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:jdrzik@fmlogistic.com
Mobile: +421 907 784 424
Solution Center manager CZ/SK
Email:brouanet@fmlogistic.com
Mobile: +421 917 550 074