Post on 20-May-2015
description
LPS Logistics & Procurement Services, LLC
LogproTM
“Freight Management”4-22-10
Presented By: Steven C. Hogan, President
Logistics & Procurement Services, LLC (d/b/a “LPS”)
INSTITUTE OF MANAGEMENTACCOUNTS
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“Your Transportation & Logistics Experts” LPS2010SM
LPS Logistics & Procurement Services, LLC
Objective
“Your Transportation & Logistics Experts”LPS2010SM 2
IMA Mission Statement:“To empower accountants and financial professionals to become “trusted business advisors” “playing a driving role” in their organizations’ business success and advancing their careers.”(http://www.imanet.org/about_mission.asp (© 1997-2008)
LPS Session Goals:Honor IMA Mission Statement By Providing Information On Freight Cost Management, Challenges, and Approaches Through An Interactive Presentation Approach.
LPS Logistics & Procurement Services, LLC
Agenda:
“Your Transportation & Logistics Experts” LPS2010SM
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Brief Overview LPS
How Do You Measure Freight Cost?
Who Has Responsibility For Freight Costs?
Basic – Challenges To Freight Costs Management
Options To Manage Freight Costs
Key Considerations
Case Studies
Q & A
LPS Logistics & Procurement Services, LLC
Logistics & Procurement Services “LPS”
“Your Transportation & Logistics Experts”LPS2010SM 4
Who we are:
We are a management service company that provides procurement
expertise, consulting, and solutions to help our customers establish
and manage supplier contracts that deliver better pricing, value and
services.
What we are not:
A carrier, broker, intermediary, or transportation capacity
provider…
LPS Logistics & Procurement Services, LLC
LPS Service Mission
“Your Transportation & Logistics Experts” LPS2010SM 5
“To be our customers independent, transparent, staff experts
at securing the best costs and services for their supply chain
operations.”
“Provide 10-30%+ operating cash savings for our Customers
through our expertise in operations & procurement of
transportation, supply chain, and 3PL provider services.”
LPS Logistics & Procurement Services, LLC
Our Service & Approach
“Your Transportation & Logistics Experts” LPS2010SM
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We fully oversee and manage the process of selecting, negotiating,
contracting, and monitoring of these services to strength our
customers existing functions or implement new solutions.
LPS Logistics & Procurement Services, LLC
Our Expertise:
“Your Transportation & Logistics Experts” LPS2010SM 7
“Service-Providers”Less Than TruckloadTruckloadParcelRailIntermodalForwarder / US CustomsOcean Air / ExpediteRail
“Service-Providers”IntermodalUSPS/Mail / ConsolidationPrivate Fleet & DedicatedCourierExpediteWarehousingDistribution3PLOutsourcing
Methods & Administration-TechnologiesTransportation MgtSupply Chain Visibility
-Freight Audit / Payment-Freight Terms-Shipping & Handling
Revenue-Consolidation; Pooling; X-
Dock-Vendor Compliance-Routing Guides-Claims-Packaging
LPS Logistics & Procurement Services, LLC
LPS Customers Include:
“Your Transportation & Logistics Experts” LPS2010SM 8
• Fortune 100 – 1000
• Manufacturing
• Retail
• Services
LPS Logistics & Procurement Services, LLC
How Do You Manage Freight Costs? (COB)
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C – Level Visibility Management Information Purchase “% $’s; Unit; Weight; Sale; Factors”
Sales /Period “ Customer / Market “
O – Operational Level- “Responsible/Authority”
Responsible/Stake Holder C Level + Services
Authority “COB”
Provider Base Rate; Accessorial; Fuel; Service (s); Distance; Volume;
Balance Sheet Purchase & Sale Terms
F.O.B.-Covington, KY – “Freight Collect”
– “Freight Prepaid”
– “PPD & Add” etc
LPS Logistics & Procurement Services, LLC
Who Is “Responsible” & WhoHas “Authority” For Freight?
“Your Transportation & Logistics Experts” LPS2010SM 10
What Drives Your Company? Sales / Marketing / Customer Service Procurement / Supply ChainManufacturing / Distribution Customer Service
Who Is Your Internal “Authority” On Freight? Shipping / Receiving Fleet / Transportation Manager Transportation Operations / Procurement ?
LPS Logistics & Procurement Services, LLC
Basics – Freight Management Challenges
“Your Transportation & Logistics Experts” LPS2010SM
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What Information Do You Have?Metric (s) – Aligned To Primary Business Driver?
Where Can You Get Them
How Can You Improve Them
Discrete Transaction Detail / Profiles To Support Metric EvaluationService Level
Requirements
Volume
Stable / Standard Freight Cost Basis Formalized Rates & Contract
Internal / External Technology Capture
Defined Service Levels
LPS Logistics & Procurement Services, LLC
Options To Manage Freight Costs
“Your Transportation & Logistics Experts” LPS2010SM 12
Resources – Reward – Balance Paradigm
InternalExpertiseAbilityTime
ExternalCapabilitiesCostStrategy
External Resource Cost
& Expertise
Internal Resource
Expertise & Availability
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Customer Case Study Discussion:
“Your Transportation & Logistics Experts” LPS2010SM
Status Quo” Customer—- Legacy services and costs with primary focus on daily operations and execution, limited internal expertise in transportation and logistics and poor internal information to recognize and implement improvements. Costs are generally rising and unknowingly absorbed or passed on.
“Routine” Customer—-Services and costs are updated to a schedule more reactively based on service changes, price increases, or internal events effecting operations, locations, and customers. Internal expertise exists without work tools, planning, or depth of knowledge and leadership visibility to achieve more than cost containment.
“Challenged” Customer—-Services and costs are updated with specific internal expertise however the resources are used in a more formalized project mentality causing trade-off and completion challenges. Leadership visibility is good, cross-functional strength is poor or specific expertise to address larger scale improvements in process, policies, organization, technologies, network, and services leaving significant cost and service improvements unrealized.
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Customer Case Study Discussion:
LPS Customer Case Studies
CUSTOMER: Vertically Integrated Manufacturer Windows, Doors,
Columns, And Extrusions
• 6 Business Units
• 11 Locations (12 U.S. Plants, 1 Plant In China)
• 120 Tractors; 290 Trailers
• Sales > $650M MARKET: Building Materials SITUATION: “ROUTINE”
• Rapidly Rising Fleet Transportation Costs
• Legacy Driver Routes, Processes, & Use of One
Way Transportation
• Decentralized Transportation Spend and Man-
agement “Within” SBU
• Limited Senior Management Visibility To Costs
& Service Options Across SBU’s
LPS Multi Mode Transportation Improvements Save $2.9M In Pur-
chased Transportation Costs
Building Materials Holding Com-pany “CFO” Seeks Fleet Cost &
Transportation Savings
Logistics & Procurement Services, LLC
“Your Transportation & Logistics Experts” LPS2010SM
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LPS Customer Case Studies
CRITICAL SUCCESS FACTORS:
• Establish Transportation Council Approach
Across SBU’s To Manage Changes & Improve
Team Approach
• Reduce Fleet & Transportation Costs Through
Leverage of SBU spend and services.
• Establish Go Forward Senior Leadership Con-
trols & Management Scorecards
KEY BENEFITS:
• Reduced Total Supply Chain Costs $6.5M, Elimi-
nated 25% Of Fleet Assets
• Decreased Purchased Truckload, LTL, & Ocean
Transportation Costs 22%
• Rationalized Plant To Customer Market Service
Area, Reduced Total Miles 8%
• Decreased Empty Fleet Miles 18%
• Established Strategic 3 Year SC Plan Consoli-
dating 2 Plant Locations
SOLUTION: • LPS LogproTM
• Truckload Bid-Contract
• LTL Bid-Contract
• Ocean Bid-Contract
• Network Analysis
• Route Utilization
SERVICE DESCRIPTION:
• Contracted To Source Fleet
Tractor & Trailer Equipment &
Services
• Contracted Source Truckload
Transportation
• Contracted To Source Import
Ocean Transportation
• Contracted To Provide Network
Analysis, Route Rationalization,
& Transportation Technology
Solution
LPS Multi Mode Transportation Improvements Save $2.9M In Pur-
chased Transportation Costs
Building Materials Holding Com-pany “CFO” Seeks Fleet Cost &
Transportation Savings
Logistics & Procurement Services, LLC
Customer Case Study Discussion:
“Your Transportation & Logistics Experts” LPS2010SM
“Your Transportation & Logistics Experts” LPS2010SM 16
Customer Case Study Discussion:
LPS Customer Case Studies
LPS Consolidates International Ocean And Air Spend Across Diverse SBU
Requirements
Automotive Supplier & Industrial Power Systems “COO” Cost Reduction
Initiative—International Freight
Logistics & Procurement Services, LLC
CUSTOMER:
Multi National Automotive and Industrial Power Sys-
tems Manufacturing Holding Company
• 12 SBU
• 28 Locations (North America, Asia, Europe)
• Sales > $1B
MARKET:
Automotive
Industrial Power Systems
SITUATION: “ROUTINE”
• Decentralized Import/Export Transportation
Spend And Contracting Across SBUs
• Limited Resources, No Specific International
Ocean & Brokerage Expertise
• Poor Executive Visibility of Spend And Service
Data Between SBUs
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Customer Case Study Discussion:
LPS Customer Case Studies
SOLUTION: • LPS Managed Services
• Project Management
• LogproTM - Ocean/Brokerage
• LogproTM- Import Intelligence
SERVICE DESCRIPTION: • Contracted to source Import
Ocean, Air Freight, And U.S. Cus-toms Brokerage Services
• Contracted Provide Logprotm –
“Import Intelligence Services”
LPS Consolidates International Ocean And Air Spend Across Diverse SBU
Requirements
Automotive Supplier & Industrial Power Systems “COO” Cost Reduc-
tion Initiative—International Freight
Logistics & Procurement Services, LLC
CRITICAL SUCCESS FACTORS:
• Implement Inter Division and Suppler Routings
• Establish Over 20% Cost Reduction And SBU
Participation Solution
RESULTS:
♦ Over 24% Reduction Of Ocean Transportation
And U.S. Customs Brokerage Costs
♦ 31% Reduction Air & Charter Service Costs
♦ Established Visibility Solution Linked To Master
Planning And Inbound/Outbound ERP Line Item
Status
♦ Established Vendor Compliance Routing & Re-
lease Controls
“Your Transportation & Logistics Experts” LPS2010SM
LPS Logistics & Procurement Services, LLC
Key Freight Management Considerations
“Your Transportation & Logistics Experts” LPS2010SM 18
“COB” – Can You Measure & Report Sufficiently: C-Level; Operational?
Who has “Responsibility” and “Authority” For Freight Management?
Do You Have The Right Resources?
Can You Identify Your Reward to Resource Balance?
LPS Logistics & Procurement Services, LLC
Thank You !
“Your Transportation & Logistics Experts” LPS2010SM 19
Contact Us:Steven C. HoganPresidentLogistics & Procurement Services, LLCP.O. Box 271Verona, KY 41092E-mail: shogan@logproservices.comMobile: 859.630.6944Office: 859.485.6994
Questions & Answers