Slide 1

The Global
March 15, 16 2010 Fairmont Bab Al Bahar, Abu Dhabi, UAE
Understanding Drivers, Success Factors, Challenges & Enablers of
Growing Logistics Markets for Dedicated Countries
Dr. Thomas W. Speh, Director of Strategic Initiatives, CSCMP,
and Senior Director of MBA Programs, Miami University (Ohio), USA
Evolution of Logistics Service Providers in the US
Pre-1980: Transportation
 Highly regulated environment stifled creativity, high cost, poor service
 De-Regulation fostered new environment, which lead to massive changes
in the 3 PL environment, at least in Transportation
 Lessons learned
Pre-1980: Warehousing & other 3PL Services
 Heavy focus on private warehousing, little integrative 3PL companies
 3 PL industry: small, unsophisticated players, small capital base, focused on
real-estate, storage vs. service was the focus
 Lack of trust by potential users, unsophisticated marketing
 Emergence of larger 3PL companies with professional management
 Demonstrate the value of decreasing asset investments and managing a labor
force, achieving shipment consolidation
 Trust fostered by successfully operating DCs and serving the
customer’s customer
Evolution of Logistics Service Providers in the US, continued
Key elements to the development of a healthy
Logistics Service Provider industry in the US
1. Hands-off by government
2. Attraction of top management talent
3. Provision of effective IT solutions for managing logistics
4. Offering an effective value-add: asset and headcount
reduction along with consolidation opportunities
5. Effective marketing: changing top management
mindsets on using 3 PLs
6. Significant expansion of service offerings: forwarding,
packaging, reverse logistics, kitting, assembly, etc, etc
Key elements to the development of a healthy Logistics Service Provider
industry in the US……. continued
7. Sophisticated skills to manage a network: people, IT, systems
integration with transportation
8. National, if not global operations
9. “McDonald’s Concept:” Ability to offer standardized, high
quality service anywhere
10. Partnership mentality: collaboration and gain-sharing
11. Understanding costs: users and providers use common
costing approach
12. Move to non-asset, 4PL base: manage an entire network
and major segments of the supply chain
To Be Effective, Logistics Service Providers Need To Be…..
 Technologically state-of-the art
 Possess market knowledge
 Have 6-Sigma operations
 Be able to recruit & manage people
 Have excellent performance metrics
 Know their costs exactly
 Have a collaborative attitude
 Have a global focus and presence
 Understand customer needs

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