Samsung praises port-centric logistics
Savings are created throughout the supply chain
Samsung Electronics UK (SEUK) has reduced its air and sea supply chain costs by 10% by switching to a port-centric and airport-centric logistics setup, with some logistics costs slashed by 50%.
Iain Ulvmoen, general manager of SEUK, told the Navigate PortCentric Logistics Conference, that by switching its distribution operation from Northampton to NYK Logistics’ facilities at Thamesport in June 2008, the percentage of white goods’ sale value spent on distribution was cut in half, from 18% to 9%.
“Before switching to a port-centric model, white goods was a loss-making business division,” said Ulmoen.
“The move to Thamesport has assisted in making white goods a double-digit profit making business unit.
Based on management projections, the facilities should achieve savings of around 10% on inbound supply costs.
And by moving its distribution facility for high-value goods, such as mobile phones and cameras, from Tilbrook to Heathrow in 2006, SEUK reduced the cost of distribution by 8-10% despite volumes growing
“In terms of mobile phones, when we speak to the industry we are deemed as having the most flexible supply, because of our port-centric and airport-centric solutions, and that’s the manufacturers that are saying this to us,” said Ulvmoen.
While savings came from cutting out transport and emissions from airport and seaport to distribution centres in Tilbrook and Northampton, there were also other benefits.
Iain Veitch, CEO of NYK Logistics UK, said the switch to port-centric logistics had reduced lead-time to final destination, reduced inventory, meant excise duty and VAT could be deferred, reduced quay storage costs, reduced the return journey of containers from out of port distribution centres, allowed direct-to-retailer deliveries from the port and more cost-effective warehouses.
Veitch added that customers wanted more control over the entire supply chain and port-centric logistics was one way that NYK Logistics could help them achieve this.
Ulmoen added: “We’ve streamlined logistics on a global and European platform because we are now able to see the end-to-end supply chain and overall cycle time has been compressed, taking three days off the UK leg.
“We also have better internal discipline when it comes to stock allocation. Previously all our stock was coming into the UK and getting snapped-up by our bigger customers, so we’ve got more discipline in our stock allocation and we are able to serve every customer in the right way, first time.”
Iain Ulvmoen, general manager of SEUK, told the Navigate PortCentric Logistics Conference, that by switching its distribution operation from Northampton to NYK Logistics’ facilities at Thamesport in June 2008, the percentage of white goods’ sale value spent on distribution was cut in half, from 18% to 9%.
“Before switching to a port-centric model, white goods was a loss-making business division,” said Ulmoen.
“The move to Thamesport has assisted in making white goods a double-digit profit making business unit.
Based on management projections, the facilities should achieve savings of around 10% on inbound supply costs.
And by moving its distribution facility for high-value goods, such as mobile phones and cameras, from Tilbrook to Heathrow in 2006, SEUK reduced the cost of distribution by 8-10% despite volumes growing
“In terms of mobile phones, when we speak to the industry we are deemed as having the most flexible supply, because of our port-centric and airport-centric solutions, and that’s the manufacturers that are saying this to us,” said Ulvmoen.
While savings came from cutting out transport and emissions from airport and seaport to distribution centres in Tilbrook and Northampton, there were also other benefits.
Iain Veitch, CEO of NYK Logistics UK, said the switch to port-centric logistics had reduced lead-time to final destination, reduced inventory, meant excise duty and VAT could be deferred, reduced quay storage costs, reduced the return journey of containers from out of port distribution centres, allowed direct-to-retailer deliveries from the port and more cost-effective warehouses.
Veitch added that customers wanted more control over the entire supply chain and port-centric logistics was one way that NYK Logistics could help them achieve this.
Ulmoen added: “We’ve streamlined logistics on a global and European platform because we are now able to see the end-to-end supply chain and overall cycle time has been compressed, taking three days off the UK leg.
“We also have better internal discipline when it comes to stock allocation. Previously all our stock was coming into the UK and getting snapped-up by our bigger customers, so we’ve got more discipline in our stock allocation and we are able to serve every customer in the right way, first time.”
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