Subscribe to our free, weekly email newsletter!


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 Patrick Burnson, Executive Editor
July 19, 2012

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

image
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 .(JavaScript must be enabled to view this email address).


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!

Recent Entries

West Coast port authorities may be overstating the obvious when they decry “business as usual.” But it’s refreshing to see them finally coming around.

Transportation stakeholders reliant on North Carolina’s major seaports are welcoming news this week, which outlines plans to enhance the intermodal and cold chain network in the region.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.9 in February, which was 0.2 percent ahead of January and also 0.1 percent ahead of the 12-month average of 56.8. Economic activity in the non-manufacturing sector has grown for the last 61 months, according to ISM.

Non asset-based third-party logistics (3PL) services and logistics technology services provider Transplace said today that Brooks Bentz has joined the company in a newly-created role as president of Transplace Consulting in conjunction with the launch of the company’s new North American consulting services practice.

The advent of e-commerce continues to grow and gain increased traction over time. The many ways for consumers to order and purchase goods online continues to expand and leads to various subsequent byproducts of online purchases, including shopping through multiple channels, and delivery and payment options, among other things. These types of topics serve as the thesis in the second annual UPS Pulse of the Online Shopper Global Study issued this week by UPS and comScore Inc.

Article Topics

News · Supply Chain · Logistics · Transportation · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA