Added value services in Logistic Driving forces and barriers for developing and providing value added services
“How to become a 3PL leader of added value 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
FRAME OF REFERENCE
Service management in logistic
Customization High Low
Basic service package consists of core and supplementary services
Customized core service
Customized augmented service
Service management
Standard core service
Low
Standard augmented service
Differenciation
High
Value-added services as services adding extra feature, form or function to the basic services
Make or buy
Importance to the customers High Low
Three reasons such as the lack of capability, scale and ability and lack of capacity to perform it within the organization Total solutions provider High value
Game changers
Extremely high value
Positioning Vendors
Low value
Low
Specialists
Medium value
Uniquesness of offerings
High
Low
Complexity
High
3PL positioning
Low
Asset specificity
High
ANALYSIS
Customer adaptation High Low
EXAMPLES for 3PL’s
Low
Problem solving general ability
High
Customer adaptation High Low
EXAMPLES for PRODUCERS
Low
Problem solving general ability
High
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
Added value
The earlier the 3PL is participating in the supply chain, the most added value he can bring
Manufacturing
Final assembly, etc.
Packaging, Display, Building, etc.
Supply Chain
Warehousing and Distribution
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 Who takes initiative for developing value added services ? How is development of value added services done ? Process/support team Internal innovation
Key account manager Multi customer related innovation
Innovation Customer related innovation
Single customer related innovation
Commercial team Innovation at the beginning of the relationship episode
Company spirit Reactive innovation
Innovation in an ongoing relationship
Company strategy Proactive cost improvement
Proactive innovation Proactive performance improvement
DRIVING FORCES & BARRIERS
What are the driving forces in the development and providing of value added services ? Meet customer’s 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, customer’s 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 customer’s 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 provider’s 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 company’s 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 ?
Strategy
Team
Tools
Budget
RESULTS
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
Brice Rouanet
Plant manager Email:
[email protected] Mobile: +421 907 784 424
Solution Center manager CZ/SK Email:
[email protected] Mobile: +421 917 550 074
