Download Asset 2015 - Future of supply chain logistics and implications for LG

The Future of Supply Chain
and Logistics – Implications
for Local Government
National LG Infrastructure & Asset
Management Conference 14 May 2015
Dr Hermione Parsons, Director ISCL
VU Associate Professor
ISCL’s Strategic Focus
Supply Chain Information Unit (SCIU):
Data Modelling, Analytics & Forecasting
Whole-of-Chain
Integration
Public Policy
and Regulatory
Reform
Industry
Research
Thought
Leadership
Capability
Building
Harmonisation
Studies
Intermodal
Connectivity
Supporting Sustainable Public and Private
Sector Decision Making
2
What is freight
transport?
What is Transport?
Point B
Point A
The physical movement of goods
What is Logistics?
What is logistics?
Point of
Consumption
Point of Origin
Systematic organisation of goods
and/or services
What is supply chain?
Supply
Demand
The interdependent organisation of supply and demand,
including forecasting and strategic asset investment
Supply Chain Complexity Involves:
Systems Thinking
Labour
Oil and alternative energy
Transport
Logistics
Finance
Business Processes
Transaction Systems
Supply
Information Technology
Procurement /Purchasing Sourcing
Supply Chain Management
Commercial Power
Legal and Regulatory Systems
People /Relationship/ Resistance to Change
Strategic Asset Investment
Global, Political Economy
Demand
Global forces
1. Urbanisation
2. Global
connectivity
3. Accelerated
technology
4. Ageing
population
(McKinsey 2015)
.
7
1. Urbanisation
• China’s industrial revolution - creating cities
• 60% of the world’s population lives in 700
congested cities
• In the next decade, 50% of GDP will occur in
440 new cities - in newly emerging cities and
new markets
• The city logistics challenge is everywhere and
involves amenity, efficiency, sustainability and
productivity gain
8
2. Global connectivity
• Global capital flows expanded 25 times between
1980 and 2007
• New flows of capital, people and information;
constant geographic change, and volatility
• The focus is on complex webs of interaction
connecting emerging markets
• We are now in a new and dynamic phase of
globalisation …. that we ignore at our peril
9
Top 10 port cities
2004
Hong Kong
Singapore
Shanghai
Shenzhen
Busan
Kaohsiung
Rotterdam
Los Angeles
Hamburg
Dubai
2014
Shanghai
Singapore
Shenzhen
Hong Kong
Busan
Ningbo-Zhoushan
Qingdao
Gaungzhou
Dubai
Tianjin
10
3. Accelerated technology
• Digital life and mobile electronic commerce
(meCommerce) is here
• The “Internet of Things” and big data usage
now drives supply chain thinking
• New technologies, logistics assets, processes
and people are required
• Entry level requirements in supply chain and
logistics > digital literacy is fundamental
11
meCommerce users Australia
Source: ACMA www.acma.gov.au
12
The Internet of Things (IoT)
13
IoT Growth Perspective
50
50
Billion
“Things” per person
40
SmartObjects
Billions of Devices
Rapid adoption rate of digital infrastructure
5 x faster than electricity & telephony
30
20
Inflection Point
10
0
World Population
6.307
2003
6.721
6.894
7.347
7.83
2008
2010
2015
2020
Cisco IBSG projections, UN Economic & Social Affairs http://www.un.org/esa/population/publications/longrange2/WorldPop2300final.pdf
Automation and robotics
https://www.youtube.com/watch?v=eSIkRdAEF0g
DHL sortation equipment
Linfox’s robotics (Kellogs)
15
Daimler’s driverless trucks
Volvo’s truck driverless convoy in Europe – think Hume Freeway?
https://www.youtube.com/watch?t=80&v=zAiTySwWTiQ
Rio Tinto’s driverless mining trucks
16
4. Ageing populations
• Australia's “2015 Intergenerational Report”
o Greater need for more efficient aged service delivery
models
• 60% of the world’s population lives in countries
where the fertility rate is less than population
replacement
o E.g. China’s labour force peaked in 2012
• Increasing reliance on automated logistics
• Higher productivity is now critical to operate
17
Servicing an ageing population
18
What do these global trends mean for
Local Government Managers?
• Urgent need: to take a global perspective and to
understand that supply chain and logistics are
economic and social enablers
• Strategic plans need to be articulated across and
between each level of government
• Smarter land use planning and regulation is needed
• Flexibility and responsiveness is needed – to survive
• Local training and employment is needed in SC&L
• We need to help business deal with constant transition
19
Source: Jones Lang Le Salle 2014
20
Source: Jones Lang Le Salle 2014
21
New Asset Investment
Toll Group
AUS $150m sorting facility close to Melbourne Airport
• Dedicated e-commerce parcel delivery service
• 35,000 parcels per hour
• About 500 employees will be based at the facility, with
staff expected to be relocated from existing sites in
Altona and Dandenong
Source: Toll Group, 2014
Last mile challenge
24
Strategic planning must be integrated
25
East & SE
Suburbs
Productivity gain is essential
• Logistics and freight transport are changing
– there is higher granularity
e.g. larger vehicles (HPFVs) and smaller multi-product
delivery vans (LCVs)
• Optimisation – determines investment
Across the whole supply chain
And locally e.g. cross-docking; delivery systems;
automated pick and pack processes
27
Land use planning & regulation
• Change is needed to reflect and enable supply
chain reconfiguration and reality:
o More loading docks and cross-docking sites
o Parcel hubs
o Activity centre access
o Out-of-hours delivery
o Recycling surplus assets and industrial areas
 Importer/exporter SME business success
depends on it
28
Raising awareness
• Strategic asset management and ‘enabling’
regulation are as important as protecting hard
infrastructure investment
• Promote SC&L as enablers of economic activity
and local wellbeing
• 14.7% of GDP is involved in delivering freight
• Work with industry to enable their ‘flexibility’
• Local government has a critical role in
understanding and supporting how SMEs can
survive and prosper
29
Supply chain and logistics success checklist:
How does your local area score?
 Land
 Labour
 Services
 3PL and 4PL expertise
 Access
 Value add logistics suppliers
 Regulatory environment for
business
 Infrastructure
 Business investment climate
 Community support
 Leasable industrial
properties
 Education & Research
Thank you