1. Logistics Performance in Baltic Sea Area Managing Director Mikko Melasniemi Finnish Association of Purchasing and Logistics LOGY

2. Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
Topics
Trends in global logistics
Logistics Performance Indicator
State of logistics in Finland
Regional projects between Finland and Russia
Northern Dimension in Naples
Potential beyond the near future
Mutual competition over cross cultural supply chain
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

3. "Excellence in Logistics" European Logistics Association (ELA), 2004
Biggest challenge is the explosion of supply chain complexity
Larger share of purchases and sales outside Western Europe
less failure tolerant supply chains
Ever increasing customer requirements
service levels, lead times, delivery reliability
Increasing amount of value added services
Shifting activities from manufacturing to distribution centres
Higher product complexity
Shorter product life cycles, arising number of stock keeping units (SKU)
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

4. "Excellence in Logistics" European Logistics Association (ELA), 2004
Leading capabilities to manage complexity
Collaboration
Sharing and utilizing information along the entire supply chain, which leads to higher supply chain quality and lower costs
Value chain management
Holistic view of all the end-to-end issues
Integrating supply chain partners
Outsourcing in a sophisticated way
Differentiation of supply chains
Meet specific requirements of customers, sales channels, type of product, regional specifications
The time of “one size fits all” is over!
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

5. Logistics professionals Ojala & Solakivi CSCMP Sept.22, 2009 5
What is the LPI?
Logistics Performance Index (World Bank 2007)
A set of indicators that measure the performance of the logistics environment of countries
Data for the LPI
Professor Lauri Ojala
Turku School of Economics, Finland
Logistics professionals
in international
freight forwarding
Turku School of Economics, Finland
International Federation for Freight Forwarders Associations
Global Facilitation Partnership for Transportation and Trade
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
Ojala & Solakivi CSCMP Sept.22,

6. Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
International comparison of the Logistics Performance Index (World Bank 2007)
1. Efficiency and and effectiveness of Customs and other border procedures
2. Quality of Transport and IT infrastructure for logistics
3. Ease and affordability of arranging shipments
4. Competence in the local logistics industry (e.g. transport operators, customs brokers)
5. Ability to track and trace shipments
6. Domestic logistics costs (e.g. local transportation, terminal handling, storage)
7. Timeliness of shipments in reaching destination
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

7. Logistics Performance Indicatior Globally
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

8. The level of Logistics Performance varies a lot in Europe15 16 4 47 99 42 58 11 74 9 3 40 7 18 22
115 26
139
Source: World Bank, Logistics Performance Index
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

9. Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
”Logistics gap” among countries in BSR
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

10. Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
What does low LPI mean in practice?
”…lower costs for logistics reduces the cost of delivered products – and thereby encourages sales, increases trade, opens new markets, breaks down local monopolies, increases competition and generally encourages business.”
(Waters 2003)
 prosperity, competitiveness
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

11. Ojala & Solakivi CSCMP Sept.22, 2009 11
Similar trend despite research method: logistics costs decrease till end-90s, and rise after that
% of sales
% of GDP
Costs indexed; 2008 = 100
14 %
2008
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
12 %
10 %
8 %
6 %
4 %
2 %
0 %
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Finland state of logistics
ELA/A.T .Kearney
CLM/CSCMP
VINNOVA
Ojala & Solakivi CSCMP Sept.22,
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

12. Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
Distribution of turnover for different types of logistics services – 2006 and 2010
Pure transportation services
Pure warehousing services
Standardised logistics service packages
Customized logistics service packages
In terms of logistics service providers, the survey provides insight to the state and the future development of the logistics services market. The picture depicts the estimated change in service offering from 2006 to Slight increase in the shares of broader and more complex, both customised service, as well as standardised service packages, is expected to take place in the focus period. Essentially this may mean more value added services, such as postponed labelling and packaging, offered by the service providers. Transport services offered alone will reduce in significance, i.e. narrow and routine services.
The picture also demonstrates the differences in terms of the logistics services market development level, in various countries and regions.
Slide as originally presented by Professor Wolfgang Kersten
The demand for more individualised products is expected to increase in the future
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

13. MoA of Northern Dimension Partnership Signed in Naples in October 2009
Memorandum of Understanding setting out the modalities of establishing the Northern Dimension Partnership on Transport and Logistics
Mutual understanding by European Commission, Ministries responsible for transport, infrastructure and logistics
Norway, Russian, Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Sweden, Republic of Belarus
Was agreed about
Goal of partnership to improve major transport connections and logistics in the Northern Dimension region
Other matters: Action plan, Exchange of information, Cooperation framework, Cooperation with regional bodies, Participation of private sector and social partners
Next step in December, when officers from ministries meet
Resources and guidelines over the projects
Important because
Baltic states have mutual forum for Northern Dimension
Formal way to go ahead with projects
Helps to take logistics into practise
Goal: to have a momentum in EU budget for Northern Dimension
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

14. Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi
Conclusions
Focus on value in supply chains, not only transportation
Two-way supply chains instead of one way transit traffic
Supply chain from supplier to final customer can bee complicated but competitive
Logistics performance is a case of competitiveness
Logistics costs are rising, time is money
Efficiency and visibility
Northern Dimension needs a line in EU budget
Act regionally, think collaborative
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

15. Thank you for your attention!
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

16. LOGY Mission and Values
offers its members an innovative forum for continuous development of their competence and
aims at improving the competitiveness of members business
aims at improving the valuation of logistics and purchasing.
Development
Members
Competence
Cooperation
Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi