Nlm Analysis

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 100% 100%

COGS 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: 111

- 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 program's success is evident in the excellent air quality at the plant and the overall quality of the transmissions.

Core Competencies

1. IT Infrastructure

a. Internet Based

b. Unique EMS program

c. Carriers' location tracking with Global Positioning System (GPS)

2. Knowledge Worker

a. Strong Team

b. Entrepreneurial Spirit

3. Reputation

a. Based on Best Price & Carrier Quality

b. ~90% On-Time Delivery

c. Complete Client Satisfaction

d. Deadline-Driven Industry

4. Alliance

a. Strong connection with carriers

b. 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

3rd