Kuehne + Nagel Investor Day
April 27, 2007Otto Schacht
• Market trends / challenges
• Customer and Kuehne + Nagel
• IT solutions
• Customers initiatives
International Procurement, Production and/or Distribution Networks
International Procurement, Production and/or Distribution Networks
Rationalised & changing
Procurement-, Production- and Distribution Networks
Rationalised & changing
Procurement-, Production- and Distribution Networks Reduced Product Lifecycles Reduced Product Lifecycles Increased Customer Demand (Time, Quality)
Increased Customer Demand (Time, Quality)
Increased Supply Chain Reliability, Speed and Visibility
Increased Supply Chain Reliability, Speed and Visibility
Increase Shareholder Value Increase Shareholder Value Capital Efficiency Cost Pressure Capital Efficiency Cost Pressure Globalisation
Understanding the Market Place and Trends
Increased Supply Chain Complexities (more parties involved, e.g. Contract Manufacturing)
Increased Supply Chain Complexities (more parties involved, e.g. Contract Manufacturing)
“Carbon Footprint” of the Supply Chain
“Carbon Footprint” of the Supply Chain
Environmental Issues
Environmental Issues Globalisation
Globalisation Increasing Move from “Push” to “Pull”Increasing Move from “Push” to “Pull”
Understanding the Market Place and Trends
• Demand for information and process integration is growing exponentially
• Next plateau to drive improvements
• Financial
• Inventory, Cash-to-Cash Cycles, Efficiencies, Infrastructure, ROI
• Service
• Fill rates, lead times Driven by
• ERP, Internet, ease of EDI, XML
Traditional 3PL value proposition cost reduction cost reduction Customer Customer’s customer
Supplier • Transport cost reduction
• Operational efficiency
Enhanced value proposition by Kuehne + Nagel Customer
Overall supply chain visibility and optimisation for the customer Customer’s customer Supplier • Improved delivery performance • Reduced inventory • Reduced fulfilment cycle time
• Increased overall productivity • Lowered supply chain costs • Improved order fill rates • Improved capacity utilisation
Traditional and Enhanced Value Proposition
Expediting costs Expediting costs Late delivery Late delivery High High logistics cost logistics cost Lost revenue Lost revenue Lost revenue
Poor customer service Poor customer service Poor customer service
Asset cost Asset cost Asset cost Rework Rework Rework Returns Returns Returns Warranty Warranty Warranty Operating cost Operating cost Operating cost
Lost customer loyalty Lost customer loyalty
Lost customer loyalty RiskRiskRisk
Litigation Litigation Litigation Excess inventory Excess inventory Excess inventory Production downtime Production downtime Production downtime
Long cycle times
Long cycle times
Long cycle times
Firefighting Firefighting Firefighting Replanning Replanning Major impacts due to lack of transparency are not visible – but nevertheless
MASSIVE
Need for Visibility
• Many points of entry (difficult management)
• Detailed various ocean carriers
and/or
• Various forwarders
• Different systems • Track & trace
• Invoicing
• Reporting
• Transfer of liability
Seafreight – Consolidated Management
Advantages
• Fewer points of entry for a customer
• Simplified rate structure
• Simplified invoicing
• Single reporting system
• Single track & trace system
• Clear transfer of responsibilities
• Outsourcing of administration
• More control to warehouse partners
Customer Solutions
Traditional Model
No common standard ofinformation and restricted no. of carriers Information / Contracts
Customer
Carrier II Carrier III Carrier IV Carrier V Carrier ICustomer Solutions
Kuehne + Nagel‘s role
Contract Information Detailed information Vendor I Vendor II Airline I Airline II Airline III Kuehne + Nagel
•
Planning•
Optimising•
Monitoring•
Controlling•
Reporting•
Execution Customer•
Production•
Production planning•
Sales forecast•
Marketing•
Research and development•
Public relations Carrier I Carrier II Carrier III Carrier IV Carrier VIntegration with Carriers
• Schedules • Booking
• Shipping instructions • Bill of Lading
• Track & trace • Reports
Customers
Single access to multiple carriers reduces training, mistakes, and time!
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•
•
•
•
Reliability through People, Processes and Technology
KN Login – Enables carriers and supply chain partners to directly input
CIEL (FA/FS) – First Generation
Information directly interfaced to KN Login
CIEL (FA/FS) – Captures information
from carriers and other supply chain partners to increase data quality and availability
CIEL (FA/FS) – Single Global
Operational Platform to plan
transportation, create documentation and post events. Driven by a
standard workflow to ensure SOP conformance
KN Login – Web-based window to
view and manage transportation across carriers & modes
• Provides online visibility to order lines across vendors and source channels
• Provides online integrated visibility to order line allocations to respective shipments across carriers and modes
• Enables reliable and efficient transportation and information flow management
Visibility Monitoring Collaboration
Information management
Kuehne + Nagel Global Logistic Network
KN OMS
Enabling Customers to Effectively Implement and Manage Global Procurement Strategies Activities
KN Login Visibility and Process Management Tools
Protocols
