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The New Powerhouse

The New Powerhouse. By joining forces and becoming the industry's leading logistics powerhouse, DB Schenker will now change your world for the better - after all we are everywhere you need us to be.

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The New Powerhouse

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  1. The New Powerhouse By joining forces and becoming the industry's leading logistics powerhouse, DB Schenker will now change your world for the better - after all we are everywhere you need us to be. In Australia and New Zealand we have a team of 1,100 trained professionals. Importantly for customers in this region, the company comprises 10 locations in Australia and 2 in New Zealand with over 124,000 sqm warehouse space.

  2. DB Schenker in Australia - Offices/Warehouses • QUEENSLAND • 51-57 Qantas Drive, Brisbane Airport NEW SOUTH WALES • 72-80 Bourke Road, Alexandria • 79 Owen St, Glendenning • 73-75 Seville Street, Fairfield • 38 Pine Road, Yennora • Tralee St, Hume (Canberra) VICTORIA • 43-57 South Centre Road, Melbourne Airport • 2 Judge Street, Sunshine • Unit 14-15, 1745 Hume Hwy, Campbellfield • SOUTH AUSTRALIA • Charles Sturt Industrial Estate, Building 19 853-867 Port Rd Woodville • 3 Schenker Drive, Royal Park • 5 Frederick Road, Royal Park WESTERN AUSTRALIA • 919 Abernethy Rd, Forrestfield

  3. DB Schenker in New Zealand - Offices/Warehouses • AUCKLAND • 33 Richard Pearse Drive Airport Oaks, Mangere, Auckland • 38 Airpark Drive, Airport Oaks, Auckland

  4. Logistics – Supply Chain Management (SCM) • DB SCHENKERlogistics services Bringing the world closer to your customers through • Origin Management Services • Providing timely collection, QA, consolidation and exporting product from your points of manufacture • International Transport • Managing international transit of your product • Domestic Warehousing & Distribution • Domestic Warehouse Service • Domestic Transport Service • Providing national warehouses and comprehensive domestic transport service to ensure your product is delivered on time and in full DB SCHENKERlogistics

  5. In-depth Industry Specific Expertise HighTech/Electronics Automotive External sales – Split by industry – Main solutions: • Spare parts logistics • VMI Regional focus • APAC Main solutions: • SCM – Global Sourcing • Spare Parts Logistics • Production Supply Regional focus • Central Europe • Market entry in NA & APAC Hi-Tech/Electronics (29%) Automotive (31%) Other (10%) Other Consumer Goods Consumer (30%) Main solutions: Regional focus Main solutions: • Distribution logistics • In-house logistics Regional focus • North America • Europe • APAC Contract Logistics/SCM has an equal share between Hi-tech/ Electronics, FMCG and Automotive and a blue chip customer base

  6. Common Logistics Procurement Challenges • Where should I locate my DCs • How much inventory should I hold • What will the lead times be • How much will it cost • Should I utilize RDCs or drop ship • Should I use ocean or air freight • Should lead to Cost reduction & Service Improvement

  7. Potential Logistics savings Direct Delivery $Xm ALL INDICATIVE • Carrier Exception reporting • Carrier Returns Management • Track & Trace Stage II • Delivery Reconciliation • DFN Process Direct Delivery Xm • Consolidate DC Local INTRAstate Freight $Xm • Orders serviced out of local DC hubs eliminate Direct Deliveries Local INTRAstate Freight $Xm • Linehaul absorbed in product placement • New Transport Consortium Warehouse $Xm Warehouse $Xm • ABC Classification • Network Model – Stage I • Optimised Supply Chain • Network Model Stage II OperationalEffectiveness NetworkConsolidation Hybrid Optimised Network Supply Chain Collaboration Current $Xm Target $Xm Client / Schenker Collaboration Logistics Procurement Master Plan Logistics costs today are $X.m. Our initial analysis indicates that changing to a Hybrid Network Warehouse model in conjunction with other network optimisation initiatives could yield $XXXm in savings. However, to achieve this supply chain collaboration is required between Customer and Schenker. - Supply Chain Master Plan

  8. What are the top 12 factors considered when 3PL Providers are selected Warehousing Contract Lengths µ = 3.56 years Our 2007/8 Experience • The main services that we have won business for include: Finished Goods Warehousing and freight distribution (58.51%), VMI (23.31%), Regional Hub (6.48%) and Spare Parts (3.93%) • Contract lengths average 2-3 years • Supply Chain components are not highlighted specifically in the selection Source: State of Logistics Outsourcing 12th Annual Study (2007) - Council of Supply Chain Management Professionals

  9. Schenker Strategy to Support Business Model Control Tower Concept

  10. Step 1 - Understand How Customers Supply Chain WorksInternational Network, National Inventory/ Warehousing,National Direct Ship / Hub ship Models National Warehousing Services Nationwide Delivery Origin Services & International Transport NZ • Schenker’s own national transport service supported by other providers to provide full service offering and national coverage • Schenker provides a nationwide delivery service to customers including Samsung, DELL, Apple, HP, etc. • Manage purchase order and collect product from suppliers in Europe, Asia and USA • Consolidate and coordinate export and international freight from relevant Schenker consolidation hubs • Schenker currently performs these services for many customers including Apple, HP, and many others. • Schenker currently manages international freight, customs brokerage and collection from airport for many customers including Apple, Samsung, HP, Motorola and DELL • Schenker manages domestic warehouse and distribution for multiple customers in Australia and New Zealand including Samsung, DELL, Apple, HP, etc.

  11. Inter-depot DC Inbound Supply Outbound Demand Complex Supply Chains:Global/ Regional Alternative Scenario Analysis Alt. 1 SIN Alt. 2 HKG Alt. 3 SHA Alt. 4 SIN & HKG

  12. As-Is Inbound Supply Network – Stage 1 (Cluster Analysis)Mean yearly shipment weight % contribution from each origin (2010 – 2015)In order to determine customer supply chain now and into near future 31.7% mainly TYO & NGO, some KIX 3.4% DUB 7.5% PDX 9.2% SEL 3.8% ABQ 13.4% US contribution 23.0% TPE 18.4% MNL 1.7% SJO VN A9 0.1% SIN Components FG 17

  13. Inbound Materials Segments &Shipment FrequenciesCase Study 1 – Semicon Global Customer 18

  14. Shipments Analysis (kg) per week (2010 – 2015) • Frequency of RM Shipments • Japan 5-6x per week • Taiwan 4-5x per week • Philippines 2-3x per week • Korea 1-2x per week • US 1x per week • Singapore 1x per week 19

  15. IW Consol Export CC Based on Inventory and Consumption AnalysisProposed Solution Matrix (E2E) Customer Import HUB’s Factory Trans Mode (Normal Ship) (Primary) (Secondary) (Expedite Ship) (Primary)

  16. Quantitative Analysis to Support Our Model

  17. Lead Time Vs Inventory Balancing (Strategy for air/ocean)Also Provides Inventory Placement Decisions Assuming 20 days replenishment includes 17 days sailing time Inventory Availability 20 30 10 5 + 30 20 10 30 Estimated days of Inventory Inter Asia Lead Time 3 days Max, Can support any emergency replenishment

  18. Option Selection Censored Data

  19. Stage 1 – OutcomeEstimated Savings 12-15% of Spend(Customer Spend – USD 30 Million & Significant reduction in Inventory) 31.7% mainly TYO & NGO, some KIX 3.4% DUB 7.5% PDX 9.2% SEL 3.8% ABQ 13.4% US contribution 23.0% TPE 18.4% MNL 1.7% SJO VN A9 0.1% SIN Components FG 24

  20. CustomerSupply Chain Scope Case Study 2 – IT/Consumer Global Customer END-TO-END PROCESS Intra-Asia & Intra-Region • Consolidation & Info Management: • Shanghai • Hong Kong • Korea • Spare Parts Storage & Delivery: • Japan (+ reverse logistics) • India • Singapore • Korea FREIGHT FORWARDING CO-ORDINATING PARTY SPARECARE FINISHED GOODS FULFILLMENT DOMESTIC DISTRIBUTION & MANAGEMENT Direct Customers • Final delivery execution: • Japan • Singapore • Australia • Korea • Hong Kong • Taiwan • China • India • Malaysia • Warehousing, Pick, Pack & delivery: • Japan (10,000 m2) • Singapore (3,000 m2) • Australia (5000 m2) • Korea (800 m2 )

  21. Volume Growth Pattern YOY Collaboration With the Customer

  22. Based On the Data – Look into Future PlanningCurrent Market Dynamics

  23. Lead Time Requirements - FG

  24. Spare Parts Lead Time

  25. Current HUB - Locations Confidential

  26. Empirical Evidence of Industry Study on Supply Chain Efficiency – 5/Top 10 our Partners Publication Date: 2 June 2010/ID Number: G00201212

  27. JAPAN KOREA AUS INDIA SIN Process Flow – Overview Marketing based Collaborative Planning CONTRACT FREIGHT FG LOGISTICS DOMESTIC MANUFACTURING MGMT (CP) HUBS ORDER FULFILLMENT Marketing R A W TAIWAN E D M N I A Planning D S T T E KOREA C R R U I I S B A Buying T U L O T M O V E R E SHANGHAI R S N Operations S D O R S SHENZEN

  28. High Level Over View on Inventory Modeling Marketing based Collaborative Planning • Market driven volume planning based on previous years and product performance • Ability to work with channels to understand demand • Work closely from R&D to Market at all levels Marketing • Work with R&D team on understating input materials • Work with OEM/ Factory on demand planning and capacity planning • Ability to lock in lead times to enable delivery commitments • Controlled growth Planning • Ability to buy with factory at required lead times • Ability to collaborate on common parts • Ability to work with supply chain on forward capacity planning • Work with marketing on locking in volume commitments Buying • Execute planning at all phases on the products life cycle • Continuous feedback in the chains above to manage outcome • Leverage partnership with all parties to ensure E2E execution Operations

  29. Notes from AMR Publication Date: 2 June 2010/ID Number: G00201212 It's a first — the Supply Chain Top 25 has a three-time No. 1 company: Apple. The digital-economy icon held the top spot again in 2010 after having been ranked No. 1 for the first time in 2008. Apple dominates because it consistently brings both operational and innovation excellence to bear in some of the most competitive markets in the world. Consider first the revolutionary success of the iPhone. Although still a relatively small share of the overall mobile devices market, it has transformed the industry. From a supply chain perspective, the company's ability to ramp volumes both in hardware and software while redefining what a mobile telephone is supposed to be has been impressive. Unwilling to rest, Apple has continued to push innovation with its launch of the iPad, which is another new platform product for digital content and a further extension of the brand. volumes both in hardware and software while redefining what a mobile telephone is supposed to be has been impressive. Unwilling to rest, Apple has continued to push innovation with its launch of the iPad, which is another new platform product for digital content and a further extension of the brand. Apple has broken new ground in the area of transforming its supply chain into a value chain, starting with the consumer experience and designing its network to serve that master first and foremost. This means demonstrating some of the behaviors we look for in Top 25 companies, including embedded innovation, networked supply and demand shaping. It's also instructive that Apple, which most observers think of primarily as a design and software company, in reality has a vertically integrated value chain that reaches from logo-bearing, pure-play retail all the way back to superfast chipmaker Intrinsity, which was recently acquired by Apple to "steal a march" on competitors looking to enhance the performance of mobile devices. Not shying away from any operational challenge, Apple's value chain controls its most strategic nodes all the way from silicon to synapse.

  30. CDC3,195 SqmActive SKU: 3003300 pallet storage capacitySince Oct 09 X – Dock and DC Business relationship between XXX and SchenkerUsing RDC in China with Postponed Inventory SwitchCase Study 3 – WIP DC750 Sqm1,000 SKU500 O/B orders Since June 08 S.Korea DC China Shanghai Xiamen CDC Hong Kong Services for XXX • Warehouse storage – temperature/ humidity controlled (DG/& Non DG) • RF scanning for Put-away • Pick & Pack for daily domestic /& export orders • Slip sheet ops for loading/ un-loading containers • Value-add svcs – relabeling • Cycle count Product Types stored: • Consumer batteries • Consumer & Prof papers, films • Digital Cameras • Chemicals - Class 3, 6, 8 & 9 • Motion picture films • Displayed mat’l - com printing Thailand DC Philippines Malaysia DC900 sqmActive SKU: 900I/B & O/B orders: 18000 pallets per yr Since May’09 Indonesia Australia

  31. Six-step Implementation Methodology • Standardized implementation methodology applied throughout Asia Pacific • Critical in ensuring quality delivery of all IT solutions • Focuses equally on both business solutions and IT implementations 6 Steps

  32. Our IT Landscape improves efficiency, quality, compliance and focuses on customer demands POMS E-business RCM, SCOPE, … LISSY / GWS (Logistics Solution IT Strategy) Service-Pool Infrastructure Services (Data Centre) STAR FASS CRM Key Account Toolbox Next Generation Sales TANGO DDS My Mistral Customer Services Air & Ocean Logistics Land Enterprise Service Bus – SWORD (XIB) SAME SAFA IDM O&DM MDM Visibility GDWH / MIS E-learning KAM DB CIS / CTTS Tracking/Reporting CMSS Finance HR

  33. Multi-Dimensional Analysis & Reporting Data Visualization & Mining User Data Access (Using Business Intelligence) Localized DW Aggregated Data Site 1 Site 2 Site 3 Data Warehouse : Single Version of Truth Transformation / Cleansing Air/Ocean Freight Domestic Delivery WMS Business Intelligence System

  34. Sample Customer Interfaces

  35. Sample Customer Interfaces

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