Logistics Department Trends and Strategies in Global Logistics

Logistics Department Trends and Strategies in Global Logistics Networks II. Annual Expo and Conference Logistics in Serbia Belgrade, the 5 th of June 2012 Alfonz Antoni ELA vice-president, member of Slovenian Logistics Association Logistics Department © Logistics Department, Berlin Institute of Technology

Scientific directors and international partners of the survey Logistics Department © Logistics Department, Berlin Institute of Technology

Questioning duration 57. 200 minutes 953 hours Logistics Department © Logistics Department, Berlin Institute of Technology

Data basis n = 1008 all figures in % Logistics Department © Logistics Department, Berlin Institute of Technology

Global Logistics The globalisation is irreversible and still progressing. Logistics is more and more impacted by “Mega Trends”. Logistics Department © Logistics Department, Berlin Institute of Technology

The globalisation, the increasing requirements regarding security, protection of the environment and resources, as well as innovations in technology … Europe … significantly impact the current and future logistics practices. % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

Logistics objectives: reliability and costs Logistics Department © Logistics Department, Berlin Institute of Technology

The logistics targets prioritisation is almost similar across Europe, the USA, and China. (1 = „low priority“ to 5 = „high priority“; arithmetic means of all responses) Logistics Department © Logistics Department, Berlin Institute of Technology

The long term trend of decreasing logistics costs is broken. Logistics managers of the retail and industry sector expect increasing logistics costs. (logistics costs in % of the cost of goods sold) Logistics Department © Logistics Department, Berlin Institute of Technology

Industry: Inventory and Administration are potentials for improvement Industry Many logistics managers do not know their total logistics costs! Logistics Department © Logistics Department, Berlin Institute of Technology

Cross-company requirement and capacity management still offers untapped potential Cross-company requirement/capacity management (Europe and US) 12% 48% Long-term call-offs with confirmation fr. supplier Direct information on requirements via multi-tiers 13% 56% Sending of forecasts to suppliers 10% 16% Sending of capacity requirements to suppliers Confirmation of maximum capacity availability 16% 36% 25% Already implemented today 13% 69 % 60 % 26% 52 % 38% (in % of surveyed companies) Implemented by 2015 Logistics Department © Logistics Department, Berlin Institute of Technology

Logistics Service Providers and Outsourcing High outsourcing potentials are expected by the industry, retail, and service providers equally Logistics Department © Logistics Department, Berlin Institute of Technology

Requirements on Logistics Service Providers (LSP) by 2015 Companies with LSP as a partner in the management, administration and coordination of further LSPs. 44% Requirements on Logistics Service Providers 17% § Lead Logistics Provider § Networking of transport and logistics § Establishing of a supply chain organisation as a single point of contact for customers Today in 2015 Areas / Criteria: § Management and administration of logistics processes § Coordination of further LSPs of the customer § More pro-activity and innovation § Global IT-standards and balanced mix of flexibility and reliability Source: Straube, F. , Borkowski, S. (2008): Global Logistics 2015+. Chair of logistics. TU-Berlin Logistics Department © Logistics Department, Berlin Institute of Technology

Green Logistics Relevance – Sensitivity – Drivers Logistics Department © Logistics Department, Berlin Institute of Technology

Climate change Average global anomaly of the surface temperature Smelting of glaciers and polar caps Average per year 5 years average Source: NASA (2007) § § § Source: Global Warming Art: Robert A. Rhode (2007) Mc. Carthy Gletscher, Alaska The climate change occurs – meanwhile proven by measured data and not just forecasts Dramatic development of smelting at the polar caps, disappearing glaciers, sliding climate zones are already reality Logistics and transport come under criticism, efforts for climate change are requested urgently Logistics Department © Logistics Department, Berlin Institute of Technology

”Sensitivity“ of the logistics by the increasing environmental and resource protection requirements today Industry 2015 today Retail 2015 Logistics Service Provider today 2015 very much neutral low very low More than 74 percent of the respondents see their logistics in future affected by the increasing environmental and resource protection requirements. % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

Implementation of environmental and resource protective efforts < very advanced infancy > Industry Retail Logistics Service Provider Large Enterprises SME (Likert-Scale: 1 = „very advanced “ to 5 = „in the beginnings “; in % of respondents) Logistics Department © Logistics Department, Berlin Institute of Technology

Organisational integration of environmental and resource protection. Environmental and resource protection is …. . . a formal part of our corporate policy by guidelines and visions. Large Enterprises . . . emphasized in our corporate strategy. . defined in our logistics /SCM strategy. . defined in our logistics KPI-system/ target system. . a formal part of our corporate policy by guidelines and visions. SME . . . emphasized in our corporate strategy. . defined in our logistics /SCM strategy. . defined in our logistics KPI-system/ target system. yes, developing further yes, not, but planned not tackled % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

Lacking concepts, methods, and tools for concrete actions Cost-Benefit calculation methods Tools and measures to evaluate cause-effects interrelationships Innovation management for “green” products and services Assessment of the firm in regard to “green logistics” to determine appropriate actions Carbon Footprint Measurement Integration into existing IT-System (e. g. ERP-System) Methods and tools for Implementing green techniques CO 2 - Emission Trading Systems Standardization, Certifications Industry Retail LSP % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

Leaders – Best in class Logistics Department © Logistics Department, Berlin Institute of Technology

„Leaders“ and „Professionals“ Leaders 20 % Cost Leader 20 % Perform. Leader 3% Leader Professionals Logistics Department © Logistics Department, Berlin Institute of Technology

Project agenda of “Leaders”: Strong focus on strategic, cross-company, and innovation projects % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

Need for logistics managers: „Leaders“ are much more satisfied and are more able to find suitable recruits Country-specific need for logistics managers – international comparison Country-specific need satisfaction – international comparison % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

„Leaders“ expect from their employees alongside specialist expertise: soft skills, professional project management, and especially ICT competencies. % of respondents Logistics Department © Logistics Department, Berlin Institute of Technology

Cost and performance leaders are more focused. They emphasize: • Straight forward logistics strategy consequently aligned to the corporate strategy • end-to-end-approach • Cost transparency and permanent service monitoring • High level of IT and process standards, especially in close customer related processes. • Modern concepts of cooperation with suppliers, LSP, and partly with competitors. • High intercultural competencies • Continuous improvement, e. g. by internal Benchmarking within global networks Logistics Department © Logistics Department, Berlin Institute of Technology

Network competencies of the „Leaders“ – the Network Maturity Model Logistics Department © Logistics Department, Berlin Institute of Technology

Thank You ! Logistics Department © Logistics Department, Berlin Institute of Technology