardall) Sheerness (International Produce) Spalding (Freshlinc) Fresh Produce Chilled Foods Frozen Foods Ambient Warehouse 100% 3PL Transport 20% Asda 80% 3PL Zeebrugge (2XL) Corby (Ceva) Manchester (NFT) Stockport (Fowler Welch) Leicester (Pall-ex) Daventry (NFT)
    30. 30. We should be better than you <ul><li>Food…doing it for 20 years </li></ul><ul><li>Our systems…our buildings…our stock </li></ul><ul><li>Ability in IT, Engineering, HR is high </li></ul><ul><li>Little opportunity for external collaboration in mature networks </li></ul><ul><li>What do we get for our money? </li></ul><ul><li>‘ I’ve yet to see a better food operation than one run by a Retailer’ </li></ul>
    31. 31. Please accept my apology…we need you! <ul><li>New Business areas </li></ul><ul><li>Low experience and wrong systems </li></ul><ul><li>Immediate access demanded…we are impatient </li></ul><ul><li>De risking Industrial Relations </li></ul><ul><li>It’s dangerous to be insular </li></ul>
    32. 32. Doncaster National GM Hub - Wincanton
    33. 33. Lutterworth ASC & Returns Centre - NDL
    34. 34. Darlington Clothing Deconsolidation Centre – Clipper Logistics
    35. 35. NBD Overview Service partners
    36. 36. What’s my view? <ul><li>Relationships matter…but you can’t take me to the Races! </li></ul><ul><li>We need to learn…we need inspiration and innovation...show me </li></ul><ul><li>Dedicated facilities would only be outsourced to de risk IR </li></ul><ul><li>Non Food, Transport and New Business Operations present the opportunity </li></ul><ul><li>Don’t sell me what YOU want, show me what I NEED </li></ul><ul><li>Earn your keep </li></ul>
    37. 37. 15 minute coffee break
    38. 38. Having outsourced could I be tempted back to running my own fleet? Matthew Woodcock CMILT Logistics & Distribution Manager, Aggregate Industries IS IN-SOURCING THE NEW OUT-SOURCING?
    39. 39. AGGREGATE INDUSTRIES BUILDING MATERIALS (AI BM) IS A SIGNIFICANT PROVIDER OF BUILDING MATERIALS Company & Group overview Major brands and customers <ul><li>One of the UK’s largest building material providers </li></ul><ul><li>2008 revenue circa £300m </li></ul><ul><li>30 sites despatching over 3m tonnes with a fleet covering 19 million miles per annum </li></ul><ul><li>Part of the Holcim Group which employs 90,000 people in 70 countries in cementitious, aggregate and building material industries </li></ul><ul><li>www.aggregate.com </li></ul>
    40. 40. LOGISTICS IS FULLY OUTSOURCED IN AI BM, UTILISING A 4PL PLATFORM TO MANAGE OUR OUTBOUND DELIVERIES <ul><li>Logistics approach until Nov 2008 </li></ul><ul><ul><li>>300 small hauliers and franchisees </li></ul></ul><ul><ul><li>Fragmented manual planning </li></ul></ul><ul><li>Since Nov 2008 AI BM have been implementing a 4PL solution with TDG, now over 75% complete </li></ul><ul><ul><li>Holistically optimised deliveries, utilising specialist hauliers resources to undertake movements </li></ul></ul><ul><ul><li>A single platform using integrated state of the art systems </li></ul></ul><ul><ul><li>Access to other TDG business to drive efficient use of resources </li></ul></ul>
    41. 41. THE CHOICE BETWEEN IN AND OUT-SOURCING IS A CONTINUUM WITH MANY DIFFERENT OPTIONS <ul><li>Most companies in the building materials and construction sector run with mixed models utilising a number of these options </li></ul>OUT-SOURCED IN-SOURCED <ul><li>4PL </li></ul><ul><li>Outsourced </li></ul><ul><li>Transport planning </li></ul><ul><li>Haulier procurement </li></ul><ul><li>Driver/vehicle </li></ul><ul><li>Operations </li></ul><ul><li>3PL </li></ul><ul><li>Outsourced </li></ul><ul><li>Transport planning </li></ul><ul><li>Driver/vehicle </li></ul><ul><li>Operations </li></ul><ul><li>Sub-contract </li></ul><ul><li>Outsourced </li></ul><ul><li>Driver/vehicle </li></ul><ul><li>Operations </li></ul><ul><li>Franchisee </li></ul><ul><li>Outsourced </li></ul><ul><li>Driver/vehicle </li></ul>Own-fleet
    42. 42. OWN FLEET PROVIDES MANY CONTROL BENEFITS, BUT COMES WITH MANY RISKS AND FINANCIAL CONSTRAINTS <ul><li>Greater degree of fixed cost – exposure to mix and demand changes </li></ul><ul><li>Demand for CAPEX (with low IRR) </li></ul><ul><li>True costs often hidden </li></ul><ul><li>Perception as “free” resource </li></ul><ul><li>Driver IR </li></ul><ul><li>Legislation </li></ul><ul><li>Not necessarily a core competency </li></ul><ul><li>Control of service </li></ul><ul><li>Ownership of last step to customer </li></ul><ul><li>Availability of specialised equipment </li></ul><ul><li>Geographical flexibility </li></ul><ul><li>Political alignment </li></ul><ul><li>No external transport profit to pay </li></ul><ul><li>Service flexibility </li></ul>OWN FLEET Pros Cons
    43. 43. OUT SOURCED LOGISTICS GIVES FINANCIAL FLEXIBILITY AND CORE COMPETENCE, BUT CAN LOOSEN CONTROL <ul><li>Extra level of profit/margin to pay </li></ul><ul><li>Arms length control </li></ul><ul><li>Variety between providers </li></ul><ul><li>Exposed to haulier deserts </li></ul><ul><li>Specialised equipment can be hard to obtain </li></ul><ul><li>Providers own growth/political direction </li></ul><ul><li>Highly variable cost resource </li></ul><ul><li>No CAPEX, costs are off balance sheet </li></ul><ul><li>Core competency of provider </li></ul><ul><li>Scalable and responsive if volume/mix changes </li></ul>OUT SOURCED Pros Cons
    44. 44. A 4PL APPROACH PROVIDES MANY OF THE BENEFITS OF OWN FLEET THROUGH AN OUTSOURCED SOLUTION <ul><li>Use of a good 4PL provider, gives many of the advantages of both the in and out sourced operating models </li></ul><ul><li>From the outsource model </li></ul><ul><ul><li>No CAPEX requirement </li></ul></ul><ul><ul><li>Core competency </li></ul></ul><ul><ul><li>Cost management </li></ul></ul><ul><ul><li>Sustainability benefits </li></ul></ul><ul><li>From the own fleet model </li></ul><ul><ul><li>Flexibility </li></ul></ul><ul><ul><li>Greater control </li></ul></ul><ul><ul><li>Greater visibility </li></ul></ul><ul><ul><li>Standardisation </li></ul></ul>Service Cost Flexibility Control Visibility Capital Sustainability 4PL
    45. 45. THE OUTSOURCED 4PL SOLUTION IS PROVIDING AI BM WITH THE TOOLS TO ADDRESS ISSUES ACROSS THE BUSINESS OUT- SOURCE Internal issues across value chain buried, no visibility of cost impact Issues (cost, service, quality) captured Trends identified Challenge the sacred cows Drive change across business Improvement across the whole value chain <ul><li>Supply chain approach new to business – many years of A->B transport </li></ul><ul><li>Numerous behaviours in different silos adding unquantifiable cost </li></ul><ul><li>“ Sacred cows” and company politics preventing change </li></ul><ul><li>Key is right relationship and contract to drive smooth efficient improvement </li></ul>
    46. 46. CAN I BE TEMPTED TO GO BACK INTO RUNNING MY OWN FLEET? NO…. BUT MAYBE ONE DAY
    47. 47. ‘ Are We Adding Value and Justifying our Management Fee in our Customers’ Eyes?’ Outsourcing and Procurement Forum John Boulter, Managing Director, Non Food Retail, DHL Supply Chain Asda Lutterworth, May 12 th 2009
    48. 48. Perception of Outsourcing Page Management Fee <ul><li>Warehousing services </li></ul>Sheds <ul><li>Transport services </li></ul>Trucks <ul><li>Efficiency improvements </li></ul>Additional Overheads 3PL Stereotype Capabilities <ul><li>Paying for all operational cost plus % </li></ul>= £Cost Traditionally, many view outsourcing as just the hire of a commodity……. <ul><li>Efficiency cost savings </li></ul><ul><li>Service improvements </li></ul><ul><li>Shared networks </li></ul><ul><li>Visibility and control </li></ul>Optimised Transportation <ul><li>Flexible solutions </li></ul><ul><li>Multiple locations </li></ul>Shared User Warehousing Business Challenge <ul><li>Bring best practice </li></ul><ul><li>Cross Section Experience </li></ul>Supply Chain Expertise Actual 3PL Capabilities Management Fee = £Value ……… in reality it is about the creation of additional value <ul><li>Challenge current thinking </li></ul><ul><li>Benchmarking </li></ul>
    49. 49. How Logistics Providers have Developed Page Outsource Method Contract Services Logistics Outsourcing Integrated Supply Chain Management 1985-1995 1995 - 2000 2000 + Period Mass Production Retailer Dominance EU Harmonisation Demand ‘Push‘ Customisation Far East Production E-commerce Demand ‘Pull‘ The business environment is constantly changing………. Business Trends Collaboration Reduced Risk Transformation Cash Services Relationships Reach Competitive Landscape Competencies Buyer Value Increased Integration Strategic Partnerships Global, door to door Large Alliances and niche providers Knowledge Based Optimised cost/service Single Function Transactional Local, Regional Fragmented Asset Heavy Cost Reduction Multi-functions Longer Term Multi-regional Consolidation/Alliance Information based Cost avoidance …… . Logistics Service Providers adapt their services to support these changes Outsource Characteristics
    50. 50. The Current Market Challenges Page Increased choice and channels – same customers = Cost and service pressures. Globalisation = internal cultural challenges in traditional mature markets. Business focus more on growth in new countries Effects Inflation pressures from commodity price volatility - Less ability to pass on these costs with high impact on discretionary spend Increased focus from Pressure groups, Governments and Business Reduced customer confidence; Cost down approaches; reduced investment in supply chain Globalisation = multiple geographies, creating complex buying, merchandising and planning challenges, E2E management Multi-Channel Retailing Growth in Mature Markets The Challenge Price Volatility Corporate and Social Responsibility Agenda Financial Market Turmoil End-to-End Market Environment Regulation Competitive Pressures Impact To survive and thrive businesses have to constantly change and adapt to current challenges…… … . Supply Chains will not be immune from this constant change… … . you will need to ensure that your Supply Chain is providing maximum value… Creating value from your supply chain is a way of addressing market challenges…... ……… and using an experienced Supply Chain Operator can make the difference
    51. 51. Inhouse v Outsource? Page Outsourcing can deliver significant business benefits…… …… ..but the level of value will vary depending upon the circumstances Service Capability Expertise Experience Cost Efficiency People The Benefits of Outsourcing Capability and Resource to Deliver Level of Business Change High High Low Low Stay Inhouse Outsource When should you outsource?
    52. 52. The Value Gained from Outsourcing Page ‘ The opportunities for cost reduction are finite, there are only 100 cents in every dollar. However, the opportunities for enhancing customer value are infinite – we are only limited by our imagination. (Laura Ashley) Strategic relationships will deliver more value…. … .however they will require greater investment and commitment Value Haulier Integrated Supply Chain Partner Logistics Provider Services Provided Courier Freight Forwarder
    53. 53. Defining the Outsourcing Relationship + Choosing the Right Partner Page Outsourcing Needs? Solution Criteria Outsourcing Needs? Integrated supply chain service Service Capability Single Service; Local Service Strong credit and substantial financial strength Financial Stability Credit Challenges; Lower Financial Depth Integrated; Leading the industry; Visibility IT Capability Limited; Little Integration Seen as an asset to the business Cultural Alignment Cost based service Longer term; balanced structure; risk & reward Commercial Stance Short term viewpoint; tariff pricing; no incentivisation Common goals, Board level position Strategy Separate goals, some alignment Strategic partner; Openness & Trust Relationship Treated as commodity supplier Joint KPI Management; Bonus/reward process Performance Annual Review; Penalty charges for poor service Commodity Based Partner Integrated Strategic Partner … to ensure you select your best Logistics Provider Defining upfront your outsourcing needs is critical…..
    54. 54. Outsourcing Survey Results Page 3.6 years 2.7 years Average Contract Length 91% 88% Maintain or Increase in Warehouse Operations in next five years 65% 72% Warehouse Services 94% 83% Transport Services 2009 2008 Outsourcing Activity Year Year Through its First Choice Programme, DHL survey’s it own Customers Annual Customer Surveys started in 2006 We ask how we are doing? We invite our Customers views on Service, Loyalty, New Services and Account Management for example …… . 94% of businesses outsource their transport services and 96% of Customers renew their business with DHL Do we justify our fee?.....
    55. 55. Value from Integrated Supply Chain Solutions Page Manufacturer & Raw Materials Export / Import Activities Primary Movement Distribution Centers Secondary Movement B2B & B2C Distribution After-sales and Reverse Logistics Services Value can be achieved from all across your supply chain…. <ul><li>International supply chain management </li></ul><ul><li>Distribution to stores </li></ul><ul><li>In store logistics </li></ul><ul><li>Home delivery </li></ul>Sector Solutions Consumer <ul><li>Inbound to manufacturing </li></ul><ul><li>Technical distribution </li></ul><ul><li>Technical services </li></ul><ul><li>Service parts logistics </li></ul><ul><li>Reverse logistics </li></ul><ul><li>Inbound to manufacturing </li></ul><ul><li>Service and replacement parts </li></ul><ul><li>Infrastructure Logistics </li></ul><ul><li>In-Plant services </li></ul><ul><li>Clinical trials logistics </li></ul><ul><li>Pharmaceutical grade logistics </li></ul><ul><li>Temperature assured </li></ul><ul><li>Direct to pharmacy </li></ul><ul><li>Contract manufacturing </li></ul><ul><li>Co-packing </li></ul><ul><li>Shared-user and campus solutions </li></ul><ul><li>Ambient and temperature controlled </li></ul>Healthcare Automotive & Industrial Technology Retail & Fashion <ul><li>Consultancy services, Lead Logistics Partner services, Procurement services, Sustainability services </li></ul>
    56. 56. Summary Page <ul><li>As a Senior Logistics Professional, in trying times and complex business situations, can you afford NOT to consider outsourcing?’………’ </li></ul>Should I outsource? Does Outsourcing add Value? Do LSP’s justify their Fee? Yes …. in the right situations Yes, providing the relationship is built and managed correctly Yes, it can be used to support the changing business challenges
    57. 57. Case Study Business Continuity, Buncefield Page
    58. 58. Case Study Delivering > €1.2bn savings over 10 years Page <ul><li>Increased usage of procurement contracts by customers </li></ul>Significant savings redirected back to NHS managers for patient care <ul><li>Increased warehouse and transport productivity </li></ul><ul><li>Improved inventory turns, order volumes and range of portfolio </li></ul><ul><li>Reduced product prices and lead-times to health-care trusts </li></ul><ul><li>Reduced logistics costs for over 610,000 products </li></ul><ul><li>Single point of contact for over 600 healthcare organizations </li></ul>
    59. 59. Case Study Sequencing Product Delivery Page Contract to manage Inbound to Manufacturing, In-Plant Logistics and the collection of UK and European sourced component parts for Jaguar and Land Rover vehicles <ul><li>Consistent and lean operations across the UK manufacturing sites </li></ul><ul><li>Dedicated team to improve UK and EU collection operations </li></ul><ul><li>Reduced costs through joint freight planning operation </li></ul><ul><li>In plant logistics operations at three sites across the UK </li></ul><ul><li>Management of European suppliers </li></ul><ul><li>Lean and efficient supply chain supporting the build of over 300,000 cars annually </li></ul>
    60. 60. CHALLENGING TIMES John Boulter, Managing Director, Non Food Retail, DHL Supply Chain Outsourcing could be your Solution Thank you!
    61. 61. Question Time
    62. 62. Potential questions <ul><li>Is logistics a core competence? </li></ul><ul><li>Can 3PLs be successful 4PLs? </li></ul><ul><li>Why are we continually debating this question as to the benefits of outsourcing? </li></ul><ul><li>Why don’t we trust each other? </li></ul><ul><li>Is Open Book a licence to print money? </li></ul><ul><li>Have 3PLs been squeezed enough? </li></ul><ul><li>Are 3PLs risk averse? </li></ul>
    63. 63. Lunch and networking

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