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

Disruptions at West Coast ports, which were resolved at the end of February, may have distorted the numbers

Growth firmly remains in the cards for both the manufacturing and non-manufacturing sectors in 2015. That was the main takeaway from the December 2014 Semiannual Economic Forecast from the Institute for Supply Management (ISM), which, in many ways, picked up where its companion Spring 2014 report published last April left off.

First quarter revenue of $1.776 billion was down 4.8 percent annually but up 4.6 percent in constant currency. And adjusted EBITDA at $51 million saw an 18.6 percent annual gain, with a 23.3 percent increase in constant currency.

Heading into 2015, the intermodal sector was faced with the same challenges it had exiting 2014, namely the West Coast port labor disruption and harsh winter weather. But even with these obstacles volumes still managed to show overall growth on an annual basis, according to the most recent edition of the Intermodal Market Trends & Statistics Report from the Intermodal Association of North America (IANA).

Forget cost cutting. Innovation and sustainability are the most important factors in business today. The companies that get it right can still win in a flat economy, says ISM CEO Tom Derry.

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