As multinational companies pursue global expansion strategies, their key 3PLs are expected to expand with them. 3PLs, in turn, must convince their customers that global expansion presents opportunities for creating a more efficient supply chain if they’re willing to broaden and deepen the partnership.
One of the challenges for CEVA Logistics in pursuing global expansion through its Century Program is the reluctance of some companies to embrace broader sets of supply chain solutions for fear of too much dependence on a single provider. That limits the potential of end-to-end supply chain optimization programs.
“There is a limit to driving value out of tendering transportation and warehousing spending,” said Bruno Sidler, CEVA’s chief operating officer. “The significant savings are in vendor management and reducing cycle times and inventory.”
Through the Century Program, CEVA hopes to counter the notion that having fewer providers increases risk by bringing the concept of the supply chain as a strategic asset to the attention of top-level executives. By acquiring a thorough knowledge of customers’ businesses, priorities and expectations, CEVA hopes to show it’s ideally positioned to expand the scope of services it provides along the entire supply chain, and that doing so bolsters global expansion.
“We are able to address their challenges and support their targets through supply chain solutions,” Sidler said. “This is a matter for discussion at the top table.”
CEVA’s Century customers are diverse in how they use freight management and contract logistics services, and are further segmented by regional or multinational profile. True multinationals have disparate operations in different countries and are tied in to financial consolidation. Such customers have the greatest expectation of seamlessness and are the ones driving CEVA to expand its technical capabilities so they can integrate on a global basis.
CEVA’s plans for expanding its Century accounts rely in large part on its technology capabilities. The company’s proprietary Matrix system integrates transportation, inventory management, order fulfillment, financial settlement and e-commerce applications to maximize visibility. CEVA’s internal technology organization is comprised of centrally managed service teams, outsourcing partners based in India and four regional “demand” organizations that partner with internal and external customers to analyze, adopt and implement solutions.
CEVA is aiming for growth in its Century business accounts to exceed non-Century growth by 100 percent by the end of 2012, and to increase the retention rate of Century customers to more than 90 percent.
Contact David Biederman at email@example.com.