1. Dr. Dale S. Rogers Professor, Logistics & Supply Chain Management Co-Director, Center for Supply Chain Management Rutgers University Nevada Logistics Institute August 16, 2011 Reno, NV Megatrends

2. The Future of the Global Supply Chain Megatrends Introduction Sustainable Supply Chain Complexity & Consolidation Fuel Costs Logistics and Transportation Work Patterns Systems Evolution

3. The Future of the Global Supply Chain Introduction

4. The Future of the Global Supply Chain Historical Milestones In Conceptualization Shifts in Logistical Thinking Transportation Efficiency3000 BC Total Cost Awareness1950 AD Customer Service1955 Comprehensive Outsourcing1965 Operational Integration and Quality (Six Sigma)1975 Financial Positioning and Operational Excellence1985 Globalization1990 Customer Relationships and Enterprise Extension1995 Supply Chain Integrative Management2000 Responsive Supply Chain Management2005+ Source: Dr. Donald J. Bowersox, FedEx Summit, February 2008, February 2008

5. The Future of the Global Supply Chain Cash Conversion Cycle Q1 or Q2 2011 FirmDays Apple-41 Dell-15 Logitech41 Panasonic44 Verizon47 Colgate Palmolive48 Home Depot60 AstraZenaca109 Novartis112 Johnson & Johnson146 Estee Lauder148 Becton Dickinson181 Merck196 Pfizer198

6. The Future of the Global Supply Chain The Sustainable Supply Chain

7. The Future of the Global Supply Chain

8. Environmental Economic Social Responsibility The Sustainable Supply Chain Good Better Best Better Strategy Sustainability as part of an integrated strategy Long-term view Doing more with less Organizational Culture Deeply ingrained Organizational citizenship Values and ethics Quality cultu re Transparency Stakeholder Management Supplier Operations RFP/RFQ Process Financial Reporting (SOX) Leadtimes Visibility Risk Management Contingency Planning Supply Disruptions Supply Risk Headline Risk Agility

9. The Future of the Global Supply Chain Zero Waste

10. The Future of the Global Supply Chain Product Responsibility Curve Product Life Cycle Product Responsibility Curve Birth End of Life End of Responsibility

11. The Future of the Global Supply Chain Secondary Markets Secondary markets are effective in diverting a large number of products from landfills, creating numerous jobs, resulting in substantial economic value in the process. Although not reflected in current government metrics, a conservative estimate is that the secondary market represents 2.28 percent of the 2008 U.S. Gross Domestic Product.

12. The Future of the Global Supply Chain Secondary Markets

13. The Future of the Global Supply Chain Logistics & Transportation

14. The Future of the Global Supply Chain U.S. Logistics Costs 2003-2010 20102009200820072006200520042003 Percent of GDP8.30%9.40% 9.9% 9.5%8.6%8.5% Carrying Costs 2.064 Trillion 1.851 Trillion1.965 Trillion 2.026 Trillion 1.857 Trillion 1.763 Trillion 1.493 Trillion Interest $4 $5 $47 $103 $93 $58 $23 $17 Taxes, Obsolescence, Depreciation, Insurance $280 $233 $252 $273 $252 $245 $227 $205 Warehousing $112 $119 $122 $111 $101 $90 $82 $78 Subtotal $396 $357 $421 $487 $446 $393 $332 $300 Transportation Costs Motor Carriers Truck - Intercity $403 $368 $460 $455 $432 $394 $335 $315 Truck - Local $189 $174 $220 $216 $203 $189 $174 $167 Subtotal $592 $542 $680 $671 $635 $583 $509 $482 Other Carriers Railroads $60 $50 $63 $58 $54 $48 $42 $38 Water $33 $29 $39 $38 $37 $34 $27 $26 Oil Pipelines $10 $9 Air $33 $29 $40 $41 $38 $40 $31 $28 Forwarders $32 $28 $32 $30 $27 $22 $18 $10 Subtotal $168 $146 $184 $177 $166 $153 $127 $111 Shipper Related Costs $9 $8 $7 Logistics Administration $47 $42 $52 $54 $50 $46 $39 $36 Subtotal $56 $51 $60 $62 $58 $54 $47 $43 Total $1,212 $1,096 $1,345 $1,397 $1,305 $1,183 $1,015 $936

15. The Future of the Global Supply Chain U.S. Logistics Flows

16. The Future of the Global Supply Chain BNSF Rail System Map

17. The Future of the Global Supply Chain Union Pacific Rail System Map

18. The Future of the Global Supply Chain 2009 Top 50 World Container Ports 1.Singapore (Singapore) 2.Shanghai (China) 3.Hong Kong (China) 4.Shenzhen (China) 5.Busan (Korea) 6.Dubai (UAE) 7.Ningbo-Zhoushan (China) 8.Guangzhou Harbor (China) 9.Rotterdam (Netherlands) 10.Qingdao (China) 11.Hamburg (Germany) 12.Kaohsiung (Taiwan) 13.Antwerp (Belgium 14.Tianjin (China) 15.Port Kalang (Malaysia) 16.Los Angeles (USA) 17.Long Beach (USA) 18.Tanjung Pelepas (Malaysia) 19.Bremen-Bremerhaven (Germany) 20.New York-New Jersey (USA) 21.Laem Chabang (Thailand) 22.Xiamen (China) 23.Guangzhou Harbor (China) 24.Tanjung Priok (Indonesia) 25.Jawaharial Nehru (India) 26.Hanshin (Japan) 27.Tokyo (Japan) 28.Colombo (Sri Lanka) 29.Valencia (Spain) 30.Yokohama (Japan) 31.Gioia Tauro (Italy) 32.Ho Chi Minh (Vietnam) 33.Felixstowe (UK) 34.Algeciras bay (Spain) 35.Jeddah (Saudi Arabia) 36.Port Said (Egypt) 37.Salalah (Oman) 38.Lianyungung (China) 39.Manila (Phillipines) 40.Nagoya (Japan) 41.Santos (Brazil) 42.Durban (South Africa) 43.Georgia Ports (USA) 44.Barcelona (Spain) 45.Sharjah (United Arab Emirates) 46.Le Havre (France) 47.Port Metro Vancouver, British Columbia (Canada) 48.Melbourne (Australia) 49.Marsaxlokk (Malta) 50.Ambarli (Turkey) Source: The Journal of Commerce, August 3, 2009 edition.

19. The Future of the Global Supply Chain World Logistics Flows

20. The Future of the Global Supply Chain Clean Trucks Initiative

21. The Future of the Global Supply Chain

22. Hours of Service

23. The Future of the Global Supply Chain CSA 2010

24. The Future of the Global Supply Chain Diesel Prices

25. The Future of the Global Supply Chain 2009 U.S. Petroleum Usage

26. The Future of the Global Supply Chain

27. Impact of Large Fuel Cost Increase on Logistics Infrastructure

28. The Future of the Global Supply Chain Impact of Large Fuel Cost Increase on Logistics Infrastructure

29. The Future of the Global Supply Chain 7 Facilities - $2.50 per Gallon

30. The Future of the Global Supply Chain 10 Facilities - $3.50 per Gallon

31. The Future of the Global Supply Chain 11 Facilities - $7.50 per Gallon

32. The Future of the Global Supply Chain 12 Facilities - $7.75 per Gallon

33. 2002 Annual Average Daily Truck Traffic

34. 2035 Annual Average Daily Truck Traffic

35. The Future of the Global Supply Chain Work Patterns

36. The Future of the Global Supply Chain

37. Systems Evolution

38. The Future of the Global Supply Chain Logistics Analytics Prescriptive Analytics Prescriptive Analytics Predictive Analytics Predictive Analytics

39. The Future of the Global Supply Chain Mobile Technologies

40. The Future of the Global Supply Chain App Store?

41. The Future of the Global Supply Chain “The Network is the Computer”

42. The Future of the Global Supply Chain 19 th Century Electricity Generator

43. The Future of the Global Supply Chain Computing as a Utility

44. The Future of the Global Supply Chain 2/10 Rule 2 years of excited “buzz” 10 years before technology “blossoms” 2 Years 10 Years

45. The Future of the Global Supply Chain Complexity & Consolidation

46. The Future of the Global Supply Chain Business Life Cycles

47. The Future of the Global Supply Chain Complexity & Consolidation Focal Firm