IDENTIFYING AND ACCREDITING BEST IN CLASS CORPORATIONS

The Best in Class accreditation recognizes organizations that demonstrate a commitment to best practice in logistics execution and take a collaborative approach to their work. Accredited companies are “first movers” or “thought leaders” and demonstrate an exceptional level of regard for the role and function of collaboration in the development of their business and demonstrate a significant level of operational and strategic integration.

Collaboration leads to increased communication between stakeholders, resulting in the harmonization of the freight, finance and data flows that constitute the logistics process. This results in more effective co-ordination and control in the flow of goods between the point of origin and the point of consumption. The outcome is increased reliability, lowers costs and improved inventory management.
Organizations are identified based on in-depth interviews, analysis, and extensive secondary research conducted by the research department. The aim of our research is to establish accepted best practice , create ‘benchmarks’ and to promote standard operating procedures and their adoption in logistics.The research is leveraged to support our mission to develop a community of thought leaders from across the world who have been identified as committed to building strong relationships in pursuit of a logistics system fit for purpose.

BACKGROUND PICTURE

The Global Institute of Logistics has honored Menlo Worldwide, a subsidiary of Con-way Inc. and a global provider of logistics, transportation management and supply chain services, with its Award of Excellence for the outstanding contribution to the development of Logistics Service Provision (LSP) of it European operations.

MENLO TEAM AT EERSEL CELEBRATE THEIR AWARD

The ‘Award of Excellence’ was presented to Menlo by Kieran Ring, Chief Executive of the Institute at a ceremony its logistics facility in Eersel,
Menlo was selected for this award because of its success in applying the principles of ‘Lean’ manufacturing to the LSP sector. After reviewing a considerable amount of data, the Institute is convinced that Menlo had developed an operating model and a best practice that provided an excellent benchmark for other LSPs to emulate. Additionally, Menlo has significantly improved its customers’ efficiency, service and overall supply-chain performance.

Speaking at the presentation of the award Kieran Ring, CEO, Global Institute of Logistics said:
“Our organisation strongly supports the application of Lean manufacturing methodologies in LSP. At a time when shippers are looking increasingly to their LSP partners for greater innovation and cost reduction, we wanted to identify a company that has met and ultimately exceeded these expectations. Menlo is a deserving recipient of this award.”
Commenting at the presentation Gert Askes, managing director, European Operations, Menlo Worldwide said:
“We are honoured to receive this highly prestigious award, and to be recognised as an innovator in using principles of Lean manufacturing to bring more efficient, cost-effective transportation and logistics services to our customers. We believe this is the way forward for logistics providers, and can ultimately benefit both them and their customers.”
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NETWORKING THE GLOBAL LOGISTICS INDUSTRY

“United States BCO’s Sourcing in China: The Logistics Challenges” is an ongoing Institute research program focussed on southern China . The first module examined on how the US Beneficial Cargo Owners (BCO’s) from the consumer goods and retail sectors were coping with this region’s particular logistical challenges.The research identified the early adopters at brand level and led to the accreditation of Home Depot with “Best in Class” in the execution of container logistics strategy.

The research program is designed to understand how companies manage the dynamics of global trade in this new scenario and to determine how the most adaptive were coping with its challenges. Furthermore The aim of the research is to establish accepted best practice by the stakeholders in Sino–US trade, creating ‘bench-marks’ and to promote standard operating procedures and their adoption by other shippers. The research identified the early adopters at brand level and led to the accreditation of Home Depot with “Best in Class” in the execution of container logistics strategy.
Home Depot’s international logistics departments has direct relationships with each stakeholder in its global logistics process and while like majority of Fortune 500 companies, it outsources directly to third party logistics provider’s (3PL’s) however it regards as “best practice” to have direct contact with the the key logistics service providers, particularly the liner shipping company and the container terminal operator. Home Depot are the pioneers in managing direct relationships with container terminal operators.
Beneficial Cargo Owners including Home Depot do not have contractual relationship with any of stakeholders inside the port, leading it to a dependence on third parties for status reports etc. This leads to misreporting and guessing about the status of a particular container. Home Depot mitigated this by liaising directly with the container terminal operator. This led led directly to greater Visibility, increased Velocity and added Value add in their container logistics processes.
For terminal operators direct relationships with their end user had a direct influence on decisions by shipping lines to include their terminal on their network maps. Shipping lines are heavily influenced by their upstream customers − the port’s end users.
The collaboration also leads to logistics innovation particularly in the area of “Port Centric Logistics”
Port Centric Logistics models have led to a myriad of new logistics programs: For instance DC Bypass whereby Beneficial Cargo Owners instead of shipping containers of a product to the USA where they would then be cross-docked for store delivery, execute the cross docking process in China,thereby eliminating a relocation move at the receiving port and, in doing so, cut out considerable costs.

MORE ABOUT HOME DEPOT BEST IN CLASS

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NETWORKING THE GLOBAL LOGISTICS INDUSTRY

Findings from the Institute’s “Collaboration Between Container Logistics Stakeholders” led to the accreditation of Hellmann Worldwide Logistics as the world’s “Best in Class” logistics service provider.The main reason for the accreditation was Hellmann’s commitment to building relationships with customers, partners and employees throughout the world.

This is the approach the institute has been trying to encourage in the industry for several years now. But if Hellmann Worldwide appears to embody all the the right qualities, CEO Jost Hellmann insists that it’s more than a coincidence, more than a fad, more than a company latching onto the latest industry buzz phrase.
He points to his company’s logo, two geese flying in tandem. Geese, he explains, are born to be loyal. Quoting the writer and wildlife expert, Lawrence Durrell, he claims that these creatures take this concept so far that if one weakens or falls ill and is unable to continue its flight, its partner will break the journey with it. They will go through the tough times together, creatively and innovatively seeking new feeding grounds and supporting each other unceasingly.
“My father designed this logo in the 1960s,” he continues, pausing to explain that he is part of the fourth generation of the Hellmann dynasty to lead the family firm. “He adapted our family crest, inspired by an old German saying that you could translate as, ‘Try to find somebody with whom you can shoot for the skies’. It’s a reference to finding the right husband or wife, of course, but my father decided he wanted to bring it into the business too.”
Hellmann is still a family business, although, if you include the employees of all the partner companies in which it has a percentage ownership, it now has more than 20,000 employees. The CEO admits that maintaining strong relationships with all of these employees, as well as with a growing number of global companies, is becoming more difficult, but it’s clearly a challenge he enjoys.
He travels regularly to visit key clients in person and has made it clear to them that they can call him direct at any time and rely on him to take care of any particular issue they want to raise. This human contact is of great importance to him. All companies aim to conduct their business in this way, he suggests, but he believes firmly that everyone in his company tries to live this out.
And in this, being a family company is a benefit. “We have the luxury of being able to build long-term relationships,” Mr Hellmann observes.
“What I realise in the present climate is that, with big companies that are quarterly-driven, results-driven, you have a huge turnover of people and relationships are being destroyed.”
MORE ABOUT THE BENCHMARK 3PL HELLMANN WORLDWIDE LOGISTICS

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NETWORKING THE GLOBAL LOGISTICS INDUSTRY

After researching how container terminals across the world compared with YICT it became evident that they had first mover advantage and as such were identified as the benchmark in container terminal operation globally. This led to accreditation of YICT as the the Worlds “Best in Class” Container Terminal by the Institute. In recognising YICT, the Institute is underlying the importance of the continuing and expanding co-operation between end users and container terminal operators to make the port centric logistics process more efficient.

The evolutions in supply chains and logistics models urge container terminal operators to re-think their function in the logistics process. Terminals are central to the design of supply chains and are considered as strategic assets.

The Institute’s research program The Role of Container Terminal Operation in Global Logistics focuses on how Container Terminal Operators are responding to this new opportunity and responsibility.

Findings from the Institutes research program “U.S. Beneficial Cargo Owners Sourcing in China: The Logistics Challenges” identified that “Best in Class” international logistics departments supporting procurement departments sourcing intercontinentally, demand direct relationships with each stakeholder in the logistics process.

The majority of Fortune 500 companies outsource directly to third party logistics provider’s (3PL’s) however it is regarded as “best practice” to have direct contact with the the key logistics service providers, particularly the liner shipping company and the container terminal operator.

Home Depot who the Institute has accredited as “Best In Class” in the execution Of Container Logistics Strategy pioneered direct relationships with container terminal operators. It was through this research that we became aware of Yantian International Container Terminals (YICT) and its ground breaking work.

YICT is the world’s largest single container terminal and are champions of “Joined Up Thinking” and have built their cargo volumes through marketing directly to cargo-owners a strategy they called ‘End User Marketing’.
MORE ABOUT THE BENCHMARK TERMINAL YICT

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NETWORKING THE GLOBAL LOGISTICS INDUSTRY

The The Role Of Container Ports In Global Logistics research program sought to identify a “benchmark” port community which others could emulate, a port committed to the ‘Relay’ rather than the ‘Delay’ of cargo. That benchmark was identified as Spain’s number one container port, Valenciaport which was accredited with “Best-in-Class” status.

Globalization means that more and more goods flow between continents and subsequently the traditional role of ports in the wider supply chain context is being subject to a process of radical review. In broad terms, the traditional port system is being replaced by a model which focuses on logistics service quality which in turn has brought the performance of ports and their communities into sharp focus.

Port customers, whether they are shipping companies, importers/exporters, terminal operators or logistics service providers, judge a port not on the basis of any one port stakeholder’s individual service – but rather in a combined way, as after all logistics is a combination service. In essence, the port is only as strong as its weakest link, and therefore its reputation depends on the level of Coordination, Communication and Control amongst port stakeholders. Port logistics is delivered as a result of a combined effort by port stakeholders working in harmony supported by the Port Authority as the natural leader of the community. The Port Authority is the only agency independent and powerful enough to marshal these resources.
Across the world “First Mover” Port Authorities and their communities have devised and developed a myriad of strategies and programs designed to deliver a seamless integrated logistics product to their customers. The Institute established direct relationship with many of them as part of its “The Role of the Container Port in Global Logistics” research. The research identified the First Movers, Thought Leaders and Early Adopters of the logistics model of port development. The research considered ports at different levels of community maturity and with varied business streams – transhipment, import only, export only, and mixed.
The research sought to identify a “benchmark” port community which others could emulate, a port committed to the ‘Relay’ rather than the ‘Delay’ of cargo.That benchmark was identified as Spain’s number one container port, Valenciaport which was accredited with “Best-in-Class” status.
The criteria for the accreditation was that the port community identified demonstrated an exceptional level of maturity and a culture which indicated that stakeholders in the supply chain truly engaged in a collaborative process.
MORE ABOUT THE   VALENCIAPORT’S  ACCREDITATION GLOBAL BEST IN CLASS PORT COMMUNITY

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NETWORKING THE GLOBAL LOGISTICS INDUSTRY

The  World Freight Alliance has been named the benchmark Independent Freight Forwarding Network globally.The announcement comes as a result of the Institute’s preliminary findings from its research study Independent Freight Forwarding in Global Logistics The purpose of the research is to investigate the increasing trend by Beneficial Cargo Owners (BCO’s) to outsource the management of their global logistics requirements to independent freight forwarders.

In 1996, 75% of all sea freight volumes were booked directly with carriers, today that number has dropped to 59% and is expected to go below 50% by 2020. Even more remarkable is that it is independent freight forwarders that will enjoy a greater market share of this growth than multinational 3PL’s at 30%
This switch away from carriers to forwarders is being driven by two key factors:

1. The increasing complexity of global supply chains
2. The increasingly commoditized nature of the carriers offering.

Preliminary findings from the research indicate that one of the key drivers prompting BCO’s to work with independents is their provision of personalized bespoke services combined with access to global independent freight forwarding networks.  Such is the significance of network membership for BCO’s in choosing an independent, the Institute’s final report will include a comprehensive overview of how such networks operate. To date there has been very little in the way of research on how successful freight forwarding networks operate. As a result BCO’s and freight forwarders have access to very little information when evaluating the market place. The Institute will address this knowledge deficit in its final report.
The Institute’s approach is to first identify a benchmark network to research and for this the Institute has chosen the World Freight Alliance (WFA)
Commenting on today’s announcement, Kieran Ring CEO at the Institute said:
“I am delighted to present the World Freight Alliance with the Institute’s accreditation ‘Global Best in Class Independent Freight Forwarding Network’ The Institute have been aware of the alliance since its foundation in 2003 and have been impressed with how the network has developed. WFA members demonstrate an exceptional level of commitment to network relationships. This has led over time to the development of interdependent activities, increasing the level of mutual productivity and resulting in excellent service for BCO’s.
Collaboration is the hallmark of Best in Class and the Institute is excited to be afforded the opportunity by the WFA to now go deeper in our research and provide readers with a unique insight into the development of an international network of regionally independent freight forwarders. Our final report will enable both BCO and freight forwarder to determine the hallmarks of an efficient global independent freight forwarding network. I look forward to working with the WFA”
Commenting on today’s announcement, Tommy Kelly Chairman of the World Freight Alliance said:
“I would like to thank the Institute on behalf of the entire network for bestowing “Best in Class” status on the WFA. The vast majority of our current membership have worked together for upwards of 20 years and we remain committed to our founding principles.
Collectively our group represents some of the world’s best and longest established organizations in the business. Each and every member has a reputation for local knowledge and expertise capable of offering a full suite of services including freight forwarding, customs clearance, logistics and warehousing, fiscal representation and express delivery services.
We guarantee a standardized level of excellence in all regions. Our goal is always to partner with other experienced companies to provide a seamless service offering across the world.
The WFA looks forward to working with GIL in the next stage of the research process”
MORE ABOUT THE BENCHMARK NETWORK WFA

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NETWORKING THE GLOBAL LOGISTICS INDUSTRY