Tompkins Supply Chain Consortium Survey points to new trends in logistics

Among some of the more revealing responses contained in the Tompkins Supply Chain Consortium Survey, is that nearly one-third of distribution centers (DCs) are entirely outsourced.

By ·

Among some of the more revealing responses contained in the Tompkins Supply Chain Consortium Survey, is that nearly one-third of distribution centers (DCs) are entirely outsourced.

But the survey-based “Supply Chain Metrics Report” also suggests that supply chain managers may be expecting too much from transportation providers.

“Supply Chain Consortium data indicates that while many companies continue to have their own DCs staffed by their own employees, there is an upward trend in the percentage of DC buildings and labor being outsourced in the past two years,” said Bruce Tompkins, Executive Director of the Consortium and author of the report. “This increase signifies that more organizations are considering outsourced DCs over ones that are company-owned and operated.”

With responses from more than 100 companies across nine industries, the report reveals key metrics on annual logistics costs, DC operations, finished goods inventory turns, on-time delivery, transportation sourcing solutions and more.

Additional findings include:

• Inbound transportation metrics average 4.7 percent as a percentage of cost of goods sold and 2.4 percent as a percentage of net sales;
• Total annual logistics cost as a percentage of net sales ranges from 4.1 percent to 10.0 percent;
• On-time delivery by mode ranges from 79 percent for ocean to 97 percent for parcel and air freight; and
• Most companies have more than half of their total logistics resources in distribution, customer service and transportation.

Chris Ferrell, Director of the Tompkins Supply Chain Consortium, noted that for him, one of the key takeaways was in transportation service “variability.”

“The on-time variability in all modes, came as something of a surprise,” he said in an interview.  “Irrespective of mode, carriers don’t seem to care what they are hauling. Even with air cargo, shippers are paying a premium for service they are just not getting.”

He said that shippers are partly to blame, as they do not spend enough time measuring the performance of their providers, or evaluating hidden contracting costs.

“Many of those who responded to our survey were unable to describe ‘step change’ improvements in any aspect of transport efficiency,” he said.

Additional metrics and topics will be presented during the 2012 Supply Chain Leadership Forum, August 27-29, in Denver.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Details Key to Cross-border Ease
Ever-changing regulations are making it risky for U.S. companies engaged in cross-border trade...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo