Best-in-Class Analysis
In logistics, organizational, process and product innovations are interconnected and can be implementedthroughout the supply chain to garner the full benefits of the investment. A wide range oflogistics technologies, tools and processes are adopted by firms across industries as they striveto remain current and efficient in an increasingly competitive global market. 2
This section highlights the key innovations Best-in-Class (BiC) firms have implemented to positionthemselves as leaders in their logistics activities. These firms compete at the highest level in threekey areas: logistic networks, DCs, and global transportation and visibility strategies.
BiC firms are North American businesses defined by their performance in logistics. BiC — on-timeare the top 20 percent of firms based on their total landed cost and orders delivered complete and ontime. The top 20 percent in picking and inventory accuracy are designated as BiC — accuracy, and BiC— efficiency refers to firms that are the top 20 percent performers in transportation spending ratio and shipment integrity. Meanwhile, the Laggards constitute the bottom 30 percent number in each performance metric respectively.13
BiC — on-time firms are more likely to invest in the ability to collaborate electronically with networks of key suppliers (65 percent) of firms and key customers (56 percent) (Figure 18). These technologies give firms a competitive advantage, enhancing their efficiency and agility. Use of supply chain modelling supports BiC decision making in developing enhanced logistics network strategies.13
Figure 18 — Best-in-Class logistics network strategies 13
In support of logistics network strategies, more BiC — accuracy firms invest in software, training and advanced technologies than Laggards (Figure 19). WMS and integrated mobile devices arecomplementary BiC applications. While WMS is adopted by over 80 percent of BiC — accuracy firms, process training is strategically important to achieve operational excellence in DCs and has been implemented by 95 percent of top performing firms.14
Figure 19 — Best-in-Class distribution centre strategies 14
Performance in global transportation and visibility strategies can be measured with logisticsmetrics that assess transportation spending ratio and trend, and shipment integrity. More than60 percent of BiC — efficiency firms have introduced technologies and processes to optimize network capabilities (Figure 20). Alert-based, advanced transportation management systems and zone skippingFootnote Q are key BiC — efficiency differentiating factors.15
Figure 20 — Best-in-Class global transportation and visibility strategies15
Footnotes
- Footnote 16
Zone skipping refers to a mechanism used by shippers to minimize shipping costs by trucking many shipments together to another shipping location that is closer to the ultimate destination. The individual shipments can then be sent via small parcel carriers to their ultimate destinations.