An Introduction to LLP

Transcription

1 PLEASE INSERT CLASSIFICATION HERE An Introduction to LLP LEAD LOGISTICS PARTNER (LLP) DELIVERING A SUPPLY CHAIN TRANSFORMATION THAT DRIVES COMPETITIVE ADVANTAGE 1

2 Understanding Business Needs Emerging Trends and Supply Chain Challenges Supply chain management is an extremely interactive, complex system requiring simultaneous monitoring of many conflicting objectives Reduce Cost Reduce logistics costs as they increase in % of sales Reduce working capital and inventory Direct and indirect cost pressure Lead Growth Leverage your supply chain as a strategic tool to support your business growth and stay ahead of the competition. Develop a supply chain capable of dealing with market variations as well as leveraging new revenue opportunities quickly Manage Complexity Improve visibility while increasing supply chain complexity Create Actionable Insight to improve control and subsequently improve reliability Reduce inefficiencies and layers of hidden costs ABC Ltd s Supply Chain Risk and Continuity Manage risk and supply continuity Avoid supply chain disruptions Strikes, weather, nature, infrastructure Improve Performance Improve the speed, reliability and flexibility of your supply chain Performance improvements can be achieved in parallel to meeting cost targets, allowing you to improve business competitiveness Sustainability Sustainability is increasingly driving strategic supply chain decisions. Need for carbon measurement and management Reduce environmental footprint and improve waste management 2 2

3 DHL Supply Chain POSITIONING LLP(4PL) AN ALTERNATIVE RESPONSE TO YOUR SUPPLY CHAIN CHALLENGES 3

4 Positioning of LLP(4PL) vs. 3 PL Services Core competence of customer Traditional Typical Leading Core Business Strategy Strategy Customer An integrated end to end approach across the all areas of logistics Competence Planning Co-ordi nation Customer Customer LLP / 4PL Functional Processes LLP reaches deeper into the planning and strategy competencies enabling robust continuous improvement Logistics Execution Freight Transport Warehousing 3PL Freight Transport Warehousing 3PL Value added service 3PL Freight Transport Warehousing Value added service Partnership Approach Timeline LLP offers and evolution in our service offering that enables the release of new value in the supply chain 4 4

5 Typical supply chain Current Supply Chain Fragmented internal logistics structures that are siloed by brand or department producing a a duplication of logistics resource & a limited opportunity to effect change within supply chain Cost reduction achieved through RFQ approach and cost down pressure to service providers Incomplete overview of supply chain Localized and varied supply chain management and logistics arrangements Low transparency of logistics cost per unit produced at each facility For inbound to manufacturing suppliers control the supply chain (material purchased on DDP) Production have little control and llow confidence in the performance of supply chain which results in high levels of safety stock of inbound supply chain Many supply chains are unable to effectively deal with increasing internal demands and simultaneously navigate effectively the external factors affecting logistics 5 5

6 PLEASE INSERT CLASSIFICATION HERE Standard reponse 3PL and procuremnt led The standard response to dealing with growing internal requirements and increasing external pressures is to do more of the same and quicker. Procurement to increase the frequency of requesting tenders or change bidding format (e-bids etc) Apply greater pressure upon existing service providers Seek to reduce cost through employing more local low cost providers This may achive a small reduction however result is limited without network design changes Potential to over promise on commercial agreements ending in contractual dispute Significant addtional launch costs with new provider offset any savings Overall, companies that seek to deal with the growing supply chain pressure through continuing current processes will achieve some limited savings and success. This success may be insufficient and unsustainable as the external pressures and internal demands continue to drive increased costs 6 6

7 PLEASE INSERT CLASSIFICATION HERE An Alternative Response Lead Logistics Partner Below are some of the motivations that highlight the need for an LLP model Need Description. What LLP model provides Focus Change Strategic Complexity Technology Flexibility Outsourcing supports the need to become responsive to changing markets and more focused on core competencies. LLP can act as a catalyst for change within an organisation. Provide greater strategic focus upon supply chain improvement and innovation avoiding tactical disruption Longer and more complex multi channel supply chains increase the requires ever increasing levels of resource Increasing requirements and costs of keeping pace with changing technology across the supply chain To be able to respond to unpredictable changes in demand the modern supply chain must be flexible and on demand Gives time to the customer to focus on doing what you do best A powerful coalition for change Relentless continuous improvement Resource and technologies that simplify Access to best in class technologies A flexible supply chain resource LLP provides a path overcome the limitations of the traditional 3pl model 7 7

8 Alternative response LLP process driven transformation To effectively deal with increasing internal demands and navigate the external factors affecting logistics companies require to transform their supply chain through LLP Current Supply Chain Fragmented internal logistics structures that are siloed by brand or department producing a a duplication of logistics resource & a limited opportunity to effect change within supply chain Cost reduction achieved through RFQ approach and cost down pressure to service providers Incomplete overview of supply chain Localized and varied supply chain management and logistics arrangements Low transparency of logistics cost per unit produced at each facility For inbound to manufacturing suppliers control the supply chain (material purchased on DDP) Production have little control and low confidence in the performance of supply chain which results in high levels of safety stock of inbound supply chain Supply Chain Transformation designed implemented and managed in partnership with LLP Leading Supply Chain Integrated logistics structures that are shared by brand or department producing a a single logistics resource that can respond quickly to change Cost reduction is achieved through a holistic review of all cost drivers and utilizing data analysis tools and continuous improvement methodologies Complete overview of supply chain Central supply chain management able to adapt logistics solutions to local requirements High transparency and forecasting of logistics cost per unit produced at each facility at differing levels of production Full control of inbound to manufacturing supply (material purchased on Ex Works) Production have high confidence in the performance of supply chain which results in low levels of safety stock of inbound supply chain 8 8

9 Product Overview DHL SUPPLY CHAIN LEAD LOGISTICS PARTNER (LLP) 9

10 LLP definition Typical LLP construct (1/3) The LLP takes the role of a strategic partner to the customer that drives transformational change in its Supply Chain Client Supply Chain Organization Focus on core business Inbound Manufacturing Outbound & Return Increased flexibility & scalability Transportation Design Manage Transformation Operate Warehousing Continuously Improve IT Systems Value added Services Shared risks and rewards Driving top & bottom line growth (20 30% reduction on direct transport spend) Catalyst for change Enhanced SC capabilities Source: DHL LLP; DPDHL Strategic Logistics Consulting 10 10

11 Typical LLP construct (2/3) Bringing together all the services together with Change management to ensure a safe and secure delivery of transformation of your Supply Chain Transformation Continuous Network Design and Supply Chain optimisation Relentlessly seek to improve the design of all aspects of the Supply Chain Implementation of process through procurement and ongoing management of key stakeholders Control tower synchronizes material flow and provides visibility and control Design Services Management Services Continuous Improvement Services IT Systems Leading IT systems that support and connect your Supply Chain across all service areas and partners DHL may provide an operational support to your Supply Chain needs together with other carefully selected logistics service providers Operations Services Total Logistics Cost Mgmt. (TLCM) gives complete transparency of all Supply Chain costs 11 11

12 Typical LLP construct (3/3) Example services and approach Transform - Change Management Design Manage Logistics Strategy Design LSP Procurement LSP Management Network Design Services Container Management Logistics Financial Management Inventory Optimization Design Finance Management Material Vendor Management Continuous Improvement Total Logistics Cost Management KPI and Dashboard Management LLP systems Platform Control Tower Operations Operate Transport Operations Warehousing & Facilities VAS Provision 12 12

13 LLP services menu Core LLP Service Offering Design Manage Continues Improvement Network Design, Fixed Route Design Transport Design Transport Mgmt. Process Design Transform Change Management Implementation Management LSP Procurement Logistics Claims Mgmt. LSP Management & onboarding Control Tower Order Management & Processing Materials Management Tactical Shipment Planning & Carrier Booking Exception Mgmt. Issue Resolution & Service Desk Track & Trace Visibility Continuous Improvement Projects Total Logistics Cost Mgmt. (TLCM) Reporting & Analytics Visualization Additional LLP Services Design Manage Operate Supply Chain Strategy Design Logistics Strategy Planning Business Impact Evaluation Environmental Impact Evaluation Inventory Strategy Design Demand Forecasting/Replenishment Planning Inventory Level Optimization Packaging Design Durable/Expendable Packaging Design Co-Packing Strategy Facility & Warehouse Design Cross Dock & Warehouse Design Facility Material Flow, Layout. Process Design Non-LSP-Parties & Assets Mgmt. Vendor (Consigner) Mgmt.. Asset Mgmt. Logistics Financial Management Budget Planning & Mgmt.. LSP Invoice Consolidation, Validation & Payment Freight Billing and Audit (FBA) Document Management Shipping Document Storage (BOL, AWB, Commercial Invoice, Packing List) Value Added Services Supply Chain Risk Mgmt.. Customs Brokerage & Clearance Carbon Accounting & Reporting Logistics Service Delivery/Execution Transport Operations POD Mgmt../Electronic POD Mgmt.. Warehouse Operations Packing Services Customs Handling Value Added Services Kitting/Sub-Assembly/Co-Packing Waste, Recycling & Disposal Mgmt.. Quality Inspections Resilience360 Risk Monitoring & Contingency Mgmt

14 LLP MODULAR solution model Building from a base foundation modular services can be added and tailored to your requirements and as operations mature over time KEY:- LLP Service Building Blocks Continuous Improvement Design Mange Operate Transform Facilities Design. Vendor Mgmt. Financial Mgmt. Supply Chain Risk Mgmt. Order / Material Mgmt. Advanced Analytics Custom Implementation of various modules Change management Supply Chain Process Eng., Inco terms Conversion SC/Network Design Core Carrier Mgt Freight Pay & Audit Visibility / Track & Trace Foundation Foundation Foundation Transport Control Tower. TLCM Reporting & Analytics Foundation Low-Tier Mid-Tier High-Tier Increasing Complexity Increasing Value 14 14

15 Our Approach to LLP LLP not only provides a consultancy to identify the path to new value but is also able to deliver the solution We help clients address complex supply chain challenges Through Customized Supply Chain Management Services To achieve their business goals 15 15

16 LLP Keys to delivering Value Certain factors play a key role in delivering a successful LLP 4 LLP Keys to Value Delivery Neutrality People and long term partnership Solution design and operations excellence Value creation enabled though IT always with your interests paramount Building a stable relationship a foundation for continuous improvement provide comprehensive supply chain design and operation capabilities locally, regionally and globally Leverage supply chain data and visibility to provide real actionable insight that delivers new value 16 16

17 PLEASE INSERT CLASSIFICATION HERE How LLP delivers value LLP will create transparency across the supply chain through implementing standard operating procedures for all logistics activities. This new process and organisation rollout will not only release value itself but more importantly will provide the foundation for the LLP to instigate and manage data driven continuous improvement across the whole supply chain. Belwo are the steps we follow 1 2 Identify as is Study & understand current supply chain including organisation, execution process, compliance,, performance management, and network optimization, Engineer a comprehensive and integrated optimal supply chain process, organisation, integration and network solution Understand requirements Identify and understand the customers internal requirements consider all stakeholders and the current and future anticipated external market demands, 3 4 Design Engineer a comprehensive and integrated optimal supply chain process, organisation and network solution Implement & Manage Phased Implementation of processes, services & organisation change across supply chain Prioritises maximise early value release while balancing risk 5 Measure & Continous Improve Lever new transparency to attack remaining waste and continuously Improve supply chain performance $ $ $ $ $ $ $ Supplier Manufacturing Customer Factory Factory Customer Customer Supplier Customer Supplier Supplier Factory Customer $ Supplier Supplier $ Supplier $ Customer Savings Factory Customer Factory Supplier Customer Supplier Supplier $ $ $ $ $ $ $ Savings Leading Supply Chain 17 17

18 What value LLP delivers As a Lead Logistics Partner we design, transform, manage, operate and continuously improve our customers supply chains Commercial Value Delivered with a flexible commercial mechanism that shares risk and reward Driving your top & bottom line growth Financial Value Strategic Value Enabling your supply chain and business strategy to create a competitive advantage 18 18

19 Lead Logistics Partner Value Summary LLP = outsourcing partnership to achieve reduced complexity, transparency and cost leadership in a jointly defined scope of Supply Chain processes and services! Strategic Value Reduced complexity: streamlined processes, single point of contact Visibility and control: transparency over supply chain costs and KPIs Flexibility: adaptability of supply chain to accommodate growth and innovation Sustainability: : Control over supply chain environmental impact Creating an Competitive Advantage Financial Value Savings potential: typically above 10% of total supply chain costs Top and Bottom line Growth Improved revenues and customer retention through better operational performance and service Ongoing continuous improvement along all supply chain elements Commercial Value Partnership: Flexible and a balance commercial agreement that acts as foundation to developing relentless continuous improvement across the supply chain Creating a Win-Win Partnership 19 19

20 LLP Solution Fit Delivering solutions to all your supply chain challenges Cost Reduced Optimising your supply chain network design continuously Reduced Inventory and capital costs Improved planning with accurate SC data Improved Cost Visibility Managed Complexity Improve visibility while increasing supply chain complexity Control tower operational provides Actionable Insight to improve control and subsequently improve reliability Modular, innovative and simplified services Lead Logistics Partner Leading Growth Improved revenues & customer retention through better customer service A managed supply chain capable of dealing with market variations as well as leveraging new revenue opportunities quickly Risk Mitigation Supply chain dashboard monitoring you supply chain continuously Rapid reaction to incidnets through command and control to avoid supply chain disruptions ( Strikes, weather, nature, infrastructure) Improved Performance Increasing the Supply Chain cost visibility Improved planning with accurate SC data Providing a single point of contact KPI driven conformance to SC processes Sustainability Sustainability is considered in network optimisation strategy Sustainability dashboard with environmental impact measured and managed Reduced environmental footprint and improve 20 waste management 20

21 Our joint path to launch a successful LLP Key Milestones Measuring and control are key to mitigate any implementation risk! All projects start with a Supply chain scan and a Proof of concept. 4 Phases to LLP Engagement and typical timing 2 3 Days 4-16 Weeks Business insight Supply chain scan Due diligence Transition planning Implementation Vision and Diagnostics Business Case and Proof of Concept Transition Roadmap Analysis of current supply chain Customer strategy Configuration restrictions Operational framework design Commercial design Value identification Implementation Strategy Milestone management Continuous improvement 21 21

22 PLEASE INSERT CLASSIFICATION HERE LLP Commercial Approach Commercials based upon sharing the financial benefits of the value creation. For a successful LLP it is essential that the following characteristics prevail Co-operation & teamwork across the 2 parties Sharing information & transparency Overall group success Mutual respect This setup will ensure that Incentives exist to drive and motivate continuous improvement. Also to foster the correct behavior Risks/Liabilities must be balanced & in line with rewards Key reference material ; Vested Outsourcing, by K Vitasek 22 22

23 LLP Commercials Delivering Net Value Key to LLP commercials is to assure that the LLP team delivers absolute value over the period of the contract Savings Savings Savings Gain Share Existing Supply Chain Operating Costs (Spend + Management Costs) LLP Supply Chain Operating Costs Gain Share LLP Supply Chain Operating Costs Gain Share LLP Supply Chain Operating Costs Today Contract 23 23

24 Why Our Clients Choose DHL for LLP? DHL offers best-in-class Global LLP capabilities across your supply chain Visibility & Control of your Supply chain Global Reach, Scale & Network Fast delivery of savings World Class Supply Chin Risk Management Customer intimacy Intimacy& & partnership Partnership Supply Chain Expertise Win-win commercial model World leader in LLP services 24 24

25 LLP Value Summary New Value Delivers new value across your business Relentless focus on delivering significant new strategic and financial value back to the business Flexible Solutions & Resource Flexible solution tailored to your specific needs The scope of an LLP is highly configurable and can vary from a geographic perspective and a service perspective Integrated End to End Supply Chain Delivers a single fully integrated supply chain An End to end platform to instigate data driven continuous improvement and provide full supply chain control Expertise through Partnership Builds a long-term sustainable partnership A reliable supply chain expert within your business Delivering a supply chain transformation that drives competitive advantage 25 25

26 Add as appropriate for customer Find all approved case studies in the following location keting_sales/webparts/llp.aspx CASE STUDIES 26

27 PUBLIC Case study: LLP solution for a leading imaging company Comprehensive LLP solution enables end-to-end domestic distribution supply chain transformation for Japanese manufacturer Customer facts Geography Japan Sector Technology Solution LLP Customer challenge Redundant capacity within domestic warehousing network Insufficient visibility on costs and lack of vender management control High distribution costs due to dedicated network Inefficient in-house logistics operation that is not delivering against benchmarked performance or cost DHL solution Rationalized warehouses by leveraging shared DSC sites Increased utilization of warehouse space by adapting productivity improvements and establishing new standard operating processes Developed new bidding process to select most cost efficient sub-contractors Optimized network and established new coloading platform Set up an LLP operation that manages the supply chain operation and provides strong focus on performance management and continuous improvement Customer benefits Site consolidation results in a 5 10% reduction in space Handling costs reduced 10 15% through resource sharing Overall cost reductions of 8 12 % delivered over five years Benchmarked supply chain performance across entire business resulting in standardized KPI reporting and cost structure Flexible DHL resource to support customer strategy DHL Supply Chain

28 Case Study: Lead Logistics Provider Ford Lead Logistics Provider solution creates competitive advantage for Ford Customer Facts Geography EMEA Sector Automotive Customer Ford Customer Challenge Improve efficiency and quality while also facilitate the specific requirements of lean manufacturing that were a cornerstone to the success of the entire enterprise. Support change from local logistics management to a regional approach Need to protect increasingly complex production schedules more effectively Deliver cost savings and diminish environmental footprint Reduce emergency shipments Reduce global inventory DHL Solution Streamlined operations through one Lead Logistics Provider solution to set up and maintain efficient logistics Creation of a single European solution, with DHL staff deployed at all Ford European manufacturing locations Move from a destination based network to an origin based network for better network synergy Support of lean manufacturing and constant review of the supply chain to achieve cost optimization of material flows and full cost visibility Customer Benefits Cost optimization of material flow Stability and confidence with a 95% on time arrival within 30 minutes of the engineered window Improved efficiency, supply chain transparency and vehicle utilization to achieve Just in Time deliveries Reduction of inventory, emergency freight and CO 2 emissions by 20,000 tons Longstanding partnership between DHL and Ford 28 28

29 Case Study: Integrating Supply Networks in the Middle East and Africa A supply chain transformation that reduces costs and improves service Customer Facts Geography Industry Revenue EMEA Consumer EUR 61.8bn Employees 126,000 Customer Challenge Disconnected supply chains across 11 manufacturing sites in the Middle East and North Africa Overlapping supply routes from various manufacturing sites serving the same regions Service and cost inefficiencies High supply chain risk caused by limited transparency DHL Solution Designing, developing and implementing a fully integrated regional network Process-driven centrally-managed Control Tower to co-ordinate region s inbound operations Satellite Control Towers in all manufacturing regions Central Total Logistics Cost Management (TLCM) team that relentlessly identifies and delivers new value Locally-based teams to oversee consistency and final stages of logistics process Customer Benefits Improved supply chain visibility and reduced risk Reduction of transportation costs, transit times, inventory levels, demurrage, customs and other tax cost Control and reduction in CO 2 emissions Increased On Time in Full and Case Fill Rate 29 29

30 Case Study: Supply Chain Transformation Drives Competitive Advantage Lead Logistics Solution delivers operational excellence and creates cost savings for British American Tobacco Customer Facts Customer British American Tobacco Sector Consumer Industry Tobacco Customer Challenge Manual supply chain with little integration over huge geographical area Volatile network and lack of visibility and control, leading to reactive decisions Changing needs of customers Reduce costs and environmental footprint while supporting growth DHL Solution Fully integrated, cross-border solutions Establishing a SCi-driven Freight Control Tower to manage movements across the region Increasing control of network flows through the introduction of 5 new carrier partners Optimizing networks, creating transformational supply chain projects and providing better visibility to minimize working capital Centralizing spare machine parts into one global warehouse as part of MRO solution Customer Benefits More control and visibility of the supply chain A more sustainable and stable network, with 30% more capacity and 20% increased load-fill On target to reduce overall logistics costs by at least 18% in Western Europe 30 30

31 Case Study: A World-Renowned Premium Car Manufacturer Lead logistics partnership increases efficiency and sustainability Customer Facts Geography Industry Revenue Europe Automotive EUR 15.7bn Employees 24,000 Customer Challenge Lack of flexibility and efficiency in the inbound deliveries of parts from over 800 suppliers Meeting changing demand while ensuring transparency on costs Lack of efficiencies driven by a locked 3-month planning cycle for freight deliveries Reducing environmental footprint DHL Solution Managing transport, stock handling and line feeding at the three plants as a Lead Logistics Provider (LLP) Dynamic planning of both EU and UK collections based on customer s demand Using the latest software to optimize route planning and loading and reduce empty mileage Setting up seven cross-docks to consolidate loads before they are delivered to the plants Procuring and managing third party providers Customer Benefits Synchronized deliveries of parts to the plant with deliveries to the production lines when they are needed Reduced supply chain costs contributing to a reduced Total Delivered Cost Reduced inventory spend Reduced transportation costs by more than 45% Improved fuel efficiency Reduced the carbon footprint by 25% 31 31