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Innovation Excellence

in LogisticsValue Creation by Innovation

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Deutsche Bibliothek has registered this publication in the German National Bibliogra-phy; detailed bibliographic data can be found on the Internet at http://dnb.ddb.de.

ELA European Logistics Association / Arthur D. Little

Innovation Excellence in Logistics

Value Creation by Innovation

Results of the ELA / Arthur D. Little Study.

ELA European Logistics Association / Arthur D. Little

Brussels 2007

ISBN 978-3-924606-53-4

Copyright 2007 ELA European Logistics Association / Arthur D. Little

All rights reserved

Brussels 2007


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2 Innovation Excellence in Logistics Value Creation by Innovation

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Preface

Innovation distinguishes between a leader and a follower

Steve Jobs, CEO of Apple Inc.

Innovations have always been judged as the growth engines of society in the field oflogistics, their importance is still underestimated and they are not exhaustively analyzed.However, increasing customer needs and new business models in trade and industry offervarious chances to develop new markets by means of innovative logistics services. Tech-nology improvements also enable logistics processes to be created more efficiently.

Which innovation objectives are pursued in each case, which are the triggers and driversfor innovations in logistics, how is the innovation management organized within com-panies, which innovation approach and process is pursued in each case, which innova-tion fields receive attention and which essential success factors exist for Innovation Excel-lence in logistics?

You will observe some very interesting findings for those questions in our study cover-ing more than 100 logistics service providers and shippers in various industries across 15European countries. The study was conducted by European Logistics Association (ELA)together with the international management consultancy Arthur D. Little.

The ELA wishes to thank all the individuals from the different ELA member organi-zations in European countries who supported the study in various ways and opened thedoors to participating companies. We also thank the team of Arthur D. Little consultantsand staff members for their excellent cooperation.

Prof. Dr. Dr. h.c. Hans-Christian Pfohl

Member of the board of European Logistics Association and Head of Research andDevelopment Committee

Chair of Management and Logistics at Darmstadt University of Technology


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3Innovation Excellence in Logistics Value Creation by Innovation

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Table of Contents

1 Abstract 4

2 Management Summary 5

3 Objectives, Definitions and Scope 9

3.1 Study Objectives 9

3.2 Definitions and Innovation Model 9

3.3 Study Scope and Methodology 10

4 Detailed Results of the Study 11

4.1 Identification of Top Innovators 11

4.2 Innovation Objectives and Relevance in Logistics 11

4.3 Organization and Scope of Innovation Activities in Logistics 13

4.4 Triggers and Drivers for Innovations in Logistics 15

4.5 Innovation Strategy and Process in Logistics 18

4.6 Fields of Innovation in Logistics 23

4.7 Key Success Factors for Innovations in Logistics 24

4.8 Innovation Excellence Improvement Potential in Logistics 25

5 Case Studies 27

5.1 Rodenstock 27

5.2 Valeo 28

5.3 Woolworth 29

5.4 APL Logistics 31

5.5 Interporto Rivalta 32

6 About the Contributors 34

7 Acknowledgement 35

8 Contacts 36


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Abstract

1 In the jointly conducted European studyInnovation Excellence in Logistics theEuropean Logistics Association (ELA) andArthur D. Little, methodologically sup-ported by Prof. Pfohl (TU Darmstadt),analyzed more than 100 logistics serviceproviders as well as their counterparts the shippers in various industries acrossEurope.

A substantial improvement potential bythe application of Innovation Excellencein logistics was identified and the follow-ing questions were answered: Which inno-vation objectives are pursued in each case,which are the triggers and drivers for inno-vations in logistics, how is the innovationmanagement organized within companies,which innovation approach and processis pursued in each case, which innovationfields receive attention and which essen-

tial success factors exist for InnovationExcellence in logistics? Based on theseinsights, general and specific recommen-dations were established.

By way of a summary, the following studyresults can be emphasized:

Price and reliability are no longer theonly buying criteria. They will developinto prerequisites for contracting logis-tics services which lack differentiation

potential.

Objectives of innovation activities inlogistics will become more customer-oriented and less cost-oriented in thefuture. In this context the importanceof innovation ability as a deal-clincherwill increase significantly.

Organizationally the shift from cost-oriented towards customer-orientedinnovation activities has to manifest

itself in a bundling of these activi-

ties either in a separate department orconcentrated in a customer-orientedline function.

The innovation approaches of shippers(internally driven) and logistics serviceproviders (market-driven) are funda-mentally different but mutually com-plementary.

Top innovators have implemented astructured innovation process in orderto develop their new products / serviceofferings, and measure progress andsuccess on a results-oriented scale.

The structured generation of mar-ket and technology intelligence is themajor success factor for an effectiveinnovation management for both ship-persand logistics service providers.

In addition a market implementa-tion / rollout concept and ongoinginvolvement of customers are espe-cially important for logistics serviceproviders, while stringent project man-agement is critical for shippers.

Companies with a high InnovationIndex, meaning companies with aneffective and efficient innovation man-agement system (top innovators), gener-ally have lower logistics costs or higher

EBIT margins.

Innovation pays off. An optimizedinnovation management can boostcompany success as measured byEBIT margin by an average of 3 to8%-points.

This document summarizes the studyresults.


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Innovation Excellence

Pays Off

An optimized innovation managementsystem can boost company success. Com-panies with a high Innovation Index (topinnovators), meaning companies with aneffective and efficient innovation manage-ment system, generally have lower logis-tics costs or higher EBIT margins.

Shippers can increase EBIT margins by4.4%-points if innovation managementis optimized. Top innovators amongst thelogistics service providers can even in-crease their EBIT margins by an aver-age of 8.5%-points. Average innovatorsamongst logistics service providers con-sider the potential to be much lower,although still significant, with a 2.7%-point increase in EBIT margins.

The potential for reducing logistics costsis between 7% and 14% for all shippersand logistics service providers. For perfor-

mance-related indicators such as turnover,delivery reliability and delivery time, allparticipants expect a significant improve-ment potential.

From Cost-oriented to

Customer-oriented Innovation

Today the most important objectives for

innovation are the modularization oflogistics services plus reduction of logis-tics costs. However, this importance willdecline significantly in the future as cost-oriented innovations are replaced by cus-tomer-oriented innovations. The gener-ation of new services to cover existingrequirements and to stimulate new ones islikely to become the most important inno-vation objective (figure 1).

Price and reliability are no longer the only

buying criteria, but will develop into pre-requisites for contracting standard logisticsservices. In this context, the importance of

Management Summary

2

4.2

3.9

3.7

4.3

3.7

4.1

3.7

4.0

+5%

-7%

-12%

0%Cover basic market

requirements

Reduce processcosts

New services tocover customer

requirements

Modularization/standardization

Importance ranking from 1 (very low) to 5 (very high)

TrendExtract

2007 2012

Figure 1: Innovation objectives


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innovation ability as a deal-clincher willincrease significantly. As a result the focus

will shift from cost-oriented towards cus-tomer-oriented innovation activities.

Personalized and

Institutionalized

Responsibility Counts

The responsibility for innovation manage-ment is more often allocated within topmanagement to logistics service providersthan to shippers. Otherwise the responsi-

bility is more institutionalized at shipperscompared to service providers.

Top innovatorsprimarily anchor their inno-vation activities in a dedicated line func-tion or concentrate them in a customer-oriented line function.

Insufficient human and capital resourcesare the main reason for failure to performinnovation activities.

Customers and CompaniesTrigger and Drive Innovations

Innovation projects in logistics can becharacterized by their degree of noveltyand their degree of standardization; onlythe smallest proportions are truly newdevelopments.

Triggers for innovations at logistics ser-vice providers are mostly customer-spe-cific projects, in contrast to mostly cus-

tomer-independent projects with shippers.While the majority ofshipperssees them-selves as the source of innovation ideas,from the logistics service providers pointof view all value chain participants areinvolved.

Top innovators amongst shippers involvetheir suppliers when looking for innova-tion ideas, while average innovatorsare ori-ented towards their end-customers. Top

innovators amongst logistics service pro-viders are more customer-oriented than

average innovators; they are better at pick-ing up and implementing ideas at theirshippers.

The Innovation Approaches

are Different but

Complementary

The innovation approaches of shippersand service providers are fundamentallydifferent but mutually complementary.

The approach of shippers is primarilyinternally driven, based on strategic plan-ning. Logistics service providersfollow anapproach that is almost exclusively mar-ket-driven, meaning it is triggered by thecustomers in question (their shippers) anda concrete customer requirement or prob-lem.

Top innovators amongst shippers involvelogistics service providersin their innova-tion process at an early stage; top innova-

torsamongst logistics service providersareinvolved earlier.

All top innovatorsare increasingly measur-ing the success of their innovation proj-ects, opening up higher transparency andcontrolling options. They are increasinglymeasuring the value added of their logis-tics, whereas average innovators focus oncosts.

Adaptable and FlexibleLogistics Systems and

Networks are in Trend

Adaptable and flexible logistics systemsand networks have the highest absolutepotential for innovation within logisticsfrom the participants point of view. Inparticular, cooperation across the valuechain is regarded as crucial for the realiza-tion of improvement potentials.


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Virtual reality (such as for digital plantplanning) and automated control (e.g. by

agent systems, RFID etc.) are seen as themost important growth areas for innova-tions. The key barriers for virtual real-ity, however, include insufficient degree ofdetail and reusability of models.

Market / Technology

Intelligence is Key

Key success factors for top innovatorsamongst shippersare a structured genera-

tion of market / technological know-how,and stringent project management.

Key success factors for top innovatorsamongst logistics service providers areagain a structured generation of market/ technological know-how, and the earlyand ongoing involvement of their custom-ers. All others first need to focus on a clearstrategy for their logistics activities andthe development of strategy and projectmanagement competencies.

With respect to the degree of implemen-tation of key success factors, top innova-tors are far ahead of average innovators.This means that average innovatorsface animplementation problem.

How can Innovation

Excellence be Achieved in

Logistics?

For innovation management to yield max-

imal results for a companys success, strat-egy, processes, organization and resourceshave to be balanced and aligned. Based onthe results of this study general and spe-cific recommendations can be derived.

General recommendations which holdtrue for both shippersand logistics serviceprovidersare:

Implement a structured selection pro-cess for innovation initiatives (idea

management) and strategic planningin order to optimize resource alloca-

tion.Bundle innovation-related activitiesin department or line function, withclear responsibilities, align innovationprojects with strategic objectives andreport to board level.

Modularize and standardize serviceofferings in order to generate cost effi-ciencies.

Implement structured and continuous

market intelligence activities in orderto identify new customer needs andtechnology trends (market / technol-ogy intelligence).

Involve external partners as early asthe concept development phase.

Implement a balanced system of indi-cators consisting of both cost- and cus-tomer-oriented measures.

Shippers can address their specific defi-cits by:

Implementing a stringent project man-agement for all innovation activities intheir logistics domain.

Developing and communicating aclear strategy for their logistics areawhich is aligned with overall companyobjectives.

Ensuring early and continuously

involvement of all affected companydepartments, customers and qualifiedservice providers.

Logistics service providers can addresstheir specific deficits by:

Developing and implementing a con-cept for market launch and rollout ofnew products / services.


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Developing and institutionalizing acontinuous learning loop and a sup-

porting knowledge management.Establishing tools and methods to sup-port innovation activities within logis-tics.

Further improvement areas are dependenton the specific company environment andthe degree of maturity of the innova-tion management in place. The improve-ment potential that the study participantsexpect, even and especially when they

are already well advanced in this respect,makes striving for Innovation Excellencein logistics worthwhile.


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Objectives, Definitions and Scope

33.1 Study ObjectivesThis study aims to identify top innova-torsand the value added they generate byapplying Innovation Excellence in logis-tics.

The study determines the key differentia-tors oftop innovatorswith respect to

the strategic importance and organiza-

tional foundation of their innovationmanagement,

their innovation approach and processmodels incl. definition of roles, and

critical factors for successfully realiz-ing innovations within logistics.

Finally the additional potential benefitsthat top innovatorstap into when utilizingtheir innovation management capabilities

are quantified.

3.2 Definitions and InnovationModel

Innovations

Innovations are defined from the custom-ers point of view. An innovation exists ifthe customer gains value added from thenew product / service, which is the case

when a new function (or a new combina-tion of existing functions) is provided and/ or existing functions are provided at sig-nificantly lower cost. This may involveinnovations in products / services, in pro-cesses or in business models.

Top Innovators

Top innovatorshave been identified by eval-uating the innovation management of allparticipating companies using Arthur D.Littles Innovation Index, which is basedon a variety of qualitative and quantitative

Project management

Partners

Customers

Intelligence

Standardservice

developmentService Launch

Strategicplanning of

servicedevelopment

Idea/customer management

Customer-specific

implementation

Customer-specificservice

development

Figure 2: Logistics innovation process model


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criteria. Top innovators are characterizedby an organization that has implemented

and internalized an effective and efficientinnovation management system.

Logistics Innovation Process

Model

In order to illustrate and differentiate thevariety of innovation processes withinlogistics, the Arthur D. Little LogisticsInnovation Process Model was used (fig-ure 2).

3.3 Study Scope and

Methodology

103 companies from all points of thelogistics value chain participated in thisEuropean study. The participating com-panies are logistics service providers(ser-vice providers) and shippers from indus-trial and trading companies, who cover 15European countries with a focus on West-

ern Europe (figure 3).

All participants completed a hypothesis-driven questionnaire with 15 open and

multiple-choice batteries of questions.The current situation (2007) and expectedfuture developments (2012) were assessed.In addition, case study examples wereidentified and researched.

Industry Company Size

Logistics serviceproviders

Sample size: 103 companies

Industrialcompanies

(B2B)

Others

Trading comp.

Industrialcompanies

(B2C)

Shipper Logistics Service Provider

Sample size: 103 companies

72%

28%31%

17%14%

4%

34%

5,000employees

> 5,000employees

Figure 3: Industry and company size of the participating companies


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4.1 Identification ofTop Innovators

As a starting point, top innovators withinthe participating companies at shippersand logistics service providerswere iden-tified. For this purpose the evaluationresults based on the Arthur D. LittleInnovation Index were mapped with the

logistics cost for shippers and the EBITmargin for logistics service providers asthe relevant output and success measures(figure 4).

Companies with a high Innovation Index,meaning companies with an effective andefficient innovation management system,generally have lower logistics costs orhigher EBIT margins.

4.2 Innovation Objectivesand Relevance in Logistics

Today the most important objectives forinnovation are the modularization oflogistics services plus reduction of logis-tics costs. However, this importance willdecline significantly in the future. Thegeneration of new services to cover exist-ing requirements and to stimulate newones is likely to become the most impor-tant innovation objective (figure 5).

Price and reliability are no longer the onlybuying criteria, but will develop into pre-requisites for contracting standard logisticsservices. Shippersare the prime drivers ofthis trend; they realize the importance ofinnovation ability as a deal-clincher thatwill increase in significance. As a resulttheir main focus will shift away from cost-

oriented innovation activities towards acustomer-oriented approach (figure 6).

In contrast to shippers, logistics serviceprovidersbelieve that price is more impor-

Detailed Results of the Study

4

Top innovators Average innovators

0%

10%

20%

0% 50% 100%

Industry-specific

LogisticsCosts

in

%ofTotalCosts

Arthur D. Little Innovation

Index

0% 50% 100%

EBITM

argin2005in%

Arthur D. Little Innovation

Index

0.0% 2.5%

2.6% 5.0%

5.1% 7.5%

7.6% 10%

Shippers Logistics Service Providers

Figure 4: Top innovatorsamong shippersand logistics service providers


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tant. However they realize as well thatinnovation ability and customer orienta-tion will gain importance in the future.Higher prices can be increasingly justifiedby innovative solutions, whereas the dif-ferentiation potential of price will be onlylimited.

2007 2012

4.2

3.9

3.7

4.3

3.7

4.1

3.7

4.0

+5%

-7%

-12%

0%Cover basic market

requirements

Reduce processcosts

New services tocover customer

requirements

Modularization/standardization

Importance ranking from 1 (very low) to 5 (very high)

TrendExtract

Figure 5: Innovation objectives

Trend

Distribution of 100%

Extract

Price

Innovativepower

Reliability/delivery

reliability

Flexibility/customer

orientation

Distribution of 100%

Trend

39%

22%

9%

13%

33%

21%

12%

15%

32%

30%

9%

16%

28%

29%

11%

18%

+33%

-17%

-5%

+15%

+26%

-12%

-7%

+13%

Shippers Logistics Service Providers

2007 2012

Figure 6: Criteria for tendering process (shippers/ logistics service providers)


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4.3 Organization and Scopeof Innovation Activities in

Logistics

Organization of Innovation

Activities

The responsibility for innovation man-agement is more institutionalized at ship-pers, but more often allocated within topmanagement to logistics service provid-ers. However, over one-fifth of all logistics

service providersdo not provide adequateand clear guidance for their innovation

management activities (figure 7).Top innovatorsprimarily anchor their inno-vation activities in a dedicated line func-tion or attach it to a line function closeto the customer. This strong customerorientation is often ensured by position-ing innovation management in Sales andMarketing. Average innovators use one-man staff functions, which mostly limitthe impact within the organization (fig-ure 8).

25%

29%

19%

18%

9%

Comment: Only one answer possible


Managing director/executive board

Staff functionIntegrated intoother line function

Dedicated

line function

No clearpersonalizedresponsibilities

34%

21%

15%

9%

21%

Figure 7: Responsibilities for innovation management

Integrated into otherline function

Staff function


Managing director/executive board

No clear personalizedresponsibilities

Dedicatedline function

31%

23%

15%

15%

15%

11%

16%

28%

30%

15%


Figure 8: Responsibilities for innovation management


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Scope of Innovation Activities

Top innovators within shippers concen-

trate on technological innovation, whereasmethod and process-related innovationis left to service providers. Moreovertop innovators increasingly concentrate ontechnology development which is oftenperformed in co-operations and partner-ships. The resulting applications are oftendeveloped in cooperation with serviceproviders.

Top innovators within service providersengage in method and process-related

innovation, in line with internal mod-ularization and standardization of pro-ducts / services. Furthermore, they focuson technological development rather thanon application development. However,detailed analyses and interviews show thatoptimization of processes alone is viewedas new business models and strategies.That is why the development of radicallynew business models and strategies usuallyreceives little or no attention (figure 9).

Insufficient human and capital resourcesare named as the main reasons for the fail-ure to perform innovation activities at allparticipating companies. Top innovatorsapply a more efficient process for selecting

ideas and also display more efficient utili-zation of resources. They deal more con-

sciously with the topic of innovation andalso have better access to relevant know-how and competences.

80%

60%

40%

55%

34%

52%

45%

100%Method and

process-relatedinnovation

Development ofnew business

models/strategies

Technological

innovation

Applicationinnovation

63%

38%

38%

75%

30%

47%

40%

38%



Comment: Multiple answers possible

Figure 9: Innovation management tasks (shippers/ logistics service providers)


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4.4 Triggers and Drivers forInnovations in Logistics

Triggers of Innovations

Innovation projects in logistics can be char-acterized by their degree of novelty andtheir degree of standardization. By meansof the degree of standardization it is possi-ble to differentiate between customer spe-cific and customer independent problemsas the trigger of innovation. The degree ofnovelty clarifies the extent of change.

Based on the insights derived from thisstudy, we can usually differentiate bet-ween 5 kinds of innovation project types(figure 10):

Project types and are innovationscharacterized by the advancement of exist-ing solutions. These brownfield inno-vations usually consist of incrementalchanges. In case of customer specific proj-ects this usually means the adaptationor advancement of existing solutions tofulfill specific customer requirements. Inthe other case , knowledge generatedthrough reference projects or Best Prac-tice examples can be used to develop stan-

dardized logistics services or modules evenwithout a direct link to customer projects.

Project types and are innovationscharacterized by new solutions. Thesegreenfield innovations usually involvemore radical / genuine innovations.

Finally project type cannot be regardedas an innovation in the defined sensebecause it rather represents continuousimprovements (CIP = continuous improve-ment process).

Only the smallest proportion consists ofstrategically planned new developments

without direct connection to specific cus-tomer projects. Innovation projects atshippersare usually initiated as customer

independent projects based on internalmarket and technology intelligence. Bycontrast innovation projects at serviceprovidersare often results or by-productsof customer-specific projects.

Initiators of Innovations

While the majority of shipperssee them-selves as the source of innovation ideas,from the logistics service providers point

10%

26%

4%

5%

22%

10%

51%

16%

13%

43%

1 2

34

Degree of Novelty

low high

5high

(customer-

independent

project)

low(customer

project)

Degree of

Standardization


Figure 10: Innovation project types


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of view all value chain participants areinvolved. Both shippersand service provid-erstry to gather ideas from end-customers(customer orientation, figure 11).

Top innovators amongst shippers involvetheir suppliers when looking for innova-tion ideas and therefore make use of the

innovation competencies of their suppli-ers. Using this innovation network theygenerate their own ideas and subsequentlyoften benefit from a first mover advan-tage. By contrast average innovators ori-ent themselves to the market (incremen-tal innovation), thus following a me-toostrategy.

15% 14%

57%

0%2%

6%

53%

7%

32%

14%

Tech-

nology/

software

company


Supplier Shipper

Logistics

service

provider

End-

customer

Shipper

11%

55%

0%

16%

3%

34%

29%

22%

12%

18%

Tech-

nology/software

company

Supplier Shipper

Logistics

serviceprovider

End-customer


Logistics Service Provider

Figure 12: Initiators of innovations (shippers/ logistics service providers)

3%6%

54%

7%

30%

15%

5%

27% 27% 26%

Technology/

software

company

Supplier Shipper Logistics

service providerEnd-customer



Figure 11: Initiators of innovations


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Top innovators amongst logistics serviceproviders are more customer-orientedthan average innovators: they are betterat picking up and implementing ideas attheir shippers. Average innovators, on theother hand, try to generate ideas inter-nally or from the end-customers side(figure 12).

Impulses for innovation at logistics ser-vice providersshould be driven externally;internal impulses are rarely successful.

Drivers of Innovation

Shippers and logistics service pro-viders each see themselves in the driv-ing role for implementing innovations(figure 13).

Innovation ideas at shippers are mostlydriven internally, showing that the successof critical development projects is not leftto third-party players. Being aware of thekey role of the shippers, service provid-

erspursue innovation in cooperation with

Logistics service

provider

Development

cooperation

Supplier Shipper



16%

7%

62%

15%

19%

11%

23%

47%

Figure 13: Drivers of innovations (shippers/ logistics service providers)

Logistics service

provider

Development

cooperation

Supplier Shipper


12% 12%

38% 38%

21%

11%

18%

50%


Figure 14: Drivers of innovations (logistics service providers)


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them and integrate them continuously intothe process (figure 14).

Average innovators amongst service pro-viders try to pursue innovation internally.However, resources and competences arefrequently overestimated and initiativestend to fail.

4.5 Innovation Strategy andProcess in Logistics

Innovation ProcessInnovations in logistics can reach the mar-ket in four distinct ways. The logisticsinnovation process model can be used toillustrate the alternatives (figure 15).

The steps A and B can be performed assingle steps (one-step process) or in asequence of steps (two-step process). If aone-step process is applied, either step A( Development of modules / standards,no customization) or step B ( Develop-ment of customer-specific solutions, nomodules / standards) is performed as a

single activity (see figure 16).

If a two-step process is performed thedegree of novelty is usually determined by

the order of steps. Greenfield innova-tions, usually with a higher degree of nov-elty, are carried out in step order A then B( Development of modules / standards,then customization):

Step A: Service modules / standardsare defined without a customer proj-ect

Step B: The modules / standards devel-oped are adjusted to be customer-spe-cific

Brownfield innovations, usually with alower degree of novelty, reach the marketin step order B then A (Development ofcustomer-specific solutions, then modules/ standards):

Step B: Definition of customer-spe-cific solutions

Step A: Definition of marketable mod-ules / standards based on customerprojects

Project management

Partners

Customer-specific

implementation

Customers

Intelli-gence Standard

servicedevelopment

Service

Launch

Strategicplanning of

servicedevelopment

Step A

Step B

Idea/customer management

Customer-specificservice

development

Implementation andcoordination of thesolution together withthe customer team

Marketing ofservice modulesand standardsDevelopment of service

modules and standards(one step process, green-or brownfield approach)

Planning ofservicemodules incoordinationwith serviceportfolio

Generationof marketandtechnologyintelligence

Development ofcustomer-specificsolutions/customizationof modules/standards

Figure 15: Logistics innovation process model and steps


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Fundamental Differences

The innovation approaches of shippers

and service providers are fundamentallydifferent but mutually complementary.The approach of shippers is primarilyinternally driven based on strategic plan-ning. Logistics service providersfollow anapproach that is almost exclusively mar-ket-driven, meaning that it is triggered bythe customers in question (their shippers)and a concrete customer requirement orproblem (figure 16).

The overwhelming majority of shippersare aiming for development of custom-er-independent product / service or pro-

cess standards. Where a customer-specificsolution was the initial starting point forthe development activities, the majority ofshippersderive modules / standards out ofthese solutions . Only about a third ofthem fail to capitalize on the experiencesthey gain .

Shippersaim at standards in order to man-age the related complexity. Less than 40%of the initially developed standards arelater customized .

Logistics service providers, by contrast,predominantly conduct customer-specific

development projects and leave it at that. A minority use the experiences theygain to develop customer-specific solu-tions further into reusable modules / stan-dards . The others leave this potentialuntapped . Own, internal impulses forcustomer-independent solutions, drivenby the providers own market and tech-nology intelligence, can only rarely beobserved and.

Where modules / standards are developed,they are customized by the majority ofservice providers, whereas the majority of

shippersdoes not customize the modules /standards they have developed initially.

The Innovation Process of

Shippers

Top innovators amongst shippers conductstructured product / service developmentin collaboration with Strategic Planningaimed at the development of standardsolutions . They follow a one step


One step process

43%

85%

Internallydriven

innovationprocess

Market-driven

innovation

process


35%

6%

15%

50%

Development of modules/standards, no customization1

Development of customer-specific solutions, no modules/standards

2

57%

15%

Two-step process

22%

9%

28%

35%

Development of modules/standards, then customization3

Development of customer-specific solutions, then modules/standards

4

Figure 16: Innovation logic


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innovation process, define the areas forinnovation by applying upstream strategicplanning (push principle) and develop cus-tomer-specific solutions e.g. based on fac-tory / country demands . Best Practiceconcepts are developed without customi-zation and the service launch is coordi-nated centrally and rolled out throughoutthe whole company.

By contrast average innovators amongstshippers often conduct a market- andexperience-driven two-step process fortheir product / service development. Fieldsfor innovations are defined or enforced bycustomers and not developed by strategicplanning (pull principle). Customer-spe-cific solutions remain as single solutions or are further developed into reusable


One step process

42%

52%

Internallydriven

innovationprocess

Market-driven

innovationprocess


58%

33%

32%

22%



2

58%

48%

Two-step process

0%

15%

10%

30%



4

Figure 17: Innovation logic (shippers)


One step process

60%

90%

Internallydriven

innovation

process

Market-driven

innovationprocess


0%

10%

40%

50%



2

40%

10%

Two-step process

40%

0%

20%

40%



4

Figure 18: Innovation logic (logistics service providers)


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modules / standards. Standard develop-ment without customization is significant

but does not reach the levels oftop inno-vators(figure 17).

The Innovation Process of

Logistics Service Providers

One size fits all modules and standardsare not relevant for service providers.Service providersoften develop customer-specific single solutions without tappinginto any further commercialization poten-tial . Service providersshould thereforestrive for a two-step process. Incrementalinnovations can be reached by the reuse ofcustomer-specific solutions. Top innova-torsincreasingly create modules and stan-dards for subsequent mass customization (figure 18).

The two-step, iterative process enablestop innovatorsamongst service providerstoachieve a high level of customer orienta-tion. They increasingly use the cost effi-ciencies of modularization / standardiza-tion in combination with subsequent masscustomization. By developing service stan-dards they also tap more effectively into

the commercialization potential.

Integration of LogisticsService Providers in the

Process of ShippersTop innovators amongst shippers involvelogistics service providers in their inno-vation process at an early stage, usingtheir innovation ability for specific topics.Innovative service providerscan thereforeposition themselves far more effectively,which is already being done bytop innova-tors(figure 19).

It becomes clear that with the help ofinnovation, top innovators amongst ser-vice providerscan position themselves inhigher margin businesses. All others areintegrated at a later stage and face higherpressure on their margins.

Admittedly most service providers areintegrated into the process at a quite late

stage, because top innovatorsamong ship-pers regard logistics as their own corecompetence and therefore integrate onlyselected strategic partners into their inno-vation process. Insufficient concept designand project management competences areadditional reasons stated by shippers forthe late involvement of their service pro-

viders.

15%12%

33%

37%

0%

11%

35%

44%

10%

3%

Strategic

planning &

idea mgt.


Concept &

specifica-

tion

Implemen-tation speci-

fication

& test

Pilot &

launch

preparation

Launch &

service op-

timization

Shipper

17%

24%

37%

0%

40%

7%

15%15%

25%

20%


Strategic

planning &

idea mgt.

Concept &

specifica-

tion

Implemen-tation speci-

fication

& test

Pilot &

launch

preparation

Launch &

service op-

timization

Logistics Service Provider

Figure 19: Start of involvement in the shippers innovation process (shippers/ logisticsservice providers)


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Measurement of Innovation

Success

Top innovators are increasingly measur-ing the success of their innovation proj-ects, opening up enhanced transparencyand controlling options (figure 20). Theirexperience shows that if its not being

measured its not getting done.

Top innovatorsespecially measure the valueadded of their logistics by focusing simul-taneously on costs and contribution mar-gins. Average innovators mainly focus oncosts; performance-related value added ismeasured only infrequently (figure 21).

Contribution margin

Logistics/

production costs

Delivery reliability

Revenue, price

Delivery time



Extract

50%

58%

50%

50%

50%

70%

41%

53%

48%

44%

Figure 21: Business rationale for innovation projects

Measured for all

projects

Not measured


54%

38%

8%

37%

56%

7%


Measured forselected projects

Figure 20: Measurement of success within innovation process


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The success measures and business ratio-nales have a clear relation to the innova-

tion objectives as stated at the beginning.Top innovatorsare already ahead in terms ofadjusting to the future shift from cost-ori-ented towards customer-oriented innova-tion objectives. They focus on the overallvalue added instead of cost only.

4.6 Fields of Innovation inLogistics

Adaptable and flexible logistics systemsand networks have the highest absolutepotential for innovation within logisticsfrom the participants point of view. Inparticular, cooperation across the valuechain is regarded as crucial for the realiza-tion of improvement potentials.

Virtual reality (such as for digital plantplanning) and automated control (e.g. byagent systems, RFID etc.) are seen as themost important growth areas for innova-

tions. The key barriers for virtual real-ity, however, include insufficient degree ofdetail and reusability of models.

Internal and external material flow tech-nologies are regarded as the least impor-

tant in both relative and absolute terms.The fields of innovation can be mappedto the specific technology lifecycle (fig-ure 22) with the help of the determiningfactors of market penetration and degreeof technological maturity. The strategyemployed needs to be adapted to the spe-cific lifecycle phase of the technology:

Young technologies should be devel-oped with external partners.

Growing technologies require a clearmarket entry strategy as well as a strat-egy for expansion.

Mature technologies require newapplications and an optimization ofprocesses.

Shippers and service providers basicallyagree when it comes to the lifecycle stagesof virtual reality and logistics systems andnetworks. The expected growth areas and

potentials are consistent with these views.In terms of the other fields, the judgmentsof the two groups differ significantly insome areas.

Marketpe

netration

Technology maturation

Material flowtechnologies

Introduction Growth Maturation Saturation

Transportcontrol and

routingoptimization

Adaptable, flexible, logisticssystems and networks

Automatedcontrol

Virtualreality

Shippers view Logistics service providers view

Figure 22: Technology lifecycle


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4.7 Key Success Factors forInnovations in Logistics

Key success factors for top innovatorsamongst shippersare a structured gener-ation of market / technological know-howand stringent project management. Thesefactors also have the highest degree ofimplementation.

For average innovators amongst shippers,a clear strategy for their logistics ser-vice offerings is of paramount impor-tance. However, their degree of imple-

mentation lags behind in 2 out of 3 factors(figure 23).

Key success factors for top innovatorsamongst logistics service providers areagain, the structured generation of market/ technological know-how and the earlyand ongoing involvement of their cus-tomers. Consequently they attribute thehighest degree of implementation to themost important success factors. By con-trast, average innovators amongst logistics

service providers focus on development

of strategy and project management com-petencies, but the degree of implementa-

tion is far behind that oftop innovators(fig-ure 24).

With respect to the degree of implemen-tation of key success factors, top innovatorsare far ahead ofaverage innovators, mean-ing that average innovators face an imple-mentation problem.

132

AverageInnovators

TopInnovators

Project management

Market/technological

intelligence

Interdisciplinary teams

Rank

Rank

Rank for importance Rank for implementation

21

97

3

6

Project management


intelligence


1 1

3

6

2 2

Figure 23: Key success factors and implementation (shippers)


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4.8 Innovation ExcellenceImprovement Potential in

Logistics

An optimized innovation management sys-tem can boost company success as mea-sured by EBIT margin by an average of3 to 8%-points.

Shippers believe EBIT margins couldincrease by 4.4%-points if innovationmanagement is optimized. This self-as-sessment regarding improvement poten-tial seems realistic; positive effects on theEBIT margin are known to top and aver-age innovators(figure 25).

Top innovatorsamongst the logistics serviceprovidersbelieve they can even realize anaverage increase of 8.5%-points in theirEBIT margins. Average innovatorsamongstlogistics service providers consider thepotential to be much lower, although stillsignificant; with a 2.7%-point increase inEBIT margins (figure 26).

The potential for reducing logistics costsis between 7% and 14% for all shippers

and logistics service providers. For perfor-mance-related indicators such as turnover,delivery reliability and delivery time, allparticipants expect a significant improve-ment potential.

132

Ave

rageInnovators

TopInnovato

rs

Project management


intelligence


Rank

Rank

31

10

6

57

Project management


intelligence


1 2

31

2 3

Rank for importance Rank for implementation

Figure 24: Key success factors and implementation (logistics service providers)


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8.5%

2.7%

Increase of EBIT margin

(%-points)

BottomLine

TopLine

7.5%

2.0%

7.0%

11.3%

12.4%

6.3%

8.8%

12.3%

Reduction of logistics/

production costs1)

Increase in delivery

reliability2)

Reduction of

throughput time1)

Increase in revenues1)


1) Reduction in % 2) Reduction in %-points

Figure 26: Improvement potential compared to as-is (logistics service providers)

Increase of EBIT margin

(%-points)

4.4%

4.4%


1) Reduction in % 2) Reduction in %-points

BottomLine

TopLine

21.0%

3.6%

14.0%

13.6%

12.4%

3.8%

16.0%

6.1%

Reduction of logistics/

production costs1)

Increase in delivery

reliability2)

Reduction of

throughput time1)

Increase in revenues1)

Figure 25: Improvement potential compared to as-is (shippers)


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5.1 Rodenstock

Rodenstock is Germanys leading manu-facturer of ophthalmic lenses and spec-tacles frames. The company is based inMunich and is represented in more than80 countries with sales subsidiaries anddistribution partners. In 2006 Rodenstockgenerated with a worldwide workforce ofapproximately 4,600 a turnover amount-

ing to 371 million.

The initial situation of Rodenstock in2000 was characterized by 12 productionsites for lenses across Europe. For histor-ical reasons the production processes andinventory management have been stronglyoriented to local market conditions.

Logistics have thus been characterizedby non-standardized processes and oper-ations plus sparse international commu-

nication and coordination of activities,combined with a lack of standardizedperformance indicators and measurementsystems.

This initial situation resulted in under-performance in terms of production costs,logistics performance and brand appear-ance (inconsistency). To address theseissues an innovation project within thearea of logistics was set up. Before startingthe innovation project, the concrete objec-tives were defined, for example: reduceproduction costs by 20%, improve deliv-

ery reliability to industry standard: consis-tently between 96 98%, etc.

Due to substantial enhancements to thelogistics processes, Rodenstock was nowable to create a production network repre-sented by 3 sites in Europe. The improve-ment of reliable target figures was par-ticularly critical for this well-functioningproduction network. All activities that didnot need to be performed locally werecentralized (e.g. central warehouse). In the

new structure, European shops are mainlysupplied directly from central production/ warehouse (figure 27).

Case Studies

5

Central production facilities

(1 site for high-tech production, 1 site for innovation,

1 site for high-volume production)

Central warehousing activities

Focused local activities

with limited portfolio

Figure 27: Illustration of new logistics concept


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Reductions in production costs and sig-nificantly improved delivery times within

Rodenstock accompanied the changes tothe logistics concept.

Rodenstock identified the following suc-cess factors that were key to the achieve-ment of the described changes andimprovements:

Clear strategy for logistics services/products:

It is critical to have a clear-cut andcommonly understood concept and

plan for logistics structures and pro-cesses

Utilization of interdisciplinary teams:

Interdisciplinary teams simplify com-munication of project news withinthe organization and justification forchange/ restructuring. Moreover, mar-ket know-how, market requirementsand internal data are always available

By winning a recent tender, Rodenstockincreased its sales by 10% without the newlogistics concept the customers requirements

would not have been met!

5.2 Valeo

Valeo is one of the worlds top 10 suppli-ers of components, systems and modulesfor the automotive industry, with annualoperating revenues of 10 billion. Pres-

ent in 29 countries, the group employs69,800 people at 129 production sites,68 R&D centers and 9 distribution plat-forms. The aftermarket activities of theValeo Group are conducted by a divi-sion called Valeo Service, which accountsfor 18% of the total turnover and has twobranches: Independent Aftermarket (dis-tributors, garages, auto-centers) and Orig-inal Equipment Spares.

This case analyzes the situation for theValeo Service distribution center for Ibe-

ria (Spain and Portugal).Valeo offers 176 product families groupedin 12 lines (climate control, transmissions,wiper systems, lighting etc.) with itemsthat vary enormously in size and weight.Moreover, the individual orders from cli-ents also vary in their item composition,resulting in additional complication inpicking activity.

The initial situation faced by Valeo Ser-

vice was characterized by high stock lev-els and poor delivery performance. In aneffort to broaden the product coverageand service to customers, 2,500 new prod-ucts were launched. This resulted in atotal of almost 15,000 SKUs (stock keep-ing units). In 2006 Valeo Service decidedto address the identified issues by focusingits efforts on improving customer satisfac-tion through greater emphasis on logisticsexcellence and better service levels while,at the same time, improving the financialsituation.

The objective was to be achieved byaddressing the two areas of inventorymanagement and warehouse automation.At the same time, all activities were tobe integrated within the Total Qualityapproach of the Valeo Group.

Various changes were applied to the plan-ning process to achieve the objectives.For example monthly Sales, Inventory

and Operations Planning (SIOP) meetingswere held by Sales, Marketing, Finance,Logistics and Human Resources in orderto generate a sales forecast at product fam-ily level (for 3, 6 and 12 months) and tointegrate the input of market conditions(promotions, competitors actions) to over-ride automatic explosion to SKU level. Inaddition to the changes in the inventorymanagement process, other projects were


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launched within the warehouse activitieswith the main goal of reducing the errorlevels in the fulfillment rates (figure 28).

Valeo identified the following success fac-tors that were key to the achievement ofthe described changes and improvements:

Full commitment and involvement ofexecutive levels was critical.

During the project, the QuickResponse Quality Control (QRQC)approach was utilized, so that anyproblem which arose was immediatelyidentified and analyzed on the spot bythe parties involved, and corrective

action was defined and implementedwithin 24 hours.

By closely linking logistics to the marketingand sales department, significant improve-

ments in the fulfillment of customer require-ments can be achieved!

5.3 Woolworth

Woolworth is a retail company with approx.330 stores in Germany and 12 stores inAustria. In 2005 Woolworth was offer-ing 50,000 active products and employed14,800 employees who generated turnoverof about 1 billion. All Woolworth storesare supplied by a single distribution cen-ter (DC) in Germany. Originally this cen-ter was built to store 80% of NOS (neverout-of-stock) products and 20% one-timeproducts. But after a change of the com-panys strategy, its stock breakdown dra-matically changed to 50% NOS productsand 50% one-time products. The result

was a free capacity of 50% in the high-rack warehouse as well as 25% in the pick-ing areas. The reflection on this situationmotivated the Woolworth management tohive off the DC to offer NOS capacity tothird parties. The management of the DCwas therefore suddenly confronted withseveral issues such as developing a marketentry strategy, offering marketable con-ditions, services and prices, reducing theshare of fixed costs by increasing the uti-

lized capacity, etc.

Prod.line

Prod. family

SKU

12

176

15.000

3A - Input of market info

Monthly Sales, Inventory and

Operations Planning Meeting

By Marketing, Sales, Logistics,

Finance & HR

At product family level

Monthly

2 Demand planning1 Sales forecast

3B Explosion to SKU level

4 MRP 5 Purchase program

EDI weekly

Monthly Weekly

updates

24-week

horizon

Supplier

Figure 28: Illustration of the new planning concept


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Woolworth decided to increase the highprofile of offerings to third parties by

measures including intensive press rela-tions, and to create the ability to com-pete for business in the third party mar-ket by identifying profitable niche marketsand potentials for commercialization. Theobjective was to capitalize on synergyeffects from 330 Woolworth stores thatare supplied with goods on a daily basis.

In order to meet market expectations, anintegrated management system in com-bination with a continuous improvement

process was implemented. The combina-tions of these two innovations plus thecontinuous improvement process aloneare innovations within the retail indus-try. The DC received various ISO certif-icates and applied for international logis-tics awards, which were seen as externalbenchmarking and a publicity booster(figure 29).

Within 6 weeks, the 600 employees of theDC generated more than 200 ideas regard-ing the improvement process. Woolworthis measuring the success of the imple-mented ideas in terms of money, qualityand operational safety.

The implementation of these ideas andof the integrated management system

enabled the DC to offer logistics servicesat market quality and conditions. Today,

the Woolworth DC is prepared for thethird-party market and has already wonnew external customers.

Woolworth identified the following suc-cess factors that were key to the achieve-ment of the described changes andimprovements:

Project management capabilities:

The necessity that management livesby the common rules of successful

project management (such as bindingtimelines, assigning responsibilities,tracking of tasks)

Clear strategy for logistics services:

The management of the DC is nowusing staff meetings to communicatethe success of the companys strategy.Moreover, news updates are published

The correlation between innovation,quality improvement and company growth

was confirmed!

Supplier Retailer DC

Deutsche

WoolworthNOS

One-time

Products

DW Logistics

Supplier Retailer DC

Deutsche Woolworth

NOS

one-time

products

Figure 29: Illustration of the integrated management system (before / after)


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5.4 APL Logistics

APL Logistics is recognized as a lead-ing innovator in worldwide logistics andtechnology management. With more than300 offices serving over 100 countries,the 5,000 seasoned logistics profession-als offer local expertise throughout a trulyglobal network. APL Logistics revenueshave grown to nearly $ 1,3 billion (USD).

This case analyzes the logistics solutionAPL offered to one of its clients. The cli-ent is a major Western retailer that has

shifted its sourcing from Europe to theFar East over the recent years. Despite thischange in sourcing strategy, the logisticsconcept has remained largely unchanged:the suppliers maintained their own distri-bution centers (DCs) in their home nationand stock was called off by the retailer. Asa result, supply chain costs were far higherthan necessary, with over 90 DCs beingmaintained by the clients suppliers. Theretailer is now increasing the proportionof directly sourced lines, changing thelogistics concept from delivered sourcingto FOB ( Incoterm On Board) at coun-try of origin. The retailer recognized thata major challenge was a shortage of logis-tics and implementation skills internally hence the easiest way to implement thischange was to engage a skilled 3PL (3rd

Party Logistics service provider) firm.

While APL already had a small contractwith the retailer, the challenge was to winthis major contract against competitionfrom far larger 3PL players. APL wantedto achieve this objective through offer-ing an innovative bundle of services anddemonstrating its ability to implement theproposed solution.

The retailers specific objectives for thisproject were to design and implement alogistics system to support direct sourc-

ing for several lines and to be able to rep-licate this system, with standard processes,on other lines in the future.

For the implementation of the projectednew logistics concept FOB sourcing,APL logistics was acting for the retailerin organizing logistics from country oforigin, covering important aspects likevendor management at origin, shipmentconsolidation, control of air freight autho-rization to balance cost vs. benefit, devel-

opment of slot management software tomanage truck slot constraints at DC andprioritize key lines, etc.

APL and the retailer agreed upon an openbook approach to charging for these ser-vices in order to increase the efficiency ofthe overall project (figure 30).

UK import

process

Far East manufacturing

facility

Consolidation

Shop

Shop

Shop

Shop

Shop

Shop

Shop

Shop

Shop

Shop

Central European

manufacturing facility

UK import

processConsolidation

Retailer DC

RetailerAPL Supplier

Truck freight

Emergency Air freight

Sea freight

Figure 30: Illustration of the new logistics concept


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APL identified the following success fac-tors that were key to the achievement of

the described changes and improvements:APLs Solution Engineering organiza-tion is a catalyst for developing inno-vative service offerings and is seen as adifferentiator by customers; neverthe-less implementation skills are critical.

The use of a joint venture with anotherlogistics firm added critical skills toAPL and strengthened APLs positionin winning this contract.

A structured innovation process driven bya dedicated department leads to a significant

improvement of market opportunities andincreasing revenues

5.5 Interporto Rivalta

Interporto Rivalta (IR) is the only mul-tifunctional logistics Interporto in Italyto directly manage logistics flows of rawmaterials (soft commodities). In 2006, thecompany generated a turnover amount-ing to 40 million with 100 employees (+450 contractors). Rivalta has two lines ofbusiness, a multifunctional terminal andan integrated logistics system (raw materi-als and final products). Both business linesare focused on logistics outsourcing formanufacturing clients and industrial activ-ities (inbound and outbound). The mainactivities of Rivalta are in raw materials(cocoa, sugar, coffee) and cocoa butter for

the food industry. This case analyzes thelogistics solution Rivalta offered to its cli-ent Ferrero.

Ferrero, a global chocolate and confec-tionery producer, needed to improve itsmanufacturing logistics for chocolate, par-ticularly for cocoa butter input. In the ini-tial logistics concept, the cocoa butterwas stored and pretreated near the pro-duction lines. The location of the storageand pretreatment limited Ferreros poten-

tial for expansion of the production lines.The idea was to find a solution to free up

spaces and resources for use in the corebusiness. The main objectives for Rivaltawere to eliminate cocoa butter storage andpreparation, to reduce logistics cost forstorage and transportation and to generatefull customer satisfaction for Ferrero.

Moreover, Rivalta wanted to capitalize thenew logistics product and also offer thesame service to other producers.

To devise a solution, Rivalta had to deal

with the following situation:the cocoa butter was delivered both fromthe Port of Genoa and from the Inter-porto warehouse. The manufacturer wasresponsible for inbound goods logis-tics, warehouse management, unpackingand preparation. The production cycleincluded blending the cocoa butter (25kilos per batch) with an additional quan-tity of melted cocoa butter delivered fromthe port at extra cost. The administration

costs of this secondary phase in particularwere too high.

Rivalta therefore proposed splitting theprocess into two phases, to take over partof production and simplify logistics. Work-ing together with the client, Interportoused its plant to develop new technologieswith high efficiency and cost-effective-ness. The cocoa butter is now delivered toRivalta warehouse in containers straightfrom the harbor. Based on the monthly

production program Rivalta receives fromFerrero (now also from other producers),Rivalta plans its own operations, and everyday the necessary quantity of cocoa butterfor production is treated, transported intank trucks and delivered straight to pro-duction plants.

As a result new services are offered, addingvalue and enhancing customer satisfaction(figure 31).


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Rivalta identified the following successfactors that were key to the achievementof the described changes and improve-ments:

Withdrawing from low-value-addedphases of clients production can be auseful approach for logistics.

The innovation proved to be a real testof skills and competences in logistics.

An early involvement oflogistics serviceproviderscan lead to a win-win situation if

necessary know-how is being transferred

Interporto Client

Rivalta

(Warehouse management)

Production

Preparation

Liquefaction

20-25

Production program

Container

Figure 31: Illustration of the new logistics process


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The European Logistics Association is a federation of national logistics associationscovering almost every country in Central and Western Europe. By working togetherthrough their respective associations, these professional organizations serve the needs of

European logistics practitioners. As a formal European body, ELA provides the logisticsprofession with a European voice at international level.

Through its 30-plus member associations, ELA has regular contact with over 50,000senior logisticians across Europe.

About the Contributors

6 European Logistics Association(ELA)

We are a global management consultancy specializing in strategy and operations man-agement, serving major corporations and organizations worldwide. We are recognizedas leaders in linking strategy, innovation and technology to solve our clients most com-

plex business issues, delivering sustainable solutions. We are different from others by ourdeep industry insight and technology expertise. We are proud of our creative people withtheir intense commitment to our clients.

As a global service provider we employ 1,000 staff members in over 30 countries.Together with our partners at Altran Technologies, we have 17,000 professionals at ourclients disposal.

If you have further questions please visit our homepage: www.adlittle.com or contact thecontributors of this study directly (see below).

Arthur D. Little A

The Chair of Management and Logistics at Darmstadt University of Technology is dedi-cated to providing a coupling of theory and practice in the research fields of managementsciences and logistics. The committed business disciplines are: logistics, supply chainmanagement, cooperation and networks, leadership, and international management.

The Chair of Management and Logistics is one of the leading institutes for logisticaleducation and research in Germany.

Darmstadt University ofTechnology Chair ofManagement and Logistics


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This report is a joint survey by the Euro-pean Logistics Association (ELA) andArthur D. Little in cooperation withthe Chair of Management and Logis-tics at Darmstadt University of Technol-ogy. Arthur D. Little was responsible forconducting the study, while the Chair ofManagement and Logistics at DarmstadtUniversity gave methodological support.

Arthur D. Little was in charge of editingthe report.

Professor Dr. Dr. h.c.

Hans-Christian Pfohl

... holds the Chair of Management andLogistics at Darmstadt University of Tech-nology. He is the head of the Research andDevelopment Committee of the EuropeanLogistics Association (ELA) and is a mem-

ber of the ELA Board. He is also headof the Scientific Advisory Board of theGerman Logistics Association Bundes-vereinigung Logistik e.V. (BVL) and amember of the Advisory Board of VDI Society for Materials Handling, Materi-als Flow and Logistics Engineering (VDI-FML).

Stefan Lippautz

... is a Director in Arthur D. Littles

Munich office and a member of the Auto-motive and Manufacturing Practice. Hespecializes in strategy development in themanufacturing and automotive sector.

Heiko Frunzke

is a researcher at the Chair of Manage-ment and Logistics at Darmstadt Univer-sity of Technology. Logistics is his mainresearch interest, with a dedicated focuson the management of logistics personneland service innovations.

Markus Achtert is a Manager in Arthur D. LittlesMunich office and a member of the Auto-motive and Manufacturing Practice. He isa member of the Technology and Innova-tion Management Competence Center atArthur D. Little and specializes in innova-tion management and supply chain man-agement issues in the manufacturing andautomotive sector.

Acknowledgement

7


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For further information please contact:

Stefan Lippautz

Arthur D. Little GmbHLeopoldstr. 11a80802 MnchenGermany

Tel: +49 89 38088 700E-Mail: [email protected]

www.adlittle.com

Markus R. Achtert

Arthur D. Little GmbHLeopoldstr. 11a80802 MnchenGermany

Tel: +49 89 38088 700E-Mail: [email protected]

www.adlittle.com

Prof. Dr. Dr. h.c. H.-Chr. Pfohl

Fachgebiet Unternehmensfhrungund LogistikTechnische Universitt DarmstadtHochschulstrae 164289 DarmstadtGermany

Tel: +49 6151 165423

E-Mail: [email protected]/bwl2

Nicole Gerkens

ELA Head OfficeKunstlaan 19 Avenue des ArtsB-1210 BrusselsBelgium

Tel: +32 2230 0211

E-Mail: [email protected]

Contacts

8


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