Supply Chain Evolution

Mile Sucur - CT Freight

Introduction

• Traditional Supply Chain

Extended Supply Chain

SUPPLIERS MANUFACTURER

DISTRIBUTION CENTRE

LOGISTICS FACILITATOR

WHOLESALER

RETAIL OUTLET

CONSUMER

Online Retailers Supply Chain

ONLINE ORDER ONLINE RETAILER MANUFACTURER

DISTRIBUTOR

LOGISTICS FACILITATOR

HOME DELIVERY CONSUMER

Incoterms

• Definition - Incoterms are the international rules for the interpretation of trade terms used in international trade, formulated by the International Chamber of Commerce.

• Incoterms determine:

– Which party bears costs

– Which party bears risk

– Which party bears insurance

How to Research and Develop Alternate Logistic Models

• Establish what your own model looks like, and ask why it’s being done this way?

• Research your competitor’s models, and find out why they are doing it that way.

• Talk to the market – Integrators

– Freight Forwarders

– Customs brokers

– Couriers / Postal Operators

– Aggregators

– 3PL’s

Ask them about: Operating Functions, Capabilities, Infrastructure, Strengths, Rates and Trading Terms

Matching your business to an effective supply chain solution

Critical Mass

Critical Mass Shipping Costs

Critical Mass Shipping Costs II

Critical Mass Shipping Costs III

Scale Up

Scale Down

International vs Domestic Online retailers

VS

Differences

International • Originate from larger

domestic markets

• Access to cheaper labour

• Have established foreign markets

• Can capitalise on our high duty/tax threshold

• Easy access to B2C solutions

Domestic • Local Market Expertise

• Good Australian branding

• Can handle free shipping & returns more effectively

• Can create more value added options

International Markets & Foreign Regulations

• Evaluate demand requirements for your products internationally. In some markets your product will not sell at a commercially viable price.

• Obtain information from government agencies,

(Australian Trade Commission / Export Council of Australia and foreign Chambers of Commerce).

• Prepare a simple logistics model, and look to expand your opportunities into a diverse range of markets.

• Prepare your website with the updated terms and conditions required for international trade.

• Start slow and analyse any new business.

• Use your knowledge of Incoterms and alternative Logistic Models to create more effective solutions once your volumes increase to a level of critical mass.

Question Time