Contract logistics pullstogether the many facets ofa supply chain.

Tradelanes

agility.com

With the growth of a new consumer class in emergingmarkets has come demand for sophisticated logisticsin the supply chains that serve them.

Even a decade ago, the emerging markets supplychain was typically built to serve producers. Itdelivered inbound raw materials and intermediategoods to a production location and moved finishedproducts overseas to buyers and end consumers inthe United States, Europe and other developedmarkets.

Tradelanes looks at the development of supplychains built to serve emerging markets andconsumers in those countries. We also look at thefast-growing small and medium-size brands goinghead-to-head with one another and with multi-nationals in emerging markets – companies seekingthe logistics know-how and tools to compete.

We examine the demand for high-end contractlogistics – the integration and optimization ofwarehousing, transportation, distribution andinventory management – and show how it hasworked for customers in Indonesia, India and Pakistan.

Agility's Colin Mewburn-Mercer walks us througha supply chain assessment, something once reservedfor larger companies and now sought by homegrownand regional brands. Next, we scrutinize thecustomer portal tool, again once available primarilyfor multi-nationals, that is becoming essential tosmaller companies operating in emerging markets.

Emerging markets countries have to deepen theirknowledge base to continue making gains. Tradelanestakes a look at two Agility-backed educationinitiatives in Cambodia that aim to broaden anddeepen the talent pool by expanding access toschooling and working with young mothers.

The customer portalEasy-to-use tools give customers acomplete view of the supply chain.

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Technology in actionA look at how one company manages thecomplex flow of its products from Asia toLatin America.

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25Winning with warehousingHow a fashion group and personal careproducts brand found the answers inPakistan.

Improving education Agility helps to develop educationalopportunities in Cambodia.

21 Supply chain success storySports apparel and fashion brands gearup to serve Indonesian consumers.

Search for logistics answersIn emerging markets, companies of all sizesknow they need the tools and expertise tomake their transportation, warehousing anddistribution more efficient.

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In the world’s emerging markets, demand for contractlogistics – the business of engineering supply chains andoptimizing warehousing, transportation, distribution andinventory – is growing rapidly.

Market intelligence firm Transport Intelligence (Ti) estimatesthat the contract logistics market will grow at 6.8 percent peryear between now and 2018, driven primarily by expandingdemand in emerging markets. This trend is most notable inAsia Pacific, which is set to overtake Europe as the world’slargest contract logistics market. By 2018, Asia Pacific’scontract logistics revenues are expected to approach $100billion. Other high-growth regions include Africa (11.6 percentCAGR), Asia Pacific (10.7 percent CAGR), Central America(10.2 percent CAGR), and the Middle East (8.6 percentCAGR), Ti says.

There are two parts to this story. First, e-commerce isreshaping demand for industrial real estate in maturemarkets, driving significant rate increases that in turn areseeing companies offshoring warehousing, storage and otherdestination supply chain activities. In the United States, forexample, industrial rents (75 percent of which go towardwarehousing) rose 3.4 percent in the last year and arecoming close to pre-crisis 2008 levels, according to TheEconomist. As a result, there has been a push for contractlogistics in emerging markets where industrial space ischeaper. Asia, in particular, has benefitted from the trend aslogistics providers increasingly offer solutions like “direct to

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Search forlogisticsanswers

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Demand forcontract logistics in

emerging marketsis soaring

store” shipments or distribution center bypass models thatget goods to market without an expensiveintermediate stop in the mature, high-rentcountry where they are to be sold.

The second driver is the explosivegrowth in consumer demand in emergingmarkets themselves. It has been poweredby increases in population, size of themiddle class, spending power, andurbanization rates, along with steadyprogress in health, education and povertyreduction. Of note has been dynamism in theeconomies of ASEAN, GCC and Sub-SaharanAfrican countries, and growth in the economies ofIndonesia, Nigeria, Bangladesh, Mexico and Pakistan.Consumer demand has fed the need for upgradedwarehousing, transportation, systems and supply chainexpertise in those countries as they shift to higher-valueexports and pivot to meet the demands of the newconsuming class at home.

What does this mean?

Demand for infrastructure, value-added services The nature of contract logistics in emerging markets is beingredefined. As markets such as China, India, Indonesia andNigeria continue to mature, simple structures for storage andrudimentary inventory management are no longer enough.

Businesses in industries ranging from retail totechnology expect modern industrial infrastructure

and facilities, no matter where they operate.Increasingly, they demand value-added

services within the four walls of thewarehouse – from technology upgrades, tolabeling and managing of returns. Theyalso are seeking the same supply chainsolutions that allow large multi-national

companies to optimize how they run theirbusinesses by enhancing reliability and cost-

effectiveness.“We clearly see this changing dynamic play

out in our business,” says Tarek Sultan, Agility CEO. Examples:● In the Middle East, Agility has been able to consolidate

costly national distribution centers of customers inpharma, retail and automotive into a more efficientregional distribution hub at Agility’s flagship Dubaifacility.

● In Asia, Agility built the largest polymers mega-hub inChina, constructing it to world-class specs with anintense focus on Health, Safety & Environmentalstandards.

● In Africa, Agility is building 70 sophisticated distribution parks for FMCG, life sciences, and oil and gas customers.

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Agility’s flagship facility inDubai has allowed majorpharma, retail, and autocustomers to consolidate

dozens of nationaldistribution centers into

one regional facility.

By 2025,consumption in

emerging marketswill account for $30

trillion, nearly half of the global

total.

UNINTENDED CONSEQUENCESE-commerce, nearly 7 percent of all sales in the United States, is

creating demand for warehousing space. Rents and property

values for this space are increasing rapidly. Many companies,

particularly those producing in Asia, are looking to ship goods

direct to stores to avoid the expense of consolidation, fulfillment

and distribution in the United States.

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Search for logistics answers

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Search for logistics answers Search for logistics answers

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“The very definition of contract logistics in emergingmarkets has shifted dramatically. Companies like ours arereshaping what it means to do contract logistics in Asia, theMiddle East and Africa,” Sultan says.

Home-grown SMEs are leveraging systems to grow Small and medium-sized local companies based in emergingmarkets are also beginning to take advantage of supplychain management tools and techniques once available onlyto multi-nationals and regional giants.

In the past, especially in the Middle East and Asia, localcompanies tended to manage their

warehousing and distribution in-house. That is rapidly changing,says Morten Damgaard, CEOAgility Southeast Asia.

“In Indonesia, we work withthe biggest multi-brand sports

retailer in the country. Theyhave close to 2,000 stores in 65

cities. They aren’t a mom-and-pop,

they’re a highly sophisticated supply chain customer,” hesays. “We offer warehousing and domestic distribution fortheir products, including from their e-commerce sales, aswell as value-added services like labeling and tagging. Morethan 1,000 orders and 110,000 pieces of throughput volumeare processed every single day.”

Damgaard says homegrown companies across Asia arelooking for answers. “One of our most interesting customersin Malaysia is a local retail company that grew from twostores to more than 100 over the course of just two years.They use our inventory management systems via an onlineportal to increase reliability and reduce costs. That was amajor factor in their tremendous growth.”

Beyond track and traceA third factor driving contract logistics demand in emergingmarkets is the critical role of technology investment. Thereis a demand for greater visibility across the entire supplychain. Customers that once looked only for simple track andtrace capability are today looking for business intelligenceand analytical tools that help them manage day-to-day flowsof goods and identify areas in their supply chains wherethey can wring out cost.

“Customers are looking for providers with horsepowerand confidence in this area,” says Colin Mewburn-Mercer,VP/Global for Agility’s Integrated Supply Chain Solutions.

“One size does not fit all, and an agile offering in IT isessential. Customers are frequently concerned that deployingIT processes can take months and that the process is vulnerableto mission drift.”

Agility offers customers the ability to integrate with theirEnterprise Resource Planning system (ERP). For largercustomers with more sophisticated needs, Agility is also able tointegrate with vendors, clients and third parties via ElectronicData Interchange (EDI) or web services.

Agility customers have access to a web-based customerportal that offers configurable reports, online shipmentbooking, and management of documents, exceptions, vendors,and stock and inventory.

The advantages are clear: 100 percent elimination ofmanual rekeying, improvements in data quality, and the abilityto allow venders to directly submit – and take accountabilityfor – their information online.

“It comes down to fundamentals: drive efficiency, reduceprocess cycle times, improve reliability and performance, andempower customers,” Mewburn-Mercer says. “Now customersin emerging markets want the same thing the big MNCs havebeen getting.”

6 7CHANGING CUSTOMER PERCEPTIONSOF SUPPLY CHAIN VISIBILITY

Source: American Shipper,www.americanshipper.com/main/gtminfographic.aspx

Technology in ActionTechnology helps customers manage complexlogistics challenges, improve collaboration,eliminate errors, and increase efficiency. Take theexample of a European retailer looking to optimizea supply chain that involved buyer consolidationfrom 11 origin sites in four countries, along withexports to four destination countries with morethan 300 suppliers.

Agility set up an Agility-staffed multi-countryconsolidation center in Colombo, Sri Lanka tohandle cargo originating from India andBangladesh for onward shipping to Argentina andBrazil. The center manages label inspection of morethan a half-million pieces a month. Specialarrangements such as back-to-back charter transportare used to deftly manage seasonal cycles, spikes indemand and even emergencies such as globalshipping disruptions.

Underpinning it all is technology. Performancedata collected by Agility is aggregated directly intothe customer’s Enterprise Resource Planning (ERP)system. The resulting visibility gives the retailer theenormous advantage of remaining flexible withshipment plans right up to the point of loading. Theend result: tighter lead times on cargo movement,plus reduced handling and storage fees atdestination. Even with demanding lead times toaccommodate sourcing and distribution of finishedproducts from diverse suppliers across the Indiansubcontinent, Agility ensures its customer’s storesare refreshed each week with new styles.

Contract logistics in emerging markets has shifted dramatically aswitnessed by the Agility-operated mega-hub in Shanghai built for achemicals client and the largest of its kind in China.

80% ofAgility staff

work inemergingmarkets.

One of Agility’s customersin Malaysia is a local retail

company that grew fromtwo stores to more than

100 in just two years.

One size does not fit all,and an agile offering in IT

is essential.

In 2013, more than two-thirds ofshippers said that visibility meanslittle more than track and trace.But things changed in 2014...

Access tobasic

shipmentdetails

Simpletrack and

trace

True end-to-end view ofmy supply

chain

UncertainAll of theabove along

with businessintelligence

and analyticstools

Q: Big Four consulting firms dosupply chain assessments, too.Why would a client choose touse a 3PL instead?When a client finds it difficult tojustify a $100,000 supply chainevaluation by a Big Four consultant, a3PL provider with expertise in thesame area is a welcome solution. Thebest 3PLs have scaled up their servicesand modeling capabilities over the past 10 years.

Assessments by 3PLs are generally acheaper route, so that has becomequite a powerful argument in ourfavor. Another advantage is speed. Wetypically move quicker. With existing

clients, if you’re already handling theirfreight, you already have a lot of datathat can be used to build the modelswe rely on to gain an understanding oftheir supply chain. We can eliminatechunks of time required to get theclients’ data, make assumptions onhow to interpret it, etc.

Q: What about emergingmarkets?We’ve had a relatively small number of projects coming out of Africa andthe Middle East, but in Latin America

and Asia Pacific thenumber has grown significantly in thelast few years. But ISCShas experience in allgeographic areas.

Q: When is anassessment worth it?When you can bring sufficient savingsto pay for the cost of the consultancy. If it’s going to cost me $25,000 to have the study done and I’ll getrecommendations that will save$500,000, it’s not a difficultcalculation.

For clients, it’s about learning

where they actually spend theirmoney, and how they could spend lessto get the same impact. Or it is aboutdeveloping the structure or processesto be able to absorb much biggervolumes with a similar cost footprint.

Many of them want a checkpoint, abenchmark where they can get anexternal view on how they shape upagainst other companies within theirsector. They want new ideas andapproaches that they may not haveconsidered or may not have knownhow to achieve.

Q: What’s different about AgilityISCS?We are a much more bespoke provider.We try to escape from the one-size fitsall model. Clients used to see“bespoke” as time-consuming andunnecessary. The trend we are seeing,increasingly, is that they want

providers who will listen and designprocesses around the very specificchallenges they have to address.

Secondly, Agility ISCS hasdeveloped a reputation as being aninnovative solutions player. We usually come back with different ideasfrom our mainstream consultingindustry competitors. Lastly, wemanage supply chains – that’s Agility’s principal business – so weknow whether our solutions will work and what it will take to makethem work.

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Colin Mewburn-Mercer leadssupply chain assessmentsfor companies in retail,FMCG, automotive,

technology, aerospace and otherindustries. He is Vice President/Globalfor Agility Integrated Supply ChainSolutions (ISCS).

Q: When do companies ask youto look at their supply chains?When something’s not workingcorrectly. When a client runs out of in-house expertise to deal with thesituation, or when a client is at adecision point and unsure which wayto progress. Sometimes clients come tous because their existing providersaren’t pro-active enough. We provide avariety of services, covering projectsfrom major multinationals down tovery local companies.

Q: How does an assessmentstart?Typically, it starts with on-siteorientation, learning about a client’sbusiness processes. This leads into thegathering of data, in order to puttogether fact-based models to representhow their business processes function.A (supply chain) re-design and solutionproposal has to be supported by datain order to argue the case for change inthe specific challenge area.

The initial dialogue is critical. Wehave to be better listeners than talkers.You can’t learn about a client’schallenges unless you give the client achance to explain what they are

experiencing. The key question wehave to answer is: how are we going toadd value?

First, you need to focus upon thecustomer’s challenges, find out aboutwhat keeps them awake at night. Youcan often start a project and end upwith massive mission creep, unless youhave a clearly defined scope. You wantto find out why it’s important for acustomer to go down the analyticalroute – understand their reasoning.You don’t want to focus on theproblem or challenge in isolation, soyou need detail about the hand-offs oneither side of the stage in the processwhere the customer identifieschallenges. You look at cases,examples, data, documents, exceptions– failures to resolve problems in thesupply chain and shipment.

Customers often like options,different ideas to solve the same issues.This gives them the opportunity tocombine the input they get with theirown views about what could or shouldwork best. We are able to help thecustomer re-design the process, but wealso know how to help implement thechanges.

Q: What happens after theassessment is finished?Clients engage not only to solve initialchallenges but also because we tryreally hard to focus on developingindividual continuous-improvementplans, where we take responsibility fordriving cost out of the supply chain aspart of continuous evolution.

Q: What about companies thataren’t Agility clients to beginwith? Do they use you?Sure. A large multi-national consumergoods company wanted our helpdefining lead times to market. Theywanted us to show what we’d estimateas representative lead times rather thanwhat they internally defined thosetimes to be. They wanted to develop amodel for getting products from Indiato certain Latin America marketsbecause they were having problemsdeveloping forecasts.

They needed models for how muchstock would be required in a particularmarket for particular periods. If theydon’t know the lead times, they eitheroversupply – too much stock comingin too quickly – or they undersupply,and stock runs out.

Clients also like neutrality, thefeeling that they are speaking to ateam that isn’t placing themconstantly under buying pressure.Some clients are cautious about goingto their freight forwarder forconsultative or assessment projects.They need to feel that we won’t justtry and steer them towards using ourforwarding and 3PL services.

Supply chainassessment Q&A with Colin Mewburn-Mercer

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WHEN YOU NEED ONE AND WHAT TO EXPECT

You can’t learn about aclient’s challenges unless

you give the client achance to explain what

they are experiencing.

Supply chain assessment

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Where’s theproblem?What’s theanswer?Companies with goods to move canbreak down their supply chains intoeight areas that get scrutiny in athorough assessment.

● VISIBILITYAm I managing shipments,orders, vendors and exceptionsefficiently?

● NETWORK SOLUTIONS Do I need a control tower?Should my customer be on-site?What about a 3PL or 4PLprovider?

● CASH FLOW How can I maximize it?

● CARGO MANAGEMENT Vendor consolidation? Value-added services? Where are thesavings?

● HUBS & LOGISTICSSOLUTIONS Cross-docking? Cargo rework?Warehousing? What’s mostefficient?

● PRIMARY & SECONDARYDISTRIBUTION Do I need a distribution center?What’s best for productlaunches? Do I need packaginghelp? How do I handle returns?

● PROCUREMENT How do I work with myfranchisees? Do I need help withe-booking? What about“greening” my procurement?

● MODULATIONDo I really have a grasp of myoperations, compliance andperformance?

CFS consolidation at Chennai and delivery tocustomer Distribution Centre at Xiamen

An Agility Solution

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ThecustomerportalBEYOND SINGLE-SHIPMENT VISIBILITY

Once just for thebig guys, now amust-have forSMEs

Customer portals are giving small and medium-sizecompanies access to the same customized,tiered, integrated and affordable tools that wereonce used only by large, IT-savvy enterprises.

Small and medium-size enterprises don’t have the shippingvolumes or complex supply chains of Fortune 500 companies,but that doesn’t mean their logistics needs are simple.

An operations executive at a medium-size companymight oversee tens or hundreds of shipments a month alongwith activities at multiple warehouses. He might haveadditional responsibilities beyond managing his supplychain. But many companies can’t afford the sophisticatedsupply chain platforms and dedicated IT staff that largeenterprises often have.

Single-shipment track-and-trace tools offered by third-party logistics providers have long been a mainstay for thesecompanies. But as volumes and complexity have grown,supply chain managers need more powerful tools enablingthem to see overall performance against targets and quicklyspot operational problems. Some logistics providers such asAgility offer robust end-to-end visibility solutions that targetthis very need.

“Medium-size companies can benefit from integratedvisibility platforms like Agility’s customer portal,” says AlexGreuter, Chief Technology Officer at Agility. “The portal lets customers see all shipment activity in one consolidated

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view. They have access to shipment documentation, andthey can schedule shipments, track movement of inventoryin warehouses, manage purchase orders, and more, all with asingle log-in.”

Indeed seeing the details of a complex supply chain isuseful, and the reason many SMEs are eager to use customerportals. Portals allow them to see all their shipments anddrill down to check the detailed status of a particularshipment. In addition, customers can get email alerts aboutthe status of critical shipments, so they know where theircargo is, without having to seek out the information.

Flexible reporting, regulatory complianceWhile some customers like having all the details at theirfingertips, others prefer seeing the big picture. Agility’smedium-sized customers use a range of summary reportsfrom the portal, including shipping status and KPIperformance, so they can spot problems at a glance. Aflexible reporting engine allows them to create customreports and have those reports emailed to them on a daily,weekly or monthly basis. That’s a big time saver foroperations managers at medium-size enterprises who can’tdevote themselves to monitoring shipments.

Regulatory compliance can also be a struggle for SMEs.Keeping track of key shipment documents sent as emailattachments is time-consuming. With the customer portal,shipping documents are automatically scanned and stored,and accessible on demand. Customers know where thedocuments are and can upload them to store alongsidestandard shipping documents already in the system so allrelevant documents are in a single, secure repository.

Online booking, warehouse insightSMEs also are finding that they gain efficiency and reduceerrors by using a portal to schedule shipments. Online jobbooking is quick and easy. It reduces delays and

inefficiencies that occur when jobs are submitted via emailsand spreadsheets. “Customers that try the online bookingfeature never go back to the old way,” Greuter says. “Theyrealize the simplicity and efficiency of conducting businessthis way. The portal also offers a container view andcontainer booking for customers who need precise time slotallocation for delivery bays.”

Agility’s portal gives customers access to rich warehousemanagement functionality, in addition to the freightmanagement tools. They can track inventory in and out ofthe warehouse and see how they are performing againstKPIs.

Greuter says some customers gravitate to the portal forhelp with purchase order management. Others benefit fromAgility’s US customs management module, which lets themmanage their entries and view AES filings. Customers withtheir own IT systems can tap into the Agility portal throughits extensive EDI-based integration framework, furtherstreamlining processes like shipment booking and order

management so they can improve data accuracy and getgreater visibility across their whole supply chain.

“We’re trying to create a one-stop-shop for customers,even those with specialized needs,” Greuter says.

The customer portal The customer portal14

To get to Agility’s customer portal, click the “register” link on thewww.agility.com website home page. An Agility representative willcontact you to discuss your needs and give you a user ID. Most features are intuitive, but Agility offers training for customersrequesting it.

Customers can get emailalerts about the status of

critical shipments, so theyknow where their cargo is,without having to seek out

the information.

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Companies that operate in emerging markets allwant to manage and distribute their productsefficiently, moving inventory swiftly to keep costslow. That can play out differently from one market

and company to the next, as it did with this FMCG producer,automotive manufacturer and clothing retailer.

Global fashion group In Pakistan A Spanish multinational clothing retailer operates a supplychain with a complex network of more than 300 suppliers,buyers from 11 sites in four destination countries and aglobal distribution network of over 6,000 retail stores. Thefashion group designs and manufactures almost all itsproducts by itself, dispatching its newest fashions to storesevery two weeks. Agility operates a 30,000 sq.ft.consolidation center for the group in Karachi and handlesgarments originating from Pakistan and moving to Spain.

Each year, Agility transports approximately 2,000 tons ofjeans via air freight and another 25,000 cubic meters of jeansusing ocean freight to the customer’s central warehouse inSpain where all global shipments are consolidated. At theheart of the consolidation center is an order managementsystem that keeps track of all important supply chaininformation, including purchase orders, inventory levels,milestones and operational performance. An EDI link to thecustomer’s in-house IT system ensures full visibility of thesupply chain to better manage seasonal cycles and addressproblems right up to the point of loading.

Winning withwarehousing

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SOLUTIONS IN SOUTH ASIA

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Three examplesof complex

warehousingrequirements

Winning with warehousing

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Consumer goods giant in Pakistan Agility is one of Pakistan’s largest 3PL providers, offeringstate-of-the-art warehousing and distribution facilities in acountry where they are not widely available. In Karachi,Agility provides 215,000 sq.ft. of warehousing space to aglobal producer of personal care products such as shampoo,conditioner and facial wash.

The customer counts on Agility to handle both finished,imported goods and products that it manufactures in Pakistan.Agility manages various warehousing activities. Agility storesraw material for the customer’s production plant; movesgoods from the plant to a distribution center, then from thecenter to retail outlets in five cities; and receives andmanages 21,000 pallet positions of finished goods.

Multi-nationals selling in Pakistan can find it a difficultplace to operate: roads are poor and crowded; infrastructureis underdeveloped; and crime and sectarian violence flare upfrequently. To help navigate that environment, Agility usesits strong on-the-ground knowledge and well-establishedlocal operations, along with a GPS-enabled fleetmanagement system. Agility provides value-added servicessuch as special packing for sales promotions, and product

labeling. Its Karachi facility – equippedwith advanced warehouse

management systems andhandling equipment – helpedthe customer to achieveeconomies of scale byconsolidating its operationsunder one roof, improving

vehicle utilization andboosting order fulfillment

performance.

Luxury automotive manufacturer in India A German luxury car manufacturer was expanding itsbusiness in India but had difficulty distributing its high-value spare parts on a timely basis to meet demand acrossthe vast country. Agility set up an 87,000 sq.ft. warehouse inBhiwandi, a suburb of Mumbai, to serve as its nationaldistribution center for car parts.

The majority of the warehouse space is demarcated as anexcise area for taxable goods while the remaining spaceserves as a customs bonded warehouse for goods that are notyet subject to tax. The spare parts are imported fromGermany via ocean freight and are meant for theautomaker’s finished passenger cars in India. Agility receivesand clears the shipments through customs and conducts acheck to ensure they meet quality and quantity standardsbefore binning them. Each month, the inventorymanagement system handles more than 20,000 SKUs. Whenthe automaker’s authorized Indian dealers place their orders– routine inventory replenishment, a rushed order, or ultra-urgent parts required for a broken down, roadside vehicle –Agility picks and packs the required items for distribution inany part of India in 24-72 hours. The agile distributionnetwork enables the customer to stay on track in meeting itsgrowth plan across India.

Indonesia:view on the

groundSUPPLY CHAIN

SUCCESS STORY

Winning with warehousing20

Companies producing inemerging markets arelearning new lessons as theyretool their supply chains to

take advantage of the opportunities tosell into those markets for the first time.

Two companies – a consumer sportsbrand and a global fashion house –turned to Agility to help them make

the pivot in Indonesia, where agrowing middle class has the buyingpower to attract big brands.

The sports apparel retailer needed areliable domestic supply chain thatallowed it to store, track and distributeacross Indonesia, where the companyhad sourced and manufactured goodsfor export but done little selling.Agility allocated 3,300 sq.m. of space

in a 17,600 sq.m. warehouse in EastJakarta to manage distribution withinIndonesia. That facility processesorders. It picks, labels, packs and shipssports apparel, footwear andequipment, using road, ocean and,when urgent, air freight so the goodsget to the customer’s 11 authorizedIndonesian distributors and 400 retailoutlets, many of them quite remote.

Support forleading sports

apparel andfashion brand

Pakistanmanufactures

more than 50%of world’s

hand-sewedfootballs.

LARGEST DEEP-SEA PORTPakistan's Gwadar Port is the largest deep-sea port in the world.

Situated on the Arabian Sea, it is a vital access point for

Pakistan and for landlocked Afghanistan and Central Asian

countries. Gwadar is intended to be a fully developed regional

hub and trans-shipment port. China Port Holdings took over

management at Gwadar in 2013, and the Chinese government is

financing much of current development.

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Collection & returnReverse logistics are critical to customersatisfaction and efficient inventoryturnover, so Agility also manages thecollection and return of defective orrecalled goods. It also gave the apparelmaker 24/7 inventory visibility and theability to track products in near real-time by integrating an Electronic DataInterchange (EDI) connection to thesports company’s order managementsystem.

Agility’s recommendedconfiguration enables the sportsapparel company to compress itssupply chain and eliminate costly stepsbetween its factories in Indonesia andend consumers. The warehousing anddistribution service reduces lead timeand freight costs, and improvesinventory management through betteroperational efficiencies.

“Companies coming to us haveshifted their thinking. Now they look

at emerging markets – rather thanmature ones – as the places drivinggrowth,” says Jens Wessel, SVP Sales &Marketing for Agility Asia Pacific. “Wehave to be able to show that we canshorten their supply chains and lead

times so they can move products intodifferent markets.”

Via SingaporeAn American “fast-fashion” retailer ofmen’s and women’s clothing andaccessories uses a different supplychain model. A consolidation hub inSingapore receives finished productsfrom the retailer’s production plants inChina, Bangladesh, Cambodia andVietnam. The products are then

exported to Indonesia via air freight tominimize the lead time.

Agility provides the company withDirect-to-Store (DTS) service that freesthe customer to concentrate on its corestrengths. Each week, Agility receivesshipments containing clothes, shoesand accessories at its Singaporewarehouse. Each shipment contains upto 13,000 items that are thenindividually labeled and taggedaccording to customized orders. With aturnaround time of just two to threedays, the items are flat-packed anddistributed directly to retail stores inJakarta, where they go immediatelyonto racks or displays. Fast, agile DTSservice improves profit, reducesinventory, minimizes price markdownsand ensures retail stores get the rightproduct assortment on time.

Wessel says there are importantconsiderations for companies nowselling into markets that once wereprimarily sources of supply:

● “You can’t overlook the need forhigher SKU counts and seasonality,both of which reflect the increasingsophistication of consumers in thesemarkets. Those factors have animpact on production and leadtimes for retail customers.”

● “Shorter lead times put more focuson making transportation routesmore efficient and shorter.”

● “There is a premium on strong ITintegration, a solid multi-modaltransportation platform and goodpeople on the ground.”

Wessel says brands have opportunitiesto drive more efficiency in high-velocity emerging markets supplychains. “They don’t need to sacrificethe level of service they expect acrosstheir global trade lanes that feed moredeveloped markets.”

Indonesia has embarked on a massiveinfrastructure program to stimulate growthby driving down logistics costs andimproving connectivity between eastIndonesia and more prosperous Java. Theplan is to attract advanced manufacturingand service industries and wean the nationfrom reliance on mining and palm oil.

Indonesia's youthful population is

feeding the growth of itsworkforce and consumer

class. By contrast, theworkforce is shrinking or

about to shrink in Thailand,Malaysia and China, where the population

is aging.

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Improvingeducation

25AGILITY HELPS IN CAMBODIA

What began withvolunteerism by twoAgility executives hasgrown into a corporate

commitment for vital educationinitiatives in Cambodia, whichcontinues to struggle with the effectsof the harrowing Khmer Rouge period(1975-1979) and its aftermath.

Jens Wessel, SVP Sales & Marketing,Asia Pacific, introduced Agility toCaring for Cambodia (CFC), a groupthat operates 21 pre-K through Grade12 schools in Cambodia, includingprograms aimed at building literacyand math skills for pre-school children,as well as parental skills for youngmothers. These programs give childrena significant advantage, as earlyenrollment increases the likelihood ofgraduation and academic achievement.Jens and his family, living in Singapore,have traveled to Cambodia to work withCFC. Agility has been supporting CFC’spre-school and young motherprograms since 2012.

At about the same time, Agilitybegan working with the NorwegianAssociation for Private Initiatives inCambodia (NAPIC). With support fromUnited World College of South EastAsia (UWCSEA), NAPIC set up a full-

day school – KUMA Cambodia – in2012 to educate and care for the mostvulnerable children in villages nearTakhmau, south of Phnom Penh. TheAgility-NAPIC connection came aboutthrough Morten Damgaard, CEO ofAgility Southeast Asia, who workedwith UWCSEA and NAPIC as avolunteer and now serves on KUMA’sadvisory board.

“Poverty stunts education,”Damgaard says. “In Cambodia,children are forced to drop out ofschool at primary or secondary levelsin order to work and help support theirfamilies and because many can’t affordbasic academic expenses. Withoutsupport, it’s unlikely they will get theeducation they need to rise out ofpoverty.”

Four years of destructionThe Khmer Rouge destroyedCambodia’s education system and mostother institutions during four years oftotalitarian rule in which up to twomillion Cambodians, nearly a quarterof the population, died. Traumatizedand impoverished, Cambodia was slowto recruit teachers, reopen schools andrebuild its education system.

Today, there are about three millionstudents in more than 12,000 primary, ▼

secondary and tertiary schools. Literacy rates, at near zero amongschool-age children after the fall of theKhmer Rouge, are climbing.

“The educational landscape inCambodia is improving,” Wessel says.“But progress is slow. Support fromorganizations like Caring for Cambodiamakes education more accessible. Itwon’t be long before we see most, ifnot all Cambodian children in schoolwhere they belong.”

More than half of Cambodians areunder age 18. Many are growing up inmotherless households or have nofemale role models. As a result, CFCaddresses normal education needs andoffers instruction for young parents.

CFC builds a brighter futureWith Agility’s support, CFC has beenworking to ready pre-school childrenfor grade school while, at the sametime, helping mothers developparenting skills that will ensure theirchildren succeed. CFC provides basichealth and dental education, andhygiene instruction and materials,

working with more than 330 mothersand 500 children from 12 pre-schools.

A separate CFC program, servingnearly 900 junior high and high schoolgirls, aims to encourage and empowerfemale students, giving them theconfidence and tools to stay in school.Agility funds two counselors and asenior program manager; it has paidfor laptops and program managementexpenses. Each semester, CFC trainsmore than 85 teachers in ways toaddress the needs of female students.

Programs such as CFC’s are new toCambodia. They have helped keepchildren in school longer andimproved graduation rates, drawingattention from key governmentofficials. In a visit to CFC last year,Cambodia’s education minister said thecountry would adopt CFC’s educationand program standards for pre-schoolsthroughout Cambodia.

Lydia Breckon, DevelopmentDirector for CFC, said: “We are verygrateful to Agility for helping us tomake this excellent education a realityfor thousands of Cambodian children.”

KUMA CambodiaNAPIC’s KUMA Cambodia programserves some of the country’s poorestchildren and families by providingschooling, food and medical assistance.Located south of Phnom Penh invillages around Takhmau, the capital ofKandal province, KUMA educateschildren who would otherwise gounschooled and offers the parentsworkshops in social skills, children’srights, vocational training andemployment.

Instruction at KUMA is basicelementary education: math, Khmerand English reading and writing, arts,and physical education. KUMA alsoprovides three nutritious meals a day,hygiene, medical and dental care.Through Agility’s support, KUMA isable to give children medical examsand vaccinations, and to offerguidance, skills and instructionintended to help their parents get jobs.

Community development inemerging markets has become anAgility priority as the company hasexpanded in frontier economies. “Youdon’t have to make enormous financialcontributions to make a hugedifference in these countries. Whenyou arm children with the basic skillsthey need to get jobs and make theirown contributions, you are making agenerational difference,” Wessel says.

www.caringforcambodia.orgwww.kumacambodia.org

20152 20152

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When you arm childrenwith the basic skills they

need to get jobs and maketheir own contributions,

you are making agenerational difference.

Improving education

Agility education support in Cambodia

CAMBODIA

VIETNAM

THAILAND LAOS

Bangkok

Phnom Penh

Krong Takhmau

CFC Schools

KUMA School

Krong SiemReap

Ho Chi Minh City

28

20152

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Tradelanes is the magazine of Agility,published by Agility Holdings Inc,240 Commerce, Irvine, California, 92602, US.

Editor in Chief Jim Cox Managing Editor Nita Bhatkar Consultant Editor Richard PavittDesign Paul Cooper DesignProduced by Nugene Ltd and printed in England.Graphic Contributions Damir Karic

Editorial CoordinatorsGlobal Integrated Logistics (GIL)Toby Edwards tedwards@agility.com

Africa Deanne De Vries ddevries@agility.com

Americas Josh Rogers jorogers@agility.com

Asia Pacific Gerald Lim glim@agility.com

Europe Vanessa Dethorey vdethorey@agility.com

Middle East James Gildea jgildea@agility.com

Chemicals Mark Ridge mridge@agility.com

Fairs & Events Jennifer Lim jlim@agility.com

Project Logistics Amy Grizzaffi agrizzaffi@agility.com

Defense & Government ServicesJim Cox jcox@agility.comSarah Benrazek sbenrazek@agility.com

InfrastructureNita Bhatkar nbhatkar@agility.comMichel Karam mkaram@agility.com

Corporate MarketingMariam Al Foudery malfoudery@agility.comGerald Lim glim@agility.comNita Bhatkar nbhatkar@agility.com

© 2015 Agility Holdings Inc. All rights reserved.

Copyright of Tradelanes, and the Agility trademark areowned by Agility.Other trademarks reproduced in this magazine are theproperty of their respective owners.

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