ISSN 2010-4235 MCI (P) 196/06/2014 PPS1672/01/2013 (022917) September-October 2014 www.LogAsiamag.com

WAREHOUSE WHY LOGISTICS THAILAND’S NEXT TECHNOLOGIES PEOPLE NEED TRANSFORMATION TO ‘SOCIALISE’ INTRA-ASIA TRUCKING Get ready for increased cross-border road freight Smarter, faster & ergonomic order fulfilment Flexible, scalable & modular solutions Goods to Person picking by Dematic Another logistics result.

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Logistics Solutions | System Design & Integration | Software & IT | Voice Picking | ASRS | Storage Solutions | Conveyors | Service & Support [ EDITOR’S COMMENT ] drivers getthejobdoneasefficientlypossible. drivers therespecttheirprofessiondeserves.Rememberthathappy items above,trainyourstafftocommunicate,workwith,and show work. Evenifyoulacktheresourcesandbandwidthforsomeof the Truck driversdeserverespectfortheirskill,commitment,and hard continued emphasisonsafetyareimportantaswell. and coffeemachines.Providingdrivertrainingprogrammes a Management canalsoprovideadriverbreakroomwithcleanfacilities regular schedulesandmoretimeathome,willlikelybethewinners. their driversabetterstandardofliving,includingshorterroutes, more is equallyimportanttomanydrivers.Thosecarriersthatcanoffer retain drivers.Driverpaymustgoup,ofcourse,butqualitylife This gotmethinkingaboutwhatitisgoingtotakeattractand opportunities iftheydon’tdoanything! and governmentswilllosetheircompetitiveedgebusiness jobs tothosewithnoexperienceorriskleavingtheirfleetsparked; trucking industry?Inthefuturecarrierswillbeforcedtooffer countries. Canyouimaginetherippleeffectsthiswillhaveon amount offreightflowingoverlandfromChinathroughtoother the 10ASEANcountriesbeginsnextyear,asthatwillincrease The situationwillonlygetworseonceeconomicintegrationbetween international truckingserviceshasspikedoverrecentyears. customs procedurestoreducewaitingtimesatborders,thetake-upof road infrastructure,bothinphysicaltermsandalsothroughimproved a strongeconomictradingbloc,andwithcontinuousinvestmentsin 7), asAsiahastransformedfromasourceofcheapproductioninto CEO ofAgilityMalaysiaandSoutheastAsia(readhisarticleonpage is theboomingintra-regionaltrade.AccordingtoMortenDamgaard, being recruitedtoreplacetheolderoneswhoretire.Anotherreason How didthishappen?Wellforone,notenoughyoungerdriversare (source: Pan-MalaysiaLorryOwnersAssociation). per centdrivershortage,forcingsometodownsizetheiroperations that transport-relatedcompaniesinMalaysiaarefacinga20to30 help torecruityoungsoldiersastheyleavethearmy.Ialsofoundout fact, lastyearThailand’stransportindustryhasenlistedgovernment of some900,000trucksregisteredtotransportgoods.Asamatter looking for140,000drivers,representing15percentto20 Journal unfulfilled truckingjobsinthisregion.Ifoundoutfroma To satisfymycuriosity,IscouredtheInternettofindlegitstatisticson Singapore, butThailandandMalaysia?Noway! in SoutheastAsia.Iwon’tbesurprisedthatitisalreadyhappening (read theinterviewonpage8),aboutshortageoftruckdrivers conversation withValeryMuyard,GMofVolvoTrucksSingapore protest onthenews.SoIwassurprisedwhenfoundoutfrommy except, ofcourse,whenthere’sahorribleaccidentorsensational It’s rarethatastoryabouttruckdriversreachesthegeneralpublic– Editor DENICE CABEL [email protected] Please directyourcommentsand editorialenquiriesto reportthatland-logisticsorganisationsinSoutheastAsiaare SHORTAGE DRIVER Wall Street Sun RisePrinting&Supplies PteLtd PRINTER SUPPORTED BY www.LogAsiamag.com Tel (65)65219777Fax9788 Singapore 408941 61 UbiAvenue1,#05-17UBPoint CONTINEO MEDIAPTELTD Brenda Tan, (65) 6521 9748; [email protected] Brenda Tan,(65)65219748;[email protected] ADMIN EXECUTIVE Chiang ZhenHao,(65)65219758;[email protected] MARKETING EXECUTIVE Arthur Ong, ACCOUNT MANAGER [ SALES&ADADMIN] Denice Cabel,(65)65219750;[email protected] EDITOR [ EDITORIAL] Wai-Chun Chen,(65)65219770;[email protected] GROUP PUBLISHER Cover photocourtesyofVolvoTrucks Raymond Wong,(65)65219777;[email protected] CEO Kenny Yeoh,(65)65219740;[email protected] FINANCE MANAGER [ FINANCE] Franco Sevilleja,(65)65219778;[email protected] WEB OPERATIONSEXECUTIVE Vanxy, (65)65219783;[email protected] WEB DEVELOPER Yoke Lee,(65)65219779;[email protected] WEB MANAGER Levi Cheng,(65)65219775;[email protected] CIRCULATION EXECUTIVE Ophilia Leung,(65)65219761;[email protected] CIRCULATION MANAGER Olive Chan,(65)65219785;[email protected] GRAPHIC DESIGNER Honess Ho,(65)65219769;[email protected] DESIGN MANAGER Pauline Goh,(65)65219772;[email protected] EDITORIAL PRODUCTIONMANAGER [ PUBLISHINGSUPPORT] Get readyforincreasedcross-borderroadfreight TECHNOLOGIES WAREHOUSE INTRA-ASIA TRUCKING TO ‘SOCIALISE’ PEOPLE NEED WHY LOGISTICS (65) 65219767;[email protected] ISSN 2010-4235 MCI(P)196/06/2014 PPS1672/01/2013 (022917) TRANSFORMATION THAILAND’S NEXT www.LogAsiamag.com September-October 2014 ISSN 2010-4235 www.LogAsiamag.com September-October 2014

CONTENTS

[ EDITOR’S COMMENT ] Driver Shortage 01

[ INDUSTRY NEWS ] 03

[ PORTFOLIO ] Warehouse Technologies 06

[ HANDLING AND STORAGE ] 10 Intra-Asia Trucking 07 Workhorses on the Road 08 Schweppes Voice-enables its Warehouse 10

[ SOFTWARE AND SYSTEMS ] How a Smart Warehouse Saves Money 12 Making Sense of Big Data in Logistics 16

[ STRATEGY AND BUSINESS ] 16 Supply Chain Approach to Halal 20 Why Logistics People Need to ‘Socialise’ 22 Thailand’s Next Transformation 23

[ CEO SERIES ] Building and Sustaining an Enterprise Supply Chain Model 24

[ SPECIAL REPORT ]

Asian Manufacting Awards 2014 27 23

Logistics Insight Asia is published six times a year by Contineo Media Pte Ltd, located at 61 Ubi Avenue 1 #05-17 UB Point Singapore 408941. All rights reserved. Please address all subscription mail to Logistics Insight Asia at the above address, or Fax (65) 6521 9788. Annual air-speeded subscriptions for non-qualified subscribers is S$210. Single copies are available for S$35. Logistics Insight Asia Volume 8, Issue 5. as wellpickand packoperationsfortheelectronics industry. 39,000 sqftHongKongwarehouse, targetedatretaillogistics, ny isaddingafurther39,000sq ftofwarehousingtoitsexisting At theU-FreightfacilityinTsing Yi, thefreightforwardingcompa- Special AdministrativeRegion(SAR). airfreight importandexportdepartments intoonelocationinthe subsidiary inHongKongandhasbroughttheoperationsofits China’s population. regional clusters,andwillultimatelyserveuptotwo-thirdsof from 2015to2016.Morecoldstoresareinthepipelineformajor Province. Thesefacilitiesarescheduledtocommenceoperations ince andonefacilityisunderplanninginChengduSichuan tion atNanjinginJiangsuProvinceandNingboZhejiangProv- operations. Twomorecoldstoragefacilitiesareunderconstruc- new facilityatLangfanginHebeiProvincehasalsocommenced In additiontotheShanghaifacility,SwirePacificColdStorage’s representing aYoYincreaseof24.2percent. reaching morethanRMB100billion(US$16.28billion)in2013- cold chainservices,withfixedassetinvestmentinstorage packaged foodstuffs,Chinaisseeingaburgeoningdemandfor the middleclasses,whohaveagrowingappetiteforqualityfrozen Fengxian inShanghai,China.Drivenbytheincreasingaffluenceof all countriesinAsia. smartphone andcomputermanufacturer,shippingthem to 340,000 itemsamonthforSennheiserandleadingUS-based story sitewitheightloadingdocks,pickingandlocalisingalmost customers. Morethan40arvatoemployeesnowworkatthefour- district, hasinfrastructurelinksandoffersspaceforadditional and high-techindustry.Thesite,locatedinTuenMunindustrial tribution siteinHongKongforitsglobalcustomerstheIT S facility inShanghai Swire buildscoldstorage [ CHINA] T U-Freight expandsHKwarehouse a IT, high-techcustomers arvato opensHKwarehousefor wire ColdChainLogisticshasbuiltanewcoldstoragefacilityat rvato hasopeneda14,000-squaremetrewarehouseanddis- he U-FreightGroupisexpandingtheoperationsofitslogistics the newpurpose-built facilitiesinPenangand Johor. Acrossthe opened inMalaysiabyDHLSupply Chainthisyear,following Once completed,thefacilitywill becomethethirdnewfacility company said. ity toprovidebondedandenvironment controlledstorage,the levels tocaterfordifferentvehicle types,andwillhavetheabil- The two-storywarehousewillhave111loadingdocksofvarying and manufacturing,lifesciencehealthcareportfolios. The ILCwillalsobeusedtogrowDHL’sautomotive,engineering FMCG, technology,andretailmarkets. the growingdemandsoftheirlocalandglobalcustomersin vide modernwarehousingandsupplychainsolutionstocater Featuring theuseofdouble-rampsystem,facilitywillpro- growth strategyandmadetheimportantinvestment.” continue. We’vethereforeidentifiedthecountryaskeytoour impressive growthinrecentyearsandthistrendisforecastto sia said,“ThecontractlogisticsmarketinMalaysiahasshown Prakash Rochlani,managingdirector,DHLSupplyChainMalay- per cent. Supply Chain’swarehousefootprintinthecountrybyover100 ing itthelargestwarehouseinMalaysia,andwillincreaseDHL (ILC), hasafootprintofmorethanonemillionsquarefeet,mak- warehouse, tobecalledMalaysiaIntegratedLogisticsCentre Alam, MalaysiaworthRM100million(US$31.28million).The U India business BDP mergeswithUGLtoboost [ INDIA] conditions. maintenance ofambienttemperatureandcontrolatmospheric pers movingcargoesthataredependentontheregulationand full rangeofservices,andisanimportantdevelopmentforship- additional warehousingaddsfurthervaluetoU-FreightLogistics’ logistics functionstospecialistcompaniescontinuesapace.The Comments thecompany’sCEO,SimonWong:“Theoutsourcingof industry, mainly. with fullairconditioningtoservetheneedsofelectronics in ChuanKeiandplanstoequipthe21,000sqftwarehousing It willalsooccupythecompletefacilitywhereithasapresence D largest warehouse DHL isbuildingMalaysia’s [ MALAYSIA ] tools. BDPSmart Suiteofshippingtransaction/trackingmanagement benefit fromaccesstoBDP’stechnologysuchastheweb-based tional gateway,seaportandairportinIndia.Customerswillalso bound logisticsandcustomsclearanceineverymajorinterna- The integrationwithUGLwillmeandedicatedinboundandout- ed byateamofmorethan200logisticsprofessionalsinIndia. As aresultoftheintegration,BDP’scustomerswillbesupport- merged withitslong-timelocalpartnerUniqueGlobalLogistics. S-based transportandlogisticsfirmBDPInternationalhas HL SupplyChainisconstructingamegawarehouseinShah 03 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ INDUSTRY NEWS ] 04 [ INDUSTRY NEWS ] LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER 2014 Infrastructure on thegroundwillenableustogrow thesuccessful hubs andpetrochemicalmanufacturing zonesacrosstheworld. significant stepaswecontinue to buildourbusinessinlogistics John Sutton,SuttonsGroupCEO said:“Ourlatestacquisitionisa industry. supply chainandlogisticsservices tothechemicalmanufacturing pore. OperatingfromthreelocationsinSingapore,ISLGprovides S Suttons acquiresISLG P in Tuas Pan Asiaopenswarehouse [ SINGAPORE] U lead UPSMalaysia UPS appointsTHLimto increasing logisticsrequirements. print by200percent2020inanticipationoftheregion’s ply chainexperts.DHLplanstoexpanditswarehousingfoot- multi-purpose facilities,aswellhiringcloseto500moresup- rent transportfleetby50trucks,constructingsixadditional Malaysia byopeningsixbranchnetworks,expandingthecur- next twoyears,DHLSupplyChainaimstogrowitspresencein in wages. skilled jobstohigher-skilledroles,withacorrespondingincrease velopment framework,willseeashiftof40percentlower- quired foroperatingtheASRS,combinedwithanewcareerde- rise tohumanerrorandwaslabour-intensive.Theskillsetsre- need foroccasionalsupervision.Previously,manualhandlinggave The fullyautomatedsystemcanruncontinuouslywithonlythe in spacesavingsofabout30percent. It canstoreupto700,000differentspareparttypesandwillresult expected toboostproductivityby70percent,thecompanysaid. tures anautomatedstorageandretrievalsystem(ASRS)whichis Bay Drive,Singapore.The40,000-squaremetrewarehousefea- versant inEnglish,BahasaMalaysia,MandarinandCantonese. agement fromOklahomaStateUniversityintheUS.Heiscon- He holdsaBachelor’sdegreeinIndustrialEngineeringandMan- cities to33. sion offully-controlledoperationlocationsinChinafrom23 Clark, Philippines,toShenzhen,China;aswelltheexpan- jects includingtherelocationofUPSAsiaPacificHubfrom in Singapore,andduringhistenure,spearheadedseveralpro- vice presidentofstrategicplanninganddevelopmentbased Southern China.From2010to2013,Limwasalsotheregional gineering forUPSAsiaPacificandgeneralmanager and countryroles,includingvicepresidentofIndustrialen- Lim joinedUPSin1990,andhassinceheldvariousregional Malaysia. sponsibility forallexpressdeliveryandlogisticsactivitiesUPS UPS Malaysia.Lim,aveteranofover20years,assumesre- uttons GrouphasacquiredISLogistics(ISLG)inSinga- an AsiaLogistics(PAL)hasopenedanewwarehouseatTuas PS hasappointedTzeHsien(TH)Limasgeneralmanagerof krabang, Thailand. Con-way Inc.,hasopenedamulti-client warehousefacilityinLad- of ChinesetransportcompanyHanchiLogistics. months. InOctober2013,thecompanycompletedpurchase This isthesecondacquisitionSuttonshasmadeinlast12 and services.” with anevenwiderrangeoflogisticsandsupplychainproducts business wealreadyhaveinSingaporeandprovideourcustomers ended. lively debatethatcontinuedevenaftertheeventhadofficially Chain ManagementSociety.Hispresentationwasfollowedbya Joe Lombardo,advisoryboardmemberoftheLogistics&Supply and anexchangeofthoughtsideas,thesessionwasledby October. Setinarelaxedatmospheretoencourageinformality giSYM CEOSerieswillbeheldatHardRockCafeSingaporeon18 be heldleadinguptoLogiSYM2015.ThefirstsessionoftheLo- A numberofconferences,named“LogiSYMCEOSeries”,willalso CEO Series L All setforLogiSYM2015 M in Ladkrabang Menlo setsupnew warehouse U facility forSeagate UPS openscontractlogistics [ THAILAND] management torealworldimplementation. at bridgingconcepts,practiceandtechnologyinsupplychain learn newskillsthattheycanapplyintheirprofession.Itisaimed to senior-levellogisticianssharerealsolutions,network,and University ofSingapore.Thesymposiumwillbringtogethermid- in SoutheastAsiawillbeheldfrom4-5March2015attheNational help theirbusinessestrademoreeffectively.” mitted tosupportingallourcustomerswithsolutionsthatcan lished operationsinThailandover25yearsago,UPSremainscom- Edmund Lo,managingdirectorofUPSThailand.“Havingestab- long-term commitmenttosupportinggrowthintheregion,”said “This facilityisfullyoperatedbyUPSandatestamenttoour needs ofourglobalcustomers.” movements andoptimisingsupplychainefficiencytomeetthe will supportourbusinessactivitiesbysimplifyingglobaltrade drive businessandthedemandischangingrapidly.Thisfacility Technology (Thailand)Ltd.said,“Flexibilityisakeyofharddisk Piangruetai Sivaratana,vicepresidentofKoratOperations,Seagate existing storagecapacity. The warehousewilloperatearoundtheclockanddoubleSeagate’s services, andtechnologysolutionstothedatastoragecompany. will providesmallpackagedelivery,freightandcontractlogistics Technology. SituatednexttoSeagate’sKoratplant,thewarehouse noen, Nakhonratchasima,ThailandthatisdedicatedSeagate ogiSYM2015, adedicatedsupplychainsymposiumandsummit PS hasopenedacontractlogisticsfacilityinAmphurSung- enlo Logistics,aUS$1.5billionglobal logisticssubsidiaryof Menlo officials state that the new 9,747-square metre facility in- creases the company’s total operating space in Thailand to 32,528 square metres. The facility will employ more than 25 employees and was chosen in part for its proximity to the points of distribu- tion for international export and domestic distribution.

“The decision to open this new facility was driven by increased consumer goods customer demand in the region,” said Desmond Chan, managing director, Menlo Logistics South Asia. “Our abil- ity to provide outstanding logistics services specific to consumer goods manufacturers, including special storage and distribution, Visit us! after-market parts distribution and inbound parts management, inter airport china 2014, Beijing, China positions our company to successfully meet that demand.” October 15 – 17, 2014 German Pavillon Currently, 65 per cent of the new facility’s space is committed for use by manufacturers of consumer goods products in the consum- er goods industry, leaving approximately 3,251 square metres of space available. Citing the attractiveness of the location, Menlo officials feel certain the space will soon be filled through existing customer growth.

[ VIETNAM ] CEVA opens Hanoi office

CEVA Logistics opened a branch office in Hanoi, located at Cau Giay District. The new office will handle a full range of supply chain and logistics services, including airfreight and ocean freight, contract logistics, warehousing and distribution, local transporta- SOME THINK tion and other domestic value added services.

Nelson Chow, MD for Vietnam said: “We are excited to tap the op- DELIVERY portunities for growth in North Vietnam. The Hanoi branch office is jointly set up with CEVA’s local partner, ITL Group, a market leader in transportation logistics and aviation services in Vietnam ERRORS ARE and Indochina.”

[ WORLD ] INEVITABLE. Digital logistics market to reach US$12.96B by 2019 WE THINK The digital logistics market is expected to grow from US$8.78 DIFFERENT. billion in 2014 to US$12.96 billion by 2019, at an estimated CAGR of 8.09 per cent from 2014 to 2019, according to Marketsand- Markets’ “Digital Logistics Market by System by Application & by Service-Global Market Forecast & Analysis (2014-2019)”. The key Running an effi cient warehouse center makes a big growth factor driving this impressive increase is the need to move diff erence to profi tability and customer satisfaction. information along the supply chain faster from manufacturer to That’s why many leading brands put sortation systems customer. from BEUMER and Crisplant at the heart of their supply chain. Through operational insight and analysis, BEUMER Digital logistics is expected to become a major component of Group is able to deliver complete automated material enterprise operations for both achieving and measuring ROI and handling systems that fi t seamlessly into your process. ROA. Two other trends affecting the overall growth of digital lo- Off ering exceptional speed, capacity and accuracy, our gistics is increased adoption of RFID systems for tracking and technology makes a diff erence to your customers, your traceability and the increased focus on data transfer along the brand and your bottom line. supply chain. For more information, visit www.beumergroup.com

Standardising labelling and adopting higher-quality standards that are both industry specific and internationally accepted will help companies boost supply chain viability through global markets while expediting service locally at the same time. Between cost savings and increased profitability, firms will see major advantag- es in these efforts. 06 [ PORTFOLIO ] LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER 2014 WAREHOUSE TECHNOLOGIES TILT-DOWN BULKCONVEYOR SPACE-SAVING STORAGE SYSTEM face, thereisa20-seconddelaybefore pallet toremovefromtheorderpicking and redesignedrollers.Onliftingthefirst rator withabuilt-in“timeplus”function The systemfeaturesarobustpalletsepa- tion. sonnel; andreducedenergyconsump- to ensuresafeflowofvehiclesandper- separate loadingandorderpickingaisles sensitive products;shortertraveltimes; thus reducingwasteoffreshanddate- rate stockrotationusingFIFOprinciples, of stockwithminimumhandling;accu- include spacesavings;fasterthroughput down to-28°C.Thesystem’skeybenefits ent, chilledandcoldstoreenvironments and distributioncentres,includingambi- installed inmanystorageapplications let RollerFlowstoragesystemscanbe throughput ofstock, Providing increasedefficiencyandfaster on average,upto50%offloorspace. than conventionalrackingandcansave, The systemisthereforemorecompact of loadingthesystemandorderpicking. quiring onlytwoaislesforthepurpose use ofavailablewarehousespacebyre- A palletflowinstallationmaximisesthe critical partofwarehousemanagement. Thus, monitoringoverheadcostsofisa logistic costsand7%productcosts. Generally, storagecostsconsistof40% ing partcontactingmaterial,resulting rugged innerscrewistheonly mov- vents theseparationofblends. The tion ofmaterialbeingconveyed pre- tamination, whilethegentlerolling ac- tube preventsproductandplant con- large pellets.Theenclosedconveyor ranging fromsub-micronpowdersto veyor thattransportsbulkingredients hinged lid,feedsaflexiblescrewcon- applications. Thehopper,whichhasa overall sizeparametresoftheindividual down height,dischargeoverhandand according tothedischargeheight,tilt- corners. Eachunitiscustomconfigured vre throughnarrowaislesandaround the castor-mountedframetomanoeu- tures areducedfootprintwhichallows for removaloftheflexiblescrew.Itfea- tight spacesandprovideeasyaccess down portablebase Flexicon’s bulkconveyorwithtilt- canfitthrough Interroll’s Pal- that pack;cake;smear;seize;plug; orflu- flowing bulkmaterialsincluding: products also availabletohandlefreeand non-free- reliability. Arangeofspecialised screwsis in reducedmaintenanceand increased leading palletisremoved. lated palletscannotbereleaseduntilthe the separatorstopdevice,accumu- requires minimummaintenance.Dueto separating devicefunctionsreliablyand pedal systemandgenerallyensuresthe operation evenwithlightpalletsonthe ing sideliftsup.Thisensuressafetyin is noriskthatthepedalatunload- transferred tothepedaldevice.There lets ontheseparatorstopdeviceisnot The pressureoftheaccumulatedpal- restricted visibility. useful whenworkingathighlevelswith height restrictionforthedriver,whichis system, thereisnolongerapalletliftup is released.Asaresultofthepedal-less the palletsafelybeforesecond driver allthenecessarytimetounload pallet inline.Thisgivestheforklifttruck the separationdevicereleasesnext industrial orsanitarystandards. coatings andisstainlesssteelfinished to structed ofcarbonsteelwithindustrial idise. Themobileconveyorframe iscon- GUARD PALLET RACKING -40°C. ing clearances.Itcanoperatedownto sion soasnottoreducesafeoperat- solute minimumbayandaisleintru- fit standardracking,andfeaturesab- The guardmeasures100mmwideto es arediffusedthroughoutitslength. the palletrackaredeflectedandforc- tough foaminnerdiffuser,impactsto ty polyethyleneouterdeflector,anda guard’s roundedshape,ahigh-densi- the needforfurtherfixings.With to existingornewrackingwithout ries. Toinstall,simplycliptheguard ators fortheirsafeoperatingbounda- mechanical handlingequipmentoper- and shapeprovideaclearindictorto ing damage.Itsconspicuouscolour warehouse safetyandminimiserack- safety productdesignedtoincrease Solution Providersisapalletracking Rack ArmourfromMultistorStorage trucking intheregion. MORTEN DAMGAARD to acceleratetake-upofinternationaltruckingservices. and throughimprovedcustomsprocedures,areneeded investments inroadinfrastructure, both in physical terms The intra-Asiatradecorridorisafastgrowingarea.Huge TRUCKING INTRA-ASIA ocean serviceoptions. viable optiontoofferroad/airorroad/ the year,andtruckinggivesprovidersa capacity constrainedatcertaintimesof ocean freight.Somelocalmarketsare as analternativeoptiontoairfreightand In ASEAN,truckingisincreasinglyseen ocean freight. and aspeedadvantagecomparedto compared toairfreightoncut-offtimes This modealsooffersmoreflexibility or asatime-definitedoor-to-doorservice. trucking aspartofamultimodalsolution and security,theabilitytooffer because ofimprovedshippertransparency increasingly attractivetocustomers Cross-border roadfreightisproving become aviablealternative. ment ofrailinfrastructure,truckinghas air freightcapacity,andpoordevelop- ture, includingportcongestion,lackof in Asiaarefacingissueswithinfrastruc- Given thatsomeoftheemergingmarkets countries inSoutheastAsia. works duetotradeexpansionbetween ridors developalongthemajorroadnet- growing intheregionaseconomiccor- challenges, but thelackofacontiguous Every regionhasitscross-border trucking transit timeisquicker. door, thecostislowerthanairfreight and As theshipmentistransported door-to- access totheThailandandChina borders. in Cambodiaasaresultofimprovedroad established inVietnam,andmorerecently Manufacturing clustershavenowbeen Shenzhen, Chinabyroad. are beingtransportedfromVietnamto For example,electroniccomponents number ofconsumersintheregion. the improvedroadaccesstogrowing along thehighwaystotakeadvantageof Manufacturing clustersarebeingsetup FREE TRADEAREA D emand forlandtransportationis shares hisinsightsoncross trucking would significantly lower. would becomenegligibleandthe costof and airfreightbetweenmajor cities the timedifferentialbetween trucking into China,andborderservices improve, network connectingSoutheast Asiaand there areimprovementstothe highway use internationaltruckingservices.If and supporttheriseinshippersthat to reducewaitingtimesatborders, improved customsproceduresinorder In Asia,thereisclearlyaneedfor strong growthasoceanandairlanes. Asia truckingvolumesshowthesame challenges, itwilltaketimebeforeintra- number ofcountrieswithinfrastructure The situationisimprovingbutgiventhe adds timeandcosttomostshipments. highway networkinASEANparticularly -border incremental improvementsyearonyear. so everyoneisoptimistictherewillbe barriers thatinhibitcrossbordergrowth, the wayforwardtoremovingtrade The ASEANFreeTradeArea(FTA)ishopefully common infrontierandemergingmarkets. bureaucratic andinfrastructural,whichare The majorproblemsthatexistareboth country opensup. to tapontheopportunitiesas the representative officeinMyanmar and SoutheastAsia.Italsohas a border truckingservicesinChina provider Agilityofferscross- Asia. Globallogisticsservices Agility MalaysiaandSouthEast Morten Damgaard isCEOof 07 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ HANDLING & STORAGE ] WORKHORSES ON THE ROAD Ground freight is steadily gaining momentum in Asia. One factor to ensure that this

[ Handling & Storage ] [ Handling & Storage growth can continue is on-time delivery, which can be achieved by picking a reliable truck and a “good” driver. Denice Cabel reports.

In recent years, cross-border trade be- Volvo said it invested more than US$3 bil- DESIGNED FOR LOGISTICS tween countries in Asia – noably China lion and 14 million engineering hours in Among the three new product ranges, and the ASEAN countries of Singapore, product development alone. Volvo FH and Volvo FM are most ideal for Malaysia, Thailand, Myanmar, Cambodia, logistics services. The Volvo FH, for in- Vietnam and Laos – has registered tremen- Volvo’s proprietary Dynafleet system al- stance, features an all-new cab optimised dous growth. Because of this trend, ground lows following up on fuel consumption for long haul challenges. It is built with the transport of goods as an alternative for air- over time, and – together with Volvo driver in focus, and it is wired to make op- freight and sea freight forwarding is also Trucks Driver Training – coach drivers into erations more efficient, more productive, gaining momentum. further improving their fuel saving skills. safer and more comfortable for long dis- tance transport. One important factor to ensure that this The new range also introduces features growth can continue is on-time delivery, such as the Volvo Dynamic Steering (VDS), The flexible all-round player Volvo FM is which can be achieved by picking a reliable which delivers “exceptional” handling – designed for the urban environment and truck and a skilled driver. Obviously, man pretty much like a car’s. At low speeds, regional long-haul, and thereby meeting and machine are subjected to a lot of stress even a heavily loaded truck is easily ma- Asia’s fast-paced urbanisation. It is a ver- when it comes to delivering on time. noeuvrable that it can be steered with little satile truck that can be tailored for each effort. specific need of the customer’s business. Keeping this in mind, Volvo Trucks has launched a new range of trucks in Asia Telematics also enables the workshop to The expectations for the new truck range this year. The completely renewed prod- monitor key components, such as fuel are high, that’s why Volvo Trucks said it uct portfolio, comprising the Volvo FH, the usage, wear and tear conditions, driver’s is stepping up overall customer service. Volvo FM and the Volvo FMX, is the most momentum, etc., thus making it possible Volvo Trucks is currently present in over modern Volvo line-up as of yet, featuring to reduce maintenance needs and avoid 20 markets in Asia with more than 200 innovations in all crucial areas: from fuel unplanned stops, letting the customer dealerships and workshops. efficiency, safety to maximising uptime. fully focus on running their core business. DRIVER-FRIENDLY BRAND Logistics Insight Asia sat down with Valery Muyard, General Manager, Volvo Trucks Singapore, to discuss how businesses can leverage in-truck technologies to optimise their transport operations.

How long have you been working in high. Customers are looking for trucks that Volvo? are efficient and reliable so I would really I have been in my current role in Singa- say that this is good for us as we are able pore for nearly a year, but I’ve been in to provide these requirements. the Volvo Group for more than 13 years. Previously I was based in Thailand, and How can businesses leverage in-truck also in Volvo’s other offices such as technologies to cut costs? Sweden, China, UK, and Germany. There are two things that are “biting” the trucking industries: particles & NOx emis- trucks are using less and less fuel each Can you share some of the challenges sion and fuel consumption (CO2). Achiev- year. It’s a trend which is quite impor- you have faced in the past year work- ing low particles & NOx emissions was a tant, because fuel efficiency translates 08 ing in Singapore? challenge but we have progressed so much to lower carbon emissions as well as The market here is interesting. Custom- [on this]. We have achieved tremendous lower operating costs. ers here demand very efficient transport. progress in lowering emissions, which is Singapore is one of the countries where helping the environment as well as peo- During truck selection, what features you can enter and come out of the air- ple’s health. The other challenge is fuel do companies usually look for? Is it port in 10 minutes, so efficiency is very consumption – but I would say that our purchase cost, fuel savings, or cus- INSIGHT ASIA SEPTEMBER-OCTOBER 2014 LOGI S TI CS INSIGHT ASIA SEPTEMBER-OCTOBER [ VolvoFMcabin] employees. employees. their retain helpscustomers drivers, the that hasmanyadvanced featurestohelp shortage ofdriversandhavingatruck havea really We tractinggooddrivers. easy todriveandthisisimportantinat- that theirdriverswant. Ourtrucksare Finally, customersarelooking fortrucks fleet inreal-timewith thistechnology. driver. Youcangetafullpictureofthe andthe office ingmessagesbetweenthe fuel consumption, andallows forsend - and allows following uponthetruck’s ware which comesinstalledfrom factory tions. WealsohavetheDynafleethard- in Singapore where thereareroadlimita - especially important is This truck. your sensors totellhow heavytheloadisin withload equipped are trucks our ample, ex- in termsoftransportcapabilities.For them for do can trucks knowwhatthe wantto customers that, Secondaryto and resalevalue. fuel cost,uptime consumption, repair of ownershipincludespurchasecost, So cost good. value willbe so theresale long time a willrun for trucks our that know They to ourcompetitors. pared when com- uptime better sumption and fuel con- will achievelower they because know thatcustomers findus beneficial we but one, not thecheapest we are Clearly countries. inall have presence we and world, in the premium a brand is seenas Volvo some years. value after the resale and running truck and each owning of including thecosts – ership of own cost is thetotal for looking are think thefirstthing I thatthecustomers tomer service? - of the operations, but 30 per cent remainscent per 30 but operations, the of centper 70 willdo truck The operations. Well thedriver alsoplaysabig partofthe part intruck’soverallperformance. a major technology plays It seemsthat [ VolvoFM] [ VolvoFHandFH16] we givecustomers premiumservice. sopremium brand, a and we are trucks premiumhave way.We the themall and aservice thatwill takecareof a completepackage.Theybuy atruck buythey trucks, Volvo buy they When trucks overother brands? Why shouldcompanieschoose Volvo Sweden. ia, butallourtrucksmainly come from Austral- in plant assembly an have We all ourtruckscome fromthoseplaces. Belgium,soin is other the Swedenand two mainplantsintheworld, oneisin We manufactureinSweden. We have and assembleyourtrucks? manufacture,design, you do Where side airbags, etc. bumper ontrucks,firsttointroduce underrunfront install to first the are belt; weseat inventedthree-point the reputation onselling safercars.We ronment, andsafety.Volvobuiltits Volvo’s corevaluesarequality,envi- ful ontheroad. his truckandtendstomemorecare- aboutcares also fuel his about cares togethera driverwhoIt goesbecause erally agood driver isasafedriver. good driverandabaddriver. Andgen - abetween efficiency cent fuel 30 per ofdifference a see can you Sometimes profitability.on impact major a make fuel –evenjust1percentitwill cent of1 per save you if realise that wholehaveand usage.Youtotruck, ing tocoverthefullscope:driver, try- are steeringwheel.We the behind easierlife technologiesto maketheir emergency braking systemsandother safe trucksequippedwith reliable developingby drivers the help also [one workshop]month.least perWe them safety,etc.Wetrytohaveat teachand drivers for courses ment We alsoregularlyprovide refresh- companies. ofbottom line also helpingthe weare profitability. Throughthisprogramme, efficiency, reducecostandincrease good driving practicestoimprove fuel ofimportance the about stakeholders fleet managers,customersandother is partofoureffortstoeducatedrivers, it hasbeenrunningformanyyears.It petition inAsia2007,butEurope driving techniques.Westartedthiscom- highest fuelsavings throughoptimised competition fordriverstoachievethe ways. Oneiswe havetheFuelwatch, a actively with thedrivers indifferent the driver.WeatVolvoareworking

09 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ Handling & Storage ] SCHWEPPES

[ HANDLING & STORAGE ] [ HANDLING & STORAGE VOICE-ENABLES ITS WAREHOUSE Iconic brand Schweppes has been delivering premium quality non-alcoholic beverages for over 150 years. It boasts of 11 manufacturing sites and 12 distribution centres across Australia. How does Schweppes successfully manage its supply chain? Letʼs fi nd out.

First pioneered in Geneva in 1783 by customers nationally. One of its largest “We installed Vocollect voice solution by Jacob Schweppes, the remarkable process distribution centres, the Archerfield site Honeywell to optimise our supply chain of capturing and bottling bubbles was in Queensland, services a large majority of performance due to the ease with which it brought to Australia in 1850. The first the state’s market. Over 40 employees pick could be implemented and trained across Schweppes factory was built in Sydney in up to 16,000 cases daily, which are then the entire workforce,” said Murphy. “The in- 1877. delivered to more than 5,000 customers. tegration of the voice project occurred very quickly”, said Murphy, “hence providing a Today, Schweppes Australia is a beverage Until recently, the Schweppes Archerfield significant return-on-investment within a powerhouse, boasting 1,800 employees, DC operated using a paper-based picking short timeframe.” 11 manufacturing sites and 12 distribution system and the process of planning each centres across the country. It manufac- load could take a worker up to 15 min- Due to the automated nature of the voice tures popular drinks including Schweppes, utes. As many of the product descriptions solution, Schweppes’ workers can be SOLO, Cottee’s, Spring Valley, Pepsi and are similar, workers could easily misread trained in a much shorter timeframe. They Gatorade. information resulting in delivery errors. can now set up voice templates for new Stock tracking also was made difficult due operators in 10 minutes, and a worker can Schweppes Australia distributes and deliv- to multiple stock keeping units (SKUs) and be trained on the product range within 20 ers beverage products to more than 30,000 pallets being stocked at each picking loca- minutes. This contrasts to the old system tion. where it would take up to two weeks before an operator could be fully confident to pick In order to combat the inaccuracies and in- unsupervised. efficiencies caused by an outdated, paper- based picking system, Schweppes Australia PICK BY VOICE decided to implement a fully-integrated With the Vocollect voice solution, a worker voice-directed solution. is provided with a pallet label and then gives and receives verbal prompts which Logistics Insight Asia spoke to Danny Mur- direct them to the correct picking location. phy, Schweppes Australia’s national logis- The location is confirmed by the use of a tics execution manager, on what they have check digit upon arrival – removing any done to upgrade their Archerfield distribu- confusion about location. The voice system tion centre. then prompts the worker as to how many cartons to pick, and the worker repeats DITCH THE PAPER the quantity back to the system. Accord- According to Murphy, they did so much ing to Mike Heide, Schweppes Australia’s more than just replace paper. The com- Queensland distribution manager, within 10 pany’s goal was to build a fully-integrated the first week of using the voice system, system that would eliminate the double their carton picking errors were reduced by handling of pallets and non-value add re- as much as 90 per cent. petitive tasks, as well as provide their man- agers and supervisors with visibility in the Implementing the voice solution established workplace, which creates a safer place to an automated system that resolved the work for pickers. issue of product identification, previously INSIGHT ASIA SEPTEMBER-OCTOBER 2014 LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER force based on this information, rather than force basedonthisinformation,ratherthan ning ofthedayandflexourcasuallabour “We cangaugetheworkloadatbegin- higher accuracyinordercompletions. er, NathanLucinsky,hasalsowitnessed Archerfield’s distributioncentremanag- during theworkday. tivity reportforeachworkeratanypoint button toaccessacomprehensiveproduc- paperwork daily,theynowsimplypressa ers usedtomanuallyrevieweachworker’s work theyhavecompleted.Wheremanag- is picking,theirpickrate,andhowmuch ment canclearlyidentifywhateachworker under thenewsystemmeansmanage- ability ofaccuracyandproductivityfigures visibility intoeachworker’sshift.Theavail- A voicesolutionalsoprovidesreal-time per cent. achieved apickrateincreaseofaround20 product replenishment,whichhasalready workers too,particularlywhenitcomesto Heide expectsproductivitybenefitsforthe and PepsiMax. markedly similarpackaging,suchasPepsi ucts inthewarehouse–someofwhichhave workers hadtoidentify400differentprod- house. Underthepaper-basedsystem, a majorchallengefortheArcherfieldware- advertising solutionstocaterallyourneeds. to manufacture consumers, withspeciallydesigned products, informationand financesfrom suppliers for theentire supplychain from theflowofmaterials, Logistics InsightAsiaprovides abroad-based coverage Daily Website Daily Update andWeekly E-Newsletter D Bi-monthly IssuesinPrintandE-Book Bi-monthly B Over 13,000Quali O [email protected] Arthur Ong,AccountManager, +6565219767; opportunities, pleasecontact For moreinformationonadvertising Searchable Archive Searchable S fi ed Subscribers edSubscribers as Schweppesbecauseitallowsworkers’ Voice iswell-suitedtooperationssuch added Murphy. er workenvironmentforouremployees,” at ourpickfaceandweareprovidingasaf- accurate. Wehavestrongerbatchcontrol ment system,whichismoreefficientand were abletoactivateareal-timereplenish- “As aresultofimplementingvoice,we tegration withallthewarehousesystems. the voicesolutiontobeseamlessin- Murphy considersthebiggestbenefitof our customerdeliveries,”saidLucinsky. system hasallowedusgreateraccuracyfor mine howmuchworkisstillrequired.The waiting fortheendofdaytodeter- Connecting theSupplyChain

CONTROLLING VOLATILITY IN LOGISTICS

BUSINESS SENSE OF THE SUPPLY CHAIN

MAKING RIGHT CHOICES

EVOLVING SUPPLY CHAINS

Embracing Change In The Business Landscape as nottobedistracted. all instructionsviaawirelessheadset,so pick sheetwhilstdriving;theynowreceive Drivers nolongerneedtorefertheir occupied withpaper,scannersorlabels. hands tobefreeforpicking,ratherthan jobs easierandsafer. the latesttechnologiesthatwillmaketheir agers toensurethattheyhaveaccess valuing theinvestmentmadebytheirman- also incrediblypleasedwiththesolution, The workersattheArcherfieldcentreare accurate deliveries. tomer, whobenefitswithquickerandmore efit thatisultimatelypassedontothecus- site’s supplychainperformance–aben- visibility andsafetyhaveenhancedthe improvements inefficiency,productivity, implementation ofthevoicesolution.The tre isnottheonlywinnerfollowing Schweppes Archerfield’sdistributioncen- is safeastheydrivearound. visually checkingtomakesureeverything paper sotheirheadsareupandthey sheet. Underthenewsystem,thereisno their headsdownlookingatpick would drivearoundthewarehousewith Under theoldsystem,forkliftoperators DRIVER SAFETY www.logasiamag.com/subs ga

ISSN 2010-4235 MCI (P) 196/06/2014 PPS1672/01/2013 (022917) si Sign up for your am

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s 11 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ HANDLING & STORAGE ] HOW A SMART

[ HANDLING & STORAGE ] [ HANDLING & STORAGE WAREHOUSE SAVES MONEY Left frustrated by inaccurate stock levels or unhappy with the time it takes to deliver customer orders? Looks like a job for a smart WMS. By FRANS KOK.

The market for warehouse management system (WMS) is predicted to expand at a compound annual growth rate of 8.2 per cent across the Americas, Asia-Pacific, Eu- rope, the Middle East and Africa over the next three years, as per a recent research by a leading technology research and advisory company. The key market drivers for WMS include an economic pace that continues to pick up and push companies to spend more on advanced technology, the ongoing need for more streamlining and visibility in the distribution centre, as well as the fact that many existing solutions are ageing and need to be upgraded or replaced.

Other factors include the rapidly chang- ing clients, who demand better service and more information. Thanks to the speed of the Internet available today, clients have be- come used to getting everything instantly. One cannot ignore that the demand from small- and medium-sized businesses that [ There is a growing requirement for bigger space, but the high cost halts companies from expanding their warehouse. ] are adopting WMS solutions to help them improve efficiency and stay competitive in or the solutions – to run efficiently. To be- The challenge with using manual-based the market is playing an instrumental role. gin with, it cannot be ignored that a major stock is that the staff can only search by one factor affecting the industry as a whole is particular means, such as the product name According to the Logistics Management the ageing market for warehouse labour, or type, which halts productivity and stalls 2013 Technology Usage Study, 50 per which creates the issue of worker scarcity efficiency even longer. Without appropriate cent of logistics operations are currently and consequently increases cost. In labour- systems in place, it becomes almost impos- using WMS — the highest percentage of intensive industries such as warehousing, sible to track goods effectively. As stock vol- any supply chain software solution. The staffing is typically the largest single vari- ume starts to go up, manual or paper-based survey also revealed how 43 per cent of able cost. Warehousing jobs are physically systems simply cannot keep up with the companies admitted that their use of sup- demanding, thus they are being shunned constantly changing status of goods that ply chain software has changed in the past by young workers. have been used, sold or returned. two years. Only 5 per cent said their us- age has decreased, while a fairly healthy 23 On top of it, there is always the issue of up- OPTIMISE SPACE per cent said that they are currently using dating and maintaining data across all sites In today’s business environment, ware- more software packages than they were to ensure not only consistency and accura- houses are expensive to operate – the 12 two years ago. cy, but also smooth accessibility at all times. cost of the land, machinery, building, and In addition, the volume of goods to handle labour can amount to a significant sum of REDUCE LABOUR also tends to double. Twice as many outlets money, adding to the list of burden cur- Even though the concept of a warehouse may mean wider range of product choices rently shadowing companies. There is a is simple theoretically, the task in reality for customers, but it also means longer growing requirement for bigger space, but is complex and enormous, requiring the browsing periods for the staff. The longer the high cost halts companies from ex- right mix – whether the people, systems the time, the fewer orders they can process. panding as they wish. INSIGHT ASIA SEPTEMBER-OCTOBER 2014 LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER [ Themostpowerful partofaWMSishavingcompletevisibility ofinventorylevelsinthewarehouse ] the supplychain. tion technologies,makingitacorepartof an integrationofhighlyevolvedautoma- known, themoreadvancedwarehouseis tions ofawarehousearecommonandwell the warehouse.Whiletraditionalfunc- track ofalltheactionsoccurringinside tomation, whichprovidestoolsforkeeping One ofthewaysisthroughwarehouseau- quality level. also maintaining,ifnotimproving,their tion thatcanhelpthemsavecostswhile companies tocomeupwithanewsolu- erations. Thesechallengeshaveforced tunities withinadequatewarehouseop- pectations andseizenewmarketoppor- They cannotaddressrisingcustomerex- ufacturers anddistributorsisatrisk. global, theprofitabilityoftoday’sman- manding andsupplychainsincreasingly As customersbecomeincreasinglyde- the competition. warehouse operationsandstepaheadof embrace automationtotransformtheir retailers areleadingthegrowingtrendto dustries thatrelyonautomatedsolutions, nies. Asanexample,amongthemanyin- result inhugefinanciallossesforcompa- at thesametimewhengoodsarrivecan the goods.Ashortageofwarehousespace always availableatthetimeofarrival other handensurethattheneededspaceis They mustavoidexcessspacebutonthe becoming moreintricateanddemanding. The roleofwarehousemanagersisalso warehouses ordistributioncentres–also potential. Thecrucialbusinessareaofthe house managementsolutionstotheirfull many companiesstilldonotuseware- Despite thecircumstances,eventoday, YOUR WAREHOUSE DON’T ISOLATE the bestreturnoninvestment. the supplychainecosystem,inordertoget agement systemalongwithotheragentsin that companiesusetheirwarehouseman- the supplychainprocess,itisimportant With thewarehouseascentralhubof fort stopsthere. Unfortunately, formanycompanies,theef- improving efficiencywithinthewarehouse. just thefirststepsinreducingcostsand tion ofbillingandaccuratestockingare proper inventorymanagement,automa- And optimisedutilisationofresources, optimisation potentials. of transparencyandconsequently,missed Such isolationinevitablyresultsinaloss customs, transportandserviceproviders. areas suchasprocurement,dispatch, with operationsandsystemsfromother of thesupplychainandnotfullyintegrated chain” –isalsooftenisolatedfromtherest referred toasthe“heartofsupply [ Withoutappropraitesytemsinplace,itbecomesalmostimpossibletotrackgoodseffectively] efficient usageofbothcostandresources. and thusresultinginmoreeffective staff todifferentjobsanddepartments, requirements accordingly,re-assigning a result,companiescanadjusttheirstaff based onamastermanpowerschedule.As and assignmanpowertooverseethework, late thetimerequiredforpackingorders more, thesystemshouldbeabletocalcu- and transportationdocuments.Further- the barcodes,pickingnecessarytickets guidelines fortheexportandgeneratesall system shouldbeabletopreparethelegal remarkable. Onceanordercomesin,the The potentialbenefitsofaWMSsystemare line ordersalike–tonamejustafew. the distributionofstoredeliveriesandon- reliable demandforecasting,andcaterfor and materialhandlingsystems,support ment, facilitatedifferentpickingstrategies site andmulti-clientinventorymanage- Today’s WMSmustoffermulti-level,multi- representative is selling the most. representative is sellingthemost. too, astheywillbeabletoidentify which ment canmakebetterbusiness decisions accurate stockknowledgemeans manage- offering abettercustomerexperience, an other areasofthesupplychain.Aside from the businessintelligencecanbe applied to practices inplacebeforelookingathow tlenecks. Itisvitaltohavethesebasicbest er continuousflowofgoodsandfewerbot- minimum requirement,resultinginaprop- ventory levelsareclosetofallingbelowthe tifications tosuppliersandcarrierswhenin- A goodWMSisabletosendimmediateno- quired inordertorespondemergencies. els, keepingonlytheminimumamountre- panies willbeabletoreduceinventorylev- and whatgoesoutonadailybasis,com- in thewarehouse.Bytracingwhatgoes ing completevisibilityofinventorylevels The mostpowerfulpartofaWMSishav- COMPLETE VISIBILITY 13 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ HANDLING & STORAGE ] Beyond better mechanical solutions, to- day’s automated warehousing solutions are all about the software. In order to take advantage of the capabilities of the advanced equipment, it is important that the companies first learn new levels of the software itself.

The right software should provide com- plete visibility of inventory levels in the warehouse and of goods in transit. Full transparency of incoming and outgoing or- [ HANDLING & STORAGE ] [ HANDLING & STORAGE ders enables companies to consolidate and time their transports and reduce inventory levels, keeping only the minimum amount required to respond to emergencies. A good WMS promptly notifies suppliers and carriers when inventory levels are close to falling below the minimum requirement, facilitating a continuous flow of goods and saving money. [ Automated storage and retrieval machines weigh a lot less than aisle trucks ] Warehouse operators should also look for end-to-end traceability of order items and The ultimate choice of WMS depends on floor. Order picking may account to more returns management capabilities as es- a company’s individual requirements and than half of warehouse cost, and process- sential functionalities. This is particularly short-term, mid-term and long-term goals ing customer orders quickly and precisely important in case of product recalls, which – there is no ‘one-size-fits-all’ solution. also has a direct impact on customer satis- can quickly lead to warehouse bottlenecks That is why it is crucial that the solution faction and loyalty. and turn into PR disasters. Powerful WMS provider offers the right portfolio, experi- solutions offer drill-down options for or- ence, and consultative approach to guide In its benefit to increase productivity, not der tracking and KPI monitoring, e.g. from through the decision making process. only does automated warehousing work container level to stock keeping unit level, Ideally they should become a proactive faster than forklifts and narrow aisle trucks, and collect all applicable progress reports partner, offering an outside view and ask- they can also operate 24 hours a day, sev- and status messages on one centrally ac- ing the right questions to assist in-house en days a week, keeping products on the cessible platform. teams to design improved work flows, cut move. With automated storage and retrieval waste and increase efficiency. machines, the days of delayed process as- Returns management adds another compli- sociated with putting away or retrieving pal- cated process that each warehouse opera- In practice, automated warehousing helps lets from high locations will be long gone. tor must manage next to their core ware- a company‘s entire operation to function housing and distribution operations, often much more efficiently with less costly Seeking not only financial but also produc- within the same facilities and at a great ex- space and effective productivity rates. And tivity returns on any WMS or warehouse pense. Not every WMS is able to handle the because automated warehousing solutions automation investment is understandably various returns strategies, keep a full audit make the most effective use of space, high on the priority list for any growing trail throughout, and link each item with its building costs can be kept to a minimum. company. In an industry where time and original order to trigger related financial ac- Significant cost savings are made possi- space are both sought-after commodities, tions in the master ERP system. ble through the need for less land and a the pressure to maintain a seamless ware- smaller building. Automated storage and house operation has stepped to a whole Another crucial requirement to run a retrieval machines also physically weigh a new level, changing the game of the manu- seamless warehouse operation is system lot less than aisle trucks, further reducing facturing industry in general. integration capability: A WMS should in- construction requirements. tegrate smoothly into a company’s ex- Warehouse management systems have a isting IT environment and communicate OPERATE FASTER staggering impact on improving supply with both internal operations and systems Reducing reliance on labour and cost sav- chain dynamics and performance, and ulti- (e.g., procurement, customs, shipping and ing has always been the traditional justifi- mately on realising savings. Today’s com- sales) and external parties (e.g., suppli- cation for automation in the manufacturing panies are challenged to possess the ability ers, service providers and carriers), lead- space. Today, there is also an emphasis on to anticipate what customers are seeking ing to transparency and efficient work making things operate faster. Productivity for, and then bring the product to market flows – ideally in real-time. The software remains one of the top reasons why more before the competition. Investing in the should have a modular architecture that and more companies are now choosing to right technology and utilising them are provides the functionalities required at automate their warehouses, particularly vital in achieving this success. The right the time, with scalability, i.e. the option of since customers are placing their orders WMS can help companies impress poten- 14 expanding as a company’s requirements later and later. tial clients and provide the best possible grow. This includes integration of trans- service and support to the current ones. port as well as global trade management Nowadays orders are still accepted be- systems, facilitating comprehensive lo- yond the normal working hours, and Based in Singapore, Frans Kok is gistics execution, as well as regulatory e-commerce is only enhancing this trend. the general manager of AEB (Asia compliance with customs and global trade The later the cut-off times on order, the Pacific) Pte Ltd. procedures. shorter the lead time on the warehouse INSIGHT ASIA SEPTEMBER-OCTOBER 2014 LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER THE OMNI-CHANNEL DISTRIBUTION CENTRES Consumer online shopping is undoubtedly the biggest trend to impact the retail supply chain landscape in recent times and it is showing no signs of slowing

Through the simplicity of voice direction and instruction, they now have the tools to be used wherever they are needed, across multiple workflows. And because train- ing times for new tasks are dramatically reduced, workers can manage receiving tasks in the morning, order pick for much of the day and finish up replenishing or loading – all supported by the same intui- tive voice-directed link to the host system.

Shift managers will further benefit from a real-time view of progress, allowing them to plan and allocate resources more effi- ciently – especially in light of continuous growth of SKUs and smaller order sizes, It has been a good decade since e-commerce VOICE FOR AN OMNI-CHANNEL which can add serious inefficiencies in the took the world by storm and we are just OPERATION warehouse. beginning to see a levelling of the online DCs progressing to an omni-channel fu- versus brick-and-mortar playing fields. The ture should be mindful of two important Future DCs will be pressed to increase catalyst for this trend is omni-channel retail- factors – accuracy and flexibility. While overall use of batch picking processes to ing, an evolved and sensible way for physical these are already the cornerstones of enable more ‘each orders’ to be picked, an retailers to utilise e-commerce to give busy any warehouse operation, they have to area that is best handled by voice. Voice- customers more shopping options, without be significantly drummed up to ensure directed batch picking greatly reduces the cannibalising their traditional businesses. high levels of productivity are maintained extraordinary amount of wasted travel throughout. time, resulting in greater workforce pro- Omni-channel frees the consumer to shop ductivity. online, in-store, or do both – wherever and In this respect, a voice solution perfectly whenever their moods take them. They meets the demands of e-commerce by in- GOING MAINSTREAM can choose to have their online purchases creasing efficiency on all fronts, leading to As omni-channel order fulfilment activity delivered to their doorsteps, or pop by a shorter turnaround from ordering to de- scales up, DCs will begin to increase their physical shop to pick up their stuff to their livery. Honeywell’s Vocollect voice solu- investments in their facilities and dedi- convenience. And if they’re already there tion, for example, is purposely designed cate greater real estate to support various at the store, they will hopefully do a spot for industrial environments and to help channels. They may start out by setting more shopping. organisations: aside ‘mini-warehouse zones’ within their • streamline their omni-channel order ful- existing physical structure. But in time, To the retailer and the consumer, this is a filment needs there will be no more ‘hidden’ corners win-win solution that benefits both, so why • realise improved warehouse efficiency for e-commerce processing; these ‘mini- only now is the trend on an upswing? The • raise accuracy for a lower operating warehouses’ will become mainstream and catch is order fulfilment. cost. a common operating practice.

As much as distribution centres (DC) would It increases efficiency by eliminating the A truly mobile voice solution equipped prefer e-commerce orders be hidden in a time workers spend shuffling papers, with adaptive recognition will become a corner of the warehouse – online shopping labels, and scanners, allowing them to necessity, as the technology continuous- is not something that will go away. With perform their assigned tasks much more ly and proactively responds to changing the integration of multiple customer order quickly via a hands-free, eyes-free work- voice and environmental conditions – pro- channels, more brick-and-mortar business- flow. DCs enabled with voice are thus, able viding better performance over time. es are wising up to the benefit of having to streamline traditional work patterns both physical and virtual presences – as and often see a 20 per cent lift in produc- With retail brick and mortar businesses a way to successfully contest their pure tivity whilst ensuring accuracy rates of becoming more effective at leveraging e-commerce counterparts. 99.9 per cent. their retail store infrastructure and local inventory presence, the warehouse of the For warehouse operators, survival in this These benefits are ideal not just for man- future is one that handles omni-channel new world requires flexibility and a holis- ually-intensive tasks such as order pro- distribution as a matter of fact, rather than tic approach, as processing online orders cessing, but other operational processes a matter of inconvenience. for an individual is vastly different from like cycle-counting, receiving, loading, processing for retail. The main challenge put-away, replenishment and put-to-store Vocollect and Vocollect Voice are trade- marks or registered trademarks of lies in the changing product mix – from a as well, enabling warehouses to meet in- Honeywell International Inc. in the US mixed pallet and case world, to an increas- creasing operational demands like next- and/or other countries. ingly ‘each’ world. day and late-night fulfilment for example. MAKING SENSE OF BIG DATA IN LOGISTICS

[ SOFTWARE & SYSTEMS ] [ SOFTWARE Find out how fi ve distinct characteristics of Big Data analytics can deliver added value and effi ciency to the logistics domain. By SANTOSH TAKOOR.

The global logistics industry is facing a generated by the sector. Big Data analytics burg Port Authority in Germany. Ham- growing number of challenges. Caught be- can significantly enhance existing business burg’s docks are limited to an area of tween rising labour costs and ever-rising models, or even transform the logistics by 7,200 hectares, yet like many port hubs, fuel prices, the industry is subject to in- creating entirely new ones. expansion plans are underway. In Ham- creasing environmental pressures such as burg’s case, by 2025 the number of emissions legislation and accurate carbon Here are five distinct characteristics of Big containers passing through each year is footprint reporting. Competition is fiercer Data analytics – supported by real life exam- expected to treble from the current 9.1 than ever before as customers demand ples – which can deliver added value and ef- million containers per year. Hamburg advanced services that involve just-in-time ficiency to the logistics domain: uses a cloud-based traffic management supplies, same-day delivery, and dynamic system from T-Systems to help stream- shipment routing. 1) OPTIMISATION TO THE CORE line the flow of goods and keep up to The strong dependency of logistics opera- 40,000 vehicles a day in check. Asia is home to multiple global logistics tions on timely and accurate information is hubs, including Singapore which in 2012 a key opportunity that Big Data can address. Until very recently, logistics companies was ranked no. 1 out of 155 countries glob- Optimising properties such as delivery time, were forced to rely on radio networks to ally in the Logistics Performance Index by resource utilisation, and geographical cover- maintain contact with truck drivers. Ad- the World Bank. Urbanisation, Asia’s rapid age is an inherent challenge of large-scale vances in technology now allow for touch- economic development, and the rise of its logistics operation. Information on payload, screen tablet devices that offer text-based middle classes are expected to propel the quantity, size, location and destination are communication and mobile network con- industry to greater heights, supported by required to control efficiency and service nectivity. With GPS technology, HQ agents burgeoning intra-ASEAN trade, which is quality in a transport network. The logistics now possess round-the-clock, real-time projected to grow exponentially under the industry, already intrinsically dependent insight into the location of vehicles and ASEAN Economic Community 2015 plan. on information, therefore stands to benefit their cargo. The knowledge gained from This growth is putting added pressure on from advanced predictive techniques and this data enables HQ to communicate the region’s strained maritime, aviation real-time forecasting of events to provide a the right information at the right time to and land transport capabilities. new quality in capacity forecast and resource stakeholders. control. One of the solutions to many of the For example, police notifications can be challenges faced by the industry can be A recent example of Big Data at work in the processed and leveraged immediately. found within the vast amounts of data logistics industry can be seen at the Ham- The challenges associated with deploy- ing such a solution usually come down to concerns about the bandwidth capacity to deal with the constant stream of large volumes of data, as well as the informa- tion capture and analytics tools. Using a solution that offers a cloud platform and data processing and analytics on a scal- able, ‘pay-as-you go’ model, logistics companies can maximise the benefits of Big Data analytics without the need for up-front investment in expensive ICT in- frastructures or hardware. 16 2) TANGIBLE GOODS, TANGIBLE CUSTOMERS Whereas in other sectors such as travel or banking, where direct customer inter- action has been replaced by automated ICT processes, logistics players typically rely on direct customer communication

INSIGHT ASIA SEPTEMBER-OCTOBER 2014 LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER at both pick-up and delivery. With Big generated triggers. countermeasures basedonautomatically ate andinitiateproactivecustomerservice recognition havethepotentialtogener- natural languageprocessing,andpattern media, foranalysis.Semantictextanalysis, agencies, annualreports,andevensocial cally availableInternetdatafromnews service levels,andwithcustomer’spubli- distribution networkdataonstatistical tal customertrailcanbecorrelatedwith and complaintmanagement.Thisdigi- ing activities,customerserviceenquiries, include responsestosalesandmarket- Logistics customertouchpointscanalso ceiver side. side andunderstanddemandonthere- applied tominimiseattritiononthesender media mining,BigDatatechniquescanbe ditionally, enrichedbyInternetandsocial ment ofcustomerrelationsandloyalty.Ad- cant valuefortheanalysisandmanage- from distributionnetworkcarriesasignifi- is moreimportantthaneverbefore.Data ket, customersatisfactionandretention creasingly competitive.Inacrowdedmar- the logisticsmarketplacebecomesin- As Asiaopensupitsmarketstotheworld, sonal customertouchpoint. in verticalsthathaveabandonedtheper- uct qualitythatismoredifficulttoobtain insight inconsumersentimentandprod- companies togeneratevaluablebusiness concepts providethemeansforlogistics feedback, orevendemographics.BigData ing alinkformarketintelligence,product rect customerinteractionsdailybycreat- can derivevaluefromthemillionsofdi- Data technology,thelogisticsindustry tion orcrisis. possible remedialactionincase ofdisrup- be seeking,suchassupplychain risksand locks thevaluethatmanyindustries might data, andBigDataanalyticstechnology un- ready haveaccesstoclient’ssupply chain example, contractlogisticssuppliers al- lytic methodologiestorevealinsights.For their enterprisecustomers,andapplyana- position tobecomevaluableadvisorsfor logistics providersrecognisetheirunique The dataopportunityherecomeswhenthe businesses serviced. to ‘feel’theveryheartbeatofindividual many casesenablingthelogisticsprovider lessly integrateintoahostofindustries,in er-specific requirementsareabletoseam- ern logisticssolutionstailoredtocustom- company’s operationalprocedures.Mod- gistics servicesasacriticalfactorinany and withitincreasestherelevanceoflo- and supplychainsisfurtherincreasing– The globalexpansionofmarkets BUSINESS 3) IN-SYNCWITHCUSTOMER risks forclient’ssupplychain. tions toclients,andreportonupcoming for countermeasuressustainedopera- tics providerstomakerecommendations that haveeverypotentialtoenablelogis- ing tasksandprocesspetabytesofdata plications candistributecomplexcomput- high andunstructureddatavolumes.Ap- work forstorageandprocessingextremely Hadoop, anopen-sourcesoftwareframe- T-Systems isatrustedpartnerofApache ing predictiveanalyticsonglobalaffairs. secure customeroperationsbyperform- Logistics providersarewell-positionedto when disasterstrikes. tection thatensuresbusinesscontinuity chain canbringasitisforesightedriskde- maintaining aresilientandflexiblesupply derestimate thevaluethattheirinsightin ness world.Logisticsfirmsmustnotun- pability intoday’srapidlychangingbusi- unforeseen eventsareavitalbusinessca- Robust supplychainsthatcancopewith given market. trends andchangingconditionsinany for everybusinesstodetectdeveloping the globalflowofgoodsisapowerfultool A detailedanalysisandsegmentationof tion downtoamicro-economicviewpoint. Data analyticsmovesthelevelofobserva- applying thepoweranddiversityofBig economic indicatorinthepast.Today, gistics datahasalreadybeenusedinan On anaggregated,macroscopiclevel,lo- valuable insighttoexternalparties. the networkitself,butcanalsoprovide mation notonlyservestofurtheroptimise fore, adistinctbusinessasset.Suchinfor- a high-resolutiondatasourceandis,there- wards goodsaroundtheglobedoublesas timised infrastructurethatconstantlyfor- networks isnoeasytask,thishighly-op- Whilst maintainingtransportanddelivery 4) ANETWORKOFINFORMATION ing drivingbehaviour. thus maximisingfuelefficiencybyimprov- haviour andfuelconsumptionforvehicles, offer completetransparencyofdrivingbe- ing fuelandoperatingcosts.Theycanalso mise shipmentsandroutes,thereforesav- behalf ofthelogisticsprovider.Theyopti- mental footprinttoensurecomplianceon designed tocutcostsandmonitorenviron- T-System’s EfficientFleetManagement)are Platform-based BigDatasolutions(e.g. both the capture of data and information both thecaptureofdataandinformation place withintheBigDatacloud,enabling Again, dataprocessingandstoragetakes trucks inthenot-too-distantfuture. mitters areexpectedtobebuiltintoall the wayforthis;locationinformationtrans- to machine)devicesarealreadyheralding data virtuallycomesforfree.M2M(machine ers, theabilitytocollectandmonetiselocal single location.Forgloballogisticsprovid- tion –customisedcarsweresenttoevery ment wasrequiredtocapturethisinforma- as abusinessmodel,butsignificantinvest- that itispossibletoprovidelocalfootage example. TheInternetgianthasproved Take Google’ssuccessful‘streetview’,for environmental, andtrafficstatistics. valuable zoomdisplayforademographic, along thetransportroutescancreatea collection andanalysisoflocalinformation various typesofshipments.Automated in ordertopick-up,forward,anddeliver across continentswithblanketcoverage ers engageafleetofvehiclesthatmove chains. Asaresult,manylogisticsprovid- end-points ofincreasinglyfar-flungsupply serving customersatboththestart-and a necessity.Alocalpresenceiscrucialto tries isthatdecentralisedoperationsare rates logisticsfrommanyotherindus- Finally, anothercharacteristicthatsepa- PRESENCE 5) GLOBALCOVERAGE,LOCAL 17 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ SOFTWARE & SYSTEMS ] from sensors (ambient temperatures, rain of prevalent industry challenges and will sensors, fog, etc.). Not only can this in- take operational efficiency and customer formation enable predictive assessments experience to the next level. of driving conditions and possible route changes, there is also the potential to Together, the five properties highlighted maximise the value of this data externally. here give a road map for logistics provid- Should the demand arise, sensor devices ers to better understand their own data can be built into all kinds of vehicles, ships, assets and unlock the value contained and trains to monitor factors of interest within them. In turn, this provides en- – such as local pollution levels and their terprises with opportunities to identify spread. specific cases where the adoption of Big Data analytics processes can be used to [ SOFTWARE & SYSTEMS ] [ SOFTWARE Big Data is a disruptive technology that exploit value and contribute to operation- gives logistics companies the power to al efficiency and improved customer ex- process vast data volumes at an affordable perience, or possibly development of new price point. It can help address a number business models.

TALKING BIG DATA Q&A with SANTOSH TAKOOR, vice president of sales for T-Systems Americas and APAC, Systems Integrations

LIA: Could you give us an overview of of other things for a couple of years. At the try to make sense of it and use it, not what T-Systems is doing? start of this year, I was asked to come back reactively, but proactively. What has ST: Let me give you a quick once-over to APAC, and similarly it was to bring in the changed is that there is now the speed, of T-Systems. We started from Deutsche portfolio, the analytics ideas, solutions and volume and variety for you to choose Post, the German post office. From sales ideas. from. There’s a lot of data technol- there, Deutsche Post was then merged ogy out there, so for example we have and became Deutsche Telecom, a cor- LIA: Is T-Systems a competitor of SAP, someone on stage presenting about porate telecoms company. Finally, out Oracle, etc.? Big Data, and how he could send data of Deutsche Telecom, T-Systems was ST: We are key partners, and this is again back to Nike or Apple recording what formed. So, T-Systems being the IT arm one of the best-kept German secrets: that his heart rate or calories burn are. That of Deutsche Telecom, we went to big we are one of the largest partners of SAP. kind of volume and variety of data has German corporations such as the likes We work closely to develop a lot of func- changed how businesses work nowa- of Volkswagen, which has massive IT de- tions. I came from SAP and I spent 40 years days. So although you can ask a team partments, and we provided them with there. Another key board member of T-Sys- people to physically do data spread- cheaper, better and faster IT solutions. tems also came from SAP and brought in sheets, by the time you’re done with We have maintained very good relation- this relationship from SAP for us to keep that, the data expires as it is already ships with them for the past 10 to 20 working with them to develop key appli- days or weeks old. When volumes of years and have been renewing services cations. We are one of the largest provid- data go into not just a few megabytes contracts and increasing our business ers of outsource application optimisation but a few giga- or terabytes of data, with them since. We are now doing a services for SAP. So we take care of your you can no longer handle it physically. lot more than we started off with, and entire ICT infrastructure for you, instead we are now an organisation worth more of you having to host your own data serv- That is where Big Data analytics comes than 10 billion euros [US$12.85 billion], ers and have people running around doing in. The ability is to take information doing anything related to pure ICT, such IT and managing services. We do it all for in its shape however quickly it comes as telephone systems, computers, and free, and even better, we do a full scalable in, and to make sense of it. Take the networks, amongst other IT solutions IT system. For example, during Christmas 1970s and 1980s when people sat in and systems. We are strong in Germany, where there is larger expected volume, the office to discuss last month’s fig- and for the last 15-20 years, we have you can pay for us to scale up in order to ures and wait for next month’s figures been investing in expanding our global meet this demand; and when volume goes to come in, and compare that to today, footprint. down, we can then rescale it accordingly. when you get quicker reports of your In that way, you don’t need a huge invest- financials and supply chains in almost LIA: What are your responsibilities as ment in your IT system as we can manage real-time. Nowadays, last month’s fig- VP of sales in APAC? and update your system on your behalf. ures are no longer relevant; we now ST: I joined T-Systems after working at need faster analysis of business fig- SAP for almost 14 years. I actually joined LIA: How has Big Data analytics evolved ures. Customer experience is really as a consultant and really wanted to over the years? Where are we now driving that. It is also different in that 18 learn about this trade. My former boss exactly? now you can instantly search for over- invited to join the company, to bring ST: From the very early days, we had seas goods online from E-bay, Amazon, fresh analytics IT idea to the business, the pirates and the loggers of data and etc. for goods from China or America. and I became the solutions integration the pragmatic approach. And even be- You want your purchases to arrive sales in APAC. This was two and a half fore that, we go back to ancient Greece quickly, and for stock to be available years ago. I am responsible for 16 coun- where we had the earliest form of data and information to be as timely as pos- tries, managing huge turnover and a lot collation. We take this information and sible in order to make good decisions. INSIGHT ASIA SEPTEMBER-OCTOBER 2014 LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER create a function to reach out to these create afunctiontoreachout to these viral onTwitter?Whatifyou’re ableto realise thatwhatsheiswearing is going doing researchonsocialmedia, and you Let’s goevenfurther:whatifwhen you’re already amarkethere. for consumerstobuy?Bingo!Thereis make thesedesiredproductsoutthere meet thisdemand,manufactureand And whatif,bytheevening,youcould latest clothesorshoessheiswearing. within thenext15-25minutesabout ket, theyareinterestedandtweeting to 18-25-year-olds,thetargetmar- may becompletelyirrelevanttoyou,but wearing isdiscussedonsocialmedia.It for apeace-keepingmission,whatsheis Angelina JoliewasseeninAfghanistan next fashionableitemisoutthere.If dia andtheweb,findoutwhat a scrollacrosstheInternet,socialme- turer, youwouldwanttobeabledo For example,ifyou’reashoemanufac- analysis. data availableouttheretodosentiment experience andmakeuseofthevast want toensureyouhaveabetteruser ers demandandexpectations.Thenyou matic andefficient,meetscustom- making surewhatyou’redoingisprag- we’re talkingabout.Thefirststepis how youdobusiness?Nowthisiswhat rate, andnotjustoptimise,butchange which wearecreatingataphenomenal wealth ofdatastructurethatexistsnow, now. Whatifwecouldusethevast completely differentparadigmshift your doorstepwithindays.Thatisa you purchaseitandarrivesrightat want toseethestockavailableonline, lead timetodeliveringjustintime.You ventory anddeliverywithtwomonths right fromstorefronts,warehouse,in- works andhowwesupplydeliver, fundamental paradigmofhowlogistics What we’retalkingabouthereisthe ing ismakingitquickerandcheaper. ages, itisn’trocketscience.Allwe’redo- logistics hasbeenaroundsincethedark ing whatyou’relookingfor.Yousee, to theorganizationbymaybeoptimis- that thingout.Thisway,weaddvalue value outofit.Ifitdoesn’twork,take recipe andputthingstogethermake sense ofit.Soweneededtoknowthe take thenoiseoutBigDataandmake to everybody.Itboilsdownhowyou going around,andeverythingistalking Things (IoT).Thereisalotofinformation ST: the logisticssector? business operations,particularlyin LIA: Howdoyoursolutionsoptimise We lookatBigDataandInternetof tail-end? vantage? Areweleadingorare weatthe Do wehavethenecessarycompetitive ad- doing? Whataresimilarbusinesses doing? question is,whatistherestof market seem likeloss-makingatfirst, thereal to convincethemisthatalthoughitmay sic businessfundamentals,theonlything tailored-made systems.Again,backtoba- ST: ForSMEs,itsnormallyhouse-madeor their businessesdespitecostconcerns? implement yourdataanalyticssystemin LIA: HowwouldyouconvinceSMEsto vice modelfortheirITsystems. some ofthesolutionsandafullself-ser- SMEs, theycanstillaffordthechannels, el isabletocopewithdeliveringsuch not muchdifference.Soifyoursalesmod- cessibility, platform,models,etc.,there’s organisations. Intermsoftechnology,ac- as comparedtothoseweuseforsmaller ple –isnotthatmuchdifferentorcomplex we usedforhosting–Shell,exam- fully onlineandself-service.Theplatform example, weareabletomakethesystems order tomaketheservicescheaper.For different packagesandfunctionalitiesin are abletoupscale,downscaleorprovide where theideaofscalabilitycomesin;we individual businessesreallyneed.Thatis offer betterdealsbasedonwhatthese they offer.Weareabletostandardiseand of ITsystemsandcoreapplicationsthat the exampleofSAP,thereareactuallytiers ST: expensive toimplement.Doyouagree? that thebetterITsystemsoutthereare operations. However,manyofthemsay technologies availabletooptimisetheir firms herearelookingforthelatestIT MNCs, andmanyofthesmalllogistics LIA: SoutheastAsiahasmoreSMEsthan thing is,itisdefinitelypossible. happen. Arewethereyet?No,butthegood and thatisreallysomethingcould sumer toconsumer)almoststraightaway, sumer) sales.Infact,itbecomesC2C(con- supply chainanddoB2C(businesstocon- you manufacture,howmanageyour the targetmarket?Thatischanginghow based ondatamining,andthenfeeditto could createademandforproductsjust images, amongstotherthings.Whatifwe databases, structures,feeds,emailsand power. Justimagine.We’retalkingabout quires ahugeamountofcomputing Now todothatkindofdataminingre- anteed marketanddemandaswell? store thenextday?Wouldn’tthatbeaguar- get theoutfitbypostorcollectitaphysical piece ofclothingatadiscountedprice,and choose andplaceanorderforasimilar people, andaswhethertheywouldliketo Yes, it’sverytrue.Butgoingbackto

vs. excel.” supply chainandlogistics,“computer able. Thatiswheretechnology sitsin that aresophisticatedenough avail- better decisionsiscritical,and tools available informationoutthere to make The needforusingthevastpoolof easier andfasterthroughtechnology. business andmakesprocessesbetter, efits andknowwhatworksforyour step, youcanbalancecostsandben- larger scaleimplementations.Stepby sitions, youcanthenmoveforwardto When youhaveseenthevaluepropo- adapt, growandmakevalueoutofit. tions straightaway.Instead,gradually pieces andnotlargescaleimplementa- SMEs. Youcanstartbydoingbitsand the requirementsandbudgetsofthese platforms thatcanbecustomisedto tems comesintocreatesolutionsand whatsoever, andthatiswhereT-Sys- can subscribeto,beitthehardwareor a commercially-viablemodelthatthey certain shares.Essentially,youneed they hadtostrategicallysellandbuy years, justbyusingtheintelligence the sumandmoreinfact,withinafew on thecablesbutgraduallymadeback And trueenough,theyspentbillions cial institutions?Isitreallyworthwhile? five secondsquickerthanotherfinan- the stockmarketsinordertoknow needed wasquickerinformationabout Why wouldtheydothatwhenall ing moneyinlayingfibreopticcables. a groupofUS-basedbanksareinvest- try change.Anotherexamplewouldbe sector? Youwanttobeaheadofindus- Google andAmazonareintheirown you leadingthechangelikeFacebook, of whereyouareintheindustry.Are systems, italmostbecomesaquestion make itjustifiabletoimplementthese Returning toyourquestiononhow say you’reunabletodoit. cesses withthisintelligence.Youcan’t readily beforegoingbacktoyourpro- to reachoutforinformationeasilyand cesses. Similarly,inbusiness,youneed and thengoesbacktohisnormalpro- regardless ofwhereIwasphysically, order tomakethingsfasterandeasier, using technology(hismobilephone)in He reachedouttomeforinformation that heneededforhisschoolmatch. the whereaboutsofhisfootballboots reaching outtomeforinformationon here. Accordingtohisrationale,hewas were. Thereisanimportantdistinction and askedmewherehisfootballboots working inRio,andmysoncalledme analytics andsolutions.Iwasoriginally land abouttheneedtoimplementdata I wasexplainingtoanaudienceinFin- 19 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ SOFTWARE & SYSTEMS ] 20 [ STRATEGY & BUSINESS ] LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER 2014 Although thismight notdirectlyleadto the loadcarrieritself. goods intransport,storageand evenon leading tomixingofhalaland non-halal halal statushasnotbeena criterion, in theconsolidationofgoods flows, the in storageandtransportation.Traditionally way andareconsolidatedwithothergoods become fragmentedandthinneralongthe the supplyiscomplex,asgoodsflows Extending halalassurancedownstream of consumerpurchase(retailorrestaurant). to beprotectedallthewayuppoint approach, wherethehalalintegrityneeds halal standard),towardasupplychain production processareconformingtoa (confirming thattheingredientsand independent halalcertificationbody the slaughterhouseorfactorybyan where theproductishalalcertifiedat Halal ismovingfromaproductapproach, facilitation ofthesehalalsupplychains. provider canplayacentralroleinthe halal requirements.Thelogisticsservice chain partnerstomeettheseemerging (SCM), thereisanevidentneedforsupply halal towardssupplychainmanagement As thehalalindustryisstartingtoextend and promisetothe(Muslim)consumer. significant componentofthebrandimage safety. Halalassurancehasbecomea and brandowner,similartothatoffood integrity forboththeMuslimconsumer demanding abetterprotectionoftheHalal reputation damageforbigbrandsandare issues overthepastyearshaveledto Various halalscandalsandcontamination throughout thesupplychain. mark, andismorecriticaltobeaddressed forming, providesahighlevelquality worldwide. Halalisinfluentialinopinion ceutical productshavebecomeavailable halal food,cosmeticsandevenpharma- part oftheirreligiousobligations.Today, F consumer purchase. needs tobeprotectedallthewayuppointof towards asupplychainapproach,wherehalalintegrity Halal certifi TO HALAL APPROACH SUPPLY CHAIN or Muslims,halalisessentialasit cation is moving from a product approach cation ismovingfromaproductapproach MARCO TIEMAN supports theconcept ofputtinghalal Research conductedoverthepast years chain). safety (addressedthroughoutthe supply a ‘supplychainapproach’tofood/product halal (onlythesourceiscertified) and 1) wherethereisa‘productapproach’to result isahalalsupplychain(see throughout theentiresupplychain.The which hasbeentraditionallyextended This isdifferentfromfoodsafety, to pointofconsumerpurchase! but nottheentiresupplychainfromsource pockets arehalalcertifiedorcompliant, certified. Theresultisasupplychainwhere some partsofthesupplychaincanbehalal logistics, HORECAandretail.Therefore, have developedspecifichalalstandardsfor However, somecountries(likeMalaysia) warehousing, trading,HORECAandretail. chain, coveringpossibletransportation, the processesdownstreamsupply production standardsdonotspecify the methodofproduction.Thesehalal guidelines ontheingredientsusedand pharmaceutical andcosmetics),providing on slaughteringandmanufacturing(food, Conventional halalstandardsarefocused INCLUDE DOWNSTREAM HORECA (hotel,restaurantandcafé),etc. airports, wholesalers,distributers,retail, such aslogisticsserviceproviders,seaports, chain partnersthathandlethesegoods, and needstheinvolvementofallsupply Halal assurancerequiresanewparadigm vulnerable. Muslim consumer.Thismakesabrand integrity ofaparticularbrandbythe products, leadingtodoubtofthehalal as alcoholicbeveragesandpork(based) supply chainwithharamproductssuch halal brandedproductsaremixedinthe brand imageinjeopardywhenthese increase theriskaswellputting cross-contamination, itwoulddefinitely reports. Figure by beingproactive inhalalcompliance brand ownersandlocalplayers do benefit impact onthereputationofbrands, big As halalscandalshaveshownto havebig the certificationofentiresupply chain. will requirealsothecompliance oreven certification inparticularMuslim countries matter oftimethatthehalalproduction chain canbehalalcertified,itisjusta Once thecomponentsofsupply issue thesecertificates. certification bodiesintheworldthatcan by theimportingcountryofselected halal certificateaswelltherecognition prescribing moreproductsthatrequirea the MiddleEastandAsiaforimports, strengthened byMuslimmarketsin Halal regulationsarealsobeingfurther (such asIHIAllianceandSMIIC). and/or internationalhalalstandards Cooperation Councils’shalalstandard) of local,regional(e.g.,theArabGulf halal compliantthroughtheadoption allow industriestomakethesupplychain logistics, foodservices,retail,andothers; also creatingnewhalalstandardsfor standards andcertificationbodiesare of transportationandstorage.Halal tier suppliersandcustomersinterms slowly includingrequirementsforfirst- not static,andthroughrevisionsare SCM. Halalproductionstandardsare is whetherandhowtostartwithhalal The questionformanyhalalproducers contamination andhalalissues. supply chain,whichismoreresistantto This wouldcreateamorerobusthalal partners andenforcedthroughaudits. be statedincontractswithsupplychain standard operatingprocedureswhichcan in theirsupplychainthroughdeveloping brand ownerstoaddresshalalcompliance just inafewpockets),itisimportantfor possible downstreamthesupplychain(or Although halalcertificationisnotalways and food/productsafetyatequalfooting. positioned this halalpark,providing part ofthesupplychainisgeographically economic zone,wherebyasignificant manufacturing) inanindustrial parkor (halal food,cosmeticsorpharmaceutical clustering ofhalalproduction chains chain orchestrators.Halalparks are spatial industrial parksandso-calledhalalsupply chains canbeachievedthroughhalal vertical collaborationofhalalsupply avoid highercostsinlogistics.Effective could bebeneficialforbrandownersto among companiesinthesameindustry, supply chainpartnersandhorizontally chains, collaboration,bothverticallywith For abetteroptimisationofhalalsupply systems. documents, labelsandviainformation identification ofthehalalstatusonfreight of (1)physicalsegregationand(2)clear non-halal products,throughaprocess chains aresystematicallysegregatedfrom the supplychain.Thereforehalal halal andnon-halalproductsthroughout chain processesistopreventmixingof distribution. Consequentialinthesupply chain structure,coveringsourcingand chains. Itispivotaltoreviewyoursupply benefit bysimpleandshortsupply Research showsthathalalsupplychains performance indicators. resources, supplychainprocessesand supply chainstructure, logistics objectives,control, covering areassuchashalalpolicy, review yourhalalsupplychaindesign, in yoursupplychainbydesign.Forthis, halal SCMistoembedassurance A secondandmoreintegralapproachto country). chain partner(Muslimornon-Muslim origin yes/no),andlocationofthesupply halal sensitivityoftheproduct(animal chain partner(high/lowvolumehandled), depending ontheimportanceofasupply a distinctioncanbemadeinfrequency checked throughregularaudits.Inhere recommended thathalalcomplianceis through acontract.Inbothcasesitis partners or(2)assuringhalalcompliance either (1)halalcertificationofsupplychain Halal compliancecanbeachievedby current supplychain. to addressthemosturgentgapsinyour here youcoulddevelopaprioritisedlist issues inyourcurrentsupplychain.From vulnerabilities andpossiblecompliance gap analysistobetterunderstandthe A firststepinhalalSCMistoconducta GAP ANALYSIS competitive advantage. their brandandusehalalSCMasa along thesupplychaintobetterprotect [ Figure1:Atypicalhalalsupplychain] brand owner. halal assurancethatcanberealised forthe partners determinetheactual levelof of halalassurancewiththose logistics other logisticsplayers,its(lack of) control of theactualtransportandwarehousing to logistics serviceprovideroutsources much advantages inhalalsupplychains.Asthe the brandownerandinrealisingsynergy global sourcinganddistributionflowsfor chain partnerinthemanagementof The logisticsserviceprovideriskeysupply CERTIFIED LSP HORECA, andfinallyretail. providers, thenthedistributors, we firststartwithourlogisticsservice possibly onatier-by-tierbasis.Forexample, it isimportanttodothisphasebyphase, implementation ofanewhalalsupplychain logistics serviceproviderortrader.Inthe or throughanintermediary,suchasa collaboration betweendifferentcompanies can befacilitatedthrougheitherdirect and restaurantchains.Collaboration be beneficialformanufacturers,retailers supply chains.Horizontalcollaborationcan in achievingsynergyadvantageshalal collaboration, cantakedifferentforms same industry,alsoknownashorizontal Collaboration betweencompaniesinthe a logisticsserviceprovider. transportation. Thisrolecanbefulfilledby in keygatewaysandconsolidationof use ofcommonhalaldistributioncentres halal network.Thisorchestratormakes the integrityismaintainedthroughout the destinationmarketandensuresthat chains accordingtothespecificationof assists inmanagingglobalhalalsupply Kingdom. Ahalalsupplychainorchestrator Brunei, China,MalaysiaandtheUnited Today therearededicatedhalalparksin and innovationgrowth. increase capacityofhalalparkparticipants products, includingwasteandenergy; transportation times);optimaluseofby- evident logisticaladvantages(byshorter and distributionnetworks. in orchestratingthesecomplexsourcing provider isakeypartnerforbrandowners halal supplychains.Thelogisticsservice generating actualsynergyadvantagesin assurance forthebrandownerandin supply chainsprovidesbetterhalal However, amorerobustdesignofhalal evident gapsinyourhalalsupplychain. can beagoodstartinquicklyimproving issues inyourcurrentsupplychain.This insight intovulnerabilitiesandcompliance brands. Agapanalysiscanprovideafirst Muslim consumerandbetterprotectionof for ahigherlevelofhalalassurancethe A supplychainapproachtohalalisneeded consumer. with theexpectationsofMuslim contamination, andapossiblemismatch terms ofcrosscontamination,risk in supplychainsthatarevulnerable products areeasilymixed.Thisresults less-than-truck load),halalandnon-halal flows aresmaller(less-than-containeror chain towardsretail,wherethecargo complex. Furtherdownstreamthesupply It isclearthattoday’ssupplychainsare (IHIAS 0100:2010)halallogisticsstandards. 2400:2010 inMalaysia)andinternational are gettingcertifiedunderlocal(e.g.,MS providers invariouspartsoftheworldthat is agrowingnumberoflogisticsservice distribution networks.Fortunately,there orchestrate thosecomplexsourcingand logistics serviceprovidersthatcan There isanurgentneedforprofessional halal supplychainmanagement. (Malaysia), inchargeofresearch on with UniversitiTunAbdulRazak He isalsoadjunctprofessor logistics andthirdpartylogistics. food supplychains,industrial & researchfirmfocusingonagri- International, alogisticsconsulting Marco Tieman is the CEO of LBB is theCEOofLBB 21 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ STRATEGY & BUSINESS ] 22 [ STRATEGY & BUSINESS ] LOGISTICS INSIGHT ASIA SEPTEMBER-OCTOBER 2014 I boost intheglobalmarket.By procurement strategiesandsecureacompetitive should looktonicheonlinenetworkshelptheir Logistics, supplychainandprocurementprofessionals ‘SOCIALISE’ PEOPLE NEEDTO WHY LOGISTICS 1) GLOBALNETWORKING three keybenefits: Niche onlinenetworksforbusinesses offer to asocialnetworkbutalsomuch more. These nicheplatformsoffersimilar there’s Procurious(www.procurious.com). procurement andsupplychainprofession, IT administrators.Andforthelogistics, Healthtap fordoctors;andSpiceworks software engineers;Doximity,Sermoand industry. ExamplesincludeGitHubfor Think LinkedIn,butforaspecific niche onlinebusinessnetwork. to professionalsinspecificindustries:the new waveofsocialmediawhichistailored world’s mecca,LinkedIn.Butthere’snowa Facebook, Twitterandthecorporate associated withsocialmediasiteslike Online orsocialnetworkingisusually competitiveness. relationships andrespectively,boosttheir platforms tohelpbuildtheseglobal professionals aretappingintoonline logistics, procurementandsupplychain modern day,online.Agrowingamountof The solutionlies,asdomanythingsinthe on theirradar? world? Howdoyoufindthemandthenstay and/or buyersareontheothersideof But howcanyoudosowhenyoursuppliers pliers. is tobuildstrongrelationshipswithsup- procurement practice,accordingtoNoble, global trade.Asolutiontopromotebetter supply chainstoprovideaccessibilityfor Asian businessesneedtoestablishrobust in ordertocompeteontheworldstage, group CEOofCIPSDavidNoblearguedthat recent demand intheglobalmarketplace.Ina human andnatural–whichareinhigh has adiverserangeofresources–both t’s nosecretthattheAsia-Pacificregion Logistics InsightsAsia article,the functions minded peers. network andshareknowledgewithlike- opportunities formemberstoconverse, focused globalcommunities,providing discussion forums,theseplatformscreate industry specificnewsupdatesand functions suchasnetworkingcapabilities, on LinkedIn–itisjusttoobig.Butwith feels disconnectedandlikeoutsiders of Procuriousrevealedthattheprofession members. Researchconductedonbehalf provide arealsenseofcommunityfor network andLinkedInisthatthey The differencebetweenanicheonline 2) ASENSEOFCOMMUNITY some oftheworld’slargesteconomies. relationships withprofessionalsfrom a keychannelforestablishingbusiness numbers, theonlinespaceisnodoubt the UKandUSAalsodrivingmembership – oneofthekeymarketsforAsia.With countries, withmanycomingfromAustralia Procurious boastsmembersfrom56 all pocketsoftheglobe. million onAcademiaforacademicsfrom GitHub, fivemilliononSpiceworks,and10 staggering sixmillionusersregisteredon from allcornersoftheglobe.There’sa opportunity tonetworkwithpeople and thesenichenetworksprovidethe chain professionisglobalinnature The logistics,procurementandsupply discussion groups thatincludeexperts as wellindustryopinion pieces or videos fromtheworld’sbest trainers, For instance,theyofferbite-sized training knowledge andup-skilling. these sitesprovidememberswith tailored they playinandlocalindustryissues.And understand theirbackground,themarket business withsomeone,itisimportantto relationship building.Ifyouwanttodo of knowledgewhichcanbeusefulto Niche onlinenetworksarealsohubs 3) TAILORED LEARNING TANIA SEARY . in theglobalmarket. strategies andsecureacompetitiveboost relationships aspartoftheirprocurement online networkstohelpsupporttheir professionals inAsiashouldlooktoniche Logistics, supplychainandprocurement has madethisquickerandeasier. phenomenon, andonlinenetworks relationships –inAsiaisnotanew The conceptof already joinedtheparty. competitors andpeersarelikelytohave aimed atthem.Therealityisyour use socialnetworkingsitesspecifically almost fouroutoffivepurchaserswould chain field,arecentsurveyrevealedthat In thelogistics,procurementandsupply are experiencing. to supportthetremendousgrowththey capital betweenUS$50toUS$100million Spiceworks havebeenabletoraiseventure sites includingGitHub,Doximityand incredible speeds.Severalnetworking Niche onlinenetworksaregrowingat invaluable. before enteringanewmarketcanbe another culture’swayofdoingbusiness development andtheabilitytolearn and supplychainprofessionals,skills in thefield.Forlogistics,procurement USA, UKandAustralia. Walt DisneyCompanyacrossthe the likesofAlcoa,Rowlandand the sleeve, Searypreviouslyworked for procurement industryupher With morethan15yearsinthe and procurementprofessionals. business forlogistics,supplychain Procurious, anonlinenetworking recruitment firmTheSource;and management consultancy;itssister The Faculty,aprocurement procurement relatedbusinesses: Tania Seary is the founder of three is thefounderofthree “Guanxi” –orfostering hub. By government infrastructure atacostofUS$74billionshowsthe The eight-yearplantodevelopThailand TRANSFORMATION THAILAND’S NEXT 25,403 baht,orUS$785(Source:Thailand and averagemonthlyhouseholdincomeof the nationalpopulationatover65million modernisation initsretailsector.With is experiencingrapidtransformationand Thailand, especiallybigcitieslikeBangkok, in asupermarketjustoutsideherhouse. and thecomfortofindoorair-conditioning duce andgroceryproductssourcedglobally ward to,withthelargevarietyoffreshpro- her —onethatsheisactuallylookingfor- become anentirelydifferentexperiencefor outskirts ofBangkok.Today,shoppinghas the quainttownofBangYailocatedin ket threebusstopsawayfromherhousein A.M. everydaytorushthelocalwetmar- K hun Aom used to have to get up at 6 hun Aomusedtohavegetupat6 KEVIN BURRELL ʼ s ambition to become a regional supply chain s ambitiontobecomearegionalsupplychain . m-commerce hasaddedmorecomplexity retail formats,theriseofe-commerceand highly fragmentedmarketanddiverse in MajorASEANMarkets).Ontopofthe cent (Source:ModernGroceryRetailing and recordedamarketshareof54per remained importantforThaiconsumers other hand,traditionalgroceryretailers to enlargetheirpresenceaswell.Onthe expansion, whilehypermarketscontinued development withaggressivenewoutlet retailers andsupermarketssawthefastest Convenience stores,chainedforecourt growing ataspeedof63percent. Grocery retailcurrentlyleadsthemarket, retail ishuge. National StatisticalOffice),thepotentialfor respond quickly tosudden disruptions, agileenoughto resilient enoughtowithstand The supplychainmustbe channels andretailformats. capable ofservingmultiple purpose’ inthisenvironment, supply chainthatis‘fitfor must createandmanagea effective flexibility.They capabilities tosupportcost- options, risktolerancesand building outaportfolioof an eyetowardonething: their supplychainswith Retailers havetore-think plays akeyrole. achieve this,supplychain to consumerdemands.To highly flexibleresponses to provideappropriateand trends aredrivingretailers fits-all isoutdatedandthe that themodelofone-size- However, what’scertainis trend inretailisgoingtobe. predict whatthenextbig behaviour, itishardto the dynamicconsumer technology revolutionand In viewofthefast sector. and issettoreshapethe ʼ s transportation s transportation critical importancetothenewAEC. well poisedtobecometheregionalhubof private operators,Thailand,orBangkok,is coming fromthesupplychainsectorand combined withtechnologyandinnovation put ininfrastructureandlegislation, With thecontinuousgovernmentefforts across rail,air,roadandwater. and integratealltransportationplatforms its strategytodevelopthelogisticssystem of buildingaregionalsupplychainhuband billion) showsthegovernment’sambition at acostof2.4trillionbaht(US$74.17 Thailand’s transportationinfrastructure The eight-yearplanannouncedtodevelop countries. location andproximitytootherAEC a supplychainhubridingonitsstrategic Community (AEC)by2015andbecomes prepares itselfforASEANEconomic transformational stageasthecountry economy today,whichisalsointhe indeed areflectionofThailand’soverall What’s happeningintheretailsectoris retail customers. best levelofefficiencyandqualityforthe to mitigateoperationrisksandachievethe trucks, aswelldrivertraining,inorder fleet managementtools,fuel-efficient invested inwarehouseautomationsystem, to protectmargins.DHL,forexample,has customise products,andefficientenough or unexpectedchange,flexibleenoughto business developmentroles. senior leadership,operationsand spent thelast15yearsinAsia in logistics industryandhaving than 20yearsofexperiencein across thecountry.Hehasmore value addedsupplychainservices warehousing, transportationand development, drivinggrowthin day operationsandbusiness for managingtheday-to- November 2012,heisresponsible Thailand. Inthisrolesince director ofDHLSupplyChain Kevin Burrell is the managing is themanaging 23 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ STRATEGY & BUSINESS ] 24 [ CEO SERIES ] LOGISTICS INSIGHT ASIA SEPTEMER-OCTOBER 2014 I STEPHANIE KRISHNAN culture andaCEOthatisattentivetodisruptivechanges. The sustainabilityofasupplychainrequiresstructuredandcompetentgovernance CHAIN MODEL AN ENTERPRISESUPPLY BUILDING ANDSUSTAINING the necessaryresources, likeabudgetfor Management wouldalsoneedto facilitate investments deployed. sustainability andsuccessofefforts and work fortheprogrammearecrucial tothe cess. Up-frontpreparationand planning complexity ofthetransformationalpro- sion, theorganisationstructure,and dependent onthebusinessmodeldimen- monitor theprogress.Thegoalswouldbe milestones, timelinecheckpoints,and ered projectteamtobecreated,setthe for theorganisation,requiringanempow- viewed asamedium-tolong-termjourney direction. Aprogrammelikethisshouldbe and operationalleadershiptowardsanew vide theorganisationwithinspirational ment oftopmanagementisneededtopro- Like withanymajorinitiative,fullengage- organisation. management programmeacrossthewhole tive asaformaltransformationalchange agement tofullyembracesuchaninitia- necessary fortheCEOandhisseniorman- management methodologies.Itwouldbe set change,whichcontraststraditional ness strategy.Thisisafundamentalmind- must belinkedandadaptedtothebusi- of howsupplychainsworkandthey vocating startswithagoodunderstanding The managementengagementwearead- TOP MANAGEMENTCOMMITMENT growth anddevelopment. in commercialvalueandorganisational ured notonlyinfinancialtermsbutalso such astructuredapproachcanbemeas- alignment. Thevalueandbenefitsfrom ness operatingexpensesfromsuchan tion, wewillalsoseereductionsinbusi- ments inbusinessperformance.Inaddi- processes, therewillbetangibleimprove- By aligningthebusinessresourcesand to anorganisation’sbusinessstrategy. supply chainmodelthatiscloselylinked from awelldesignedandimplemented discussed thevaluethatcanbederived n Part2ofthissix-partCEOSeries,we and JOE LAMBARDOexplaininPart3ofthesix-partCEOSeries. agement atalllevelsmustmaketimeto of themanagementcommitment.Man- This attentiontoprogressreviewsispart tuning andadjustmentsasnecessary. opportunity toperformtheappropriate mandate andtoallowmanagementthe to ensureadherencetheprogramme would needtobemonitoredregularly ing currentbusinessactivities.Progress necessary transition,whilstmaintain- the organisationspacetomake education andtraining,aswellgiving [ Figure1] RAYMON KRISHNAN programme seriously. sation tomakeanychangesortakethe does notinspirenormotivatetheorgani- gress –delegatingsuchanimportanttask personally reviewtheprogrammepro- a supplychainexecutionmodeldoesnot ecution modelwillbecrucial.Setting-up tablished, designingtheappropriateex- buy-in bykeystakeholdershavebeenes- Once topmanagementcommitmentand DEFINING THEEXECUTIONMODEL , supply chainexecutionmodel. step tolinkthebusinessstrategywith execution strategy.Thisisthefirstcrucial immediately putinfocusthemanagement stage ofthesupplychainmodel,asitwill definition isfundamentalatthedesign or monthlyperformancedashboard.This that theywanttoseeintheirdaily,weekly ly defineatleastthetop5supplychainKPIs CEOs andseniorexecutivesshouldtypical- other suchKPIs. time, timetomachineuptime,andmany to customercomplaints,machinedown- time, customercomplaints,responsetime be: producttimetomarket,ordercycle being measured,someKPIsusedwould Depending onthepartofsupplychain supply chainactivitiesandprocesses. KPIs thatmeasuretime,costandqualityof chain KPIswouldgenerallyrevolvearound of operationalprocessesandflows.Supply measure thecapabilitiesandperformance On theotherhand,supplychainKPIs (capital expenditure)andcashflow. turns, OPEX(operatingexpenses),CAPEX profit margins,marketshareandInventory entated, likepercentagesforsalesgrowth, ness KPIstendtobemorefinancially-ori- similar butarenotalwaysthesame.Busi- supply chainKPIs,whichmayappeartobe we shouldnotconfusebusinessKPIswith It isrelevanttonoteatthisjuncturethat the rightprocesspriorities. KPIs anddeliverables,tofocusattentionon from thesupplychainmodel,expressedas the deliverables(outputsorachievements) is mandatorythattopmanagementdefine have tobeanundulycomplexprocess.It capabilities that weneedinthecompany the CEO,andaskourselves,what arethe start bytakingthetop5KPIsgiven tousby titles andgobacktobasics.Wewill instead organisation charts,departments andjob cution model,wewilldiscardall traditional As wemovetobuildthesupply chain exe- ties enablers. evant supplychainfunctionsandcapabili- reasons –oftenconfuseanddistorttherel- over timeandduesometimestolegacy strange jobpositions–havingevolved ganisation charts,elaboratejobtitlesand We alsohighlightedthatcomplicatedor- tion model. business cycleandthesupplychainexecu- is thefoundationforalignmentof of thesupplychainexecutionmodel.This Figure 1illustratesthethreemajorblocks business cycleandsupplychainmodel. In Part2oftheseries,weintroduced EXECUTION MODEL BUILDING THESUPPLY CHAIN [ Figure3] [ Figure2] and important capabilities first. The second and importantcapabilities first.Thesecond will besufficienttoaddressthe highlevel To startthebuildingofright model,it the supplychainexecutionmodel. necessary todrivethebusiness cycleand capabilities thatweconsiderrelevant and supply chainmodelandattachthecore To addressthisquestion,wewillusethe and supplychainKPIs? business modeltoachieveour appear tosimilar be but are business KPIs with supply [ “We should “We not confuse not always the same.” chain KPIs –which may ] tion ofthekeybusiness processes,adapt model willalsofacilitateaclearer defini- This approachtobuildtheright execution clear tangibledriversofthebusiness. partments orahierarchyofcharts butas around thecorebusinesscycle. Not asde- new dimensionandorganisationemerge Using thisapproach,wecanseeawhole sector andproduct/services. pending onthetypeofbusiness,industry capabilities andtherearemanyothers,de- ness cycle.Thesearejustafewofthekey to achieveeffectiveexecutionofthebusi- cal coreoperationalcapabilitiesnecessary In Figure2,weidentifysomeofthetypi- all thekeyorganisationalfunctions. emerge asthemodelisexpandedtocover and thirdlevelcapabilitiesinthemodelwill 25 LOGISTICS INSIGHT ASIA www.LogAsiamag.com [ CEO SERIES ] 26 [ CEO SERIES ] LOGISTICS INSIGHT ASIA SEPTEMER-OCTOBER 2014 son for being there should be questioned. son forbeingthere shouldbequestioned. model, itshouldbechallengedand itsrea- not playaroleinthesupplychain execution If afunctionaldepartmentorgroup does chain executionmodel. support thebusinesscyclesin the supply ute therelevantcapabilitiestoactively each functionaldepartmentmustcontrib- chain executionmodel.Thismeansthat linked tothebusinesscycleinsupply cial toensurethateverydepartmentis departments inanorganisation.Itiscru- There aremanydifferentfunctional performance. – willdeliveranoverallhigherlevelbetter are abletoexecutethebusinessstrategy ensuring thatthefunctionaldepartments pabilities tothebusinesscycles–andby Having linkedthecoresupplychainca- ties thathavealreadybeendefined. ering thesupplychainexecutioncapabili- tributors inthebusinesscycleanddeliv- This robuststructureshowstherealcon- chain thateliminatesthesiloorganisation. providing aclearconnectiontothesupply tion structuretakesonanewdimension, In Figure3,weshowhowtheorganisa- linked tothebusinesscycles. the recognisabletraditionalblocksand sational structurecanberecompiledinto to thesupplycorecapabilities–organi- ness strategytothebusinesscycles,and ness capabilities–startingfromthebusi- to eachofthethreemajorblocksandbusi- When wehaveestablishedtheclearlinks the performanceoftheirsupplychain. ment tohaveimmediateinformationon required. Themodelwillenablemanage- ous levelsofenablersandcapabilitiesas We couldadd,amendoreliminatevari- tion modelisadynamicandscalableone. Such anapproachtobuildingtheexecu- ecution model. supply chain,hencethechainex- deliver therequiredperformanceof sure thattheexecutionmodelisableto with thevariousbusinessblockswillen- core capabilitiesandtheinterconnections and enablersintheorganisation.These capabilities arerealisedbythedrivers chain. Itisfundamentaltonotethatcore the variousrelevantlinksinsupply major businessblocks,wehavecreated then addingthecorecapabilitiestoeach it tothethreemajorbusinessblocks.By view ofthesupplychainmodelandlinked We startedthisserieswithasimpleover- and responsivemanner. and measureperformanceinastructured needed, andenableasystemtocontrol them tomarketandcustomerchangesas review andacontinuous correctivemind tainable performancerequiresa constant that surroundthebusinessrealities. Sus- impervious tothevariouschange factors can workonremotecontrol,unattended or is afallacy.Therenosupply chain that smooth operationcancontinueindefinitely the expectationthateffectivenessand signed, implementedandisworkingwell, Even afterasupplychainhasbeenwellde- chain performance. business strategyandeffectivesupply mental tokeepingthe‘freshness’of ness. Butmanagingchangeisalsofunda- in thesustainabilityandgrowthofabusi- Managing changeisacrucialdimension business viability. performance andeventuallyeventhreaten would undoubtedlydeterioratebusiness disrupting theexecutioncapabilities.This ever, willresultinuncontrolledvariables failure ordelaytoaddressthisreality,how- seem tobeaneverendingchallenge.But the capabilities,changemanagementmay man resourceisanimportantaspectof continuously evolvingandwherethehu- Considering thatmarketconditionsare pectations isachallengingproposition. the capabilitiestomeetperformanceex- competencies, synchronisedprocess,and Sustaining anorganisationwithbalanced created. supply chainexecutionmodeltheyhave tain theeffectivenessoftransformed of howtheCEOandhisteamwillsus- emerge. Thequestionnowbecomesone formational journey,anewchallengewill Even beforethecompletionofthistrans- successfully completed. once thebalanceandalignmenthasbeen will bringmanybenefitstothebusiness challenging inthetransitionphases,but an organisationaltransformationwillbe the supplychain.Therealisationofsuch ing corecapabilitiesrequiredtodrive key businesscycles,aswellidentify- model, linkingthebusinessstrategyand how tobuildasupplychainexecution We havediscussedthefundamentalsof EXECUTION MODEL SUSTAINING THESUPPLY CHAIN [ “There is nosupply “There chain impervious to the various that can work onremote surround the business control, unattended or change factors that realities.” set ] and performance. element intheorganisationalstructure ecution model.Thisaspectisanimportant in thebusinesscycleandsupplychainex- people andcompetencies(Nov-Decissue) In Part4ofthisseries,wewillbelookingat day-to-day business. ensure changeismanagedaspartofthe which willrequireasubtleperiodtuningto ment inthetransformationalprocesses, ecutives mustalsocontinuetheirengage- disruptive changes.TheCEOandhisex- culture, andaCEOthatisalsoattentiveto structured andcompetentgovernance ecution capabilitiesthereforerequiresa The sustainabilityofthesupplychainex- delivery ofperformancetargets. balance inthecapabilitiesthatenable is essentialtomaintainthecoherenceand and managedbeforeimplementation.This erate, theyallneedtobeproperlyassessed Whether thechangesareaccidentalordelib- sustainability. is alsoanimportantfactorthatimpacts managing risksinthesupplychain,which we willbelookingatunderstandingand In Part5ofthisseries(Jan-Feb2015issue), edly changethedeliverables. will alterthecapabilitiesandundoubt- critical operationalareas.Thesechanges istics whenchangesareinducedintothe supply chainwilltakeonnewcharacter- tue ofbeingthebusiness‘bloodline’, nals andresourcesaroundthebody.Byvir- the veinsofahumanbodythatcarrysig- The supplychainexecutionmodelislike levels. to maintaintheintendedhighperformance any specificcompanyorindustry. supply chainmodelorstructurefor intended torepresenttheoptimum of thepointprincipleandarenot series, aredesignedforillustration Note: Thechartscontainedinthis please [email protected]. articles ortocontactthewriters, For moreinformationonthe Chain ManagementSociety. president ofTheLogistics&Supply Consult. RaymonKrishnan Lombardo University ofWollongong.Joe fellow of,andlecturesfor,the Stephanie Krishnan Management Society(LSCMS). the Logistics&SupplyChain chain performance,writtenby part seriesonoptimisingsupply This articleisthethirdofasix- is the founder of ESP isthefounderofESP is an honorary isanhonorary is the isthe Companies enabling excellence in man- reflect the portfolio of publications within ufacturing performance in Asia through Contineo Media’s Manufacturing Group, the provision of industrial technology solu- namely Logistics Insight Asia, Asia Food tions and services were celebrated at the Journal, Control Engineering Asia, and Asian Manufacturing Awards 2014 gala PharmaAsia. The categories are: Logistics dinner and awards ceremony, organised by & Supply Chain (eight awards), Pharmaceu- Contineo Media and held at Marriott Hotel, tical Manufacturing (four awards), Indus- Singapore on 28 August 2014. trial Software (four awards), Automation & Control (17 awards), Food & Beverage “The complexities facing manufactur- Manufacturing (four awards), and Corpo- ers in Asia have evolved over the years. rate Social Responsibility (two awards). Today, amongst other challenges, the modern plant is faced with improving op- Under the Logistics & Supply Chain Cat- [ Kenny Tan (R), KEYfeilds Group ] erations productivity, ensuring safety, rais- egory, the winners are DHL Express, Hon- “All winners in the other award categories ing power efficiency, and taming supply- eywell Scanning & Mobility, ifm electronic are mainly MNCs and large corporations. chain complexity. These challenges have Pte Ltd, JDA Software, Kerry Logistics, KEY- We are glad that a home grown [Singapore] resulted in newer and improved products fields Pte Ltd, SWISSLOG, and Vocollect by company stands up to the occasion with and services to the manufacturing indus- Honeywell. the big boys in the industry to win this try,” said Contineo Media CEO Raymond award,” said Kenny Tan, group founder Wong in his welcome address. and CEO of KEYfields Group. “I would like to thank my team in KEYfields for their pro- Now on its third year, the Asian Manufac- fessional service and hard work to win the turing Awards was conceived to recognise trust of our business partners.” companies which deliver innovative indus- trial technology solutions and services. This year, the Awards received more than 170 nominations across the 39 award cat- egories. These nominations were assessed by a judging panel made up of 17 inter- nationally recognised experts and practi- tioners from a variety of industry sectors and disciplines. Their extensive industry [ Rudolf Hausladen, Swisslog ] knowledge and experience enabled them to adjudicate effectively and ensure de- “We are honoured to receive the recogni- serving winners in each category. More tion as the Best Storage System Provider,” importantly, the votes have been audited said Rudolf Hausladen, head of Swisslog by independent auditors, HLB Atrede LLP, WDS Asia-Pacific. “I’m deeply proud of [ Lawrence Lim and Kerry Logistics team ] to ensure impartiality and legitimacy in the our team in Southeast Asia. This award Lawrence Lim, regional commercial direc- process and to dispel any notion of favour- will spur our team to continue delivering tor, South and Southeast Asia of Kerry itism, or advertising-led award giving. the best-in-class automation solutions Logistics said, “We are proud to win the for our customers to provide the right award for Best 3PL Provider in the competi- AWARD WINNERS products, to the right place, at the right tive logistics and supply chain category for The award categories were selected to time.” the first time. Obtaining this award reflects the manufacturing community’s recogni- tion of our dedication to providing quality integrated logistics services and custom- ised supply chain solutions to customers across the region. We would also like to thank our customers from various indus- tries, who made this win possible by nomi- nating us.”

Also prominent among the winners this year was Emerson Process Management, Recognising product and service excellence recipient of four of the 39 awards given in the manufacturing industry out during the evening. It captured Best Control Valves Provider, Best Process LOGISTICS & SUPPLY CHAIN Best Industrial Network Provider Control Systems Provider, Best Process In- Best Bar Code Technology Provider Moxa Inc. strumentation Provider, and Best Pharma Honeywell Scanning & Mobility Automation Provider. There were three Best Industrial Wireless Provider straight victories for JDA Software, Best Best Express Logistics Provider Honeywell Pte Ltd Supply Chain Software Provider; Siemens DHL Express Best Internet of Things Provider PLM Software, Best PLM Systems Provider; Best RFID Technology Provider Rockwell Automation Southeast Asia Pte Ltd and Emerson Process Management, Best ifm electronic Pte Ltd Best Machine Vision Provider Process Instrumentation Provider. Best Storage Systems Provider Cognex Singapore Inc. Corporate Social Responsibility Awards SWISSLOG Best Machine Safety Systems Provider were given to companies who promote sus- Best Supply Chain Software Provider Siemens Pte Ltd tainable manufacturing and provide cus- JDA Software Best Process Control Systems Provider tomers with solutions to cut energy costs, Best Third Party Logistics (3PL) Provider Emerson Process Management improve efficiency, and reduce their impact Kerry Logistics on the environment. This year’s winners Best Process Instrumentation Provider were Schneider Electric Singapore, for Best Best Warehouse Automation Provider Emerson Process Management Energy Management Technology, and Agil- Vocollect by Honeywell Best Process Safety Systems Provider ity, for Best Solution for Sustainability. Best Warehouse Management Siemens Pte Ltd Systems Provider Best Programmable Control KEYfi elds Pte Ltd Systems Provider Rockwell Automation Southeast Asia Pte Ltd PHARMACEUTICAL INDUSTRY Best Robotics Provider Best Pharma Automation Provider ABB Pte Ltd Emerson Process Management Best Servo Drive/Motor Provider Best Pharma Logistics Provider Mitsubushi Electric Asia Pte Ltd Korean Air Cargo Best Variable Speed Drive Provider [ Ramesh Ganeshan (R), Agility ] Best Pharma Packaging Fuji Electric Asia Pacifi c Pte Ltd Solutions Provider “We at Agility feel encouraged and hon- MULTIVAC Pte Ltd oured to be recognised for our efforts in CORPORATE SOCIAL developing and delivering sustainable sup- Best Pharma Production RESPONSIBILITY Technology Provider ply chain solutions to manufacturers,” said Powder Systems Limited (PSL) Best Energy Management Technology Ramesh Ganeshan, Agility vice president AspenTech for human resources in Asia Pacific, who Best Solutions for Sustainability accepted the award the gala dinner. “We INDUSTRIAL SOFTWARE Veolia Water Solutions & Technologies understand the impact of supply chains on Best CAD Systems Provider society and the environment. We remain Siemens PLM Software committed to sustainable action in collab- Best CAM Systems Provider FOOD & BEVERAGE INDUSTRY oration with our customers and partners.” Delcam Best Food/Beverage Ingredients Provider Ingredion Singapore Pte Ltd ASIAN MANUFACTURING Best ERP Systems Provider CONFERENCE Epicor Software (Asia) Pte Ltd Best Food/Beverage Packaging Equipment Provider For the first time ever, Contineo Media Best PLM Systems Provider MULTIVAC Pte Ltd launched the Asian Manufacturing Con- Siemens PLM Software ference to complement the Awards. With Best Food/Beverage Processing the theme “Delivering Productivity, Qual- AUTOMATION & CONTROL Equipment Provider ity, Safety & Sustainability Through In- Best Automation Systems Integrator KHS Asia Pte Ltd novation” and held on the same day and Excel Macro Industrial Systems Pte Ltd Best in Food/Beverage Packaging Design venue as the Awards, the inaugural one- Essentra Packaging day Conference featured presentation Best Control Valves Provider tracks aimed at educating manufacturers Emerson Process Management in achieving productivity, quality, safety Best Embedded Systems Provider CORPORATE SOCIAL and sustainability in their manufacturing National Instruments RESPONSIBILITY processes. The event was supported by Best Fieldbus Infrastructure Provider Best Energy Management Technology Platinum Sponsor Rockwell Automation; Beckhoff Automation Pte Ltd Schneider Electric Singapore Pte Ltd Strategic Partner Sponsors Belden and Epi- cor Software Corporation; and Supporting Best Industrial Cyber Security Provider Best Solution for Sustainability Association, Singapore Industrial Automa- Check Point Software Technologies Agility tion Association (SIAA). Fostering Innovation for Global Security Challenges

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