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Perspectives from Freight Transportation Users US Department of Transportation – Federal Highway Administration. Consumer Electronics – Overview. High Value commodities Profitability challenges due to price erosion, operating costs, and Customer requirements

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Perspectives from Freight Transportation Users US Department of Transportation – Federal Highway Administration

consumer electronics overview
Consumer Electronics – Overview
  • High Value commodities
  • Profitability challenges due to price erosion, operating costs, and Customer requirements
  • Small, Medium and Large boxes utilizes a multitude of shipping modes
  • Highly competitive and growing in competition
  • 5 years ago major Electronics vendors were: Sony, Philips, Thompson (RCA), Zenith, Sharp, and Panasonic
  • Today major Electronics vendors are: Sony, Philips, Thompson, Panasonic, Samsung, APEX, Audiovox, Sharp, and Sanyo.
consumer electronics overview1
Consumer Electronics – Overview
  • New Competitors in 2004: Dell, Gateway, and Virgin Companies launch new products in the CE sector.
  • Forecasting, Order, and Shipping migration from Monthly Cycle to Weekly cycle
  • Customer Requirements
    • Radio Frequency Identity (RFID)
    • Vendor Compliance
philips overview
Philips - Overview
  • Philips Consumer Electronics balances Customer demand and requirements with 300 model variations to ensure timely delivery of our product.
  • Product sizes vary from the size of a disposable razor to a 60” projection television.
  • The customer mix ranges from small to large companies.
  • 3 Outbound Distribution points in the US
    • Greeneville, TN
    • Roanoke, TX
    • Riverside, CA
  • Products are manufactured in Europe, Asia, and Mexico.
philips overview1
Philips - Overview
  • Inbound shipments
    • Port of Entry (Asia and Europe)
    • Moving product from Port to Warehouse
    • US/Mexico Boarder crossing
    • Third Party Logistics Provider involvement (3PL)
philips overview transportation
Philips – Overview Transportation
  • Restructured the Supply Chain (3PL)
  • Modes of Transportation
    • Air (Next Day, 2nd Day, 3 Day)
    • Ground (Parcel Ground ie. Fed Ex, UPS)
    • Less Than Truckload (LTL)
    • Truckload
    • Intermodal (Rail)
  • Transition from LTL and Ground (150lbs+ shipments)
  • LTL Expedited service vs. Traditional “Air” service
philips overview transportation1
Philips – Overview Transportation
  • Hours of Service – Challenge in 2004
    • Multiple Stops (More than one customer on a trailer)
    • Increased charges from Carriers for Detention and Multi-Stops
    • Equipment Demand moves from Moderate to Severe
    • Driver retention and expansion
    • Will force more equipment on the road vs. less
    • Capacity battle transforms to a capacity war
    • LTL shipments will increase as will costs of operations (Carriers, Shipper, and Customers)
  • 2001, 10% of all truckloads shipped by Philips were multi-stop shipments
  • 2003, 46% were multi-stop shipments.
philips improvement opportunities
Philips – Improvement Opportunities
  • “Being an attractive fish, in a Big fish pond”
    • Carrier relationships
    • Equipment utilization
    • Equal profitability
    • Automating Truckload “tender” process
  • Rail congestion
    • Utilization can increase if transit time improved
  • Factory Direct
    • Customer’s Freight Forwarder
    • Mexico Direct
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