Logistics Best Practice Strategy
Source: Editorial Staff
Local industrialists are using logistics tool to compete in world markets, cut costs and increase productivity.
Third party logistics companies are also upgrading capabilities and services to secure more business. Logistics gurus admit that upgraded capabilities may not help to lower production costs for some industries due to inefficient implementation of supply chain/ logistics management, lack of comprehensive monitoring and inventory control systems within each organization as well as external supply chain linkages. Just-in-Time concept has also ot been fully implemented while inaccurate inventory management system, inefficient and sub-standard product delivery, as well as inadequate inventory holding data throughout the supply chain result in foregone opportunities.
Despite these drawbacks, ongoing efforts to upgrade logistics management will yield immeasurable benefit by way of improved business processes.
According to statistics jointly compiled by the Thai National Shippers’ Council and Thammasart University, average logistics cost incurred by the Food Industry is 7.26% of sales revenues as compared to 15.61%for the garment industry, 7.52% for electrical appliances & electronics, 13.04% for leather goods and shoes, automotive parts 12.84% and furniture 14.76%.
Food Industry Logistics
“Surapon Foods” has re-structured its organization and applied logistics strategy to improve operational efficiency and customer services, cut costs and lead time while ensuring that goods delivered to consumers are in good condition and comply strictly with the terms of contract, thereby contributing to trade and investment expansion, job creation and economic growth. Efficient logistics management system also facilitated work procedure planning and internal coordination.
“Logistics is the key success factor for food producers. We rely on detailed planning in order to cut costs, maximize efficiency, comply with meeting customer’s requirement on quality standard, environmental protection and raw material control, and prevent contamination before/during/after production as well as during the transportation process. Global consumers are also increasingly concerned with traceability of raw material inputs, exact production base and dates,” said Surapon Vongvadhanaroj, Chief Executive Officer.
Since 2003, Surapon Foods’ Logistics Division has been responsible for inventory management, shipping arrangements and transportation schedules, export documentation, planning and purchasing raw materials.
“Thai producers, and SMEs in particular, need to upgrade logistics and supply chain management which affects all types of businesses. While large enterprises benefit from bulk transportation, SMEs have to be nimble ninjas if they want to minimize possible damage and compete in a fast-changing and fierce environment. Logistics system also helps to improve organizational efficiency and ensure business survival.” Surapon affirmed.
World class mover
Backed by 16 years’ track record in Thailand and over 40 years of accumulated global experience, modern IT system, professional staff, and 200 overseas branches, “Crown Worldwide” aims to become a full-fledged 3PL in the near future. Early this year, the company launched 3 new core businesses: Hotel and Resort Logistics, Records Management, Fine Arts.
The company ranks No. 1 in the Global Mover business and one of the Top-3 Records Management companies. Despite economic slowdown and political instability, this year’s revenues to surpass the 2007 level of USD200million, said U-tain Pongprapas, Business Services Manager.
Notwithstanding high fuel costs, price cutting and ever-growing number of competitors, Crown Worldwide expects to retain leadership in the moving and packaging business by quoting the same prices and continuous improvement of customer services.
Logistics Model Award 2008
Recognizing the importance of logistics management for local exporters/importers, industries, and over 15,000 logistics service providers, the Department of Export Promotion organized the second Logistics Model Award in tandem with Thailand International Logistics Fair 2008.
The objective of this award is to encourage private enterprises to upgrade logistics capabilities and supply chain management by recognizing Best Practices that can be emulated by other local enterprises and industries.
The criteria for selecting prototype companies include KPI, logistics efficiency in terms of cost savings, on time delivery, convenience, safety, reliability, competitiveness, systematic knowledge management, and Good Governance.
This year’s award went to 3 Thai-owned companies: V-Serve Logistics Co., Ltd., (full service logistics), Hazchem Logistics Management Ltd., (international cargo transportation), and Excellent Business Corporation International Ltd., (Freight Forwarding).
Thanet Sorat, V-Serve Group’s Vice President, noted that the key success factor is HR policy, which aims to create a learning organization, combined with e-Logistics system and strategic planning that translates into Annual Business Plans.
Established in 1981, the Bangkok-based company has 13 subsidiaries and 10 provincial branches, combined registered capital of Baht 66.5million and 500 employees. Based on 10-15% annual revenue growth, combined total sales for 2008 are projected at Baht 1,100 million.
Apart from BOI privileges to operate as an international cargo distribution center, the company has been certified under ISO 9001:2000 and C-TPAT (US Customs). Winning the Logistics Model Award for 2 consecutive years is attributed to the company’s ability to offer comprehensive services, namely, Customs Clearing, DC & Warehouse, VMI, International Freight Forwarding, Cross Border Logistics, Truck Terminal & Transport. The company also operates a fleet of 200 trucks and 3 distribution centers measuring 5,880-sq.m. Global Positioning System helps to minimize ‘Back Haul’ while container packing system meets US safety standard (C-TPAT). The IT system enables ERP applications and e-document storage up to 5 years. The online system enables customers to monitor shipment status. Under the paperless management system, ebXML is used to prepare bills of lading, export-import documents, and link up directly to Customs.
The Group’s business strategy focuses on superior competitive edge based on monthly meetings with suppliers, excellent services, guaranteed lead time (import cargo delivered within 2-days, 95% completed documents counting from the ship’s arrival, 100% completed export documents), monthly preparation of Customer Satisfaction Index, accelerated problem-solving, and policy to enhance sustainable growth.
Hazchem Logistics Management’s
“Niche Strategy” relies on 3 critical factors – in-depth knowledge of hazardous chemicals, organizing a safety system, professionalism.
As one of the 6 companies affiliated to Triple I Logistics Group, Hazchem has over 10 years experience in providing comprehensive logistics services for domestic and overseas chemicals & hazardous products. 90% of the current customer base comprises multi-national companies and businesses that deal with chemicals and hazardous materials.
Apart from sustained 25% annual revenue growth for several years, the company has also built up strategic alliances with international freight forwarders, shipping agents, warehouses, shipping lines, and express package delivery companies – with a view to developing innovative services, and improving service capabilities.
Continuous development of the organization’s knowledge base and IT systems not only helps to improve management and operational efficiency but also contributes to transfer of knowledge to the public sector, local industries and the general public by participating in activities initiated by various trade associations and organizing training programs for all levels of employees.
“By customizing comprehensive logistics solutions to meet diverse customer needs, upgrading warehousing standards and services that include customs privileges and ERP data linkage to inventory management systems, Hazchem can help exporters/importers to cut costs, access new markets, improve operational efficiency and minimize data duplication. Drawing on in-depth studies of the chemical market and systematic business planning, Hazchem can offer technical assistance to strengthen customers’ business potential,” said Chalermsak Karnchanawarin, Hazchem General Manager.
EBCI – No. 1 Freight Forwarder
One Stop Service (E-Oss), domestic and international networks, and close collaboration with customers are the key success factor, said Sayan Chanvipaswongse, Managing Director, Excellent Business Corporation International.
The first objective is to make sure that customers are more than satisfied with work procedures. EBCI consultants work closely with customers to formulate Action Plan and solve problems, followed by preparation of Business Plan, organization of training program(s) on the customer’s premises, and, accurate and comprehensive implementation of the Action Plan.
E-Oss offers transportation and product distribution in domestic and international markets, reserving cargo space in ships/airplanes, inventory management, customs clearance, compliance with laws and other relevant regulations.
EBCI has also prepared analytical studies of tax privileges granted by FTA, WTO and other international trade agreements, selective use of BOI privileges, Clause 19, Free Zone, Bonded Warehouse, target markets, marketing plans, L/C and MOU analysis, along with seminars on international trade.
In its capacity as an authorized Customs Broker, EBCI has forged business alliances with warehouses, freight forwarders, packaging businesses, and IT businesses. The company also works closely with export-import customers to cut costs and improve logistics management, with the help of in-house customs clearance team, international trade experts, and state-of-the-art IT system that enables online data exchange, 24/7 monitoring of shipment status, minimum documentation, lead time and errors.