1. A customer intimacy strategy Offering a leading multi-brand proposition in automotive parts Piet van BergeijkRonald Schoo Schiphol, November 6 th 2014

2. 2 Introduction Automotive parts distribution services: Key competitive and continuity factor  Focus on providing expertise, advice and reliability  Design logistics processes to fulfil service requirements of individual customers optimally  Level of customer satisfaction is measureable by KPI’s Customer intimacy & Parts distribution Product Leadership Organizational Excellence Customer Intimacy

3. Thinking and acting in the supply chain world We create value in your logistics SUPPLY CHAIN CARGO LOGISTICSLOGISTICS FACILITIES BUSINESS INTELLIGENCE 3

4. Designing a automotive parts distribution network 4 Network modelling: Translating service scenario’s into logistics alternatives and costs Commercial logistics scenarios (lead time and frequency of deliveries) Physical distribution cost functions (supply, stock, housing, labour, distribution) Parts distribution network (network costs, locations, fleet) Commercial principles

5. Market developments 5 Parts distribution in Germany  3 – 5 deliveries per customer per day  Lead times < 140 minutes  30 starting depots in area  3.500 customers  250 vehicles Future scenario for parts distribution in The Netherlands?

6. Costs of physical parts distribution 6 Increasing customer requirements leads to (re-)design of parts distribution network

7. Economies of scale 7 Multi-brand parts distribution offers economies of scale

8. Improving service performance 8 Trade-off in benefits between lower costs and higher service  Cost reduction  Higher frequency level  Wider product range  Other...... Using the benefits for:  Investment costs?  Operational costs?  Benefits? How to allocate: Costs of physical distribution  Service points (number of depots) 

9. 9 Optimal balance is industry and product dependent B2B - B2C Automotive Electronics Fashion Healthcare... How to balance speed, service and costs to fulfil the customer experience?

10. 10 Vision on parts distribution Multi-brand logistics set up Manage & Control Parts distribution centre(s) Transport providers Multi-brand logistics execution Developments: Volumes, products, cycle times etc. Redesign set up & Evaluate partners Project scope “multi-brand proposition in automotive parts”  Define service framework: ‘Speed & Costs’  Cost drivers & Tariffs  Outsourcing options Cost control within service framework

11. Toyota Motor Europe Louwman Logistics The long and winding road to High performance, lowest cost Warehouse and VAL services

12. p. 12Louwman Logistics’ Long and Winding Road to Customer Intimacy Starting point 2012 On the good side  Part of solid Group  Loyal Customers  Loyal workforce  Need for change ItemNumbers Outbound lines1,000,000 Inbound lines250,000 SKU’s in stock80,000 VAL production115,000 Volatility (max/min)7 – 64,000 Addresses/day400 Unique adressess/year2,000 On the bad side:  Customer satisfaction: 4  Productivity: 65%  Opposite forces within Louwman Logistics  Counter productive beliefs  Reverse hierarchy

13. p. 13Louwman Logistics’ Long and Winding Road to Customer Intimacy Clear vision on change What does this text say? D323 M3D3D3L1NG L44T J3 213N T0T W3LK3 GR0T3 PR35T4T135 0N23 H3R53N5N 1N 5T44T 21JN. 1N H3T 83G1N W45 H3T 23K3R N0G M031L1JK D323 T3K5T T3 L323N, M44R NU K4N J3 H3T W44R5CH1JNL1JK 4L W4T 5N3LL3R L323N 20ND3R J3 3CHT 1N T3 5P4NN3N. D4T K0MT D00R H3T 3N0RM3 L33RV3RM0G3N V4N 0N23 H3R53N5. KN4P H3? D323 M3D3D3L1NG M4G J3 835T 44N 83K3ND3N V3R5PR31D3N. Conclusions 1.The human brain adopts very quick to changes 2.Resistance to change (coincidentally always ‘the other one’) is an excuse for not taking responsibility for your own results.

14. p. 14Louwman Logistics’ Long and Winding Road to Customer Intimacy Operational Excellence -> Customer Intimacy  Understand me  Care for my business  Respond swiftly  Competitive price

15. p. 15Louwman Logistics’ Long and Winding Road to Customer Intimacy Focus on strategic results Balanced performance Customer Satisfaction Financial Return Fit for position workforce Resilient Continuous Improvement  Lost in details -> 5 strategic goals  Customer Satisfaction  Financial Return  Fit for position workforce  Resilient  Continuous Improvement

16. p. 16Louwman Logistics’ Long and Winding Road to Customer Intimacy No responsibility -> fact based, results responsible team  Customer based  Team targets  Cross training  Training and coaching on the job  Renewal

17. p. 17Louwman Logistics’ Long and Winding Road to Customer Intimacy 12 *1 -> 1* 12  SLA’s terms and conditions  Put away  Storing  Picking and packing  And many many more

18. p. 18Louwman Logistics’ Long and Winding Road to Customer Intimacy Results

19. p. 19Louwman Logistics’ Long and Winding Road to Customer Intimacy And counting…  Continuous improvement  2020?  More VAL?  More brands? .. Suggestions?

20. p. 20Louwman Logistics’ Long and Winding Road to Customer Intimacy Questions and discussion

21. Together we deliver