Gianni Montezemolo
Business Europe
May 21, 1997
1) Efficient Consumer Response (ECR)
- a) Buzzword of the past
- b) Currently
- i) Competitive pressures drive to slash costs
- c) Future logistics
- i) Exploring alternative distribution channels
(1) Home delivery
(2) Internet
(3) Multimedia interactivity
2) Leaders and Laggards
- a) Leaders
- i) Best-in-class have cut logistics costs 30-40%
- b) Laggards
- i) At a considerable cost disadvantage
- ii) Also at a service disadvantage
3) A model distribution system
- a) Cost savings result from
- i) Faster inventory turnover yields most immediate positive results
- ii) Fewer order errors
iii) Faster payment of invoices
- iv) Utilizing fuller truckloads
- v) Fewer emergency shipments
- vi) Economies of scale
- b) Common mistakes
- i) Trying to tackle too many parts of the supply chain
- ii) Rationalizing one-part without devising and entire system plan
iii) Proceeding without full commitment of all affected parties
- iv) Simply investing in IT, not managing it
4) When determining the scope of rationalization, companies must consider
- a) Customer preferences and needs do not follow geographical boundaries
- b) Clearly define the parameters of the project
- c) Determine location and number of distribution centers
- d) Don’t underestimate the importance of IT
- e) Consider outsourcing logistics function
5) Logistics in the future
- a) Distribution systems will
- i) Meet the demands of customers at minimal cost to the supplier
- ii) Anticipate the emerging and potential future changes in distribution channels and buying patterns