E-Fulfillment Towards a success story for The Netherlands?

Transcription

E-Fulfillment
Towards a success story for The
Netherlands?
Johan Beukema
Partner Supply Chain
Buck Consultants International
Duiven, november 2012
Postbus 1456
6501 BL Nijmegen
Tel nr : 024 379 02 22
Mobiel : 06 51100938
Fax
: 024 379 01 20
E-mail : [email protected]
Background
 Buck Consultants International conducted a study on efulfillment and the competitive position of The Netherlands
 The study was requested and financed by Heembouw,
with support of NDL, SADC/AAA
 Literature research + Interviews
 Key themes:
 NL Position in E-Fulfillment
E Fulfillment
 E-Fulfillment Regions in NL
 “E-warehouses”
Buck Consultants International, 2012
1
1
Agenda
1 E-Facts and Figures
2 From E
E-commerce
commerce to E
E-fulfillment
fulfillment
3 The Position of The Netherlands as location
for E-Fulfillment Operations
 Buck Consultants International, 2012
2
1 E-Facts & Figures
In Summary: Why are we talking about this?
(internetretailer.com, 2012)
Growth Market AND Logistics
Complexity
=
O
Opportunity
t it for
f Logistics
L i ti
Community
(IMRG, 2012)
(Accenture, 2012)
3
2
Europe is an interesting “e-market”
 Largest e-market in the world
 European online sales from € 117 bln in 2008 to € 203 bln
in 2011
 Growth in 2012: 16.1% (18.7% in 2011)
Online sales (bln USD), 2010-2013
Sources: JP Morgan, 2011, Centre for Retail Research, 2012
4
Benelux # 5th market in Europe
 UK, Germany and France: 70% of European online sales
 Benelux 5th position
Online sales and expected growth
Country
Online
sales
(€ bln)
Increase
Online
Sales
2011-12
GDP
($ bln)
Inhabitants
(mln)
UK
59.4
14%
2,418
63.0
Germany
45.1
13%
3,577
81.3
France
38.7
22%
2,776
65.6
Italy
12.3
18%
2,199
61.2
Benelux
12.3
14%
1,412
27.6
Spain
9.4
16%
1,494
47.0
Sweden
5.7
18%
538
9.1
Switzerland
5.5
16%
636
7.7
Denmark
5.2
14%
333
5.5
Norway
4.9
17%
484
4.7
Poland
4.5
24%
513
38.4
Sources: Kelkoo, Centre for Retail Research, 2012, CIA World Factbook, Eurostat, 2012
5
3
Relevant E-Commerce characteristics
 Local for Local  Only 6% of European businesses selling
online across borders, 25% within own countryy
 Concentrated Industry  130 webshops do 75% of Dutch
online sales
 US companies usually pick a large market market for entry
to Europe
 Online Portfolios expanding
6
Online Portfolios are Broadening…
 Telecom/ electronics/ IT and fashion are the largest
product offerings online
 Strong growth in white goods, toys, etc. (resp. 25% en
38%)
Percentage sold online
Reizen
Speelgoed
Tickets
Kleding/schoenen
Erotiek
Witgoed/keukengoed
Computer software
fietsen / fietsaccesoires
DVD/Blu‐ray
Interieur
Verzekeringen
Auto's
Musiek
Sportartikelen
Foto/Film
Doe het zelf / hobbie
Home‐entertainment ‐software
Persoonlijke verzorging
(Mobiele)telefoon
Tuinartikelen
Computer hardware
Dierenvoeding
Consumentenelectronica
Optisch / lenzen
Boeken/magazines/kranten
Bloemen, planten
Internet
Winkel
Levensmiddelen
Audio/video
0%
20%
40%
60%
80%
100%
0%
20%
40%
60%
80%
100%
Source: Thuiswinkel Multichannel Monitor 2011
Buck Consultants International, 2012
7
4
2 From E-Commerce to E-Fulfilment
E-commerce: critical success factors
 Offering the best customer experience
 Scalability; size, portfolio, geography
 Online technology; full value chain
S
Supply
l chain
h i as integrated
i t
t d partt off the
th Business
B i
Model!
M d l!
8
E-fulfilment: In the Heart of E-commerce
 E-fulfillment is the entire supply chain management
process behind the online web shop to ensure consumer
orders are processed
processed, products are delivered on time and
that returned orders are managed efficiently and effectively
E-fulfilment
Logistics
Front office
On-line shop
- Assortment
- Website design
- E-marketing
- Product development
Warehouse
- Inbound
- Storage
- Order picking
- Loading
Transport
- Shipment
- Delivery
Back office
Returns
- Return transport
- Return handling
- Delivery of
other product
Back office
- Customer service
- Stock management
- Warranty
- Fin/adm. services
Source: Buck Consultants International , 2012
9
5
Process E-fulfilment
10
Consumer complaints online shopping
Logistics
Logistics
Logistics
Logistics
 4 out of top 5 major complaints are directly linked to logistics!
 Succes factor E-commerce  excellent logistics service !!
11
6
E-fulfilment network configurations
1
Production
2
Production
Consumer
Distribution
Centre
Shop
Consumer
Distribution
Centre
Shop
Distribution
Centre
Consumer
Production
3
Production
4
Distribution
Centre
2 Combination centres –
Stores and on-line customers
serviced from same facility
3 Dedicated centers – Stores
and on-line customers
serviced from separate
locations
Shop
Consumer
5
1 Direct delivery – Often for
unique custom made products
Distribution
Centre
Shop
Distribution
Centre
Consumer
Production
4 St
Store distributed
di t ib t d – on-line
li
customers are serviced from
stores
5 Hybrid model – Combination
of the above strategies based
on geography, SKU segment
(type or velocity)
12
Network configuration 3:
Dedicated center(s)
Production facility
Distribution Center
Shop
Production to DC/store
Direct to customer
(Outside
Europe)
Store service
Characteristics
 Stores and on-line customers serviced from dedicated facilities for each channel
 Can be a single facility or multiple facilities, although typically limited for both
retail and online business (Exceptions: Amazon has over 10 facilities in Europe;
Zalando has multiple centers)
 Service areas (store and direct to consumer can overlap)
 European examples include H&M, Urban Outfitters, Tesco, Esprit
 Buck Consultants International / DHL 2012
13
7
Network configuration 5:
Hybrid model
Production facility
Distribution Center
Shop
Production to DC/store
Direct to customer
Store service
(Outside
Europe)
Characteristics




Online orders can be collected free from the selected store or are delivered at cost to the customer
home via a courier for an additional delivery fee
Centralized DC is used to distribute both store and online orders to each country. In each country the
online orders which the customer has selected to be collected in the store are delivered with the
regular replenishment orders to each store. The direct to consumer home delivery orders are
delivered centrally to the local/domestic courier company for next day delivery
Returnable items can be returned (free of charge) to a local store
Example: Zara
14
Evolution model
Maturity
(volume,
Geography,
Scope)
p )
Store
Integrated
distributed
Dedicated
Hybrid
Network configuration
15
8
A channel vs. an integrated approach
Business
Channel focused
approach (channels
operate in silos
Brand focused approach
(integration as standard)
Cross-channel fulfilment
(e.g. Click& Collect)
Cross-channel fulfilment
(e.g. Click& Collect)
C
Cross-channel
h
l returns
t
C
Cross-channel
h
l returns
t
Unified brand experience
Unified brand experience
Discontinuity between
channels fails to deliver
consistent brand
experience
Consistent customer
experience enabled
across channels
Operating
O
ti
Structure
Customer
Order Data
strategy
Elements
Staff
training
Factors underpinning
a convenient and
easy cross-channel
customer experience
Source: DHL Freshminds report
16
Towards cross-border “e”DCs
 The number of RDCs/EDCs in Europe for e-fulfillment will increase
 Main drivers: increased cross-border sales, economies of scale,
transport networks
Characteristics1)
Lead
time
Value €
/ kg
Sales
volume
Internat
ional
sales
Product group
Size of
products
Prevailing
warehouse
solution now2)
Prevailing
warehouse
solution in future2)
RDC
1 CDs, DVDs, Books
0
0
+
+
-
SDDC
2 Consumer electronics
0
+
+
0
-
SDDC
EDC
3 Apparel & shoes (incl. sports)
-
0
+
+
0
RDC
EDC
EDC
4 ICT hardware
0
+
0
0
0
SDDC
5 Fashion accessories
0
+
+
+
-
RDC
EDC
6 Toys
0
0
+
0
0
RDC
RDC
7 White g
goods
0
+
-
-
+
SDDC
RDC
8 Furniture
+
0
-
-
+
SDDC
RDC
9 DIY
0
0
0
-
0
SDDC
RDC
10 Med tech products (consumer)
-
+
0
+
0
EDC through air
EDC
11 Pharmaceutical products
-
+
+
0
-
SDDC
RDC
12 Office furniture
+
0
-
-
+
SDDC
RDC
13 Fresh food
-
-
+
-
0
MDDC
MDDC
1)
2)
+ = high, 0 = average, - = low
EDC = European Distribution Center, SDDC = Single Domestic DC, MDDC = Multiple Domestic DC, RDC = Regional DC
17
9
E-Fulfillment: in-house or outsourced?
Key Drivers
Outsourcing
 Limited
Li it d iinvestment
t
t
 Focus on core activities
 Limited logistics knowledge
and experience
 Economies of scale / synergies
 Flexibility
 Integrated services portfolio
specific LSPs
Large retailers
Large manufacturers
Smaller manufacturers
In-house
 In-house
I h
expertise
ti  
core activity
 Costs, e.g. synergy with
existing retail flows
 Image / logistics as
“business card”
 in-house
 mix in-house / outsourced
 outsourced
18
What should a 3PL offer your
customer?
Source: Thuiswinkel.org, 2012
19
10
Characteristics “e”-DC








Flexibility in Floor Space
Process around the product
Fire compartments
High Floor Pressure (buildings until 4 stories)
Day Light
Product related installations
More SKUs (smaller stock per unit)
Labor-intensive, mechanization, WMS
 Level of mechanization depending on product
20
3 The Position of The Netherlands
as a location for E-Fulfilment Operations
Drivers
Location Factors
Distance To Market
Reliability
Conclusion:
Location Factors “e-DCs” not very different from “normal” DCs
Delivery Speed
Logistics Infrastructure
Flexibility
Logistics Services
IT/Systems
Tax & Customs
Efficiency
Overall Cost Levels
21
11
Distance to Market
 Eurodelta region: 12% of the European Union’s GDP
 With shortening lead times, it is crucial to be in a central
location in relation to your markets (within a 1-3 day
reach))
Conclusions:
 The Netherlands is well positioned for Regional and
DCs
++ European
NL well positioned
versus major European consumer
concentrations…
just
surrounding
Logistics
Hotspot
Typical service coverage
from as
a Central
facility in the Benelux
area
(line haul + domestic in feed and express)
regions in Belgium and Germany…
Dedicated
Express
1 day
-// NL not located in a top
top-4
4 EU market
2 days
3 days
4 days
> 5 days
Source: BCI, 2012
22
Logistics Infrastructure and Services
Infrastructure
 Port of Rotterdam: no1 in Europe for containers
 Amsterdam
A t d
S
Schiphol
hi h l Ai
Airport:
t no 3 iin E
Europe ffor airfreight
i f i ht
Conclusions:
 Well-positioned in European road networks
Source:
NDL, profit
2012
NL
can
from its strong general logistics base
Services
NL’s 3PL community could (or should) be the key driver behind
Specialised
E‐fulfilment
“Regular” 3PL’s
future
success
as suppliers
E-FulfillmentParcel networks
hub!
- The DC itself will not differentiate
- Key is in local fulfillment; link to local distribution network
- Also essential: full order to cash process and returns process
23
12
Availability and location of “e”
Real Estate
Examples e-DC’s in The
Netherlands
Conclusions:
“e”DCs located in existing Logistics Hotspots
Source: BCI, 2012
24
Taxes/Customs
 Just as other recent studies show, also in the attraction of
E-fulfillment Centers NL can profit from its positive scores
on Customs
C t
and
dT
Taxes A
Aspects:
t
 Customs Efficiency
 VAT Deferral
 Bonded warehousing availability
25
13
Towards a success story for NL?
Location Factor
NL
Direct Competitors
Proximity to Market
++
++ to +++
L i ti IInfrastructure
Logistics
f t t
++
++
Tax and Customs
++
+(+)
Overall Logistics Costs
+
+
Average
++
+(+)
How
to win the battle for international
E-Fulfillment Centers?
Logistics Services (“e”-focus)
++
+(+)
The key is in the hands of the Dutch Logistics Community:
 Sustain the overall attractiveness of NL

Develop integrated “e-Solutions” that cover the full value
Conclusions:
chain
• NL
is well positioned
• But competition is close to the same level and especially
Germany can profit from its large home market
26
To Conclude: Key Challenges “e”NL
 Decrease the disadvantage of not being a top 4 consumer
market
 Excellent
E
ll t cross-border
b d ttransportt networks
t
k (and
( d rates!)
t !)
 Develop top level end to end e-fulfillment solutions with
execution and coordination in NL
 Facilitate
ac a e Flexibility
e b y
 cross-channel, differentiated distribution models, flexible buildings,
etc.
 Market Smart!
27
14
Contacts
Onderzoek uitgevoerd door:
In opdracht van:
Heembouw
Postbus 1456
6501 BL Nijmegen
Nederland
024-379 02 22
De Lasso-Zuid 22
2371 EW
Roelofarendsveen
Nederland
071 - 332 00 50
[email protected]
Met behulp van:
Nederland Distributieland en Amsterdam Airport Area
28
15

E-Fulfillment Towards a success story for The Netherlands?

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