World Trade - October 2008 - (Page 25)

3PLs to the rescue Companies that employ strong supply chain competencies tend to have 7 to 26 percent higher market capitalization than competitors who do not. For such high cap enterprises in many a sector, a reduction of even 5 percent in total distribution cost can have the same impact on proﬁt as a 30 percent increase in sales. And, there are many functions a 3PL can perform to save companies money. For one, 3PLs can manage imports, reduce lead times to customers, and ship the right quantity of products at the right time to the right place. ODW Logistics provides East Coast and West Coast 3PL distribution services via its ﬁve strategically located shared logistics centers and four contract logistics locations. Among its offerings are pick and pack fulﬁllment, labeling, point-of-sale displays, assembly/kitting, product inspections/quality assurance, bundling, international import/export logistics services, special product handling, packaging, and cross docking. Some suppliers like Ralston Foods, which sells brand cereal to Wal-Mart, use ODW to meet Wal-Mart’s demand for radio frequency identiﬁcation tags (RFID). Instead of investing in the technology themselves, they share the expense with ODW, a bill that shows up as an incremental charge on the cost of shipping each case. DHL Exel Supply Chain, part of the Logistics Division of Deutsche Post World Net (DPWN), offers its customers functions that span a wide range of industries. For Toys “R” Us dot-com customers, it implemented a system whereby each product is weighted and scanned by UPC code while being picked to verify proper fulﬁllment rather than ﬁnding errors later in shipment. In addition, orders are bundled by same zip code to save shipping costs. Elsewhere, Exel works with vendors to maximize tote capacity being shipped to speciﬁc stores. For example, it’s consolidating tote shipments of ﬁve optical suppliers for delivery to Wal-Mart. It also operates call centers that link shipments to customer service, funneling some 20,000 retail orders six days a week out of one in Ohio. Its Client Services department addresses issues regarding inventory, defective products in network and recalls. The operation is the single largest home delivery transportation service provider in North America, dispatching some 150 trucks across the United States daily. “By using high technology like GPS, we are able to determine not only the driver’s location, but the speed at which the driver is traveling, and when deliveries will be made,” says John Cox, head of the center’s routing and scheduling group. Fuel consumption can also be determined. “That’s especially important because if 20 percent of the ﬂeet is running incorrectly, your proﬁt is gone,” Cox adds. Liner options Exel Another route to the value-added services of 3PLs is through afﬁliated steamship lines that offer airfreight and ocean freight forwarding services, arrange ground transportation, and provide warehousing, distribution and supply chain management services. To meet speciﬁc industry needs, some 3PL services target speciﬁc industries. That’s the case for Maersk Logistics’s SupplyChain HealthCheck™. It was applied to assist a leading food and beverage manufacturer under pressure to cut logistics costs. The company imports 6,000 containers of raw materials and exports 13,000 containers of ﬁnished product from Thailand per year. Maersk Logistics suggested that the client exploit synergies between Maersk Line’s reefer service and Maersk Logistics, which would help redesign the import and export warehouse network; implement cross docking service; replace less-than-container load (LCL) trucking with back-haulage of reefer containers; and introduce a warehouse management system to improve visibility. The end result: $2.4 million savings per year in addition to a more streamlined supply chain. APL Logistics, the logistics arm of Neptune Orient Lines, offers guaranteed services. Its OceanGuaranteed™, a port-to-door, day-deﬁnite transportation service from APL Logistics and Con-way Freight, combines premium ocean LCL service with high-performance LTL transportation. It guarantees delivery of imports from Asia to the U.S. “These are shipments that would usually go by air,” says Tony Zasimovic, vice president, International, APL Logistics. Exel works with vendors such as Wal-Mart to maximize tote capacity being shipped to speciﬁc stores. WWW.WORLDTRADEMAG.COM 25 http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - October 2008

World Trade - October 2008 Contents Tune Up Your Supply Chain Globalization: The Real Competitive Threat Supply Chain Watch Tradewinds Shippers and Providers Collaborate to Take on a Challenging Economy Tweaking the Supply Chain to Optimize Value and Minimize Cost Supply Chain Software Morphs Into Enterprise Management Can Warehousing Really, Truly Be Strategic? Everybody is Global Between the Devil and the Deep The Hidden Costs of ‘Free’ Translation Blowing Smoke

World Trade - October 2008

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