LOGISTICS COST AND SERVICE 2005 - Supply Chain Consulting

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Logistics Cost —Percent of Sales by Industry Classification Food, Soaps, Cleaners Industrial Equipment Tires Retail Stores Electronics Pharmaceuticals Database Average Establish, Inc./Herbert W. Davis and Company www.establishinc.com Copyright © <strong>2005</strong>, Herbert W. Davis and Company/Establish, Inc.
Why are Overall Costs Declining? First, the average company in our trend group has successfully reduced inventories. Inventory as a percent of sales is at the lowest level in 25 years. Second, this reduced the pressure on warehousing, so warehousing costs have declined since the last recession (2001). These two cost reduction actions are the normal reaction to weak recession-related sales. Companies reduce costs. The actual cost reduction traditionally shows up in the years immediately following the recession; i.e., sales are up and costs are down. Establish, Inc./Herbert W. Davis and Company www.establishinc.com Copyright © <strong>2005</strong>, Herbert W. Davis and Company/Establish, Inc.
Page 1 and 2: LOGISTICS COST AND SERVICE 2005 EST
Page 3 and 4: Today - 2005 North American Status
Page 5 and 6: 1974 1982 1985 1987 Timeline 1992 1
Page 7 and 8: For those companies in the database
Page 9 and 10: Several Database Trends are Evident
Page 11: Logistics Cost —Percent of Sales
Page 15 and 16: Warehousing 22% Customer Service/ O
Page 17 and 18: Cost as a % of Sales 12 10 8 6 4 2
Page 19 and 20: Logistics Cost—Percent of Sales v
Page 21 and 22: Logistics Cost—Percent of Sales v
Page 23 and 24: 9.0 8.5 8.0 7.5 7.0 6.5 Logistics C
Page 25 and 26: 50 25 0 -25 -50 Annual Functional C
Page 27 and 28: 6.00 5.00 4.00 3.00 2.00 1.00 0.00
Page 29 and 30: Logistics Expense Change—2005/200
Page 31 and 32: Average Performance Reported STANDA
Page 33 and 34: Strongest Forces Driving Decisions
Page 35 and 36: Most Pressing Issue in Operating Lo
Page 37 and 38: Most Recent Changes in Your Logisti
Page 39 and 40: What It Means In a change since 20
Page 41 and 42: The Balanced Strategy Know your co
Page 43 and 44: Establish, Inc./Herbert W. Davis an

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