TRG Update – April 2008

Welcome to The Results Group’s quarterly update.  We are passionate about your success and we have a track record of delivering rapid results that has earned over 80% repeat business with our clients.  We have recently revamped our entire website including highlights from several interesting client successes.  Please check it out at www.resultsgroup.com and let us know what you think.
In this Update we have highlighted recent trends driving changes in the Supply Chain for logistics providers.  We have also been sharing our collective experience and point-of-view in publications and speaking engagements.  We welcome your ideas and invite you to provide us with your thoughts. email TRG.

TRG Thought Leadership
The Changing Global Logistics Landscape – Why Should Your Firm Care?

The global logistics outsourcing landscape is changing rapidly.  Why should your firm care?  Logistics represents not only one of your largest costs, but also a key factor in customer responsiveness and satisfaction.  For products such as digitally based photo albums and merchandise, logistics costs rival or even exceed manufacturing and materials costs.  With short manufacturing cycles becoming the norm, most of the fulfillment cycle lag apparent to customers is in delivery logistics – the perception of “instant gratification” is gated by logistics execution.

The logistics industry landscape is rooted in warehousing and transportation core competencies, with firms expanding outward.  Firms are offering new services to capture more business.  Value added functions now include planning, providing real time information, configuring outbound product and triaging returned product.

Logistics Firms Expand from Core Bases to Capture More Spend
chart 

In confronting this evolving landscape, two prototype strategies can maximize benefits for your firm: One stop shopping or Disaggregating. 

Firms focusing on cost reduction are better off disaggregating sourcing to multiple suppliers, each with lowest cost in a logistics segment.  In exchange for low external costs, firms incur more internal costs: people to manage suppliers, management attention, and exposure to interface changes among network players.  This path works best when product and business rules can be simplified so that “any” supplier can execute reliably

One stop shopping is preferred when execution is more complicated. Companies pay an integration premium to a supplier who deals with their unique requirements, but get lower internal costs in return. One stop shopping promotes focus on core competencies, and it simplifies rapid capture of growth opportunities. This approach works best when companies invest in relationship management capabilities.

Choosing the right strategy can yield big returns, as opportunity awaits companies ready to leverage the changing logistics landscape for improved business results.

In Closing

We focus on turning new challenges into opportunities and take pride in making rapid improvements in business performance by “delivering results” that are operationally embraced by our clients.   If you would like some new ideas on your business, contact us at either 650-234-9979 or 949-651-1600.

Bill Schneiderman
Kevin J. Steele
Mike Sulaver

 

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800 West El Camino Real, Suite 180
Mountain View, CA 94040
Phone: 650-234-9979
15615 Alton Parkway, Suite 450
Irvine, CA 92618
Phone: 949-651-1600