Presentation Transcript

1. WINNING GLOBALLY Chair: Michael Jacobs Chief Logistics Officer, Keurig Green Mountain
2. Opening Remarks & Introduction Michael Jacobs Chief Logistics Officer, Keurig Green Mountain
3. Going Global Case Study Craig Simon President and CEO, FedEx Supply Chain
4. But I only speak English. Why should I do business globally? What does it cost to source from another country? How does customer demand affect my sourcing decision? What is a frontier market? Who can sign contracts in Tunisia? How do I organize internationally? Which countries are most important? Is there sufficient infrastructure? What will the price of oil be next year? What are the regulations? Do they have paved roads? Where should I store my finished goods? What time is it in Sri Lanka? How does Colombia compare to Panama? How do I keep my products secure? Should I worry about FCPA? Should I use one operating system globally? Should I use a distributor or go direct? How do exchange rates affect profits? What is CTPAT? Is it safe over there?
5. Brent Crude Oil Prices 1982–2014 2014: ~$109 2008: $145.61 1986: $8.75 Source: Trading Economics
6. Export Trends for Top Markets Exports from some of these countries have been slowing down since CY2010 (YOY% Total Export Value in USD) Source: IMF, National Authorities
7. World Trade Volume vs. Global Real GDP During the globalization of manufacturing, trade grew 2-3 times faster than GDP In 2012 and 2013, trade volumes failed to grow at their historical rate Since the “Great Recession,” trade has been steadily improving but not at the prior pace Source: CPB Netherlands Bureau for Economic Policy and Analysis, Economic Intelligence Unit, FedEx Corporate Economics
8. “New Normal” Near Shoring Domestic Agenda Protectionism
9. Impact of Global Trade 95% of America’s consumers live outside our borders Every $1 billion in additional exports supports approximately 5,000 U.S. jobs Since President Obama launched the National Export Initiative in 2010, U.S. has seen record exports and an increase of 1.3 million export-related jobs Source: U.S. Department of Commerce, April 2014
10. Record U.S. Exports in 2013 U.S. exports in 2013 set record for fourth straight year – reaching $2.3 trillion, up nearly $700 billion since 2009 Record U.S. merchandise exports in 2013 to 63 markets, including: Canada (+2.7%)* Mexico (+4.7%) Colombia (+13.8%) Panama (+9.6%) Peru (+7.6%) Jordan (+18.2%) Source: U.S. Department of Commerce, April 2014 * Year-over-year change from 2012
11. Value of World Merchandise Exports 2003-2013 Source: WTO
12. Six Largest Economies by Share of World GDP – 2005 vs. 2011 Total 2011 World GDP: $90 trillion Total 2005 World GDP: $55 trillion Source: International Comparison Program (ICP)
13. How do you make decisions about where to do business globally?
14. Emerging Markets Definition Countries restructuring economies and growing along market-oriented lines and offer wealth of opportunities in trade, transportation, technology transfers and foreign direct investment. Stand out due to some combinations of these characteristics: Fast-growing economies, contributing great deal to world trade growth Regional economic powerhouses with large populations, large resource bases and large markets Transitional societies undertaking domestic economic and political reforms Emphasize infrastructure developments and improving regulatory and social environments
15. Components of Emerging Markets Index (EMI)
16. Emerging Markets Framework: EMI Roadmap
17. 10 Global Risks of Greatest Concern 3. Water Crisis 5. Failure of Climate Change Mitigation and Adaptation 6. Greater Incidence of Extreme Weather Events 8. Food Crisis
18. Corporate Climate Adaptation Opportunities: Building Resiliency around the Globe
19. ND-GAIN: Data to Inform Decision Makers Ranking & country scores 177 countries 50 indicators 17 years of data 9 variables
20. ND-GAIN Matrix Threats and opportunities for country-level investment decisions
21. ND-GAIN Matrix
22. ND-GAIN Country Profiles Example: Brazil
23. ND-GAIN Sector-Specific Profiles Example: Infrastructure India China
24. Notre Dame Global Adaptation Indexwww.nd-gain.org Managing Director Joyce Coffee Research & Development Jessica Hellmann NiteshChawla
25. Risk, Technology, and Transportation TrendsPanel Discussion Moderator:Michael Jacobs Chief Logistics Officer,Keurig Green Mountain Panelists: Ron Marotta Vice President, Yusen Logistics (America), Inc. Ken Wood EVP Product Management, Descartes Kevin Zweier VP Transportation Practice, Chainalytics
26. Yusen Logistics
27. Yusen Logistics
28. Question for Audience Question: What is the motivation for terrorists to use the supply chain as a weapon? Answer: A. Create global economic chaos B. Impact to employment C. Impact to flow of goods & disruption to supplies that sustain society (food, water, medical supplies)
29. Supply Chain Risk Common Methods Cargo - Used to smuggle people, narcotics, weapons Cargo - Used to transport weapons of mass destruction, biological, chemical weapons Threat of piracy, theft, violence Terrorism and sabotage Strikes, riots, civil commotion, coup d'etat, war Money – Revenue from shipping used to fund terrorist activities Money – Ships used to launder funds for terrorist organizations Assets (Land, Air, Sea) – Used as weapons; aid in the disruption of infrastructure
30. Supply Chain Risk Specific Hazards Bioterrorism & Outbreaks - Anthrax, Plague, Smallpox, Salmonella Chemical Emergencies - Ricin, Chlorine, Nerve Agent Mass Casualties - Explosions, Blasts, Injuries Natural Disasters & Severe Weather - Hurricanes, Wildfires, Floods, Earthquakes Radiation Emergencies - Nuclear Blasts, Dirty Bombs
31. Foreseeable Issues in 5 Years The National Consortium for the Study of Terrorism and Responses to Terrorism released data in December that reported 8,400-plus attacks worldwide in 2012 and more than 15,400 casualties. Terrorism Global Harmony Global Port Infrastructure Local Infrastructure Fuel Fluctuations
32. Who is Descartes? 172,000+ What we do for our11,000 customers global network transport management mobile & telematics forwarder/broker systems customs filing 160+ 50+ connected parties countries industry verticals 4.5 billionmessages processed/year 70 millioncustoms filings processed/year 31.2 millionroutes managed/year
33. Poll Question How do you believe information technology will impact your market over the next 5 years? No impact Reduce costs Expand opportunities Accentuate competitive differentiation Redefine the market
34. Technology’s Impact on Retailing 83% 15% 5 year growth in the US 60% 2017 UKeconomy 5 year growth inWestern Europe 2013 Holiday Delivery Capacity Problems -11% 5 year margin impact from omni-channel retailing
35. The Connected World $1.9T 2020 global economic IoT value add 26B IoT devices in 2020 2B High speed broad band users in 2019 1.9B Smartphones & tables sold in 2017 2013 Mobile devices outnumber global population 150 Daily Smartphone Touches
36. Tech Will Play a Greater Role IT market growth (ex. smart phones & tablets): 2.4% Cloud: 25% growth, $100B Big data: 30% growth, $14B Location based services: 19% growth, $7B Supply chain in the “front office”
37. Who is Chainalytics? Helsinki Stockholm Milan Minneapolis Atlanta Bangalore BY THE NUMBERS MILESTONES 150+ FTEs Worldwide Serve 500+ Unique Clients 17 of Gartner’s Top 25 Supply Chains 80 Fortune 500 Companies Delivered 750+ Engagements Founded in 2001 Established Bangalore office in 2005 Acquired Chainnovations and Adalis’ Packaging Solutions Group in 2011 Strategic Investment by GEF Acquired ROCE Partners in 2013 Acquires Logiworx, Australia / APAC effective April 2014 Singapore office to open Q2-14 SYDNEY
38. Poll Question By what percentage have U.S. Dry Van Shipments increased or decreased in the last 7 years? Decreased ~20% Decreased ~10% Stayed about the same Increased ~10% Increased ~20%
39. Poll Question Answer By what percentage have U.S. Dry Van Shipments increased or decreased in the last 7 years? Decreased ~20% Source: ACT Research for tractors; ATA for shipments.Tractors in 000s; Shipments put in an index for comparative purposes vs. tractors.
40. USA Truckload Trends 5.1 % 25,000 Intermodal growth increase through 2017 3.1 229,000 % Unfilled driver positions at the end of 2013 Time 2017 New drivers needed by 2022* ATA ATA ATA productivitydecrease Decrease in newer tractors 2006-2013 $ 19 % Resulting from Hours of Service (HOS) changes projected increase in 2014 rates 2-3 % Schneider estimate ACT research Stephens, CHAIN estimate * Each item represents 10K drivers
41. Global Ocean Container Trends 5.8 % $600 Operating Margin of most profitableocean carrier in 2013 % 7.6 77 % in total carrier capacity in 2014 Proposed general rate increaseper FEU* through April 2014 Alphaliner increase TSA Alphaliner 70% 4.6% Projected increasein container shipping volume in 2014 of the current market share is covered by the three global shipping alliances Alphaliner Seaintel Drewry * One forty-foot equivalent unit (FEU) equals 25 metric tons or 72 cubic meters. Carrieron-time reliability in Q4 2013
42. Global Air Freight Trends $60Billion annual growth rate for the 5 years covered by 2013-2017 Middle East Estimated air freight revenues in 2014 3.2% % 10 1 Number of regions with tonnage growthabove 3% down since 2011 1.4% 2.6% 40% 2013 Growth Total Freight-Ton-Kilometer (FTK) Available Freight-Ton-Kilometer (AFTK) Asia-Pacific Market share of airfreight industry Source: IATA
43. Wrap-up & Closing Remarks Michael Jacobs Chief Logistics Officer, Keurig Green Mountain