AmCham Ho Chi Minh City

Transcription

1 AmCham Ho Chi Minh City Mark Ketelaar Managing Director - DHL Exel Supply Chain Vietnam June 5, 2007 Delivering Excellence Together!

2 List of Contents Deutsche Post World Net DHL Vietnam Outsourcing Logistics Landscape in Vietnam What can we learn from China? Page 2

3 Deutsche Post World Net A global player with strongly placed divisions... MAIL EXPRESS LOGISTICS FINANCIAL SERVICES Germany Germany s leading retail bank 12.3 million customers 17.2 million savings accounts USA Worldwide finance services for logistics industry Page 3

4 List of Contents Deutsche Post World Net DHL Vietnam Outsourcing Logistics Landscape in Vietnam What can we learn from China? Page 4

5 DHL presence in Vietnam Express, Parcel, Freight Shipment Worldwide Document Express Worldwide Parcel Express Contract Logistics (Warehousing & Distribution) Supply Chain Management Warehousing Distribution Value Added Services Air Freight and Ocean Freight Services Air Freight Ocean Freight Industrial Projects Joint Venture 100% FDI Exel (Vietnam) Ltd Representative Office * This is only a selection from the portfolio Page 5

6 List of Contents Deutsche Post World Net DHL Vietnam Outsourcing Logistics Landscape in Vietnam What can we learn from China? Page 6

7 Outsourced Logistics Services Source: Georgia Institute of Technology, 2006 Page 7

8 Factors contributing to success with 3PLs Today, more and more customers are price sensitive, but are also demanding a high quality. To be successful within the 3PL Logistics market you definitely cannot focus on one or the other, you have to have both and above all create real value for the customers Source: Georgia Institute of Technology, 2006 Page 8

9 4 Requirements for successful outsourcing A company must evidence four major characteristics that in combination make logistics outsourcing viable. Low Low Company need Tangible value High Successful Logistics outsourcing opportunity High Low Supplier credibility Management commitment Low Page 9

10 Quantifiable Measures of 3PL Success 3PL users are receiving quantifiable benefits such as reduced logistics costs, fixed assets and shortened average order cycle time. More efficiency gain seems to be available in Asia-Pacific and Latin-America Source: Georgia Institute of Technology, 2006 Page 10

11 Sample Logistics Spend Page 11

12 Strategic importance First and foremost it is the overall business strategy that must drive your customer service and supply chain strategy Page 12

13 Value proposition A different strategic focus leads to a different supply chain configuration. Value discipline Perception characteristics Product leadership Operational excellence Customer intimacy Customer s perception of you as a provider of products and services Innovative A great price Leading edge No hassle firm Constantly pushing They never make new products mistakes Unique services Exactly what I need Responsive Supply chain characteristics Short pipeline Focus on eliminating tiers from the chain Robust Capable of dealing with high volumes Focus on cost Flexible Individualized solutions Linked to customer process Agile Lean Responsive Page 13

14 Explanation of dynamics The choice between a more de-centralized or centralized supply chain configuration can have significant impact on the cost structure. RDC Customer Vendor Plant Regional Distribution Centers RDC Customer Cost item Decentralized Centralized Inbound transport Outbound transport Inventory Warehousing Vendor Plant One Central Distribution Center EDC Customer Page 14

15 Central versus de-central models Several considerations should be taken into account when choosing one of the basic supply chain configurations Local market volume Forecastibility of demand Required market responsivess Value density of the product Transport intensity Labour intensity Number of global suppliers Importance of consistent quality Central solution low low low high low high high high De-centralized solution high high high low high low low low Page 15

16 List of Contents Deutsche Post World Net DHL Vietnam Outsourcing Logistics Landscape in Vietnam What can we learn from China? Page 16

17 Logistics Landscape Vietnam Logistics network has not been implemented in an integrated manner Resulting in high total logistics costs: 15-20% of GDP Inefficiencies of transportation Lack of supporting infrastructure (roads: only 19% are paved) Logistics outsourcing Fragmented with an estimated 800 operators competing for business Most operate on small scale and have limited coverage, service range and IT capabilities Inconsistent regulations Lack of skilled manpower Shortage of logistics facilities and transport for cold chain Source: Prost & Sullivan Page 17

18 Logistics Vietnam: Let s Get the Basics right! Good Warehouse facility Warehouse lay out /design Standard Operating Procedures Warehouse Management System Measure performance based on KPI (Key Performance Indicators) Training of staff Security Quality / Process Improvement Safety & Health Page 18

19 Trends and Challenges: Supply Chain Complexity Global challenges Supply chains becoming extended & more complex The technology to provide transparency requires more functionality & flexibility Our responses Full range of solutions across supply chain Professional operators Proven and robust systems & processes Value created Reduced management time devoted to logistics issues Timely information to make profitable decisions Enabling you to focus on your core business Page 19

20 Trends and Challenges: Increasing Competition Global challenges Constant margin pressure, requiring continuous cost reduction, & increased customer responsiveness Drive for leaner, integrated supply chains Our responses Leveraged buying power to reduce costs Industry-leaders in integrated services Application of cross-industry best practice Value created Using our scale to reduce your costs Supply chain designs that are optimized for your business, to meet your customers needs Page 20

21 Key Assets of a Logistics Service Provider: People Professional approach Higher Service Levels Global Consistency across all services Better Customer Understanding Strategic Partnerships Supply Chain Consultancy expertise in developing optimal supply chain solutions global / regional / country level experience Project Implementation strong implementation skills to deliver minimum risk to business continuity practitioners of DePICT, focused on standard implementation methodology worldwide Logistics Information Systems Expertise development of management systems for warehousing, inventory and transportation needs Systems Warehouse management systems Transportation Management systems Tracking & Tracing Tools Network Design Systems Warehousing design Procedures Operating Procedures Customer Work Instructions Project Implementation Methodology Page 21

22 List of Contents Deutsche Post World Net DHL Vietnam Outsourcing Logistics Landscape in Vietnam What can we learn from China? Page 22

23 Migration of Logistics Best Practices (China)? Producing product in Asia Pacific is definitely more cost effective, however the logistics cost associated with the production and distribution of the end product suggest otherwise. The gap has narrow slightly but there are plentiful opportunities to improve and streamline the total logistics cost. China Europe Japan US Logistics Cost as percentage of nominal GDP, % 10.1% 11.5% 21.4% 0% 5% 10% 15% 20% 25% Source: Peter van Larrhovan, TPG 2004 Percentage Logistics spend in China is twice the proportion as compared to USA. Year Logistics expenditure as percentage of GDP in China Transport cost Inventory carry cost Ave 21% Over the past decade, logistics spending in China is consistently 21% of the GDP Source: China Federation of Logistics & Purchasing,2006 Administration cost Total Logistics cost % 7.0% 3.2% 22.1% % 7.6% 3.4% 22.0% % 7.5% 3.3% 22.0% % 7.7% 3.5% 22.2% % 6.8% 3.5% 21.3% % 6.2% 3.6% 21.4% % 6.5% 3.6% 21.3% % 6.4% 3.5% 21.1% % 6.4% 3.4% 21.4% % 6.3% 3.1% 21.4% % 6.2% 3.0% 21.3% Although cost of manufacturing is lower in China, cost of logistics (comprising transportation, inventory and administration) is still high. Page 23

24 Key Logistics Challenges China Factors polled by various businesses in China include regulatory, infrastructure, capacity, human resource, internal and external demand. Government regulations such as trade and customs draw the highest attention and concern. Key Logistics Challenges in China Government Regulation 48% Quality of service Transportation and Logistics data tracking 41% 43% Cargo security Local knowledge/expertise Ocean/Port capacity Internal road and rail network 38% 36% 34% 33% Web-based operations/capabilities 25% Air Capacity Foreign expansion in Chinese infrastructure 21% 20% International demands on manufacturing Intra-Asian network Warehousing 17% 17% 16% Labour demands/ cost 13% Internal Chinese consumption of goods 5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Source: 3PLs Views on the Logistics Landscape in China, Eye for Transport, 2005 Page 24

25 Thank you for your interest and time Page 25