Page 67 - Linkline Yearbook 2017
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What are your thoughts on current trends in the logistics market?
The Irish logistics market is in a state of redevelopment, both domestically and offshore. The phenomena of supply chain ‘squeeze’ have focused attention on efficiency, effectiveness and value-adding mechanisms, driven by competitor rivalry and customer demand. In progressive organisations logistics is regarded as one of many corporate strategy enablers,
and similar to every other departmental strategy there is an alignment with corporate strategy and a “North Star” vision. The corporate strategy key performance indicators (KPIs) cascade down through every function to deliver demanding metrics, relative to the competition. The acceptance of CI and Change is the life blood of the industry and survival depends on supply chain integration throughout the value chain. Progressive logistics organisations are embracing lean principles by:
• Specifying what does and does not create value through the eye of the customer;
• Identifying all the steps necessary to deliver the service;
• Removing non-value-adding waste in the logistics VS;
• Create non-interrupted flow of processes and activities, without backflow;
• Deliver only what is required by the customer;
• Strive to be the best in class, through CI and
innovation.
Traditionally, producers “pushed” products through facilities to the customer, generating cost-adding inventories.
The existing paradigm shift allows the customer to “pull” products as required – and not before. The result is that logistics providers adapt strategies designed to sustain, profitably, the most efficient route to market, including the provision of third party logistics (3PL). Global value chains increase complexity and competitive rivalry within the industry. Logistics providers must develop an awareness
of customer choice, rate of technological change, ease of transfer of knowledge and the speed at which products are commoditised. In addition to the five modes of transport; air, water, road, pipeline and rail, logistics providers
must optimise the information superhighway in terms
of managing data and relationships. The focus is now on full container loads (FCL) and factory gate pricing (FGP). Supply chain security (SCS) is an area of increasing concern by logistics providers and the new security standard is
the ISO28000. The IMO International Ship and Port Facility Security Code (ISPS) is a mandatory security regulation in existence since 2004. However, with over 30 wars raging around the world in 2016, supply chain security is of constant concern within the global logistics industry. At Keeling’s, we import produce from 42 countries and supply chain risk is definitely on the agenda.
Logistics providers are adapting innovative information technology applications, including warehouse management systems (WMS) and radio frequency identification (RFID), with enhanced capabilities in tracking, security, stock management and data processing. TMS systems are used to optimise route to market, provide information on cost per case (CPC) and cost per pallet (CPP), when and where loaded. The system can generate invoices, monitor fuel consumption and provide information in terms of legal compliance, including the number of driver hours worked (The Working Time Directive). There is a growing trend to set KPIs within the industry and commonly used metrics include:
• Warehouse utilisation,
• Weeks of stock,
• Profitability and net margin,
• Labour utilisation,
• Food miles,
• DOT /DSL/QSL,
• Total Landed Costs (TLC),
• Vendor/packaging costs,
• Transport costs,
• Insurance, taxes and reverse logistics costs.
What does the future hold?
Of significant concern within the logistics industry is the level of uncertainty in domestic and global markets. Brexit and the change of power in the USA could add to the level of uncertainty, along with the changing landscape in Europe, within a political and geopolitical context. The landscape within the EU has changed as result of the Middle Eastern crisis and commentators would suggest that supply chains are at a higher risk since WW2. There are opportunities, however, in growing global trade through emerging markets and a general uplift in established economies. The challenge for logistics service providers (LSP) is to grow profitably through differentiation, cost effectiveness, communications technology and enhanced customer service. In the Irish fresh produce sector, we are definitely, up for the challenge.
  Mike Kelly has worked in Supply Chain, Lean and Oper- ations management roles for over 25 years at home and abroad. He holds a BA in Management (IMI), a Masters in Supply Chain Management (DIT) Postgraduate Diploma in Management in Lean Practice (WIT) and is currently a PhD Candidate (part-time) researching Sustainable Supply Chain Management within the Irish food manufacturing industry. An experienced Management Consultant, Mike
is currently Head of CI & Change and Interim Operations Director at Keeling’s.
 The CharTered InsTITuTe of LogIsTICs & TransporT 67
  MIKE KELLY


































































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