Added value services in Logistic Driving forces and barriers for developing and providing value added services

SUMMARY Frame of reference Service management in logistic Make or buy 3PL Analysis 3PL positioning Value added in logistic Development of added value services Forces and barriers Conclusion How to become a 3PL leader of added value services ?

FRAME OF REFERENCE

Service management in logistic Basic service package consists of core and supplementary services Customization Low High Differenciation Value-added services as services adding extra feature, form or function to the basic services

Make or buy Three reasons such as the lack of capability, scale and ability and lack of capacity to perform it within the organization Importance to the customers Low High Uniquesness of offerings

3PL positioning Low High Asset specificity Complexity Low High

ANALYSIS

EXAMPLES for 3PLs Customer adaptation Low High Problem solving general ability

EXAMPLES for PRODUCERS Customer adaptation Low High Problem solving general ability

POSITIONING OF 3PL PROVIDER

Value added services in 3PL Basic logistics Transportation Network-based transport Emergency transport Transportation management Warehousing Storage Order picking Inventory management IT-services EDI Tracking and tracing Value-added logistics Value-added services (physical handling) customer-focused service direct delivery cross-docking labeling repacking adding usage instructions promotion-focused service making point-of-sale displays adding advertising material to the product package shipping of promotion materials Manufacturing-focused service postponement assembly Time-focused service just-in-time sequenced just -in-time Basic service reverse logistics aftersales service spare parts quality control Administrative services Purchasing of material Order processing Invoicing Export/import operations Consulting Customer support Telemarketing Custom clearance Certification (Tapa, AIO, ISO)

Value added services in 3PL The earlier the 3PL is participating in the supply chain, the most added value he can bring

METHODOLOGY How to become a 3PL leader of added value services solution ? Define your strategy Choose which king a actor you want to be and include VAS in your long term business plan Make pro-activeness a value of your company : « Think » as important as « Do » Prepare your team Develop your expertize Reinforce your client relationship Lead a common team of technical experts, account manager and commercial team Master the complexity Develop your tools to handle customized solution as your standard, at a competitive cost Treat your investment connected to added value services differently than your core business investments Added value and profit are proportional

DEVELOPMENT OF VAS : Innovation InnovationInternal innovation Customer related innovation Multi customer related innovation Single customer related innovation Innovation at the beginning of the relationship episode Innovation in an ongoing relationship Reactive innovation Proactive innovation Proactive cost improvement Proactive performance improvement Who takes initiative for developing value added services ? How is development of value added services done ? Process/support team Key account manager Commercial team Company spirit Company strategy

DRIVING FORCES & BARRIERS What are the driving forces in the development and providing of value added services ? Meet customers demand Lock-in customer Be more competitive and attractive to the customer Warehouse is the suitable place in the supply chain to perform added value services Task that nobody wants to do (customer, customers customer, specialist in providing particular service) Changes in customer business and outer environment : Economical reasons can be a driving force for 3PL firms to provide value-added services (man hour cost, better possibility to plan work force, etc.)

DRIVING FORCES & BARRIERS What are the barriers in the development and providing of value added services ? High costs are a common barrier for service development. Necessity of too big investments in providing value-added services, as well as requirements from customers side to extensively customize value-added service Problems with establishing successful organizational learning Lack of trust and communication derived from not enough close relationships between the 3PL provider and customers Lack of proactiveness from the 3PL providers side Lack of proactiveness can result from, for example, 3PL providers themselves being more oriented towards doing than thinking Also depend on logistics seen as a less important development area from the customer companys point of view.

DRIVING FORCES & BARRIERS What are the barriers in the development and providing of value added services ? The difficulty for the 3PL provider to coordinate offering of so many different value-added services Accept the probable necessity to work with external partners The possible lack of expertise in the area of service which can result in service of low quality can be seen as a barrier in such extent that somebody needs to pay for the costs of acquiring necessary expertise to ensure quality.

CONCLUSION How to become a 3PL leader of added value services solution ? StrategyTeamToolsBudget

RESULTS

This strategy has been implemented in the core of FM Logistic and this where we are now :

FM added value services plant Sered – Bratislava plant in numbers VAS

FM added value services plant Basic logistics Transportation Network-based transport Emergency transport Transportation management Warehousing Storage Order picking Inventory management IT-services EDI Tracking and tracing Value-added logistics Value-added services (physical handling) customer-focused service direct delivery cross-docking labeling repacking adding usage instructions promotion-focused service making point-of-sale displays adding advertising material to the product package shipping of promotion materials Manufacturing-focused service postponement assembly Time-focused service just-in-time sequenced just -in-time Basic service reverse logistics aftersales service spare parts quality control Administrative services Purchasing of material Order processing Invoicing Export/import operations Consulting Customer support E_commerce Custom clearance Certification (Tapa, AIO, ISO)

Contact details Further questions, clarification, curiosity ? Jan Drzik Plant manager Mobile: Brice Rouanet Solution Center manager CZ/SK Mobile: