Turning Crisis into Opportunities
Logistics and risk management tools can turn a crisis into an opportunity. The Trade Logistics Office actively supports Thai LSPs, exporters and importers, but more pro-active leadership is needed to ensure national benefits from GMS cooperation.
Hit hard by plummeting exports, transport operators and logistics service providers are reviewing their logistics/supply chain tools to manage risks and survive the global economic melt-down.
The Institute for Management Development has just released its 2009 review of Thai economic conditions, which is based on four categories: economic strength, public sector efficiency, business efficiency and basic infrastructures. It ranked Thailand as 26th out of 57 countries, up marginally from 27th spot last year.
During a seminar on opportunities and threats for Thai LSPs organized by Logistics Digest, several logistics and supply chain gurus exchanged views on appropriate strategies to manage systematic risks.
Wallapa Satirachaval, Secretariat General of Thai Federation on Logistics, noted the urgent need to appoint a project owner to lead the Thailand Team and accelerate the national logistics development strategy. In the absence of a well-coordinated strategy, Thailand may not be able to withstand threats, or benefit from opportunities, arising from trade liberalization within the Greater Mekong Sub-region and the ASEAN Economic Community. Outdated rules and regulations and inadequate insurance coverage on cross-border cargo also restrict trade and investment opportunities.
Dr. Krizz Chantjiraporn, President, Thai Logistics and Production Society (TLAPS), spoke of the need to train logistics personnel to operate in an international environment. As a private sector organization, TLAPS has regularly promoted the transfer of knowledge to local enterprises and institutions. An international training course called “Certified Production and Inventory Management” has also been introduced. As the strongest member of the GMS group, Thailand is well positioned to promote international standards and develop networks in neighboring countries based on a win-win business strategy.
Speaking on behalf of local LSPs, Sunyawit Sethapokin, Business Development Director, Blue & White Logistics Co., Ltd., emphasized the growing difficulty in competing with multi-national companies which hold the lion’s share of the logistics market and prefer to use LSPs from their own country.
Government support is also needed to balance supply and demand based on the volume of cargo using GMS routes. By organizing fairs in neighboring countries, Thai producers could create new distribution channels and warehousing facilities.
Charnreong Leongnimitmas, Sales Manager for FORTH Tracking System Co., Ltd., which manufactures and distributes GPS devices, emphasized the usefulness of IT systems as logistics and marketing tools to improve productivity, control drivers’ behavior, and use data to create value-added services such as transportation management, prevention of fuel theft and accidents.
Noting the current difficulties in securing new customers, Charintorn Noparat, Thai National Shippers’ Council and Freight Manager SCT Co., Ltd., urged local businesses to increase their profit margins by focusing on cost management. Logistics and Risk Management tools can help strengthen competitiveness and lower production and service costs while maximizing customer satisfaction.
By cutting down on unnecessary costs and non-productive activities, a lean and agile organization is sufficiently flexible to respond quickly to changing environments. Other tangible benefits include value added products or services, maintaining and expanding the customer base, creating a culture of learning, and overall management flexibility. Especially relevant to crisis situations, risk management systems share five common features:
1. A clear-cut risk management policy that directly relates to organizational strategy;
2. Appropriate tools to classify the order of priority and dangers from various risks;
3. Different mechanisms to manage various categories of risks;
4. Duties and responsibilities for managing each type of risks are clearly divided;
5. IT systems are available to ensure effective risk management.