Delft University of Technology
Faculty Mechanical, Maritime and Materials Engineering
Transport Technology / Logistic Engineering

M.J. Heeroma Value added logistics; possibilities for logistic service providers.
Literature survey, Report 96.3.LT.4564, Transport Technology, Logistic Engineering.

Value added logistics is a 'buzz'-word that is used in the Dutch logistics business. The activities it stands for implying an extra value that is being added by or during the logistic process. A global distinguishment in two sorts of value adding can be made: Value Shifting and Value Creation.
Value Shifting is the shifting of physical activities that add value to the product. Moving the final assembly to distribution centres is a form of value shifting.
Value Creation consists of all activities that a distribution centre or a manufacturer can add during the logistic process. These activities are services which are no part of the original distribution function.

These services become more and more important in a customer driven economy. They make it possible to react faster on customer demand and therefore deliver faster, safer and even cheaper to the customer. Value shifting is interesting especially for the international distribution. By transporting only the semi-products and modules to international or regional distribution centres, multinationals can specify their products at the latest possible moment, and so reduce the total stock levels.

Moving the assembly process closer to the customer, is especially interesting for components with a high value density that are assembled into final products with a low value density. Consumer electronics is an example of this kind of products. Specification does not have to take place for only one customer. Customers can be grouped by language, country or even age.

Distribution Centres can use the benefits of VAL to win the battle of the competition. When multinationals more and more chose to outsource their distribution functions, DC's can grow into logistic service providers. The opportunities VAL can offer for the Netherlands, being an distributing country, especially count for the middle and small sized companies. Their activities in the transport and distribution sector have to be supported by the government. Examples are regions where DC's can settle down and different kinds of transport are available.

Reports on Logistic Engineering (in Dutch)
Modified: 2000.02.28; , TU Delft / 3mE / TT / LT.