genpact logistics analytics - unlock hidden value from your logistics operations through analytics

Unlock hidden value from your logistics operations through analytics

Gianni GiacomelliSenior Vice President, Genpact

PROCESS • ANALYTICS • TECHNOLOGY 2© 2014 Copyright Genpact. All Rights Reserved.

A Global Leader in Business Process Services: Process Transformation and Outsourcing, Analytics, Technology

We help leaders of some of the largest enterprises transform and run their processes and operations, including the very complex and industry-specific

What we do

Unbiased, agile combination of process science, related technology and analytics limiting upfront costs and enhancing future adaptability

Right critical mass: we are large (62,000+ global staff) but our solutions appropriately flexible; our top management is directly involved in our client partnerships

How we do it

Our impact

We help enterprises to bemore competitive by becoming more intelligent: adaptive, innovative, globally effective and connected…

…by enabling tighter management of costs, risks, regulations, and growth enablement

The results: US$22B* of impact for 800+ global clients

*US$22B is a cumulative figure since 2006

*US$22B is a cumulative figure since 2006


Unlocking value – some examples

Challenges in logistics

Q & A

Solution approach


Global economic recovery leading to increasing focus on managing logistics operations as a source of value

Following the slump in 2009, logistics spend as a proportion of global GDP will regain its 2008

peak of 9.3% in 2013

Total logistics expenditures represent an average of 12% of

sales revenues

For a $1 billion industrial company with a 5% profit margin, a 10% savings on freight transportation can add about $6.3 million to the

bottom line, a 12%profit increase

Logistics is a significant and growing cost for supply chain

organizations


However, logistics service providers face a complex and challenging environment

• Volatile fuel costs and concerns of greenhouse gas emissions

• Increased globalization leading to rising support costs

• Highly agile and responsive operations needed to service customers

• YoY logistics cost reduction with enhanced service levels


Each industry has specific issues requiring deep industry knowledge

Electronics• Disintegrated global supply chain,

long distance transportation, outsourced production and M&As

• Shortening product life cycles• Inventory obsolescence

Pharmaceutical• High sourcing costs • Need for secure temperature

controlled transport; Counterfeiting • Product expiry issues• Complex network design

Retail• ‘Last mile’ delivery, especially with

online retail• Timely delivery of perishable goods• Near “real time” tracking of millions

of SKUs and PPGs

Telecom• Inefficient supply chain design• Poor visibility into inventory• Long cycle times

Chemical• High logistics cost with heavy,

bulky, difficult to store and hazardous products

• Shortage of suitable carriers and certified drivers

Automotive• Challenging in matching demand

with supply• Customized containers and fuel

price volatility


Logistics operations are often not optimized due to lack of visibility, limited analytics bandwidth and data silos

• Silo operations, no clear feedback mechanism between planning and execution function

• Local optimization, lack of global visibility

• Lack of multi-disciplinary insight required to enable smart decisions

• Person dependent and not process dependent

• Shortage of logistics analytics talent, mostly dependent on local pool of people


Organizations struggle to answer - What data is useful?, What insights are needed for strategic and tactical decisions and… how to get to them?

Increasing complexity of material and

information flows

Massive data explosion in the transportation

industry…

30 Million sensors, 227 Petabytes data

growing @ 40% per year

US alone faces a shortage of 140,000 –

190,000 analytical positions by 2018

1.5 Million more data-savvy mangers needed to take full advantage of big data in the US1

1 Source: McKinsey Global Institute 2 Source: Economist Intelligence Unit Survey, October 2010

More than 80% of the companies do not effectively use their data to make informed decisions2




Q & A

Solution approach


Up to 25% potential cost savings can be realized with logistics analytics

Network

Design

and O

ptimization

Carrier

Sourci

ng Analy

tics

Distrib

ution Cen

ter Analy

tics

Total

savin

gs poten

tial0%

5%

10%

15%

20%

25%

30%

ILLUSTRATIVE

10–12% savings

8 – 10% savings

6 % savings

% c

ost

sa

vin

gs


18% cost savings through strategic network design and optimization for a US furniture manufacturer

• Agile and responsive network needed to meet demand

growth and fluctuation

• Optimal number and location of consolidation/

deconsolidation hubs to align the logistics network to the

demand pattern

•Potential cost savings through better consolidation,

mode-shifts and continuous moves

18% savings generated due to mode shift, consolidation, continuous move and hub selection

Challenges

Our solution

Delivered Impact


$5.2 MM cost savings through inbound network optimization for US consumer appliances manufacturer

Challenges

Our solution

Delivered Impact

• 432 suppliers ship material to 9 manufacturing plants

• Higher shipments, dynamic shipment patterns,

inefficient load planning and low capacity utilization

resulted in high transportation cost

• Cost savings through better consolidation, mode-

shifts, optimizing supplier window times

• Additional savings through frequency optimization

$ 5.2 MM (22% of the baseline freight cost) annual cost savings


20% labor productivity improvement in warehouse operations for US consumer appliances manufacturer

Challenges

• Increased labor and low labor productivity

• Multiple data sources and no standard methodology

to measure the labor productivity and improvement

Our solution

• Compiled the data to perform statistical analysis to

identify significant variables (X-Dock , Golden Zone

Picks and Major Units) impacting labor productivity

• Recommended the optimal setting for significant

variables Golden Zone and X-Dock to maximize the

labor productivity

Delivered Impact

Improvement of 7.4 units handled/man-hour (20% productivity) in warehouse operations


Up to 30% reduction in freight spend by increasing Lowest Cost Carrier usage for a 3PL major

Challenges

• Lack of feedback on carrier performance to operations

• Increased effort by operators to find carrier to ship loads

• 30% of the loads shipped with increased freight spend

Our solution

• All loads tendered with greater than 2 day lead time to

provide sufficient time to the carriers

• Feedback to sourcing to re-bid lanes where Least Cost

Carrier (LCC) is not able to cover the loads

Delivered Impact

Increased LCC usage to 90%

Freight spend reduced by up to 30%




Q & A

Solution approach


• Does my data accurately describe the current state of my operations?

• Am I using data to predict future challenges?

• Do I have analytical skills to prescribe improvement initiatives?

Missing ‘A’ is

Analytics

Data SM RT DecisionsA


Most analytics resources with organizations today focused on descriptive analytics creating limited value…

Analytical Capabilities and Complexity

Bu

sin

ess

Va

lue

Collect and aggregate data to get visibility on current business performance

Use historical data from internal operations and external sources to forecast future trends

Identify lead indicators and simulate future scenarios to recommend continuous improvement initiatives

Descriptive

Predictive

Prescriptive


Deep analytics can be done across the logistics planning and execution lifecycle

Network visualization and opportunity assessment

Dedicated fleet analysis

Site selection strategies

Network optimization

Network Design and Optimization

Warehouse design and planning

Warehouse performance management

Labor estimation andplanning

Operations improvement

Distribution Center Analytics

Spend analysis

Savings opportunity assessment

RFX management and analysis

Carrier performance management

Carrier Sourcing Analytics

Metrics rationalization and development

Scorecard design and production

Business intelligence reports

Metrics analysis

Metrics Rationalization and Analysis


Execution factory with standardized processes and effective automation can power scalable analytics

• Collaboration with customers

• Access to external experts…industry, academia, cross industry, cross geography

Extended Organization

Collaborative Solutions

• Catalog of ‘On Demand’ analytics work packages with pre-defined inputs/outputs

• Access to dedicated teams or pool of hours of defined skillsets

On Demand Services

Talent – On Tap

• Standardized processes

• Technology enabled automation

• Quality output through templates, checklists and six sigma processes

Scale, Quality and Speed

Execution Factory




Q & A

Solution approach


About Genpact

Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients.

Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability.

We have global critical mass – 62,000+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally.

Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years.

For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn.

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