john langley from georgia institute of technology on ‘outsourcing logistics: meet and exceed your...

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“Outsourcing Logistics: Meet and Exceed Your Customers’ Real Expectations, and Create the 3PL Relationships that Drive Costs Down and Drive ROI” 3PL Summit Chief Supply Chain Officer Forum Atlanta, Georgia June 21-23, 2010

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Page 1: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

“Outsourcing Logistics: Meet and Exceed Your

Customers’ Real Expectations, and Create the 3PL

Relationships that Drive Costs Down and Drive ROI”

3PL SummitChief Supply Chain Officer

ForumAtlanta, GeorgiaJune 21-23, 2010

Page 2: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

2

Effects of Economic Crisis on Supply Chain and 3PL Relationships

Increase, 30%

Decrease, 21%

No Impact,

42%

Do Not Know, 7%

0%20%40%60%80%

Yes No Not Sure

59%

22% 19%

Current Economic Crisis is Viewed as “Inflection Point” to

Re-Think Supply Chain/3PL Relationships

The Need for 3PL Services in Times of Economic Volatility

Source: 2009 14th Annual 3PL Study.

Page 3: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

3

3PL/Customer Panel Participants

Scott McWilliams – CEO, OHL

Greg Javor – Vice President, Global Logistics, Starbucks

Tom Sanderson – President & CEO, Transplace

Chris Cavin – Director of Purchasing, Shared Services, Rock-Tenn Corporation

John Langley – Professor of Supply Chain Management, Georgia Tech (Moderator)

Page 4: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

Starbucks® Coffee Company and OHL

Page 5: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

Starbucks Confidential Page 5

From One Little Bean Store

• 16,700 retail stores

• 120,000 partners

• 51 countries

• 50M customers per week

• Our products:- Coffee and Tea- Handcrafted Beverages- Consumer Products

Stores

Page 6: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

Starbucks Confidential Page 6

The Starbucks Supply Chain

• Plants- Coffee Roasting: 5- Tea: 1- Co-Manufacturing: 24

• Distribution- RDCs: 13- CDCs: 42- Green Coffee Warehouses: 6

> $4.0B Enterprise Spend> $0.8B Operating Expense > 4.4M Deliveries per year> 1.1M Picks per day

Page 7: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

OHL OverviewGlobal integrated third‐party logistics company

Headquartered in Nashville, TN

Employs 5,500

$979MM 2009 revenue

3 business units:

7

Contract Logistics

• $392MM

North America Transportation

• $250MM

Global Freight Management and Logistics

• $337MM

Page 8: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

9%

27%

4%

14%3%3%

25%

11%4%

Retail

CPG

Automotive

Electronics & High Tech

Apparel

Chemical

Food & Beverage

Healthcare

Publishing

OHL Vertical Market Focus

Page 9: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

OHL History

9

Foundation

Acquisition

Integration

Execution

WCAS purchase 2005

Founded 1951

2006‐2008 2010 and beyond

Page 10: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

• Improved Inventory Planning

• Less Expediting of Orders/Inventory

• Fewer stick‐outs/excess inventory

• Best‐fit network solution

• Efficient mode shift

• Fewer customs delays

• Proper inventory positioning

• Customer/market proximity

• Variable warehouse space and cost

• Fixed asset optimization

• OHL Supply Chain Visibility

• OHL Consolidation, Ocean/Air, Customs Brokerage and optimal network placement

• OHL Contract Logistics and North America Transportation Solutions

• Database driven KPI measurement

• Continuous operational improvement

• Optimized visibility

• Optimized core competencies

• OHL Integrated Solution

OHL Value Proposition

10

Centralized CRM

Network Flexibility

Time to Market

Visibility

Page 11: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

How to Get the Most out of a Partnership

• Partner; not vendor

• Communication

• Cultural fit

• Focus on core competency

• One source solution (visibility)

• Trust expertise

11

Page 12: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

© 2010 – All contents CONFIDENTIAL

Strategy Session – Outsourcing Logistics: Meet and Exceed Your Customer’s Real Expectations, andExamine the 3PL Relationships that Drive ROI

June 22, 2010

Page 13: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

© 2010 – All contents CONFIDENTIAL

Technology & Service Offerings

Basic Comprehensive

Man

agem

ent S

olut

ion

Bas

icC

ompr

ehen

sive

Technology Solution

TMS Technology• On-Demand TMS

• Optimization• Highly Configurable• BI, Reporting and Analytics• Rapid Implementation & Integration

Capacity Provider• Single Source

• Core, Committed and Primary • Brokerage • Spot Market• Dedicated Fleet

Lead Logistics Provider (LLP)• Full Transportation Outsourcing

• Transportation Provider Contracting• Shipment Control Centers• Inbound Freight Management• Freight Bill Audit & Payment

Logistics Consulting Services• Benchmarking• Transportation Procurement• Network Analysis & Design• Professional Services Consulting• Joint Lean Six Sigma Projects

Transplace takes a consultative and analysis-driven approach to solution design and deployment. Ourbusiness model adapts to the operational needs of our customers – from high-tech and high-touch, tomore basic operational services.

13

Page 14: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

14

RockTenn Overview

• RockTenn is a leading North American producer of paperboard, containerboard, consumer and corrugated packaging

Headquarters in Norcross, GAOperating over 100 facilities in the US, Canada, Mexico, Chile and ArgentinaAnnual net sales of approximately $2.9 billion

• RockTenn Business SegmentsConsumer Packaging Corrugated Packaging Merchandising Displays Specialty Paperboard Products

• Transplace Services to RockTenn:• Load Control Center Operations/Staffing• TMS Technology • Customized Business Intelligence Reporting• Engineering Support for Strategic Bid/Network Events• LTL Contract Management

Page 15: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

15

RockTenn Production Facilities

RockTenn Operates over 100 Production Facilities160,000 + annual freight shipments across all modes7,000 + unique freight lanes over last 18 months

Page 16: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

© 2010 – All contents CONFIDENTIAL

3PL Relationship Success

• Alignment with Customer Goals• Quarterly Business Reviews• Constructive Discussions/Problem Solving• Filling the Gaps• Supply Chain Expertise• Efficient Processes – Lean Six Sigma• Innovative Technology• Thought Leadership

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Page 17: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

© 2010 – All contents CONFIDENTIAL

Why Transplace?

• Best in Class TechnologyTransplace is the only 3PL to make the 2010 Gartner TMS Magic Quadrant

• Flexible, Transparent, End to End Transportation Management• Ongoing Transplace Executive involvement ensures year over year

synchronization with Executive Management at customerQuarterly Business ReviewsOn-Demand Customer BenchmarkingCollaborative Transportation Management

• Annual “Voice of the Customer” survey• Transplace Customer Advisory Board

“Transplace aligns our Account Management Team’s Goals with our Customers’ Goals” Sheldon Ellis, Intertape

• Transplace Executive Management is committed to the principles of Lean Six Sigma

54 Green Belts and 12 Black Belts within Transplace» Proper ratio 10% and 1% employee base

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Page 18: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

© 2010 – All contents CONFIDENTIAL

www.transplace.com Corporate Headquarters 972-731-4500www.transplace.com Corporate Headquarters 972-731-4500

Page 19: John Langley from Georgia Institute of Technology on ‘Outsourcing Logistics: Meet and exceed your customer’s real expectations, and examine the 3PL relationships that drive ROI’

“Outsourcing Logistics: Meet and Exceed Your

Customers’ Real Expectations, and Create the 3PL

Relationships that Drive Costs Down and Drive ROI”

3PL SummitChief Supply Chain Officer

ForumAtlanta, GeorgiaJune 21-23, 2010