Nlm Analysis
Essay Preview: Nlm Analysis
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Part I
Logistic Business
Transportation, Process to manufactures & 3 keys
Shipper needs to ship product or goods by using Carrier to Receiver
3rd Party Logistics Provider / Service
Shipper
Receiver
Type of 3PLs
Asset-Based
Non-Asset-Based
Revenue
80 – 85%
70 – 74%
Gross Profit Margin
15 – 20%
26 – 30%
Asset-Based: Owned its own fleet of transportation vehicles i.e. truck, airplanes, railroads and ocean freighters
Non-Asset-Based: without any of their own physical assets.
Freight Transportation
Multiple shipments: air, water, truck, and rail
Truck segment: Ryder, Penske, and Emery Freight to small owner-operated trucking firm
In competition: smaller firms developed specialty service or served niche markets
Large firms expanded into multiple modes of transport and provide service across a wide range
All shipper demanded Goals be transported safety& timely fashion
Price importance all companies (especially large, automakers) want to reduce cost of delivery to customer
Big 3 automaker (Ford, GM, Daimler Chrysler) looking to better management of supply chain (the series of transaction & interaction between suppliers, buyers, and intermediaries) to minimize costs while improving quality
All parties – manufacturers, 3PLs, suppliers – could participate in EDI (electronic data interchange)
NLM Overview
National Logistics Management is the only North American Third Party Logistics provider to specialize solely in premium freight for manufacturing industries, including automotive manufacturers. It is non-asset based and has a unique business model that employs its proprietary software to utilize the Internet to determine optimal shipping modes; export shipments to its vast carrier base including ground, air freight, and air charter; receive bids back form its carrier network; evaluate the lowest bids and carrier quality ratings; and coordinate shipments based on best price and carrier quality ratings all within a 30-minute window.
Company profile
Founded in 1991
Over 1.3 Million shipments successfully managed.
Network in North America:
200+ Assembly and Manufacturing Plants
6,800+ Suppliers and 300+ Ground, Air Freight, and Air Charter Carriers
Financial Information
1999 Revenues:
$ 7.3million No debt
Total share:
$ 825 million (10% MKT Share)
Employee:
65 in Detroit, Michigan Office
36 Logistic coordinators & Supervisors
7 Audit Team
1 Marketing & Business Development
2 IT Team
Business Model
Business to Business
NLM to Big 3 automaker (Ford, GM, Daimler Chrysler)
NLM manages the return of containers to over 130 suppliers throughout North America.
The returnable container program is part of an industry-wide greening strategy to reduce landfill use and decrease production-source pollution.
Suppliers ship their products to the plant in returnable, reusable plastic containers. Most containers are returned to the suppliers within a 12-24 hour period. NLM determines release quantities and ship frequencies for containers and monitors supplier inventories. One measure of this programs success is evident in the excellent air quality at the plant and the overall quality of the transmissions.
Core Competencies
IT Infrastructure
Internet Based
Unique EMS program
Carriers location tracking with Global Positioning System (GPS)
Knowledge Worker
Strong Team
Entrepreneurial Spirit
Reputation
Based on Best Price & Carrier Quality
~90% On-Time Delivery
Complete Client Satisfaction
Deadline-Driven Industry
Alliance
Strong connection with carriers
Artisan & TopFlite Alliance
Part II
The Analysis
5 Forces Analysis
1st Force: Supplier Power is LOW
Several carrier company
e-Auction system
2nd Force: Buyer Power is MODERATE
Switching cost is high
Big in value and volume customer