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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







Transportation statistics average cubic feet utilized truckload volume
Transportation StatisticsAverage Cubic feet utilized (Truckload volume)


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