On the day it announced year-on-year Q3 rises in oceanfreight and airfreight volumes, supply chain management company CEVA Holdings LLC also announced it is changing its operating strategy to a local rather than regional model.
CEVA is adopting a new operating model which eliminates the existing region-based structures across the globe, opting instead for an operating model consisting of 17 local geographic clusters of countries with standardised governance and business rules across all clusters.
Clusters may consist of a single large country, such as China, or may consist of several countries in close proximity. The new structure takes effect on 1st January 2015.
“This is a transformative announcement for CEVA,” said Xavier Urbain, CEO of CEVA. “The new operating model supports our objective to be the most professional logistics company by enhancing our ability to provide Impeccable Execution to our customers. We expect it to increase our velocity across the board, enhance customer responsiveness, enable faster decision-making and provide numerous opportunities to leverage speed as a competitive advantage.”
The new operating model will drive increased network efficiency and productivity by eliminating duplicate work and functions, as well as strengthen communication across the business.
In addition to announcing a new operating model, CEVA implemented a number of cost-saving initiatives during the course of the third quarter which are expected to show savings results in the second half of 2014 and into 2015. These measures include restructuring in a number of European countries, inauguration of e-auctions to drive transport savings, continued focus on SG&A reductions, and site consolidation in Singapore, among others.