Logistics Performance in Baltic Sea Area
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Logistics Performance in Baltic Sea Area Managing Director Mikko Melasniemi Finnish Association of Purchasing and Logistics LOGY. Topics. Trends in global logistics Logistics Performance Indicator State of logistics in Finland Regional projects between Finland and Russia

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Topics

Logistics Performance in Baltic Sea Area Managing Director Mikko MelasniemiFinnish Association of Purchasing and Logistics LOGY


Topics
Topics

  • Trends in global logistics

  • Logistics Performance Indicator

  • State of logistics in Finland

  • Regional projects between Finland and Russia

  • Northern Dimension in Naples

  • Potential beyond the near future

    • Mutual competition over cross cultural supply chain

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Excellence in logistics european logistics association ela 2004
"Excellence in Logistics"European Logistics Association (ELA), 2004

Biggest challenge is the explosion of supply chain complexity

  • Larger share of purchases and sales outside Western Europe

    • less failure tolerant supply chains

  • Ever increasing customer requirements

    • service levels, lead times, delivery reliability

  • Increasing amount of value added services

    • Shifting activities from manufacturing to distribution centres

  • Higher product complexity

    • Shorter product life cycles, arising number of stock keeping units (SKU)

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Excellence in logistics european logistics association ela 20041
"Excellence in Logistics"European Logistics Association (ELA), 2004

Leading capabilities to manage complexity

  • Collaboration

    • Sharing and utilizing information along the entire supply chain, which leads to higher supply chain quality and lower costs

  • Value chain management

    • Holistic view of all the end-to-end issues

    • Integrating supply chain partners

    • Outsourcing in a sophisticated way

  • Differentiation of supply chains

    • Meet specific requirements of customers, sales channels, type of product, regional specifications

    • The time of “one size fits all” is over!

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Topics

What is the LPI?

Logistics Performance Index (World Bank 2007)

A set of indicators that measure the performance of the logistics environment of countries

Data for the LPI

Professor LauriOjala

Turku School of Economics, Finland

lauri.ojala@tse.fi

Logistics professionals

in international

freight forwarding

Turku School of Economics, Finland

International Federation for Freight Forwarders Associations

Global Facilitation Partnership for Transportation and Trade

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi

Ojala & Solakivi CSCMP Sept.22, 2009 5


International comparison of the logistics performance index world bank 2007
International comparison of the Logistics Performance Index (World Bank 2007)

1. Efficiency and and effectiveness of Customs and other border procedures

2. Quality of Transport and IT infrastructure for logistics

3. Ease and affordability of arranging shipments

4. Competence in the local logistics industry (e.g. transport operators, customs brokers)

5. Ability to track and trace shipments

6. Domestic logistics costs (e.g. local transportation, terminal handling, storage)

7. Timeliness of shipments in reaching destination

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Logistics performance indicatior globally
Logistics Performance Indicatior Globally (World Bank 2007)

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


The level of logistics performance varies a lot in europe
The level of Logistics Performance (World Bank 2007)varies a lot in Europe

15

16

4

47

99

42

58

11

74

9

3

40

7

18

22

115

26

139

Source: World Bank, Logistics Performance Index

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Topics

(World Bank 2007)Logisticsgap” amongcountries in BSR

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Topics

What does low LPI mean in practice? (World Bank 2007)

”…lower costs for logistics reduces the cost of delivered products – and thereby encourages sales, increases trade, opens new markets, breaks down local monopolies, increases competition and generally encourages business.”

(Waters 2003)

 prosperity, competitiveness

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Similar trend despite research method logistics costs decrease till end 90s and rise after that
Similar trend despite research method: (World Bank 2007)logistics costs decrease till end-90s, and rise after that

% of sales

% of GDP

Costs indexed; 2008 = 100

14 %

14 %

12 %

12 %

10 %

10 %

8 %

8 %

6 %

6 %

4 %

4 %

2 %

2 %

0 %

0 %

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Finland state of logistics

ELA/A.T .Kearney

CLM/CSCMP

VINNOVA

Ojala & Solakivi CSCMP Sept.22, 2009 11

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Distribution of turnover for different types of logistics services 2006 and 2010

Customized (World Bank 2007) logistics service packages

Standardised logistics service packages

Pure warehousing services

Pure transportation services

Distribution of turnover for different types of logistics services – 2006 and 2010

Slide as originally presented by Professor Wolfgang Kersten

The demand for more individualised products is expected to increase in the future

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Moa of northern dimension partnership signed in naples in october 2009
MoA of Northern Dimension Partnership (World Bank 2007)Signed in Naples in October 2009

  • Memorandum of Understanding setting out the modalities of establishing the Northern Dimension Partnership on Transport and Logistics

  • Mutual understanding by European Commission, Ministries responsible for transport, infrastructure and logistics

    • Norway, Russian, Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Sweden, Republic of Belarus

  • Was agreed about

    • Goal of partnership to improve major transport connections and logistics in the Northern Dimension region

    • Other matters: Action plan, Exchange of information, Cooperation framework, Cooperation with regional bodies, Participation of private sector and social partners

  • Next step in December, when officers from ministries meet

    • Resources and guidelines over the projects

  • Important because

    • Baltic states have mutual forum for Northern Dimension

    • Formal way to go ahead with projects

    • Helps to take logistics into practise

  • Goal: to have a momentum in EU budget for Northern Dimension

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Conclusions
Conclusions (World Bank 2007)

  • Focus on value in supply chains, not only transportation

    • Two-way supply chains instead of one way transit traffic

    • Supply chain from supplier to final customer can bee complicated but competitive

  • Logistics performance is a case of competitiveness

    • Logistics costs are rising, time is money

    • Efficiency and visibility

  • Northern Dimension needs a line in EU budget

    • Act regionally, think collaborative

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Thank you for your attention
Thank you for your attention! (World Bank 2007)

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi


Logy mission and values
LOGY Mission and Values (World Bank 2007)

Development

LOGY

  • offers its members an innovative forum for continuous development of their competence and

  • aims at improving the competitiveness of members business

  • aims at improving the valuation of logistics and purchasing.

Members

Competence

Cooperation

Finnish Association of Purchasing and Logistics LOGY/ Mikko Melasniemi