Global Supply Chain Management needs strong local know-how
Frankfurt on the Main, May 2009. Global Logistics Trend Study 2009 shifts common ideas - Piracy, Infrastructure, Centralisation in a new Sight. Today’s common idea considering piracy as the biggest security problem within international supply chains misses the facts. As a current study of the international Supply Chain Consultancy Miebach Consulting shows more than 40 per cent of participating companies indeed do have security problems with logistics. However, piracy is not the main driver of difficulties. Hot topics are thievery, robbery and “unexplained losses” especially occuring on road transportation as well as on sea transport and directly in the warehouse. The ‘everyday’ transportation criminality has a far bigger impact on the companies business as piracy”, says Klaus-Peter Jung from Miebach Consulting who is head of the study. The study was executed in cooperation with the BDI, CEL and PMSL and went public on the fair “Transport Logistic” in Munich on the 12th of May.
Further interesting fact is, that the positive self-perception of western industrialized countries. They believe that their infrastucture is more advanced than in other regions worldwide. This received a suprising offsetting item: The infrastructure in Far East (without India) is assessed considerable higher in terms of road, rail, port and telecommunication infrastructure than the one in Northern and Western European industrialized countries as well as in North America. An effective infrastructure is essential for industrial enterprises and logistics companies. It stands for a clear and significant advantage of location in global competition between regions. Consequently, infrastructure policy has to be placed in the centre of any political discussion to accomplish economic growth, prosperity and high quality of life”, says Dr. Heinrich Höfer, Head of economy, technology and infrastructure at BDI.
Further estimations on the quality of regional infrastructure: South America has been evaluated as worst region in all items except for Telco. Only Southern Europe shows a worse Telco infrastructure in comparison to South America.
Probably one of the most striking figures in the survey is the following: The companies earnings before tax (EBT) on the one hand and their tendency of future centralization level on the other showed that companies with higher average EBT strive for more decentralized logistics solutions.
The conclusion on the study is: The familiarity of regional markets and customers, the proximity to the market and consequently a higher service-level performance are the key elements to generate higher profit margins. The local orientation pledges more success. Jung mentions, “Good service, short delivery times and customer proximity create higher logistics costs, but will pay off considering the big picture.
These issues were hot topics with noticeable results which came out of the “Global Logisitcs Trend 2009” study. The survey was spread out worldwide to more the 6,000 Logistics and Supply Chain Managers of which more than 350 decided to contribute their knowledge and experience.
Following, find further interesting results shortly summarised:
Logistics costs: Another impressive figure in the survey is the following: 20 per cent of all participants stated that they do not know their logistics costs. “This result is maybe not as alarming as it first sounds”, believes Jung, due to the fact that the analysis also shows a significant positive correlation between the growth of a company and EBT, but no correlation of EBT and logistics costs. Evidently, logistics costs have only a limited influence on the overall profitability of the company. But on the other side, Logistics is the key driver for service and therefore for customer satisfaction and can influence EBT much more by performance than by cost! “Logistics is no longer only a cost factor but a performance driver for the companies”, states Jung.
Network Structure: The study proves that Logistics networks are not only driven by logistics costs: purchasing, production technology and customer proximity also influence the degree of centralization. Additionally, any branch has its own drivers: High Tech Industry will strengthen its centralized setup whereas Pharma as the current “centralization leader” tends to a more de-centralized structure. The analysis also comes up with another astonishing result: the smaller the company, the higher the tendency to future centralization!
Intralogistics & Automation: A tendency towards automated solutions for those industries showing a lower degree of outsourcing is noticed. The smaller the company, the higher the tendency to future - not current - automation! Another new aspect for the authors is that no significant differences in the degree of automation in regard to the analyzed regions can be detected. Automation is obviously an industry-driven and not a region-driven topic.
Especially smaller companies, which usually tend less to outsourcing, are more focused on service level and marketability. These results exactly comply with general assumptions of cost structure observation. Accordingly, rather service requirements in the warehouse operations than intralogistics determine the degree of automation costs.
Supply Chain Security: Participants suggest their own region more insecure than rest of the world
Key security problems occur by road transport (73% of the participants), followed by sea transport (30%) and warehousing (24%) – not depending on industry or region. Eastern Europe and South America are looked upon as the most insecure areas worldwide. Surprisingly enough: except for North/West-Europe, all of the participants view their own region as much less secure than rest of world does. This is an additional indicator for our general conclusion: “Global Supply Chain Management needs strong local know-how”, says Jung.
Green Logistics: The green agenda is put on hold!
Regarding “Green Logistics” big differences appear between industries. The survey determines a growing gap between so-called green leaders as High Tech, Wholesale and Electronics and those industries with a lower green impact, so-called “grey” industries as Pharma or Chemicals. (Table 2)
Observing regional differences, especially higher industrialized regions show currently a lower green impact. However, North/West-Europe expect a significant increase in the future. Jung mentions, “Within the industrialized regions the green agenda is put on hold. It remains to be seen if this snapshot is mainly influenced by the current crisis and if we still get the same answer to the high future impact of green logistics in three years time.” The biggest potentials for improvement that managers see is in the area of Road Transport. The key measure is identified in better utilization of transport capacities and freight consolidation.
1) Informational Background of “Global Logistics Trends 2009”
The study “Global Logistics Trends 2009” was organized and accomplished worldwide by the 17 offices of Miebach Consutling in cooperation with the Federation of German Industries (BDI), the Centro Español de Logistica (CEL) and the Polish Association of Logistics Managers - Polskie Stowarzyszenie Menad?erów Logistyki - (PSML). The study will provide a broad outline of current global trends in the field of Logistics and Supply Chain Management.
Therefore, more than 350 Logistics and Supply Chain Mangers from different European regions, North, Middle and South America, the Middle East, India and the Far East contributed their experiences and regional know-how to the survey. Based on these answers the study allows to give completely new sights on topics as Logistics Costs, Outsourcing, Network Design, Intralogistics & Automation, Supply Chain Security (SCS), Green Logistics and Infrastructure (Table 3 – Participants by industries/regions).
Request the study from: jung@miebach.com
Responsible
Miebach Consulting
Untermainanlage 6
60329 Frankfurt/Main
Tel.: 49 (0) 69 / 27 39 92-0
Fax.: 49 (0) 69 / 27 39 92-20
www.miebach.com
Head of study:
Dr. Klaus-Peter Jung
Tel.: 49 (0) 69 / 27 39 92-92
E-Mail: jung@miebach.com
PR contact
Miebach Consulting Group:
Dr. Volker Krobisch
Mobil: 49 172 6261968
E-Mail: krobisch@miebach.com
BDI: Thomas Fabian
Dep. Infrastruktur, Verkehr und Telekommunikation
Tel.: 49 30-2028-1498
Further publications about the study (in german, spanish):
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ORF, 28.06.2009
Lkw-Piraterie nimmt stark zu
Link: http://vorarlberg.orf.at/stories/371487/
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Webpicking, 05.06.2009
El Grupo Miebach Consulting presenta mundialmente a la prensa especializada el Global Logistics Trends Study 2009
Link: http://www.webpicking.com/ps/news.php?n=10708
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Posttip 31.05.2009
Studie: Unerklärlicher Verlust auf Europas Straßen?Link: http://www.posttip.de/News/23085/Studie-Unerklaerlicher-Verlust-auf-Europas-Strassen.html
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International Transport Journal Logistics worldwide (ITJ), 29. Mai 2009
Supply-Chain-Management-Studie von Miebach Consulting - Lokales Know-how zahlt sich aus,
Link: http://www.transportjournal.ch/index.php?id=489&tx_ttnews%5bswords%5d=Miebach&tx_ttnews%5btt_news%5d=14005&tx_ttnews%5bbackPid%5d=441&cHash=5df22440f5
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Visavis.de, 29.05.2009
Globale Logistik-Trends 2009
Link: http://www.visavis.de/finanzen/modules.php?name=News&file=article&sid=16455&mode=&order=0&thold=0
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MyLogistics, 26.05.2009
Studie: Globales Supply Chain Management braucht starkes lokales Know-how
Link: http://www.mylogistics.net/de/news/themen/key/news1045282/jsp
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BDI 12.05.2009
Mit Unterstützung des BDI legt Miebach Consulting die Global Logistics Trends Study 2009 vor.
Link: http://www.bdi.eu/2709_3160.htm