The Changing Role of Gateways in the Context of Global ...€¦ · Dynamics of Global Value Systems...

Department of BusinessPolicy & Logistics

UNIVERSITY OF COLOGNE

Prof. Dr. Dr. h.c. Werner Delfmann

The Changing Role of Gatewaysin the Context of

Global Value Chain Dynamics

Werner DelfmannUniversity of Cologne




V-2

Agenda

Introduction: Customer Orientation and Value ManagementLogistics in Global Value Systems:Networks and Flows Dynamics of Logistics:Modes, Nodes, and FlowsGateways and Corridors: Logistical Contingencies and Configurations




V-3

Introduction: Customer Orientation and Value Management

Logistics Integration as Value AddedParadigm Shift: From Volume to ValueMarkets and Customers: Dynamics of Global Value SystemsStrategic Development Guideline for Gatewaysand Corridors: Creating Customer Value




V-4

Logistics in Global Value Systems:Networks and Flows

Evolution of the Logistics Concept: FromFragmentation to Supply Chain Management Value Chain GovernanceLogistics Service Providers and ContractLogistics (3/4 PL)Globalization of Value Systems: Functional Specialization and Logistical Integration




V-5

Evolution of the Modern Logistics Concept

Demand Forecasting

Purchasing

Requirements Planning

Production Planning

Manufacturing Inventory

Warehousing

Materials Handling

Packaging

Inventory

Distribution Planning

Order Processing

Transportation

Customer Service

1960 1980 1990 2000

Demand ForecastingPurchasingRequirements PlanningProduction PlanningManufacturing InventoryM

ater

ials

Man

agem

ent

InventoryDistribution PlanningOrder ProcessingTransportationCustomer ServicePh

ysic

alD

istr

ibut

ion

Warehousing

Materials Handling

Packaging

Information Technology

Marketing

Strategic Planning

Logistics SCM

Fragmented Functions First Consolidation Process Logistics Perspectiveand new Functions

Value Chain Perspective

Adapted from: Hesse, Rodrigue (2004), 5




V-6

Logistics and Inventory Costs &Cycle Time Requirements

0

2

4

6

8

10

12

14

16

18

1960s 1970s 1980s 1990s 2000s

% o

f GD

P

0

5

10

15

20

25

30

35

40

Days

Logistics Costs (% GDP) Inventory Costs (% GDP)Cycle Time Requirements (days)




V-7

Span of Integration in Value Systems

Source: Lambert, D.M.;Cooper, M.C.; Pagh, J.D.: Supply Chain Management: Implementation Issuesand Research Opportunities, in: International Journal of Logistics Management, Vol. 9, No. 2, 1998, p.7.

1

2

n

1

n

n

1

n

Tier 3 toinitial

Suppliers

Tier 2Suppliers

Tier 1Suppliers

1

2

n

1

n

1

2

Tier 3 to initialCustomers/

End-Customers

Tier 2Customers

Tier 1Customers

1

2

3

n

1

n

1

21

2

3

Tier

3 to

n s

uppl

iers

Focal CompanyMembers of the Focal Company‘s Supply Chain

Non-Members of the Focal Company‘s Supply Chain

Managed Process LinksMonitored Process LinksNot Managed Process LinksNon-Member Process Links

Initi

al S

uppl

iers

Tier

3 to

n c

usto

mer

s

n

n

Cus

tom

ers

/ End

-Cus

t om

ers




V-8

Types of Value Chain Governance

Val

ueMarket Modular Relational Hierarchy

End Use

Materials

Cha

in

Low HighDegree of Explicit Coordination

Degree of Power Asymmetry

Customers

Price

Suppliers

Turn-keySupplier

LeadFirm

Componentand Material

Suppliers

LeadFirm

RelationalSupplier

Componentand Material

Suppliers

LeadFirm

IntegratedFirm

Captive

Source: Gereffi, Humphrey, Sturgeon (2003), 9.




V-9

Strategic Positioning of Logistics Service Providers

TPL

Low High

Low

High

General ability of problemsolving

Ability of customer adaption

Medium

Medium

Stand. transp firms

Integrators

Trad. house broker

4PL?




V-10

Main Challenges in Global Logistics:Managing Contradictions

Outsourcing: Physical Decentralization vs. IntegrationE-Commerce:Informational Integration vs. Geographical DistanceMass-Customization:Customer-Orientation vs. Process-OptimizationInterorganizational Cooperation:Strategic Partnership vs. „Virtual“ OrganizationIntegrated Control:Supply Logic („Push“) vs. Demand Logic („Pull“)




V-11

Dynamics of Logistics: Modes, Nodes, and Flows

Basic Logic of Logistical FlowsLogistical Friction vs. Logistical Value AddedPostponement, Just in Time and Pull Orientationas dominating Trends in Logistics Flow ControlNodal Functions and Value Added LogisticsTransmodality and Intermodality




V-12

Logistics Utility / Value Added

Logistics is supposed to provide the right quantity of the right good in the right quality, composition and sequence at the right time and location at the lowest possible cost / price withthe highest possible reliability, security, precision, flexibilty, and additional services, meeting customer requirements and confirmedfeatures




V-13

Structure and Process in Logistics Networks

Source: Rodrigue (2006 ), 6




V-14

Network Structure and Scheduling Processes

A

BPoint-to-Point

A

BCorridor

A

BHub-and-Spoke

A

BFixed Routing

A

BFlexible Routing

Transshipment node Route nodeNetwork node Unserviced node

Route Alternativeroute

A

BMultiple-Hub




V-15

Logistical Friction

Distance in miles / kmDistance in timeGeographical obstaclesCostReliability / Regularity / Congestions / DelaysComplexityModal / Flow InterfacesBorder CrossingCultural / Language Borders




V-16

Value Adding Services

Picking & PackingLabelingSortingCustomizationFinal AssemblyFacturingJust in Time / Sequence Supply / Delivery




V-17

Logistical Friction and Logistical Value Added

Assumption: B and E are identical geographical delivery points

Differences in total costs and time due to transportation costs (mode of transportation and routing) and option to store (storage costs and time)

Option to choose alternatives 0-A-B vs. 0-C-D-E dependent on time preference and desired overall cost of delivery

Tota

l cos

t /Va

lue

adde

d

Time

Dist

ance

C

D

DeliveryPoint

0 (Pick-upPoint)

StorageCosts

A

E

B+ costs- time




V-18

Functional Scope of Logistical Nodes

Gateways (Ports) as Intermodal Interfaces(Sea-, Air-, and Landports)Hubs as Transmodal InterfacesMerging Role of Gateways and Hubs as IntermediateNodes in complex NetworksCompetition of Central vs. Distributed Networks Functional Upgrade of Logistical Nodes: From simple Transit to Value Added LogisticsThe future: „Logistics Parks“?Impact of Customization on required Flow Patterns and Nodal Functionality




V-19

Modal Interfaces

Transport Mode

Road Rail Sea / Inland Water Way

Tran

sshi

pmen

t M

ode

Inte

rmod

alO

pera

tions

Tran

smod

alO

pera

tions

TransloadingOn-dock Rail

Roadport Railport Waterport

Air

Intermodal Terminal

Port (Container) Yard

Airport




V-20

Principles of Flow ControlPo

int t

o Po

int

HU

B /

Cro

ss D

ocki

ng

Logistics Center

• Receiving• Sorting• Shipping




V-21

Flow Patterns in the Transport Chain

Parts and raw materials

Manufacturing and assembly Distribution

VolumesFrequency

Stage

Network

Flows

Bulk Shipping Unit Shipping LTL Shipping

TRANSPORT CHAIN

Market




V-22

Flow Logic of Value Chains

PureStandardization

SegmentedStandardization

CustomizedStandardization

TailoredCustomization

PureCustomization

Design

Fabrication

Assembly

Distribution

Design

Fabrication

Assembly

Distribution

Design

Fabrication

Assembly

Distribution

Design

Fabrication

Assembly

Distribution

Design

Fabrication

Assembly

Distribution

Speculation Postponement

Processing without order

Shipment to order Assembly to order Fabrication to order

Design to order




V-23

Logistical Paradigm Shift (1)

From Consolidation to CustomizationTimeliness and ReliabilityTotal Service providedTotal Cost of OwnershipTotal Value Chain ControlFlexibility and RobustnessFederated / Distributed Value Chains




V-24

Logistical Paradigm Shift (2)

Smaller ShipmentsHigher FrequenciesHigher CustomizationHigher FlexibilityHigher Value DensityHigher Global ComplexityHigher Modal Complexity / Multiple ModalityHigher Nodal Complexity




V-25

Gateways and Corridors: Logistical Contingencies and Configurations

Re-Assessing Port-Corridor IntegrationFrom Hinterland Accessibility to integratedNetwork FunctionalityLocal Impacts of Global Flow ImbalancesModal and Nodal Choice in the Light of Total Cost of Ownership and Total Value AddedContingencies of Network Configurations




V-26

The Global Ocean Shipping Network:Major Nodes and Flows

Source: Rodrigue (2006), 7




V-27

Trade (exports) between main regions,growth forecast 2005-08

250 311

375 439

7588

5764

5564

105120

242311427

588

INTRA-ASIA

1.888

1.395

628 799

263 336

2005 2008

Value, $bn: 000 000

Source: Global Insight

Source: „Shining Examples“ in: The economist, 17.6.06, p. 5.




V-28

Major US Modal Gateways, 2004





V-29

Growth and Imbalance of Global Air Cargo Flows




V-30

North American Landbridges





V-31

European Spatial Development Perspective:Vision of a Future European

Polycentric Gateway and Network System

Source: Woxenius (2001), 14




V-32

Future Role of Gateways and Corridors:Opportunities and Risks

Limits of Centralization: Polycentric Networks!?Specialization / DifferentiationAllocation / Attraction of Value Adding LogisticsExploiting Further Potentials of MultimodalityGlobal Trends / Shifts of Goods FlowsTransnational Approaches / Global Reach of Gateways and CorridorsImpacts of Uncertainties: Strategic Flexibility




V-33

DUBAI Logistics CityThe Future Gateway Model?




V-34

Thank You!

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