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European Commission 1 INFORMATION A Cornerstone for Competitiveness.

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Presentation on theme: "European Commission 1 INFORMATION A Cornerstone for Competitiveness."— Presentation transcript:

1 European Commission 1 INFORMATION A Cornerstone for Competitiveness

2 European Commission C ustomers C ompetition C hange P eople P rocesses P roducts The Business Environment STRATEGY

3 European Commission Logistical Improvements Manufacturing Sector

4 European Commission Strategic Planning Information Technology Marketing Supply Chain Management 2000s 1980s Evolution of Logistical Integration Materials Management Demand Forecasting Purchasing Requirements Planning Production Planning Manufacturing Inventory Warehousing Materials Handling Packaging Physical Distribution Inventory Distribution Planning Order Processing Transportation Customer Service Logistics 1990s

5 European Commission Logistics in the 90's Logistics has given rise to two fundamental features of the contemporary economy: Just-in-Time (JIT). Door-to-Door (DTD). Both favour use of the least energy efficient modes: Road. Air.Impact: Cycle time requirements down by 25% between 1990 and Half of the productivity boom of the late 1990s resulted from logistics.

6 European Commission Distribution Fleet management Returns and reverse logistics Sorting Warehouse Warehouse operations Inventory management Order picking and packing Local delivery Call center Online OROR Data center Order processing Customer analysis Inventory analysis Order origination Order receipt Order tracking Customer and call center management A Supply Chain Perspective 50% inventory reduction. 40% increase in on-time deliveries. 27% decrease in cumulative cycle time. Doubling of inventory turns coupled with a nine-fold reduction in out-of-stock rates. 17% revenue increase.

7 European Commission Supply Chain Logistics First Generation (1970s s) Transportation / warehousing Freight forwarders / brokers Shippers agents Second Generation (1980s s) Non asset-based companies Asset-based companies with increased service offerings Third Generation ( 2000 and beyond) Online freight marketplaces Web-based 3PLs Increasing supply chain integration Broader more integrated services

8 European Commission Market Growth of 3PL

9 European Commission Source "What's ahead for 3PLs Modern Materials Handling, April, 2000 The Main Users of 3PL

10 European Commission Information has become the fuel of our knowledge society. The ability to manage the right information in due time is therefore pivotal for the assurance of competitive advantages. Technology doesn't usually save companies time or money but, in a competitive world, it often keeps them in business. Anonymous The Role of Information

11 European Commission 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Inland WaterwaysRailRoad Freight Market – A Snapshot

12 European Commission Consumer The Freight Business Process Producer

13 European Commission A Supply Chain Business Rationale Improvement of customer service by delivering The right goods In the right quantities In the right condition Delivered to the right place At the right time For the right cost. Ensure revenue growth Improve asset use Reduce inventories Accelerate cash to cash cycle Enhance supplier/supply management New integrated higher-revenue services(e-services-based) Responsive order management Improvement of demand planning From supplier to partner CustomerFocus GlobalCompetitivenessInnovation

14 European Commission Innovative business and operational processes from service origin through to destination Continuity of service, notably across borders Coherent management of information across the commercial, logistic and operational chains of the railways More reliable and flexible management of infrastructure and mobile assets notably under degraded operating conditions Enhanced demand/supply management TAF-TSI An Enabling Information Backbone TAF TSI – A quick start Not a final goal

15 European Commission TAF TSI Potential Deployment Scenarios System Development Partnerships Information Providers System Networking

16 European Commission TAF TSI - A SWOT Analysis Strengths Opportunities Weaknesses Threats

17 European Commission A SWOT Analysis I Quality of Service across Value-Chain Better management of operational processes Responsiveness mainly in degraded mode conditions Innovation capability Strengths Quality of information/Confidentiality Issues Management of intangible rather than tangible assets IT systems know-how of the rail sector (railways and traditional suppliers alike) Contractual Issues relating to System Procurement Weaknesses

18 European Commission A SWOT Analysis II Competition interests between parties Fragmentation of deployment Limitations of legacy IT systems Priority of Investments/ROI timing Problems of interoperability of IT systems Cultural Change Threats Innovation potential for revenue growth Requirements from customers Shortcomings of legacy IT systems In lieu investments – IT as a means to achieve enhanced operational performance Better management of assets Opportunities

19 European Commission System Development Challenges

20 European Commission Hardware Year Percent of total costs Software Development Maintenance System LCC – Cost Breakdown System LCC – Cost Breakdown Requirements Specification Design Coding Testing Integration Maintenance

21 European Commission It is not necessary to change. Survival is not mandatory. Epilogue The mind is like a parachute, It works much better when it is open.

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