1. 8th Annual 3PL Summit
June 21-23, 2010
Executive Workshop:
Developing a Flexible Relationship
to Respond Intelligently
to the Economic Rebound
All rights reserved, Joel Sutherland, 2010

2. Agenda
Economic Indicators
Shipper Feedback – SCLA Conference
3PL’s - Supporting Customers’ Req’ts
Interactive Discussion
All rights reserved, Joel Sutherland, 2010

3. Economic Indicators
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4. US GDP Growth
 The US GDP is $14.2 trillion or 22.9% of the
world economy – the world’s largest.
 US GDP growth for Q110 revised down to
3%, showing that the recovery may not be as
strong as many had expected.
All rights reserved, Joel Sutherland, 2010

5. US Balance of Trade
 The US leads the world in imports while remaining one
of the top 3 exporters.
 The US balance of trade deficit in April was $40.3B.
 US trade deficit with China was $19.3 billion – nearly 50% of total.
 Total 2010 deficit estimated at a record $1.84 trillion.
 Represents 12.9% of the economy – highest since 1945.
 Forecast to decrease in 2011 – but iffy.
 Higher fiscal deficits will likely lead to higher taxes.
All rights reserved, Joel Sutherland, 2010

6. Unemployment
 Employers in the US hired fewer workers in May than
forecast and Americans dropped out of the labor force -
showing a lack of confidence in the recovery.
 Consumer spending (needed to increase production) is
weak mostly due to high unemployment rates.
 It may take a few years to revive 8.5 million jobs lost
since the recession began in December 2007.
 The federal government added 412,000 jobs.
All rights reserved, Joel Sutherland, 2010

7. Logistics Indicators
 Logistics costs fell to 7.7% of US GDP in 2009 from
9.3% in 2008.
 Warehousing costs fell 2% below 2008.
 Although early 2009 saw warehouses full of inventory, by mid-year
inventories were reduced leaving facilities with empty space.
 Transportation costs 20.2% lower than 2008, with all
modes of transportation being negatively affected.
 Trucking had a 9% drop in tonnage carried.
Source: CSCMP’s 21st Annual “State of Logistics Report®”
All rights reserved, Joel Sutherland, 2010

8. US Logistics Costs - 2009
Source: CSCMP’s 21st Annual “State of Logistics Report®”
All rights reserved, Joel Sutherland, 2010

9. Looking Ahead
 The jury is still out on when the economy will
realize a meaningful and sustainable recovery.
 Understanding your customer’s needs, and
adapting an effective strategy that responds to
these needs, is essential in achieving
successful and sustainable 3PL-customer
relationships.
All rights reserved, Joel Sutherland, 2010

10. Shipper Feedback
SCLA Conference
May 25-27, 2007
All rights reserved, Joel Sutherland, 2010

11. SC Management Challenges
Economic slowdown/recession recovery
Supply chain disruptions – natural & manmade
Managing global supply chains
Supply chain visibility and event management
IT: Internet, web applications, social networking
Developing ROI for going “Green”
Organizational issues
Source: SCLA Annual 2010 Conference
All rights reserved, Joel Sutherland, 2010

12. “Best” SC Management Strategies
 Customer-driven
 Aggressively pursue innovation and creativity
 Capitalize on skills of people in every area
 Leverage core competencies
 Develop solutions, NOT technology (do after)
 Inspire competitors to imitate
Source: SCLA Annual 2010 Conference
All rights reserved, Joel Sutherland, 2010

13. Areas for Improvement
 Supply chain accounting/finance (CEO & Wall Street)
 KPI’s (more supply chain focused)
 Increasing skill requirements (continuous learning)
 Using available information technology
Source: SCLA Annual 2010 Conference
All rights reserved, Joel Sutherland, 2010

14. What SC Leaders Need to Master
 Strategy, tactics and execution
 “Push” to “Pull”
 Lean
 Cash flow and people management
 Sustainability and “Green”
 Collaboration
 Fundamentals
Source: SCLA Annual 2010 Conference
All rights reserved, Joel Sutherland, 2010

15. 3PL’s: Supporting Customers’
Changing Requirements
All rights reserved, Joel Sutherland, 2010

16. 3PL’s Can Help Their Customers’…
Contain Supply Chain Costs
Increase Supply Chain Visibility
Prepare for SC Disruptions
Improve Customer Service
Expand Globally
All rights reserved, Joel Sutherland, 2010

17. Opportunity: Develop lean and agile SC capabilities that
allow rapid response to customers’ changing needs and
provide variable cost structures that fluctuate with revenues.

18. Opportunity: Provide effective visibility tools and facilitate
the identification, collection, and use of information to
improve supply chain performance.

19. Opportunity: Become an expert in managing a variety of
potential supply chain disruptions. Enhance processes and IT
to more effectively monitor and respond to disruptive events.

20. Opportunity: Facilitate increased coordination, integration, and
collaboration with shippers and suppliers, utilizing information
technology, to improve end-customer satisfaction.

21. Opportunity: Provide end-to-end solutions, including
comprehensive visibility and event management, to ensure
reliable service and lowest total supply chain costs.

22. Takeaways
 SC costs are significant and the pressures to
reduce costs are severe
 Supply chains are global, increasingly
complex, and challenging to manage
 Effective SC management has a high impact
on customer service
 SC disruptions can be catastrophic if not
planned for
 Technology is a game-changer
All rights reserved, Joel Sutherland, 2010

23. Interactive Discussion
 What are YOU doing in each of these areas?
Contain SC Costs
Increase SC Visibility
Prepare for SC Disruptions
Improve Customer Service
Expand Globally
All rights reserved, Joel Sutherland, 2010

24. Questions?
Joel Sutherland
Managing Director
Center for Value Chain Research
Lehigh University
Joel.sutherland@lehigh.edu
All rights reserved, Joel Sutherland, 2010