Supply Chain and Logistics

Supply chain & Logistics

BUSINESS PROCESSING

We offer supply chain and logistics enterprises the opportunity to remove complexity across a full range of business processes – including payroll, learning and development, recruitment, HR administration. We can also offer offshoring services delivering advantages including speed to market, back office transformation, on-demand business, improved customer service and cost optimisation. The result is more flexibility and greater efficiency in the face of formidable challenges.

TECHNOLOGY

We offer extensive technology capabilities across a variety of industry sectors. In the supply chain and logistics industry specifically, we have developed business processing software for one of the world’s largest courier companies and provide an array of technology service for a global leader in petroleum shipping - including Oracle financial support and legacy server migration tasks. On the wider stage, our infrastructure team supports customers’ growth with cost effective, scalable and rapidly-deployed solutions.  We can also provide customers with Total IT Outsourcing (ITO) solutions – a single point of supply for an end-to-end managed service.

PROCUREMENT

We are experts in supporting procurement professionals with services including sourcing, spend management, procure to pay (P2P), system management and software solutions. In this industry, we already provide sourcing and category management for an international leader in pallet and container pooling.


INDUSTRY OVERVIEW 

Xchanging’s previous review of the supply chain and logistics sector depicted an industry reeling from the impact of the global economic crisis.

Then, in the period between December 2007 and December 2008, global international cargo traffic had plummeted by 22.6%. International passenger traffic had taken a 4.6% drop.1

Today, figures from the same source reveal a picture of continuing challenges:

“Passenger Demand Grew as Air Cargo Declined in 2012: The    International Air Transport Association (IATA) announced full-year traffic data for 2012 showing a 5.3% year-on-year increase in passenger demand and a 1.5% fall for cargo.”2
 
Offsetting the overall decline in cargo traffic was the development of trade between Asia and Africa which supported strong growth for airlines based in the Middle East (14.7%) and Africa (7.1%) – a reflection of the contribution emerging economies are making to recovery.

In the developed economies, meanwhile, organisations continue to look at strategies for optimising their supply chains.

According to the 2013 Third-Party Logistics Study, outsourcing is widely seen as an important part of the way forward:

“Despite challenging business conditions, aggregate global revenues for the 3PL sector continue to rise, and far more shippers (65%) are increasing their use of 3PL services than returning to insourcing (22%) some 3PL services. Nearly three in five (58%) shippers are reducing or consolidating the number of 3PLs they use. Shippers report spending an average 12% of revenues on logistics, and an average 39% of that figure is spent on outsourced logistics services.”3

The critical question for these organisations is precisely which aspects of their supply chain should be outsourced.

PwC suggest that for the most successful the answer is often to outsource  support functions such as warehousing, manufacturing and assembly whilst continuing to insource core strategic functions such as sales and operations planning, or research and development.4

This certainly mirrors the experience at Xchanging where we work with one of the biggest names in this sector. 

For this customer, we provide Application Management Services and manage their data and transactions to support their international express, overland transport and air freight services across more than 220 countries and territories worldwide.

This removes complexity and simplifies business processes so that the customer can concentrate on their core business activity.

References:

http://bit.ly/rgiDWC
2 http://bit.ly/bo8pKP
3 http://bit.ly/12ffeUm
4 http://bit.ly/11GKuvv

Business Issues

The prosperity of the supply chain and logistics industry will naturally rise and fall in line with general economic activity.

With the onset of the global financial crisis in 2008, the emphasis in that equation was very much on “fall”.

The situation was neatly summarised by the International Air Transport Association (IATA): “Geneva - The International Air Transport Association (IATA) released international scheduled traffic results for both December 2008 and the full-year. In the month of December global international cargo traffic plummeted by 22.6% compared to December 2007. The same comparison for international passenger traffic showed a 4.6% drop. The international load factor stood at 73.8%. For the full-year 2008, international cargo traffic was down 4.0%, passenger traffic showed a modest increase of 1.6%, and the international load factor stood at 75.9%1.”

For logistics firms, a 2009 survey revealed that 65% of managers believed that the financial crisis was the most important issue throughout the supply chain industry2.

But the economy is far from the only concern.

The volatility in oil prices and the consequent high price of fuel continues to impact the industry’s profit margins and competitiveness, increasing inventory costs for customers and encouraging some to keep more inventory on hand and thus reduce the frequency of deliveries.

Margins and competitiveness are also under threat from an increasing regulatory burden associated in particular with the industry’s environment impact. A pressure which the more progressive providers such a DHL are attempting to turn to competitive advantage under the theme of “green logistics”:

“Sustainable logistics are a challenge to our industry, but also an opportunity. In this time of climate change, it is not enough to make a significant improvement in our own CO2 balance. Logistics operators also need to meet the growing demand from customers for environmentally friendly services. Large corporations look for the support of their logistics providers when it comes to reducing their own CO2 emissions. For them, logistics have long been much more than a standard service to manage their business. Rather, they are a strategic lever to fulfill their own responsibility to contain climate change3.”

It is a complex time for this industry and agility is needed to navigate it safely. Some of the biggest names have asked Xchanging to help deliver that agility.

By taking away a range of complexities, we can provide supply chain and logistics firms with an enhanced ability to seize opportunity and adapt to threats and shocks.

So they can survive when time are bad – and thrive when times are good.

1 http://bit.ly/rgiDWC 
2 http://scr.bi/mR3WIJ  
3 http://bit.ly/r3JKZF

Case studies

12 Years of Success in Logistics
Technology Services
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12 Years of Success in Logistics

Technology Services

CHALLENGE

To provide peace of mind for one of the biggest names in logistics by ensuring high availability for their applications

SOLUTION

01 Provide best-in-class Application Management Services

02 Build strong relationships across multiple business units

03 Manage data and transactions for the customer’s Enterprise System Integration

RESULTS

1 The customer can now be confident that their applications are secure and available

2 We have removed a significant workload from the customer by managing the Enterprise System Integration: 280+ live customers completing up to 700 million transactions per year

3 We contribute to the customer’s IT quality certification such as ISO/IEC 2000

Transactions managed:
700 million per year

Building a More Cost-Effective Real Estate Business
Managed Business Processes
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Building a More Cost-Effective Real Estate Business

Managed Business Processes

CHALLENGE

To support the client in its aim is to reduce operational costs and drive savings and at the same time free-up skilled in-house resources to focus on core business

 

SOLUTION

Xchanging leveraged its strong domain experience in the property/ real-estate industry to add value to the business through processes and technology interfaces which covered:

01 Service Charge Management (SCM), Reconciliations, Database Maintenance, Reporting, Insurance Claims process outsourced to Xchanging to reduce administrative burden on the client front facing teams.

02 Consolidated middle office administration activities with that of the back office to avoid duplication

03 Implemented X-Flow, our proprietary work flow management tool to streamline operations

 

RESULTS

1 Delivered reduced operational costs of £2mn and savings of £3mn over a period of 5 years

2 Reduced administrative time and effort for the client, resulting in more time to focus on their core real estate activities

3 The client realised better scalability and flexibility in operations

We give this customer

Over 5 years, reduced operational costs by £2mn & delivered £3mn in savings

A Sharper Competitive Edge Through IT
Technology Services
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A Sharper Competitive Edge Through IT

Technology Services

CHALLENGE

To help a well-known UK University become one of the country’s Top Ten by transforming its IT infrastructure

 

SOLUTION

01 Plan, design and implement a complete new infrastructure

02 Incorporate voice, data, wireless and security solutions

03 Ensure continuity through a five-year partnership with the customer

04 Provide ongoing support through lead engineers, management and Technical Design Authority

05 Initiate a WAN optimisation exercise

 

RESULTS

1 The customer’s infrastructure now supports its business strategy

2 We gave the customer visibility of its network 24x7

3 We delivered a 30% saving on telephony support costs

4 We instigated best practice operational management

Telephony support costs cut by
30%

Network visibility
24x7

Network Infrastructure Support for a Major International Airport
Technology Services
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Network Infrastructure Support for a Major International Airport

Technology Services

CHALLENGE

Create a common IT infrastructure for Gatwick airport

SOLUTION

01 Provide a managed service for wired and wireless networks across the airport

02 Align this service to ITIL V3 standards

03 Deliver 24 x 7 x 4 monitoring of services, incident and problem management, and management of change

04 Install a dedicated onsite delivery team, including service management

05 Provision a Shared Network Operations Centre for remote monitoring and maintenance

06 Deploy Enterprise class monitoring tools

RESULTS

A secure, reliable, flexible and fast network (wired and wireless) was created

2  Reflecting the customer’s confidence, Xchanging was awarded a further contract to provide the airport’s End User Computing Services

3 The passenger experience has been transformed

“The wired and wireless network we now have in place is secure, reliable, flexible and fast to meet the  needs of the latest airport applications…”

Michael Ede IT Service Director Gatwick Airport

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