MOBILE PRINTING AEROSPACE INDUSTRY ......March 2012 MICA (P) 144/01/2012 PPS1672/01/2013 (022917)...
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March 2012 www.LogAsiamag.com MICA (P) 144/01/2012 PPS1672/01/2013 (022917) MOBILE PRINTING AEROSPACE INDUSTRY DANGEROUS GOODS LESSONS FROM THE FRONT LINE Anheuser-Busch Executive Discusses Key Supply Chain Challenges
Transcript of MOBILE PRINTING AEROSPACE INDUSTRY ......March 2012 MICA (P) 144/01/2012 PPS1672/01/2013 (022917)...
March 2012www.LogAsiamag.com
MICA (P) 144/01/2012 PPS1672/01/2013 (022917)
MOBILE PRINTING
AEROSPACE INDUSTRY
DANGEROUS GOODS
LESSONS FROM THE FRONT LINEAnheuser-Busch Executive Discusses Key Supply Chain Challenges
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March 2012www.LogAsiamag.com
MICA (P) 144/01/2012 PPS1672/01/2013 (022917)
MOBILE PRINTING
AEROSPACE INDUSTRY
DANGEROUS GOODS
LESSONS FROM THE FRONT LINEAnheuser-Busch Executive Discusses Key Supply Chain Challenges
FLYING HIGHSingapore is the number one hub in Asia for the aerospace maintenance, repair and overhaul (MRO) industry. This augers well for the logistics services providers as the aerospace vertical is one of the vital pillars of the supply chain industry.
The Economic Development Board of Singapore says that there are about 100 aerospace companies operating here. For example, major companies like ST Aerospace and Goodrich are carrying out comprehensive nose-to-tail MRO services like airframe maintenance, engine overhaul, aircraft modifi cations and conversion.
Beside MRO, there are also a growing number of aerospace design and manufacturing operations in Singapore. Engine gears, valves and galley equipment are some of the products manufactured here.
The Seletar Aerospace Park is designed to meet Singapore’s growing aviation needs. The Park’s 300 ha of space caters to MRO activities, design and manufacture of aircraft systems, components and light aircraft, business and general aviation activities, and educational and training institutes. It also has an airport with a 1,800 meters runway.
For two decades since the 1990s, Singapore’s aerospace industry has consistently achieved an average growth rate of 12 percent every year. In 2010, it achieved a record output of S$7.2 billion. The MRO sector captures about a quarter of the market shares in Asia Pacifi c.
The factors contributing to this accomplishment are that Singapore has good infrastructure, excellent connectivity to the rest of the world and a tried and tested supply chain. The recent disasters in Asia also highlighted the importance of having a trustworthy supply chain.
And in my view, reliability and dependability are vital to Singapore’s success as I think having a good reputation is paramount in building up a win-win business relationship.
www.LogAsiamag.comMarch 2012
[ STRATEGY & BUSINESS ] 12
CONVERSATION WITH A THOUGHT LEADERSHEKAR NATARAJAN is a supply chain professional and scholar who has written numerous articles and books. He shares his thoughts on challenges facing the industry and other topics with LEE KOK LEONG.
[ TRACK AND TRACE ] 18
THE RACE FOR MOBILE PRINTING PRODUCTIVITYAsian supply chain professionals must understand the advances in mobile printing and also how their own operating environment and equipment will interact with the printers. By OW SONG THIAM.
[ SOFTWARE & SYSTEMS ] 22
STAYING AHEAD WITH GTMDR TORSTEN MALLÉE says that in the next fi ve years, we will see a rise in organizations adopting global trade management (GTM) solutions in order to gain a competitive advantage in the market.
[ VERTICAL VIEW ] 24
SOARING TO NEW HEIGHTSAsia holds the key to continued growth of the aerospace industry, underpinned by demand in fast growing regions such as China and India. By HERBERT VONGPUSANACHAI.
[ HANDLING AND STORAGE ] 28
HANDLE WITH CAREWhen handling dangerous goods, the logistics service provider has to face complex environments at all points of the supply chain. By RACHITA JHA.
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Logistics Insight Asia is published eight times a year by Ten Alps Communications Asia Pte Ltd, located at 67 Ubi Avenue 1 #06-06 StarHub Green, North Wing Singapore 408942. 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 US$125. Single copies are available for US$25. Logistics Insight Asia Volume 6, Issue 2.
[ EDITOR’S COMMENT ] 01
FLYING HIGH
[ INDUSTRY NEWS ] 04
• UPS Bidding For TNT• Kewill Streamlines Trade Permit Declaration Process• Panalpina Expands In China• Dematic, Vocollect Complete Dairy Farm Pilot Trial • MercuryGate Enters Asian Market• Lessons Of Supply Chain Integrity From Apple• Ceva Appoints Chief Commercial Offi cer• Asia’s Manufacturers To Rely On Predictive Analytics To Counter Supply Chain Risk• Container tracking systems to reach a million by 2016• Damco Appoints Managing Director For Thailand, Malaysia• Dachser Opens Warehouse In Shanghai• Logwin Off ers Red Carpet Logistics In Beijing
[ MARKET MOVES ] 11
GOING FOR DOUBLE-DIGIT
[ LAST MILE ] 32
RECONFIGURING ECOSYSTEMSMARK MILLAR says that 2012, the year of the dragon, will see a new focus on reconfi guring global supply chain ecosystems, in many cases to reduce complexity and address volatility.
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PANALPINA EXPANDS IN CHINA
KEWILL STREAMLINES TRADE PERMIT DECLARATION PROCESS
UPS BIDDING FOR TNT
TNT Express announced that it has received an unsolicited non-binding and conditional proposal from United Parcel Service (UPS) for the acquisition of the whole of the issued capital of TNT Express at an indicative price of €9 (US$11.8) per ordinary share.
TNT said that its supervisory and executive boards had considered the indicative proposal and explored the bid’s merits and risks, eventually rejecting the proposal. They have informed UPS accordingly but continue to be in discussions. Transport Intelligence’s CEO, John Manners-Bell, commented: “TNT’s
sale has been on the cards for some time even though it previously appeared that UPS and FedEx had rejected the idea. We expect that there will an improved off er as well as potential interest from other parties. This is just the start of what will be a long and protracted bargaining process.”
Kewill announced the availability of Trade Permit Integrated Chain, which streamlines the trade permit declaration process by connecting shippers and forwarders. It is an electronic business-to-business connectivity which sits on the TradeXchange platform.
The existing trade permit declaration process is currently plagued with tedious manual data entry and information on-forwarding. This is subjected to delays and human errors, which increases the chances of wrong permit declarations, delays in shipments or penalties issued by the customs authority.
Trade Permit Integrated Chain trims this trade permit declaration process by off ering a single point of connectivity
through TradeXchange. Shippers auto-populate their shipment details from their backend system for permit declaration electronically to their freight forwarder. Freight forwarders then log-in to their permit declaration system – TradeNet to ensure that the information is correctly auto-populated before submitting it for customs clearance electronically.
Currently, two pairs of companies, Hitachi Data Systems and Expeditors, Xilinx Asia Pacifi c, together with its express service provider have embarked on this pilot project. Vincent Ong, project manager in Xilinx Asia Pacifi c, said the project has helped to increase (their) productivity by more than 50 percent. Logistics service provider, Expeditors also sees their
integration with Hitachi Data Systems as a win-win situation that will move them towards a streamlined supply chain, as well as reduce operational costs, a move especially crucial in a tightening economy.
Evan Puzey, chief operating offi cer for Asia at Kewill said: “A weaker economy has put an emphasis on logistics service providers and shippers to mitigate risks and eliminate unnecessary costs such as work duplication and penalties.
Trade Permit Integrated Chain, which focuses on simplifying the trade permit process, is a timely initiative that answers calls from the industry on ways to streamline their operations.”
Panalpina has opened a logistics center in the Chinese city of Tianjin. The Tianjin Logistics Center marks a milestone in the company’s forward strategy to extend its value-added logistics services (VAS) capabilities not only in China but throughout the world. The Tianjin Logistics Center also refl ects the partnership between Panalpina and Bosch Automotive Diesel Systems.
In the next three years, Panalpina plans to set up many more new logistics centers in strategic locations in Greater China. “We are establishing a truly integrated supply chain network in China that combines international air and ocean freight with comprehensive
value-added logistics services and supply chain services,” explained Mike Wilson, global head of logistics at Panalpina. “This is in line with our global strategy to extend our VAS capabilities throughout the world.”
In the fi rst phase, the Tianjin logistics center off ers 10,000 square meters.“In the next phases, we plan to develop Tianjin logistics center into a hub fi rst for the whole Bohai Bay district and then for Northern China,” said Stefan Gustafsson, district manager Yangtze and Bohai Bay, Panalpina Greater China. “The hub will serve multiple customers and provide VAS, together with cross-docking for air and ocean freight shipments.”
The Tianjin logistics center also refl ects the on-going partnership between Panalpina and Bosch Automotive Diesel Systems. Today, 5,000 square meters are exclusively for Bosch. “Bosch and Panalpina can look back at a long partnership that started more than forty years ago.
Over the decades, Bosch grew together with Panalpina and we achieved excellent results through continuous improvement programs on both sides,” said Dr Hans-Henning Toepper, vice president of Bosch Automotive Diesel Systems. Panalpina is involved in all major Bosch markets and has a relationship with all global Bosch manufacturing, distribution and sales facilities.
Dematic RapidStore is a new class of storage retrieval machine (SRM). And just like some of the finest German cars, RapidStore is made to exacting standards in China. With world class controls, drives, and forks for longer life and more reliable operation, RapidStore SRMs are available in a range of sizes and speeds to precisely match your storage and handling requirements. And they do it automatically which means you not only save space, you save time and labour as well. RapidStore systems can operate round the clock, providing 24/7 ROI. That’s what we call a logistics result.
Creating Logistics Results
Engineering excellencePrecision manufacturingOutstanding design meets exceptional value
Another Logistics Result.
Ask us.(65) 6398 3980www.dematic.asia
Logistics Solutions | System Design & Integration | Software & IT | Voice Picking | AS/RS | Storage Solutions | Conveyors | Service & Support
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] DEMATIC, VOCOLLECT COMPLETE DAIRY FARM PILOT TRIALDematic and Vocollect announced the successful completion of Dairy Farm Singapore’s pilot trial for Vocollect Voice, conducted as part of its regional logistics improvement strategy to modernize business. This initiative produced proof-of-concept results, and Dairy Farm has developed an implementation roadmap for Vocollect Voice across the region, starting with Singapore in early 2012.
“Dematic has been implementing voice solutions globally and in Asia Pacifi c for over a decade, helping to deliver some tremendous results for our customers in a range of sectors including retail, wholesale and FMCG where accuracy, productivity and speed are essential. With the hands-free, eyes-free operation and real time wireless connectivity, we have seen some outstanding productivity and accuracy improvements at Dairy Farm. This is an ideal technology for Dairy Farm’s picking operations, and it is no surprise that the voice picking technology has been selected for wider deployment across their organization,” said Michael Bradshaw, director, integrated systems, Dematic South East Asia.
“Vocollect engages customers right at the beginning by developing a deep understanding of their unique challenges, and this is no exception for Dairy Farm,” said Vance Lau, vice president and managing director, Vocollect Asia Pacifi c. “By assisting them with this pilot trial, both Vocollect and our technology partner, Dematic, are able to sync our understanding
towards their business motivations and drivers, thereby providing our extensive warehouse and industry experiences to tailor a solution for their immediate as well as future needs.”
One of the retail formats in Singapore was selected for this pilot trial, due to the need for frequent replenishment of small but high value products like cosmetics and health supplements, which are particularly sensitive to human error, damages or loss.
The pilot trial ran for three months and the format experienced a multitude of benefi ts during the period, including:• Productivity and accuracy improvements in the order of 30% and 35% respectively. • High levels of user acceptance and adoption across a workforce with diverse ethnic backgrounds and a wide
range of English profi ciency levels.• Fast and easy training. • Real time management of information to support KPI
monitoring, with reporting tools to provide greater visibility.• Improved worker motivation with the introduction of new
technology and tools to enable staff to work more eff ectively.
Moving forward, this model of implementation will be adopted in other countries so that the benefi ts of voice can be experienced. Plans are currently in progress to progress the rollout to other countries.
MERCURYGATE ENTERS ASIAN MARKETMercuryGate has entered into a partnership with JFE to create MercuryGate Asia Pacifi c. Based in Singapore, it will provide sales, implementation and product support services throughout the Pacifi c Rim for shippers, 3PLs and freight forwarders.
MercuryGate Asia also announced an agreement with Zuellig Pharma, distributor of pharmaceutical and healthcare products in Singapore, to implement and support the MercuryGate TMS (transportation management solution). MercuryGate TMS, deployed as a software as a service (SaaS), with its rapid implementation and time to market enables Zuellig Pharma to quickly realize the effi ciencies, cost savings and competitive advantages.
“MercuryGate has supported customers’ use of its TMS to manage transportation in the Pacifi c Rim and around the world for several years. This venture increases our ability to more eff ectively support existing clients and to reach new customers who wish to do business locally as well as globally,” said Monica Wooden, CEO of MercuryGate. “We believe we’ve
found the right team at the right time to carry the MercuryGate message to this market.” MercuryGate Asia Pacifi c is positioned to fi ll the gap that currently exists for transportation management solutions in our region,” said Fulvio Lana, CEO of MercuryGate Asia Pacifi c. “The functional rich solutions, the low cost of entry backed by a fast implementation process is ideally suited for the Asia Pacifi c market. We expect a strong demand and strong growth over the next 24 months. Asia is the manufacturing hub of the world and as such we see strong demand in our region for MercuryGate and its functionally rich solutions.”
MercuryGate Asia will sell, implement and support TMS in Singapore, Hong Kong, Australia, Japan, Malaysia, and South Korea. The TMS supports this market with its localized interface, real time currency conversion, and ability to create documents and interfaces necessary for cross-border freight movements. Multi-leg, multi-modal shipments are easily planned, executed, tracked, and settled, making the MercuryGate TMS ideal for managing internationalshipments.
[ The pilot trial ran for three months and the format experienced a multitude of benefi ts during the period. ]
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LESSONS OF SUPPLY CHAIN INTEGRITY FROM APPLEIshan Palit, CEO of the product services division at TÜV SÜD, comments on the results of Apple’s recent supply chain audit, which revealed only 38 percent of the company’s suppliers adhered to its internal standard of a 60 hour, six day working week.
“The results of Apple’s supplier audit demonstrate the severity and prevalence of inhumane working conditions within global supply chains and the drastic requirement for immediate action. But they also highlight the pervasive challenge of securing supply chain integrity in today’s global business environment. Unlike 15 years ago, for example, corporations now seek effi ciencies not only through direct suppliers but suppliers’ suppliers, and often even further down the supply chain.
Subsequently, supply chain management has become increasingly challenging. However, complexity is no excuse for negligence and ultimately brands need to take more control. In this case, Apple has recognized this and is now taking appropriate action. What’s important now, however, is that other companies learn from Apple’s experience and follow suit.
The most eff ective way for a company to secure supply chain integrity is to ensure their entire supply chain adheres to a relevant and recognized international standard such as SA8000 – a voluntary certifi cation governed by Social Accountability International (SAI). SA8000 certifi cation is based on standards set by organizations such as the International Labour Organisation (ILO) and addresses several social issues including child labour, forced labour, worker health and safety, discrimination, discipline, working hours and compensation on an on-going basis.
The fi rst step in this process is to conduct robust independent on-sites audits to evaluate the factory’s compliance to the chosen standard, as Apple has just done. Necessary corrective actions as well as continuous improvements must then be identifi ed and put into practice throughout the supply chain.
Being socially responsible is often a very complex challenge in several developing economies where working at a young age may be essential for survival. The young worker ethical dilemma has been debated vigorously amongst all stakeholders in the supply chain. Standards such as SA 8000 and BSCI have developed into eff ective tools to address these issues in a balanced and humane manner, allowing organizations to educate the young workers and re-integrate them into society.
This approach may sound exhaustive and costly but compliance to a selected standard not only improves working conditions but makes business sense. Supply chain integrity off ers a number of social, branding, productivity and risk management benefi ts. For example, it ensures workers’ health and safety, which helps boosts production effi ciency, facilitates further penetration into international markets, and protects brands against the often irreparable consequences of a scandal. It is also worth noting that demand for ethically produced products over the last fi ve years has skyrocketed.”
CEVA APPOINTS CHIEF COMMERCIAL OFFICERCeva Logistics has appointed Inna Kuznetsova as chief commercial offi cer. Kuznetsova will head the global sales organization and join the executive board of the company. She was VP, marketing and sales enablement for the IBM Systems Software and ISVs, Systems and Technology Group – a position she had held for the past three years. Her career at IBM had been focused on business development roles supporting and growing the IBM brand. “I am very pleased to welcome Inna and believe she will bring strong leadership to the development of our business. Her mastery in solutions selling will help advance our integrated supply chain proposition,” said John Pattullo, CEO, Ceva. Inna is a graduate of Moscow State University where she obtained an MS and a PhD. She also holds an MBA from Columbia Business School.
[ Inna Kuznetsova,chief commercial offi cer for Ceva Logistics. ]
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] ASIA’S MANUFACTURERS TO RELY ON PREDICTIVE ANALYTICS TO COUNTER SUPPLY CHAIN RISKVolatility is without a doubt the watchword for the world economy today. With rising costs, coupled with the devastating impact of the recent natural disasters in the region, Asia Pacifi c manufacturers are expected to continue their focus on effi ciencies, and are putting in greater eff orts to mitigate supply chain risks. This market phenomenon leads IDC Manufacturing Insights to predict that in 2012, there will be greater use of predictive analytics tools among the region’s manufacturers.
“2011 has been an interesting year, the cautious optimism that we forecast at the beginning of the year morphed into volatility as we reached the end of the year. This looks to continue into 2012, with volatility the watchword for the world economy,” said Dr Christopher Holmes, head – international, IDC Manufacturing Insights.
“From a technology perspective, we will see companies moving to clearly establish a link between technology and effi ciency. These companies will be focused on driving out cost and becoming even more productive with the increased use of analytics and automation. To increase top line growth, they will also be centering their eff orts on satisfying domestic demand within the region, and exploiting new business opportunities in the after sales and support market,” added Dr Holmes.
Manufacturers who wish to thrive in 2012 would do well by taking advantage of the opportunities in the region and reconfi guring their product development and supply chains to meet local demand. They should also review the new technologies available to enhance their productivity. For IT vendors, it is important to note that the region’s manufacturing sector is maturing, and companies are now looking to move beyond enterprise resource planning (ERP).
In 2012, IDC Manufacturing Insights recommends that IT vendors should have a clear strategy on how they can assist companies to move beyond ERP. IT vendors should also look at how they can help manufacturers to capture, store, analyze and deliver data across diff erent functions to support decision making.
CONTAINER TRACKING SYSTEMS TO REACH A MILLION BY 2016According to a research report from Berg Insight, the number of active remote container tracking units deployed on intermodal shipping containers was 77,000 in Q4-2011. Growing at a compound annual growth rate (CAGR) of 66.9 percent, this number is expected to reach 1.0 million by 2016.
The penetration rate of remote tracking systems in the total population of containers is estimated to increase from 0.4 percent in 2011 to 3.6 percent in 2016. Berg Insight’s defi nition of a real-time container tracking solution is a system that incorporates data logging, satellite positioning and data communication to a back-offi ce application. The market for container tracking solutions is still in its early stage. Aftermarket solutions mounted on high value cargo and refrigerated containers will be the fi rst use cases to adopt container tracking. Orbcomm has after recent acquisitions of Startrak and PAR LMS emerged as the largest vendor of wireless container tracking devices with solutions targeting refrigerated containers.
Qualcomm, ID Systems and Telular are prominent vendors focusing on inland transportation in North America, which is so far the most mature market for container tracking solutions. PearTrack Systems, Honeywell Global Tracking, EPSa and Kirsen Global Security are examples of companies off ering dedicated solutions targeting the global end-to-end container transport chain. “Ever since the events of 9/11, there have been a lot of activities to bring container tracking solutions to the market,” said Johan Svanberg, senior analyst, Berg Insight. He added that it is however that technology advancement, declining hardware prices and market awareness are starting to come together to make remote container tracking solutions attractive.
“Container telematics can help stakeholders to comply with regulations and meet the high demands on security, information visibility and transportation effi ciency that comes with global supply chains,” said Svanberg.
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DAMCO APPOINTS MANAGING DIRECTOR FOR THAILAND, MALAYSIA
[ Kiattichai Pitpreecha, managing director for Thailand and Malaysia cluster Damco. ]
Damco has appointed Kiattichai Pitpreecha as managing director for its Thailand and Malaysia cluster. Pitpreecha had
DACHSER OPENS WAREHOUSE IN SHANGHAI Dachser is expanding its contract logistics activities in China with a 10,000 sqm warehouse in Shanghai. Due to the growing demand for contract logistics services, the existing warehouse that opened in July 2007 had reached its capacity limits. The new facility is located close to the centre of Shanghai directly on the G2 Beijing-Shanghai expressway and the G 1501 Shanghai ring road, giving access to the Greater Shanghai administrative area with its 23 million inhabitants. The new warehouse provides space for up to 16,000 pallets in an area of 10,000 sqm.
The warehouse is managed with Dachser’s proprietary warehouse management system, Mikado. The operational and administrative warehouse management software has been long established in Europe and for the past fi ve years has also been used in China.
Additionally, the warehouse is equipped with modern shelving systems that fully comply with all fi re prevention requirements. Access controls, video surveillance and a round-the-clock security service ensure the necessary security on the 20,000-square-metre site. Covered and lowerable loadingramps permit safe and easy goodshandling.
[ Dachser is expanding its contract logistics activities in China with a 10,000 sqm warehouse in Shanghai. ]
a 12-year career in the AP Moller-Maersk Group, most recently serving as managing director for Damco Thailand.
“Kiattichai has played a key role in our business development in Thailand and the region,” said Tony Hotine, CEO of Damco Asia Pacifi c. “I have full confi dence that he will lead the Thailand/Malaysia cluster to new heights.”
Before the integration of Maersk Logistics and Damco in September 2009, Pitpreecha held the roles of general manager, senior general manager, country manager and regional supply chain development manager at Maersk Logistics from 2000 to 2009.
His experience puts him in a strong position to off er both existing and new customers superior logistics and supply chain opportunities. He will drive the development of integrated supply chain solutions in Thailand and Malaysia, while developing new business spanning both countries.
“We are in a unique position to tap into the synergies between the two countries and deliver on our high growth aspirations,” said Pitpreecha. “Off ering diff erentiation with our supply chain solutions and service delivery through superior organization will be at the core of our focus.”
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An online logistics and supply chain management (SCM) dictionary that has more than 5000 industry-related terms listed and defi ned is available off the Society’s website at www.lscms.org. The online dictionary appears as the most commonly used tool when a search is made for an SCM dictionary on Google. The Society is now looking for sponsors to print hard copies of this dictionary. Parties interested to fi nd out more can contact the Secretariat at [email protected].
NEWSLETTERThe Society’s publishes an online newsletter which goes out every fortnight to more than 30,000 subscribers in the Asia Pacifi c region and globally. Contents include developments in the industry and job positions from recruiters and companies looking for staff . Readers interested to subscribe can do so a www.lscms.org.
NEW CORPORATE MEMBER - LITHAN HALL ACADEMYWe welcome a new corporate member, Lithan Hall Academy, to the Society. Lithan Hall Academy provides specialist education and career services to selected professional communities in Asia. The mission of Lithan Hall is to provide experiential learning to students through practical educational programs and industry ecosystems that support their lifelong career growth and development.
CORPORATE MEMBERSHIPThe Society invites companies to join as corporate members. The memberships help support the activities of the Society and is also an excellent way for companies to reach out to our 30,000 plus readers or members throughout the Asia Pacifi c region and globally.
THE LOGISTICS SOCIETY ON CHANNEL NEWS ASIAFrom 20th February, the Society will be featured on Channel News Asia’s Invest In Me show that airs at 8.30 pm Singapore time with repeat telecasts being shown throughout the week. Episodes can also be downloaded from the Channel News Asia website.
In this program, the Society shows its support in helping social enterprises in the region by providing logistics advice and hands-on expertise to an events company with logistics issues. Follow us as we make this journey with the Society’s president, Raymon Krishnan and other individual and corporate members towards resolving some of the common logistics issues faced by SMEs.Past episodes of the program can be viewed online at http://www.channelnewsasia.com/investinme.
LOGWIN OFFERS RED CARPET LOGISTICS IN BEIJING Logwin has opened a fashion logistics warehouse in Beijing as part of the expansion of its specialist red carpet logistics network in Asia. The 1,500 sqm warehouse is located 6 km from the Beijing airport and off ers easy access to the city centre.
The premises are state of the art and are equipped with the latest safety and security systems. The customized warehouse
is the second to open in Asia following the launch of red carpet logistics in Malaysia, where the fi rst fashion logistics warehouse opened at Shah Alam near Kuala Lumpur.
“In 2012 we are expecting strong growth in the China market for our customers fashion products and the opening of our red carpet logistics warehouse in Beijing demonstrates
our confi dence in the market,” said Tomas Sonntag, managing director of the region Far East Asia at Logwin’s business segment air + ocean.
With the premium service red carpet logistics, Logwin off ers the full range of dedicated services from transportation to logistics solutions for high-end fashion customers. All current and future red carpet logistics warehouses are specially designed to meet the needs of Logwin’s high-end brand named clients.
Logwin aims to strengthen its leading position in the fashion and lifestyle logistics sector through the expansion of its red carpet logistics network and service off ering across Asia. As a result it will provide better reach for its fashion brand customers to markets in Malaysia, Singapore, Hong Kong and Mainland China as well as Indonesia, Vietnam, Thailand and Australia. [ Logwin is off ering its red carpet logistics service in the Chinese capital with immediate eff ect. ]
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GOING FOR DOUBLE-DIGITIndonesiaʼs logistics industry is forecasted to see double-digit growth in 2012. Retail, fast moving consumer goods, and service parts logistics will be areas of focus. Frost & Sullivan is forecasting the Indonesian logistics industry to grow 14.2 percent to IDR 1,408 trillion (US$153.54 billion) in 2012 as compared to an estimated IDR 1,233 trillion (US$134.46 billion) a year ago, due to strong economic growth fuelled by high domestics consumption.
Gopal R, vice president, transportation & logistics practice, Asia Pacifi c at Frost & Sullivan said that the relocation and strong fl ows of capital are expected to drive manufacturing activities in Indonesia and boost logistics demand. External trade for Indonesia is expected to see a strong growth of 32.5 percent to reach US$514.2 billion in 2012.
“The import/export forwarding, shipping and air freight-related businesses will remain strong due to sustainable external trade activities. The growth of foreign direct investment (FDI) is expected to continue in 2012 with an estimated value of US$21.5 billion,” Gopal said. FDI realization in transport and storage sector reached US$2.2 billion by September 2011, which has the second largest contribution to FDI, after mining sector. The strong FDI infl ux to the mining industry is expected to boost the industrial growth and off er business potential to the transportation and logistics sector.
The Indonesian transportation and logistics industry is forecasted to grow at a compound annual growth rate (2011-2016) of 14.7 percent to reach IDR 2,442 trillion (US$266.3 billion) in 2016, Gopal said. “However, underdeveloped infrastructure will slow down the growth if the bottleneck persists in the coming years,” he cautioned. Gopal forecasted Indonesia’s total ocean cargo volumes to increase 5.8 percent to 943.1 million tons in 2012 as compared to 891.5 million tons in 2011. The shipping industry is aff ected by overcapacity and low rates on Trans-Pacifi c and Asia-Europe long-haul routes. “However, it is expected to maintain a steady growth driven by the demand from intra-ASEAN trade,” he added. Indonesian ship operators are dominating the local market since
the government released a regulation requiring domestic transportation to use locally-owned ships. However, imports and exports shipping are still dominated by foreign operators. He expected rail freight to be revitalized by rising demand for Indonesian commodities. He predicted that cargo volume by rail to increase to 20.4 million tons in 2012 as compared to 19.7 million in 2011.
“Freight transported by the Java railway consists mostly of petroleum fuel, fertilizer, cement, coal and containers. The South Sumatra and West Sumatra dominant traffi c is coal and the North Sumatra main traffi c is crude palm oil,” he said. Rail freight volume rose 3.6 percent for the fi rst 10 months to October 2011 from a year earlier. Currently, rail networks in Indonesia are not well developed and managed and it is suff ering from under-investment.
He is predicting cargo volume by air to grow 5.7 percent to 920,000 tons in 2012. He said that Indonesia’s airport facilities and capacities expansion can increase the Indonesian air cargo market. The four main airports in Indonesia – Sukarno-Hatta, Juanda, Ngurah Rai and Polonia – made up for 47.2 percent of the total air cargo throughput in 2011. Sukarno-Hatta airport contributed about 36 percent of the total air cargo volume in Indonesia.
THE GROWING AREASGopal said that there is a higher inclination towards outsourcing variety of value-added services and it is the area of growth for the logistics industry in Indonesia in 2012. “Logistics service providers need to work towards more value-added services while strengthening the intermediate services.” He added that service quality and reliability are top priorities for customers to consider when selecting logistics service providers. “End users are moving towards integrated supply chains with professional service providers.”
Indonesia’s transportation and logistics market is expected to see an accelerating
growth, aided by the growing Asian economy. Indonesia’s key export commodities include oil & gas, crude palm oil, coal, appliances, textiles and oil and gas. He foresaw retail/fast moving consumer goods (FMCG) and service parts logistics to be the areas of growth for the logistics sector in Indonesia. “With more than 230 million population and a wide geographical area, demand for retail/FMCG distribution across the country off ers a huge market for the logistics sector.” He advised logistics service providers to tap into the lucrative market by off ering end-to-end distribution services from inbound material fl ow to fi nished goods warehousing, inventory management, inspection, returns handling and nationwide delivery. He said that service parts market is one of the fastest growing segments in Indonesia. Service parts delivery had become very crucial for manufacturers, especially in the machinery, automotive and electronics industry. International logistics service providers have invested and committed to expand their service off erings in service parts logistics. He said that logistics service providers in Indonesia should move towards off ering specialized logistics solutions for specifi c industries such as FMCG, construction, service parts and mining as compared to the current generic logistics services. A logistics network of industrial centers should be developed on the outskirts of Jakarta for improved access to the Port of Tanjung Priok as the current high traffi c congestion in Jakarta resulted in a longer lead time, shipment delay and an ineffi cient supply chain. The Indonesia government should also integrate transportation hubs – seaports, airports, terminals and distribution centers – with the transport network and develop state-of-the art logistics infrastructure for effi cient distribution. “Companies should also strengthen its human resources capabilities with professional and experienced logistics personnel along with market expansion,” Gopal said.
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CONVERSATION WITHA THOUGHT LEADERSHEKAR NATARAJAN is a supply chain professional and scholar who has written numerous articles and books. He shares his thoughts on challenges facing the industry and other topics with LEE KOK LEONG.
Shekar Natarajan is the North American director of supply planning for Anheuser Busch, maker of Budweiser. He is the developer and co-author of the planning methodology Planning By Design with co-author Richard Muther and Simplifi ed Systematic Network Planning – Six Steps To Eff ective Network Planning with Lee Hales which is translated into six languages. A new book, Systematic Logistics Redesign, will be published later this year. He serves on the board of College Industry Council of Material Handling Equipment and Material Handling Institute of America and is co-chairman of the
Institute Of High Performance Planners. He also serves on the board of Colalife, a non-profi t organization committed to children’s health in developing countries by using innovative supply chain concepts to deliver medicine in Africa. For his keynote delivery at Movimat 2008, the largest Latin American Logistics show and contributions to the society, the government of Brazil formally recognized him for the content and insights he provided for developing and managing supply chain processes. His contributions also won him the 2010 Medallion Award, the highest honor from Institute of Industrial Engineering. Natarajan received a Master of Science degree in industrial engineering from the Georgia Institute of Technology after earning his Bachelor of Technology degree in mechanical engineering in India.
1. Talk to us about your current role in Anheuser Busch InBev. I am a senior director of supply chain planning. The planning team is the central engine that runs the entire supply chain, as our plans span from order to cash generation. In my role, I have direct oversight for all demand and planning, sourcing, budgeting, transport planning, capacity and capability management, logistics management, supply chain control towers, assets procurement and management (pallets, empty bottles and cans, kegs), sales and operation planning, innovation and commercialization.
The role is transformational, especially since we are in the process of upgrading our planning process, tools and technologies. Planning is central to moving the whole engine. Adding to the challenge is that the business cannot tolerate any disruption to product fl ows – hundreds of millions of units moving through the supply chain to consumers each day. This adds an
additional dimension to the diffi culty of transformation. It’s a bit like having to reconfi gure an aircraft in mid-fl ight. I have been with the Anheuser Busch InBev family for close to nine months now and I’m fortunate that the organization is open to new ideas, where candor is respected and encouraged.
2. What are the initiatives you have planned in order to achieve the objectives?Our mission as a corporation is to be the world’s best beer company. With this comes the responsibility of being the best in everything we do, with planning being a critical part. We ensure that all assets are utilized and optimized at the highest levels. This requires us to be attuned to market needs, innovative in our approaches, proactive in planning, dynamic in execution, and agile in everything we manage.
This is a large task, but I am pleased to say that we made huge strides in the last year. We are moving to embed optimization and simulation into the planning process. Historically, simulations have been done after the fact. This helps us identify the risks in the supply chain in the early planning stages. We are building advanced tools to rapidly convert this into insights and analytics and engage all the partners to put mitigation plans in place.
We are building sophisticated control towers so we are all looking at the same information the same way, and can perform rapid what-ifs. Our eff orts will then evolve into demand sensing, inventory policy optimization, and optimal order allocation. On the commercialization front we have developed incredible speed and velocity to systematically move from inception to launch. We developed tools to spot trends, proactively to scale up and down with a lot agility and fl exibility in our
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supply chain processes to manage new products. The last seven product launches have been huge successes. Perhaps the most satisfying thing for us is we were able to convert the available capacity we have to lift sales. We anticipate running promotions to create value for our consumers.
3. With experiences in world class organizations like Coca Cola, PepsiCo and now Anheuser Busch what seem to be the current challenges facing the beverage industry?Great companies like Anheuser Busch, Coca Cola, and PepsiCo have faced daunting challenges, prevailed, and grown stronger as a result. But the velocity of change will put our strength and ingenuity to the test. Like most consumer packaged goods (CPG) companies, the battle to be waged is on all fronts.• Greater consumer challenges
o Changing product preferences (eg carbonated soft drinks to non-carbonated beverages), variety seeking
o Changing packaging preferences – in liquid refreshment beverages, cans to plastic bottles, portion control, pack confi gurations
o Changing channel preferences (fewer grocery trips, shopping more channels)
o Increasing value consciousnesso Greater time poverty-more on-the-
go consumption, more availability/locations
• Greater trade challengeso Growing bargaining power of
customers (big box chains, grocery consolidation) with
• more demanding service requirements (order accuracy, out of stock, custom packaging, on-time delivery, etc)
• lower willingness to accept price increases, even if entirely pass-through costs of commodity price increases
o Shifting channel mix into lower margin and higher cost to serve channels• Decline of grocery, convenience and
gas• Growth of supercenters• Growth of other small format stores
(club, drug, dollar)
• Greater category challengeso Flat category growtho Seasonal demando Innovation intensiveo High demand volatilityo High promotional elasticityo High volatility and magnitude of
raw material input and freight cost increases
o Major macro headwinds – health, nutrition, economy, environment, demographic transition (aging boomers etc.)
These challenges have signifi cant business and supply chain implications, including• Increase in product and service
complexity• Higher innovation mix and volatility• Increase in changeover’s• More single location sourcing• Higher demand variability• Lower full than truckload shipments
from plant to warehouse• Lower drop sizes, higher mix of cold
cases for on-the-go consumption
• More rapid response rate to satisfy retailers
• Severly constrained Infrastructure
Taken together, these are a perfect storm. Conventional tactics will not win the day. The magnitude of the challenge calls for transformation and not incremental fi xes.
4. How is supply chain driving business success in the beverage industry?The beverage industry supply chain has made tremendous strides in driving down costs, improving their ability to manage increase level of complexity, increasing velocity in the supply chain, driving consistency in operations and reducing the overall inventory requirements. When one considers all of the value adding functions/activities of a company, supply chain is the area that is most challenged by the changes in consumer, trade, category, and macro-environment. Furthermore in many cases, as goes supply chain, so goes the company – ie the competitive success of a company may very well hinge on supply chain adaptability and response both in order to meet the increasingly demanding challenges, but also in order to diff erentiate the company from others. So the onus will be on beverage companies to build a supply chain that can easily/effi ciently/eff ectively manage complexity by driving consistency, simplicity, productivity and you’ll have a material source of competitive advantage versus the competition.
5. How can the beverage supply chain learn from the electronics industry?As you examine what has made the electronics industry successful, the same principles are becoming the requisite to resuscitate the CPG industry from the tough conditions it faces. These ten principles will apply:• Planned product obsolescence• Product postponement strategy• Value packaging and options
management• Green returns management• Digitization of supply chain• End-to-end collaboration across value
chain partners• Product compaction strategy• Systematic innovation management• Customer centric innovation process• Focusing on core competency
Another example is the pharmaceutical industry. CPG companies can emulate their new product portfolio processes, innovation strategy processes, and commercializaton processes. [ The beverage industry supply chain has made tremendous strides in driving down costs. ]
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electronics and other industries learn from the beverage industry?Yes, I do. In the pharmaceutical industry with products like Lipitor going off of patent, and employers prodding their employees to use generics, the money making model has changed. CPG has a long history of operating well with its distribution partners, earning thin margins on a large base of products by being sharply focused on execution. CPG industry is also known for its easy to consume style packaging, unparalleled level of execution on trade, promotion and merchandizing management to diff erentiate the brand from generic substitutes. Similarly, a lot of electronics companies are learning from CPG to partner eff ectively with retail chains for trade and promotion management.
7. Tell us about the books you have authored.I’ve had the good fortune of authoring three books. Systematic Network Planning, which was translated in six languages, is now used in large corporations and academically. Systematic Logistics Redesign will be published later this year. And I co-authored Planning By Design with Richard Muther. We believe we have an unique idea, where we can put a systematic planning methodology to virtually any subject area – be it logistics or careers or supply chain processes. Recently I have focused on talent in the supply chain. I’ve written about 10 articles on this topic, and am contemplating writing a comprehensive book on the subject.
8. What is planning by design? What are its applications?Planning By Design is an unique methodology that helps create a systematic plan. It is a universally applicable master guide which helps someone generates a systematic methodology so long as you know/understand the subject area and can pinpoint its fundamentals.
Since you are focused on the fundamentals, the solutions generated are very effi cient and robust. This is applicable to projects of any size – very large, medium or even small. Each of these sizes has its own master guide but it looks similar for diff erent subject area(s). We rolled out one of the largest redesign initiatives using this methodology in PepsiCo: the commercialization process was based on Planning By Design and so was the integration of all bottlers, which included 96 plants and 469 distribution centers. All these initiatives were completed on time and within budget. Everyone was working from the same plan.
This process is not just applicable for projects but for any repeatable activity. The results show that Planning By Design projects are 20 percent faster and more eff ective. It could become the universal standard with every planner performing a similar activity, regardless which company or which country he/she resides in. With the language of Planning By Design the fundamentals of layout are always going to be space, relationships and adjustments. We applied this
methodology to over 150 subject areas.
9. Where is supply chain headed?This is a great question. On a scale of one to fi ve in supply chain maturity most experts agree we’re at around two or three. So we still have ways to go to reach top performance. The extent of the supply chain will include entire ecosystems; supply chains will be focused on not only controlling costs, but on driving profi tability and bringing additional revenue. Operations have the potential to be incredible agile by dynamically optimizing the tradeoff s across the ecosystem, with orders being managed based on profi t potential.
The open architecture and cloud will enable plug and play with any partner on an as-needed basis and technology will enable real-time decision making. The risks in the supply chain will be identifi ed in advance and mitigated through integrated business planning. There will be improved tradeoff s understanding and maturity among functions, and cross pollination of ideas across industry boundaries making separations less distinct. The diverse ecosystems needing a high level of customization will make volatility a reality to manage on a daily basis.
10. Who do you rely on for advice?I have been very fortunate to have a great support system – family, friends, associates, mentors and great bosses/visionary leaders. Ron Hammond, my coauthor on several articles, a visionary leader whom I had the good fortune of working for while at Coke, has been most infl uential of all. He has coached, mentored and taken me through my professional transformation. I am also fortunate to be associated with Brian Keiger, Shaun Holliday, Randall Gibson, Ricky Ingalls, Mike Ogle, Don Ratliff , Roddy Martin, John Hill, Richard Ward, Lee Hales, Richard Muther, John Gattorna, Bob Ferrari who have infl uenced my thinking over time. Never a day goes by when you don’t learn something from your colleagues, and you’re fortunate to work for a company where the door is always open and people are always ready and willing to provide advice.
11. What are the trends in supply chain that excites you? What trends keeps you up at night?Here are the top trends that I think are what make the supply chain as an industry exciting.
1. Growing importance of supply chain to business success: The emergence
[ CPG has a long history of operating well with its distribution partners, and earning thin margins on a large base of products by being sharply focused on execution. ]
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of a systems view of supply chain in which the company seeks to optimize the entire, vertically integrated supply chain across the full value chain. The supply chain is being treated as the equivalent of a vital organ in a living system, and as the central nervous system supporting system life and vitality. Embracing this expanded view brings great opportunity for optimization and breakthrough solutions. It also secures a seat for operations at the executive table, giving the operations executive an important voice in decisions well beyond its past role. To see companies embracing supply chain as a key business cost control driver is totally refreshing.
As a result, capital funds are made available. Management looks to supply chain initiatives to carry the company through good and bad economic times.
2. Advancement of technology and analytics to inform solutions to the toughest operations problems, be they immediate or long term: The problems which seemed impossible to solve are becoming easier to solve, thanks to the advancement of the technology.
Supply chain discipline and thinking is trickling down to all levels of the organization. Cloud computing will promote a customer centric supply chain – connecting with partners in real time and making complex trade off decision making much simpler. Advanced analytics has transformed our ability to take objective decisions and challenge assumptions that will drive refi nementds in the business model. Cross functionally is maturing and are able to better understand the tradeoff s. Technology savvy leaders are helping this progress in positive way.
3. Fungibility and value of operations solutions across industries: Growing recognition of merit and applicability of best practice solutions from other industries. We are seeing that as industry parallels are drawn, common platform of technology/tools are applied, and as leaders move from industry to industry cross pollination of ideas across industry are becoming viable. Pharmaceutical industry has been looking to CPG leaders to reshape its supply chain thinking and CPG has been looking to apply the ideas that made electronics a high velocity engine. We will share ideas, infrastructure, process, and technology across industries. The concept of ecosystems will begin to include consortium of partners who can be served with this intellectual inventory.
Here are top three concerns.
Supply chain talent: With supply chain’s rapid rise in importance and infl uence, there is a shortage of supply chain leaders who are experienced in their understanding and experience across multiple supply chain related disciplines, as most supply chain employees tend to
[ We are living in a business environment
where uncertainty is the new norm when
managing through complexity. We need to
adapt to the paradigm of being faster and doing
better with fewer. ]
Your contact: [email protected]
You can find the contact data of the Panalpina offices at www.panalpina.com
The healthcare industry with its increasing
requirements needs special care and dedicated
transport solutions to guarantee the integrity of its
products. We work with you to identify those
demands and develop specific products and services.
We offer flexible transportation and logistic
solutions and also provide value-enhanced services,
which meet the industry’s regulatory compliance,
temperature and hygiene requirements.
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in a narrow subset of the supply chain disciplines. What are lacking are leaders with both broad and deep experience across the many supply chain disciplines. Further, operations executives are not used to having a seat at the executive table where they are required to have a full business perspective, strategic, and multifunctional in nature. How do we fi ll the pipeline of needed talent quickly? How do we identify and supply chain leaders who can manage not only the integrated function, but also the totality of the business (ie are candidates for CEO succession)?
Talent should be everyone’s agenda. We need what I call Talent Champions guiding organizations through this journey. It has to be systematically crafted based on the unique needs of the organization. The events of 2011 – such as natural disasters and political revolutions – were a rude awakening to companies with a weak supply chain. The companies with talent and plans in place recovered, but you can count them on one hand. Others learned a harsh lesson and began the journey to undo their supply chains. I think we learned two lessons. First, that though we seem to have grown in supply chain maturity internally we haven’t integrated our partners. Despite the technology evolution, we failed to detect patterns of change or leverage the technology to balance tradeoff dynamically and ask what-if?
We are living in a business environment where uncertainty is the new norm when managing through complexity. We need to adapt to the paradigm of being faster and doing better with fewer. So many times we act and then start planning which is a complete reversal of fundamentals of management. Execution needs meticulous systematic planning. A lot of people write and talk about execution including the best sellers written by Larry Bossidy and Ram Charan. I am sure if you talk to Ram and Larry they will acknowledge the importance of truly integrated business planning, understanding and mitigating risks and ability respond to challenges.
I see many organizations running fast and not doing basics right. We will leave a much shallow organization with this mindset. Systematic planning should be the second language in every function, organization and across the globe. Planning forces one to think of the possibilities, think what if the hinge assumption changed, and be prescient. My experience has shown that you can be extremely dynamic/agile and eff ective by having proactive systematic planning
or else your agility or eff ectiveness or both are lost and we begin to mistakenly assign activity to performance just like there is this misconception that lean cannot be resilient.
12. What are the skills and personal attributes that have helped you reach your current position?I think I am very lucky. My success doesn’t come from me but the incredible team of associates I had the good fortune to lead or partner with. I had the good fortune of being in the right place at the right time. A lot of great leaders and executive leaders I have worked with had been industry visionaries. Ron Hammond is a prime example of a visionary leader who not only comes up with out of box ideas but makes you think you came up with the idea. These visionaries have been in the industry for a long time and had come to undersand that how we thought and operated organizations should change. As such opportunities were presented to me, I was able to validate this thinking by challenging the assumptions, coming up with rather simple out of box ideas, work through them, systematically craft a roadmap to meet end goal and articulate this vision to inspire others to participate.
I always made sure I included several people in this process to push and pull things in diff erent ways. Just knowing that your mind can’t think of all possibilities, however an empathetic leader you are, you need that diverse perspective. This involved a lot of arduous but persistent persuasion of people up and down and across the supply chain and telling the story which resonated with them.
I had the great fortune of building a world class team of smart, hardworking, can-do associates who could climb Mt Everest and back. They really complemented each other’s experience, exposure and education. With dignity and respect we argued, critiqued and defi ned our journey. We had taken missteps but the great thing about these teams was that they used it to refi ne our thinking and make the next steps even better by staying focused on the end goal and being positive. In tough situations I had partners from other functions lend us a helping hand as we believed in “we” winning together. There was a cross functional maturity which was demonstrated by everyone and I am proud that there were many creative ideas emerging.
I never for once felt that I had a team of 55 people of direct reports carrying us
through the fi nish line, it was like a cross functional team of 1000. It truly makes a diff erence. When you are leading a large transformation, for now I can say thrice in my career including current job, you have to be well networked with the indirect team and your informal leaders/mentors. They are the best sources of information for your ideas and build sponsorship for things you do and how it ties to other’s work.
The external network helps you validate the ideas and an understanding of what works and what doesn’t. I can remember so many times when I could have tripped up without having the wisdom from such informal networks both internal and external. Working for world class companies like PepsiCo, Coke, and Anheuser Busch InBev helps to leverage the solution across the system in ways you never thought. It also provides you the forum to exchange best practices between other functions and geographies. We brought a manufacturing-like mindset to our distribution and target setting approach that we implemented across the globe.
Personally I am fortunate that I am trained by people who live systematic planning. Lee Hales and Richard Muther have been great infl uences and I’ve adapted their ideas of rigorous systematic planning that can be adapted for scalability and repeatability. I understand this doesn’t happen to everyone and so I keep saying that you also have to be lucky to have great people in your life. You defi nitely need to have personal passion and a commitment to continuous learning. Those are a given for everyone, including me.
13. As a young professional who is successful, what is your recommendation to other professionals?Strive for excellence and competence, and success will follow. Key to sustained performance will come from the right combination of experience, exposure and education. Leaders always strive to leave a better future than the one they inherited. I would break qualities into core/fundamental fabric of who you are and 10 teachable skills. Two core skills – know thyself and thirst for wisdom.
Know thyself is developing self-awareness of one’s inner desires, passions, motivations, strengths, and weaknesses. It also includes understanding of one’s role in the ecology of the people and organizations we interact with, and real-time cognition
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[ Strive for excellence and competence, and
success will follow. Key to sustained performance
will come from the right combination of
experience, exposure and education. ]
of infl uence on the dynamics of what is happening in our presence right now (a kind of proprioceptive awareness). Self-awareness in the workplace is but a subset, and a journey that can be accelerated (the tools and resources are there, many accessible at a reasonably low cost).
Thirst of wisdom: While at the very same time, it challenges us to not seek universal answers, but instead to live in the question, to remain open to possibilities, to rally forth against conventional wisdom, to beware of our frames, prejudices, biases, and to look at problems and opportunities from entirely diff erent vantage points – opening up a new panoramas that present new visions and opportunities.
The 10 teachable skills include: Business acumen: Fundamental to everything else that follows.Work ethic: If you want to make the climb, are you willing to do the time?Networking skills: Great leaders know to eff ectively network both internal and external.Earning the stripes: Capability is essential, but credibility comes from delivering results.Permeability: Implies multi-directional data collection and synthesis across critical domains.People skills: Do you the have ability to align and motivate others to get most out of your team?Decision making: Are you cool under fi re versus running around like your head is on fi re?Lateral moves: Are you willing to do laterals in other functions to improve business savvy?Continuous development: Do you demonstrate the ability to learn continuously?Leaving legacy: Do you have the ability to help transform an organization while you are there?
14. You are a great talent proponent. Why is it so important and what shifting trends are you seeing? How do you build the best in all?PepsiCo has for decades held the view that extraordinary people do extraordinary things and their focus was on recruiting the most talented executives in the market, and then empowering them. Another expression they use is we hire eagles, give them a lot of sky, and then teach them to fl y in formation.
This is certainly a strategy that served them well – not only is PepsiCo fl ush with talent, many of the executive ranks of
Fortune 500 companies are teaming with PepsiCo alumni. However, one can argue that this strategy (ie winning the war on talent acquisition) will not suffi ce in the next generation of delayered, lean and mean companies, where there will be an increased reliance on tenured, proven talent populating critical positions.
Companies that win in the future will be those that create the conditions that bring out the best in everyone, ie those that liberate individual and collective talent by fi nding and deploying the extraordinary in everyone. While companies are getting better at this, they have a long way to go, and institutions are notoriously unreliable when it comes to assessing and deploying talent. Examples abound of experiences where the creation of self-managed teams on the production line concurrent with the delayering of supervisors resulted in extraordinary, unexpected breakthroughs in productivity, more fulfi lled workers, and the identifi cation of individual talent with two to three-level promotability, talent that had gone unrecognized for preceding years and even decades.
structures (ie those that leverage the upspikes in individual talent, but off set and mitigate the accompanying downspikes). In such environments where the focus is on liberating individual and collective talent to best realize company objectives, there will also be other regulating mechanisms in place that marshal talent constructively, the most important of which will be shared values and behaviors. 15. What are your top fi ve predictions for 2012?Business outlook: Consumption for non-premium product off erings will improve marginally in 2012. Key drivers: economic uncertainty, currency instability, energy (oil) prices, high unemployment. Cost control will once again be a key to generating profi t. Demand for premium products and services will be strong as the wealthy grows weary of being prudent. Global organizations will continue to look to emerging markets for growth.
Operating conditions: Acquisitions, mergers, divestitures and reorganization momentum will carry into 2012. These activities will be aimed at gaining scale and leverage. Companies will venture into diff erent go-to-market strategies looking for breakthrough fulfi llment innovation. Energy, currency and commodity price volatility will add to bottom line profi t and loss risk.
Supply chain: As currency and commodity volatility continue to provide a challenging environment, senior supply chain management will re-evaluate its product supply strategies. Shorter, high velocity chains with stable supplier/country combinations will gain favor. Stability will be paramount as cost is the enemy because of how it undermines coherence and focus.
Human capital: Businesses will diff erentiate on the strength of leadership or intellectual inventory. Leadership that can guide organizations through uncertain times will be in high demand. Talent acquisition, development and retention will be the top priority. We will see increased cross pollination of ideas as leaders cross industries.
Process and technology evolution: Cloud technology will continue to generate excitement. True value providers will transform raw data into insights and analytics. Decision making will improve. Social media will reshape how information is captured, synthesized and leveraged. Companies will employ enhanced tools to encourage experiential thinking.
While more corporate resources will go into accelerating company discovery and leverage of the extraordinary in each of its people, they will not suffi ce. Instead, the burden of discovery will fall increasingly on the individual employee him/herself; and this essentially means that the journey of self-awareness will, out of necessity, be dramatically accelerated in young people.
While industry has a plethora of psychometric, aptitude, and abilities tests to bring to bear to speed the journey of self-awareness, many more resources will need to be applied, not least of which are greater focus on mentoring, constructive feedback, high quality coaching, cultivation of high performance teams, more insightful appraisals, better development paths, greater discrimination in reward systems, more cross-fertilization of talent, and complementary team
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Mobile printers are deployed primarily to improve productivity. By giving users a tool to produce labels and receipts exactly when and where they’re needed, Asian supply chain organisations save the steps required to travel to a stationary or vehicle-mounted printer, pick up the print output, then bring it back to where it is needed. These steps build unnecessary labour cost into printing operations.
Ruggedness is an extremely important quality, even for mobile computers used in retail or carpeted environments, because drops, spills and rough handling are routine, and failing to safeguard against these threats will result in lost productivity, the inability to complete necessary tasks and reduced service levels.
In industrial, distribution, fi eld service, retail and other enterprise operations, the ruggedness of the mobile device relates directly to its reliability. There is a range of ruggedness across the mobile printer product spectrum. The IP ratings and drop specifi cations provide a good, non-subjective measure of ruggedness. Since printers can accidentally fall, to survive in most environments they should be specifi ed to withstand multiple fi ve-foot drops to concrete.
Mobile printers rated IP54 or higher are environmentally sealed to prevent damage from rain, dirt, dust and other
[ One of the most important diff erences
that Asian supply chain professionals need to be
aware of when considering an upgrade to a mobile printing solution from stationary printers is
where they are used. ]
The trouble for Asian businesses is that productivity enhancements aren’t easily compared between diff erent mobile printers on the market today. Indeed, even the same mobile printer used in a slightly diff erent environment or in conjunction with diff erent equipment can present vastly diff erent levels of productivity gains.
Therefore it is vital that Asian supply chain professionals properly understand the technology advances in mobile printing and also how their own operating environment and equipment will interact with the printers to ensure they are selecting the right product and right productivity booster for their businesses.
RESPECT THE WORK ENVIRONMENTOne of the most important diff erences that Asian supply chain professionals need to be aware of when considering an upgrade to a mobile printing solution from stationary printers is where they are used. Stationary printers are usually installed on a sturdy stand in a computer room, on a vehicle or on a shop fl oor where they can be kept away from forklift traffi c and the vibration and heat produced by equipment. In contrast, mobile printers are attached with the worker. As such, they may be exposed to a variety of conditions, are at risk at being hit each time the user gets into or out of a vehicle, and are frequently dropped.
Hence portable printers need to be protected against the work environment.
Asian supply chain professionals must understand the advances in mobile printing and also how their own operating environment and equipment will interact with the printers to ensure they are selecting the right product and right productivity booster for their businesses. By OW SONG THIAM.
THE RACE FOR MOBILE PRINTING PRODUCTIVITY
[ Supply chain professionals need to understand the technology advances in mobile printing and also how their own operating environment and equipment will interact with the printers. ]
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particulates. Features that promote ruggedness and reliability include moulded construction, durable housing, plus carrying straps and mounting brackets to help prevent drops and reduce wear.
UNDERSTANDING USER NEEDS Work processes are also important to consider when evaluating mobile printers, and tend to be quite diff erent from those supported with stationary models. Mobile printers are often used to produce shelf labels, shipment labels, invoices, receipts, work orders and other materials on demand, often while a customer is waiting or the user is ready to go onto the next task.
Battery life, required recharge times and the ability to remove batteries from the printer to charge them (so spares can be swapped in) can impact greatly on a mobile printer’s ability to delivery productivity benefi ts. It is vital that battery changes or battery life do not slow down the work process. Equally so, the print operations performed by the mobile printer as well should not keep customers waiting, or hold up the
business. Inches per second (IPS) is the most widely used measure of print speed, but not necessarily the most important.
The true indicator of a printer’s productivity power is its throughput, which includes the total time it takes a printer to complete a print job after receiving the print command. Before printing even begins, the printer may need to extract information from on-board memory or a mobile computer, generate graphics and format bar codes. The time required for these functions is refl ected in throughput, but not in inches per second.
Throughput directly impacts the amount of time users spend waiting for the printer to output the needed labels or receipts. Since mobile printing is on demand, the throughput to print the fi rst label or receipt is critical. Variables that impact throughput include the type of data streams the printer can process, whether the printer has enough memory to allow fonts and label formats to be stored internally, its internal processor, its electronics and print mechanisms, supported interfaces and network bandwidth.
Ease of use also impacts productivity. Mobile printers are often used far from available tech support, so how easily the user can recharge batteries, load media, clear jams and perform other basic maintenance and troubleshooting is important. If the printer goes down, the benefi ts a mobile printer provides go away until the breakdown can be resolved.
Productivity suff ers when users have to revert to manual, hand-written procedures for generating work orders, invoices and receipts. Features like audible tones and LEDs, an LCD screen that can prompt users through operations and provide easy-to-understand error messages, control panel buttons, even belt clips and shoulder straps, all contribute to ease of use.
The printer’s design is an important variable to ease of use. To provide productivity benefi ts, mobile printers need to be comfortable enough to use throughout the shift without tiring or inconveniencing the user. Many form factors and carrying options are available to support diff erent work processes. These include mobile
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printers designed for wearing on a belt clip or shoulder strap, being carried (either in a case or mounted to a workboard that can also hold a mobile computer), or mounted in a truck, cart, van or materials handling vehicle.
SUPPORTING INTEGRATION STANDARDSThe ease in which mobile printers can be integrated with various software applications used by a supply chain business and the development environments they will have to operate within are also key considerations when looking at a new technology deployment.
Mobile printers can support IT standards for integration, device management and wireless security, so Asian supply chain professionals should insist on models that are compatible with their platforms and preferences. It is not enough for a wireless mobile printer to connect to the network or with other devices, it must do so securely.
Bluetooth is another popular wireless connection option, especially for interfacing with mobile computers and other peripherals. Bluetooth security settings and profi les should be set the same for printers as they are for other devices.
It is advantageous to include printers in mobile device management programs. Doing so helps administrators monitor performance, order predictive maintenance, remotely update security,
settings and applications and provide other support that doesn’t require hands-on activity. The alternative is manual maintenance, which can keep printers out of service for hours or even days as the printer makes its way from the user to the help desk and back.
Another time saver is selecting mobile printers that share a common development environment with other devices used in the enterprise. This approach leverages programming knowledge and code while requiring fewer specialized skills and environments to support.
MATCHING MOBILE PRINTER TO COMPUTERAlthough independent printing is becoming more advanced in the Asian supply chain sector, in most cases mobile printers are still matched
to a mobile computer that directs printing and runs other applications. Most mobile printers have basic compatibility with dozens of mobile computers. However, many users are surprised to learn that printer performance can vary signifi cantly depending on the computer it is paired with.
The printer-computer combination is an important variable for productivity and should be evaluated during the selection process. Compatibility between computer and printer goes beyond whether each device supports the businesses desired interface. Bluetooth, USB and other interfaces provide basic connectivity between the mobile printer and computer, but do not optimize operations.
Before choosing a mobile printer for their business, Asian supply chain professionals should test their own label and receipt formats to determine which printer-computer combination is fastest and most responsive for operations. The printer should also be a close match with the computer in terms of form and functionality. Ruggedness and durability vary widely among mobile printer models.
Organizations should select one with drop resistance and environmental protection ratings that at least match those of their mobile computers. Temperature resistance ratings are important for fi eld-based applications because often printers are left in vehicles overnight, but the computers
[ Before choosing a mobile printer for their business, Asian supply
chain professionals should test their own
label and receipt formats to determine
which printer-computer combination is fastest
and most responsive for operations. ]
[ Ruggedness is an extremely important quality, even for mobile computers used in retail environments because drops, spills and rough handling are routine. ]
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[ Mobile printers are deployed primarily to improve productivity by giving users a tool to produce labels and receipts exactly when and where they’re needed. ]
are brought inside a facility for data transfer and secure storage. Therefore the printer is subjected to wider temperature extremes than the mobile computer or even the worker, who do not spend hours in vehicles with no climate control.
Wireless printers should support the same standards and confi gurations as the computers and networks they will interact with. In select cases, creating simple applications that will run on the mobile printers can also minimize overall hardware costs by eliminating the need for a mobile computer to direct printing operations.
For example, workers may only need to print a pass or fail label to complete an inspection process. This operation could be completed without a mobile computer by using the function keys and LCD on a mobile smart printer to select and print the required label.
RIGHT PRINTER FOR THE RIGHT JOBThe purchase price of a printer and the cost of its supplies are only a small measure of its true cost. Performance issues that limit productivity drive up the cost of mobile printers, so reliability, expected maintenance costs, the time to complete repairs and whether printers can be serviced remotely should all be considered. Rugged mobile printers often have a higher list price than common commercial models, but have longer life cycles and are more resistant to damage, which results in lower repair costs and service interruptions.
Service and support requirements are a major component to total cost of ownership, and tend to vary more widely than hardware list prices. For example, a mobile printer that can accept the enterprise’s legacy label formats (so new ones won’t have to be developed), has native support for the preferred mobile computer, and allows the organization to leverage its mobile device management system to confi gure, monitor and maintain the printer provides cost advantages over a model that would require additional software development to integrate.
The most important cost to consider is how the printer impacts productivity. Those that perform reliably and minimize the time users and their customer spend waiting for labels and receipts will provide superior value.
Mobile printers are available in a variety of confi gurations and ruggedness
levels so they can be optimized for specifi c business processes and work environments. Asian supply chain professionals must consider the deployment of new mobile technology
into their operations in relation to what systems and equipment the mobile printers will be and what operating environments the printer will be used in.
Through considering all business requirements and understanding the new mobile printing technology on the market today, Asian supply chain professionals will be able to make an informed choice and ensure that their new technology is a productivity booster from day one.
[ Mobile printers are available in a variety of confi gurations and ruggedness levels so they can be optimized for specifi c business processes and work environments. ]
Ow Song Thiam is senior product marketing manager, Asia Pacifi c Intermec.
[ Wireless printers should support the same standards
and confi gurations as the computers and networks
they will interact with. In select cases, creating simple applications that
will run on the mobile printers can also minimize overall hardware costs by eliminating the need for a mobile computer to direct
printing operations. ]
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2011 so far has been a diffi cult year for supply chain management professionals. Floods, volcano ash and a tsunami are just a few natural disasters that have heavily impacted supply chains. The globalisation movement gained momentum as fi rms increasingly prioritized new markets and locations for procuring raw materials, setting up factories and warehouses and attracting customers.
Also, cost cutting measures continue to be a priority among supply chain offi cers, with memories from the recession still relatively fresh. These factors alone have spelled the need for organisations to take a good look at their supply chains. Over the next few years, we will see organisations increasingly competing through their supply chains, with speed and effi ciency being critical to success. The key to achieving these is by gaining supply chain visibility and business intelligence from end-to-end.
Businesses have been implementing software solutions; more often to address certain aspects of the supply chain (eg warehouse management, transport management, etc). Slowly but surely, organizations are looking to implement a GTM solution to optimize the entire supply chain from end-to-end. Saving costs and increasing visibility are the main reasons for the technology adoption. To emphasize this, in the Chief Supply Chain Offi cer Report 2011, 88 percent of the respondents viewed supply chain improvements as important or very important for ensuring operating cost reduction.
In light of the diffi cult year we supply chain professionals have had, organizations should be doing more with their GTM solutions. They should be using it to make the right decisions
STAYING AHEAD WITH GTMDR TORSTEN MALLÉE says that in the next fi ve years, we will see a rise in organizations adopting global trade management (GTM) solutions in order to gain a competitive advantage in the market.
about the planning, monitoring, control and continuous optimisation of all the logistics processes in the supply chain.
FACING COMPETITIONImagine a potential customer is deciding between yourself and your competitor for a sales order. Almost immediately, assuming you have the GTM solution and your competitor does not, you will be able to give your customer details such as exactly how long the order will take to reach them and how much it will cost depending on diff erent modes of transportation – if required even in an automated way.
For most customers, these are they key considerations – how fast can they get products and how much would it cost. Your competitor would have to spend time manually checking to see if there is transportation available, stocks available in the warehouse, calculate the freight costs, check the customs and compliance regulations and process the necessary paperwork for all parties before he can provide an accurate sales order. Who will the potential customer choose?
It can be argued that the most important part of the supply chain is the warehouse and factory. With the visibility gained, it is important to zoom in to the micro level to identify and eliminate bottlenecks. Even small rearrangements to the process fl ows for the picking and packing stations can have a large impact on improving productivity, sometimes reducing lead times by days. Over time, the warehouse product off ering may change, and the scope and the scale of work may change. Organizations must use business intelligence to continuously identify points of failure and bottlenecks, improve productivity and effi ciency within the warehouse, which will enable it to reduce the minimum inventory levels required
and also improve the overall cash fl ow. Once this is in place, you will be able to off er a far better deal to your potential customer than your competitors, ensuring their business.
AUTOMATION LEADS THE WAY Traditionally, the next step in processing the sales order, deciding upon transportation, has been very labour intensive. Organizations often handle hundreds or thousands of sales orders daily, which results in a large backlog of orders and the inability to take on new orders. With a GTM, many of these manual tasks are eliminated.
Choices such as informing the supplier for raw materials, checking inventory levels, assigning manpower to pick and pack the goods, deciding on a transportation type, even arranging consignments to maximize space utilization and processing all the accompanying customs and compliance documents (which are checked against international regulations in real time) are automated through simple pre-defi ned rules decided by the management team. This means the organization can take on sales orders as per how fast it can pack consignments, which is why processes within the warehouse are of imperative importance.
The automation of all these processes allows organizations to focus on more important aspects of the business – improving the overall logistics processes. The manpower can now be used to look for new routes, source for new suppliers, alternative transportation service providers and vendors that can help make a signifi cant diff erence to the organization’s performance. A GTM solution is extremely useful in managing stakeholder relationships as it goes above just a sales process. In an increasingly service-oriented environment, it is
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Dr Torsten Mallée is the general manager of AEB (Asia Pacifi c).
essential that organizations meet all the needs of the customer quickly. One way to do so is by giving them visibility; at what stage in the logistics process is it at? How many more days until it reaches the customer? Sharing this information builds trust, which is integral in keeping customers. Implementing this practice can generate constructive feedback from the customer and help in identifying areas for improvement. Likewise, even more organizations should aim to set up a partner/supplier program where they are rewarded for good performance. By making the information related to their performance visible to them, stakeholders have everything in black and white, making it easy to solve disputes, identify problems and issues and solve them quickly through a combined eff ort. Partners and suppliers should be continuously challenged to improve their performance through a continuous improvement process.
In the next fi ve years, we will see a rise in organizations adopting GTM solutions in order to gain a competitive advantage in the market. As cost cutting, globalization and natural disasters continue to aff ect supply chains, it is essential that companies optimize their supply chains
as much as possible, to ensure maximum agility. In the case of natural disasters, the GTM solution gives the organization the ability to quickly plan and analyse the impact of using new routes, providing hard data on how it aff ects the business.
At the end of the day, these are exciting times for supply chain professionals as we are seeing fresh innovations in the ways that companies are applying
visibility and business intelligence to improve their business processes. Let us hope 2012 is a better year for supply chain professionals, allowing them to put resources into gaining a true competitive advantage in the market.
[ In the next fi ve years, we will see a rise in organizations adopting GTM solutions in order to gain a competitive advantage in the market. ]
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SOARING TO NEW HEIGHTSAsia holds the key to continued growth of the aerospace industry,underpinned by demand in fast growing regions such as China and India.By HERBERT VONGPUSANACHAI.
In today’s globalized economy, perhaps no other sector plays a more critical role than the aerospace industry in facilitating cross border trade and bringing communities together. Currently serviced by more than 15,000 commercial aircrafts globally, this sector transports over two billion passengers annually. The Airbus Global Market Forecast predicted that between the period 2009-2028, 24,951 new aircraft (24,097 passenger planes and 854 freighters, as a mix of replacements and additions) will be delivered to the global fl eet by 2028, which would have grown from a fl eet size of 15,750 in year 2009 to 32,000 by end of year 2028.
Asia holds the key to continued growth of the aerospace industry, underpinned by demand in fast growing regions such as China and India. Boeing has projected that the number of aircraft in service in the region will almost triple from 4,110 today to over 12,000 by 2029. In this same time period, the region is expected to become the largest contributor to the global airways, reaching more than 30 percent of total air traffi c.
The projected rise in Asia passengers, emerging routes as well as freighter traffi c results in increasing maintenance,
repair and overhaul (MRO) activities in the region. A trusted logistics partner, such as DHL, hence plays a key role in enabling timely delivery of aircraft components to MROs and airlines in order to reduce delays and interruptions to service during scheduled and unscheduled maintenance.
The unique requirement of the aerospace industry calls for safe and effi cient transportation of parts and components that is crucial to the overall aviation business. DHL has over the years acquired extensive knowledge of the industry and grown in providing turnkey solutions for the industry – from simple point-to-point transportation services through to complex supply chain solutions.
COMING IN FIRSTSingapore is the largest maintenance, repair and overhaul (MRO) hub in the Asia Pacifi c region and remains committed to developing the aerospace industry. For the last decade, the industry has been experiencing a compounded annual growth rate (CAGR) of almost 14 percent in the MRO and manufacturing sectors.
According to the Singapore Aerospace Value Chain Study, Singapore is expected
to capture a signifi cant market share from the MRO sector, with estimated total cumulative revenue of S$372 billion from 2010 to 2030. The MRO industry, which provides jobs for 19,000 people, achieved a record output of S$7.1 billion in recent years. Accounting as much as 48 percent of the total MRO revenue, the engine overhaul sector is the single largest contributing segment. Other sectors such as the component repair, independent and airline MRO operators as well as OEMs accounts for 26 percent, 36 percent and 34 percent of the MRO revenue respectively.
Recognized as the preferred manufacturing investment destination for aerospace companies in Asia Pacifi c, Singapore possess the skilled labor force and capabilities needed to carry out comprehensive MRO services ranging from airframe maintenance, engine overhaul, component repair, structural and avionics system repair as well as aircraft modifi cation and conversion. Singapore is also home to world-class aerospace design and original equipment manufacturers (OEMs) and suppliers, with products like engine casings, engine gears, electrical power systems and galley equipment all designed and manufactured within its borders.
Strong intellectual property (IP) rights coupled with a sustainable business environment, the aerospace industry in Singapore is set to take on new heights with the Seletar Aerospace Park – a world-class integrated aerospace facility – which, besides MRO, will play host to manufacturing and other business activities. Major aerospace companies are also establishing R&D centres here to tap into Singapore’s talent base, strong intellectual property programme, cost-competitive commercial environment and dynamic research infrastructure. Singapore’s connectivity to the rest of the world, the nation is well poised to capitalize on the air traffi c growth which is expected to exceed seven billion passengers by 2020.
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[ The unique requirement of the aerospace industry calls for safe and effi cient transportation of parts and components that is crucial to the overall aviation business. ]
FACING THE CHALLENGE With growth and expansion experienced by the aerospace industry come challenges and uncertainties. The aerospace industry constantly faces volatile externalities such as rising and unstable operation costs, air-worthiness issues and high levels of regulatory controls.
Cost reduction and faster turnaround time of MRO services are some measures to address these challenges. MRO service providers are constantly required to reduce costs, improve turnaround time, while maintaining performance levels and adherence to regulations. Hence an eff ective supply chain performance will greatly infl uence the eff ectiveness of maintenance operations.
According to Airbus, the cost for a plane to be grounded for technical reasons is €925,000 per day. A grounded aircraft is not only non revenue generating but the cost incurred will eat into the
profi ts as well. Airline companies cannot aff ord to have a single aircraft from their fl eet grounded at any point of time. As the traditional MRO model is being challenged, the ability to ensure rapid delivery of time-critical spare parts to a waiting aircraft is important in helping to yield substantial cost saving, increase effi ciency, improve competitiveness and reduce aircraft on ground (AOG) downtime.
Faced with cost pressures, manufacturers need to transform and streamline their manufacturing logistics system, from managing inbound fl ow of materials from collection points (at their component suppliers’ facilities) to the consumption points (in their production facilities), in order to remain operational and cost effi cient.
DHL established its aerospace hub in 2007. The one-stop aerospace hub provides end-to-end supply chain services, from having a dedicated
Herbert Vongpusanachai is managing director of DHL Express (Singapore).
aerospace warehouse, to delivering critical spare parts around the world, and having a devoted AOG Asia Pacifi c call centre that operates 24/7. DHL was accorded the Aerospace Logistics Company of the Year at the 2011 Frost & Sullivan Asia Pacifi c Aerospace & Defense Awards for the second consecutive year.
SIA Engineering Company (SIAEC) has signed a contract with Airbus for the implementation of the Airbus Managed Inventory (AMI) solution. This will ensure the replenishment of Airbus proprietary parts at SIAEC’s facilities utilizing an automated inventory management system provided by Airbus. SIAEC is the fi rst customer worldwide to select the AMI Ownership option – this means that the stock is Airbus-owned, up to the time when it actually needs to be used. The AMI service captures material consumption information in real-time and automatically triggers the replenishment process within the agreed inventory levels. AMI
SIA ENGINEERING CHOOSES AIRBUS MANAGED INVENTORY
shifts administration and transport responsibility to Airbus, thus reducing costs for the customer.
“We are pleased that SIA Engineering Company has chosen the Airbus Managed Inventory solution and its ownership module which is tailor-made for supply chain requirements of our industry,” said Didier Lux, executive vice president of Airbus customer services. “We are confi dent this will achieve high on-shelf availability at optimum on-site inventory levels.” “In view of SIAEC’s role as a major service provider for the Airbus Tailored Support Package solution, we are entering a new level of cooperation between our both companies.”
[ Jack Koh, senior vice president, fl eet management, marketing & sales, SIA Engineering (left) and Didier Lux, executive vice president, customer services, Airbus. ]
[ Vongpusanachai says that MRO service providers are constantly required to reduce costs, improve turnaround time, while maintaining performance levels and adherence to regulations. ]
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Lufthansa Technik opened a pool storage facility in Singapore for aircraft components. This expansion of services in the Asia-Pacifi c region off ers the company’s customers there an even more direct access to aircraft material on a 24/7 basis. Having a distribution center in Singapore also enhances service quality through faster provision times and a regional contact partner.
The warehouse, which will be operated by Lufthansa Technik Logistik Services (LTLS), is located very close to Changi International Airport, enabling fast transport of aircraft components. In addition to the handling and storage of routine shipments, the facility will handle both aircraft on ground shipments and those of dangerous goods.
“Singapore is an outstanding location for connecting to our customers’ destinations. This puts us in a position to react even more fl exibly to our customers’ requirements. In the future, we want to expand our spectrum of services even further and enable our customers to turn over material directly to us in Singapore,” said Dr
[ This expansion of services in the Asia-Pacifi c region off ers Lufthansa Technik’s customers there an even more direct access to aircraft material on a 24/7 basis. ]
LUFTHANSA TECHNIK SETS UP POOL STORAGE IN SINGAPORE
Burkhard Andrich, senior vice president aircraft component services at Lufthansa Technik, explaining the company’s choice of location.
Andreas Meisel, managing director of Lufthansa Technik Logistik Services, off ered an outlook on the next steps: “In opening this warehouse, we’re keeping up with one of the most rapidly growing markets for maintenance, repair and overhaul services for aircraft. We’re starting with the storage and handling of materials for all the usual Airbus aircraft
AIRBUS SELECTS SDV FOR WORLDWIDE SPARES WAREHOUSE MANAGEMENT
SDV has been selected to manage Airbus’ spares warehouses in Hamburg, Frankfurt, Dubai and Singapore in order to ensure a continuous spare parts and material supply all year long, around the clock, under aviation quality requirements and with a high level of responsiveness. Airbus aims at optimizing their warehouse operations through the use of fl exible and high quality warehousing services.
SDV will take over operations in Airbus locations or operate own logistics facilities. Based on the Airbus specifi cations SDV will deploy a general process applying to all locations and integrating packaging and storage for the diff erent order
priorities and if requested customs clearance and quality inspection.
“A single project team from study to continuous improvement plan and a
proven methodology for effi cient management were some of the distinctive points of the SDV solution,” said Jérôme Le Grand, SDV aerospace director and global account manager for EADS. The SDV proposal was also based on the experience of its teams in managing global supply chain projects and their long-standing experience in the aerospace industry and the Airbus processes. “We have proved our capability to deliver the best solutions at a worldwide level through our fully owned logistics assets and our long term strategic partnership with GEIS Industrie-Service in Germany. We are proud to service Airbus and be associated globally to their worldwide logistics challenges.”
[ Airbus aims at optimizing their warehouse operations through the use of fl exible and high quality warehousing services. ]
types, but we’re already planning to develop the portfolio to include material of other aircraft types and expand our logistics services for other customers of Lufthansa Technik and LTLS.”
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At the ExpressJet Airlines maintenance facility at Newark Liberty International Airport, a new approach to storing service parts has reduced the amount of space required by traditional shelving, and has helped that operation more effi ciently handle slow and medium moving inventory items.
The facility stores a wide range of parts for aircraft service and maintenance, from small fasteners to large air valves. In order to reduce the amount of fl oor space required for parts storage, and to improve part retrieval effi ciency, ExpressJet installed two vertical lift modules (VLMs) to replace bays of shelving. The VLMs, which are now being sold and serviced by Sapient Automation as the Viper VLM, were originally purchased and serviced by another organization (under the Power Column II brand). Sapient Automation now has the exclusive rights to sell and provide factory replacement parts and service to this VLM in North America.
The Viper VLM is an enclosed high-density storage and retrieval system that consists of two columns of trays in the front and in the back with a robotic extractor that delivers trays to an ergonomically positioned work counter. VLMs take advantage of unused overhead space to reduce the amount of fl oor space required by traditional shelving by up to 85 percent. MANAGING INVENTORY MORE EFFICIENTLYIn addition to the space savings benefi t, the installation of the VLMs gave management the fl exibility to retrieve parts inventory in a more effi cient manner. “We placed our slow to medium movers, those parts that we don’t retrieve on a regular basis for service and maintenance jobs, in the VLMs and kept our fast moving items, along with just a few bulk items, on the remaining shelving,” said Gloria Hume, materials services supervisor.
With slow and medium movers, retrieval velocity is low, but the number of stock keeping units (SKUs) is large. This strategy helps dramatically reduce fl oor space by maximizing otherwise wasted vertical height and helps eliminate the walking and searching otherwise required when using shelving. By analyzing ExpressJet’s inventory by size, velocity and value it is easy to create classes of items and determine the proper slow to medium moving items to store in the VLM. , Likewise, it is easy to then confi gure the VLM’s trays and storage strategy to accommodate every inventory class. “There are approximately 3,000 SKUs in the two VLMs, 2,000 parts in one and 1,000 in the other,” said Hume. “They are divided that way so that the larger, heavier parts are located in one unit
and the smaller parts in the other to optimize the storage effi ciency of the units.” A Viper VLM comes with the ability to designate specifi c storage locations or to use the unit’s optimization program. To optimize the storage cube of the VLMs, a dynamic tray height sensor automatically scans and optimizes storage density every time a tray is stored in the unit. The VLM’s control automatically directs every tray to the least amount of vertical space possible necessary for storage. “The enclosed design of the VLMs also helps maintain the cleanliness of the parts more eff ectively than using the shelving, since these parts are slow to medium movers and stayed on the shelves longer than faster moving parts. Next to space savings, cleanliness has been the biggest benefi t of the system for us,” said Hume. The modular design of the VLM also proved benefi cial to the organization when it moved its operations, including all of its inventory and the VLMs, from one storage facility to another in 2004-2005. The VLM can be disassembled and reassembled and made shorter or taller. This makes moves such as this less costly and more effi cient. Likewise, the VLMs can change to refl ect an organization’s current business requirements. At the ExpressJet maintenance facility, all parts stored in the VLMs are labeled with a location number. To retrieve parts, operators key in the location number using the touch screen controls on each unit. The VLM automatically delivers the tray containing the part to the work counter. “Inventory levels are monitored by the software program,” said Hume. “We have established minimum and maximum levels and we keep track of the levels through management reports.” VLMs have helped ExpressJet reduced the amount of space required for storing a wide range of maintenance parts with a varied range of sizes, weights and shapes while providing a more effi cient way to handle slow and medium moving parts retrieval. [ VLMs replace bays of shelving. ]
EXPRESSJET INSTALLS TWO VERTICAL LIFT MODULES
[ In addition to the space savings benefi t, the installation of the
VLMs gave management the fl exibility to retrieve
parts inventory in a more effi cient manner. ]
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The increasing incidence of accidents in air, road and sea of leakage or spills of hazardous goods has caught the attention of many activists, logistics companies and governments alike to continuously upgrade regulations and guidelines for logistics industry. However, the complex web of national and international regulations for dangerous goods storage, handling and transport, makes it diffi cult for the supply chain to keep pace and accommodate the same at all levels of service all the time. In common parlance, dangerous goods refers to items that are potentially dangerous during transportation. They include a wide range of solids, liquids and gases that have explosive, fl ammable, toxic (poisonous), infectious, radioactive, corrosive or environmentally hazardous properties.
Dangerous goods have special transport requirements to eliminate or minimise the risk of injuring people or damaging property and the environment. The necessary condition applicable for air, rail, road and sea are not the same, and these vary with respective mode of transportation. In addition, the requirements of one country may not necessarily be the same as another and the hazardous cargo may be to comply with various regional, national and international modalities. CLASSIFICATIONS AND LABELINGSubstances, including mixtures and solutions, and articles are assigned to one of nine classes according to the hazard or the most predominant of the hazards they pose in transport. To accommodate the large number of dangerous goods and the consistent, rapid development of new substances, the unusual chemical names used to describe them and the diff erent emergency response for them, the UNSCETDG devised tests and criteria to be used to determine which substances
HANDLEWITH CAREWhen handling dangerous goods, the logistics service provider has to face complex environments at all points of the supply chain. By RACHITA JHA.
could be identifi ed as dangerous goods in transport. The UNSCETDG then devised a system of nine classes for substances with the objective of dividing all current and future dangerous goods into these classes.
The system of classes was established keeping in mind the type of containment to be used, the chemical and physical characteristics of the substances and response procedures that would be most appropriate in the event of an accidental release. Consequently, in the UN Model Regulations each substance has a name (called a Proper Shipping Name) and a four digit UN number and, according to its chemical and physical characteristics, is assigned to a class and a packing group. The nine classes are Class 1 Explosives, Class 2 Gases, Class 3 Flammable Liquids, Class 4 Flammable solids; substances liable to spontaneous combustion; substances, which, on contact with water, emit fl ammable gases, Class 5 Oxidizing substances and organic peroxides, Class 6 Toxic and Infectious substances, Class 7 Radioactive material, Class 8 Corrosive substances, Class 9 Miscellaneous dangerous substances and articles, including environmentally hazardous substances.
The classifi cation of substances by type of hazard was developed to meet technical conditions while at the same time minimizing interference with existing regulations. It should be noted that the numerical order of the classes does not indicate the degree of danger.
For purposes of selecting the appropriate packaging for dangerous goods, substances are further divided into packing groups (although some classes do not have packing groups, i.e. Class 2,
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Division 6.2 and Class 7) in accordance with the degree of danger they present: Packing Group I: high danger, Packing Group II: medium danger, Packing Group III: low danger, Criteria for classifi cation and assignment to a Packing Group conform to those set out in the Globally Harmonized System of Classifi cation and Labeling of Chemicals (GHS).
Industrialization and modernization is creating new products and goods to carry across borders, with these changing production trends re-visit to the classifi cation and labeling modalities of classifi cation are ever evolving with new additions of goods and their management.
Transport of dangerous goods needs to be regulated in order to prevent, as far as possible, accidents to persons or property and damage to the environment, the means of transport employed or to other goods. However, with diff erent regulations in every country and for diff erent modes of transport, international trade in chemicals and dangerous products would be seriously impeded, if not made impossible and unsafe.
Moreover, dangerous goods are also subject to other kinds of regulations, e.g. work safety regulations, consumer protection regulations, storage regulations, environment protection regulations. This creates a complex environment for the logistics company in transportation of such goods across international boundaries. The larger safety net and modalities of transportation of dangerous goods are addressed by the United Nations and all work related to the transport of dangerous goods is coordinated by the Economic and Social Council (ECOSOC) Committee of Experts on the Transport of Dangerous Goods (TDG).
The body brings out directives under the multi-modal transport under Recommendations on the Transport of Dangerous Goods, also called the Orange Book and the Globally Harmonized System of Classifi cation and Labeling of Chemicals. In reference to the transport of radioactive material, work is coordinated by the International Atomic Energy Agency (IAEA) which produces the Regulations for the Safe Transport of Radioactive Material. For roadways, European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR) is the key agency and illustrates details of the types of packaging which may
be used, the consignment procedures, transport equipment and operations. Other includes, European Agreement Concerning the International Carriage of Dangerous Goods by Inland Waterways (ADN), the International Maritime Dangerous Goods Code (IMDG Code), the International Civil Aviation Organisation (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air and Regulations for the International Carriage of Dangerous by Rail (RID).
Although the co-ordination of the international rules and regulations has been quite synchronized with various countries, the in-depth understanding of local and regional regulations becomes a challenge for the logistics service provider. From January 1, 2012, the next editions of the International Air Transport Association (IATA) Dangerous Goods Regulations (DGR) and the International Maritime Dangerous Goods (IMDG) Code have come into eff ect.
SHIFTING TRADE ROUTESThe economic recession of 2008 not only changed the profi t sheets of companies but also skewed the routes of travel for many industrial materials and goods. Chemical industry, one of the major contributors to the volume of dangerous goods worldwide also experienced a shift. Moving away from its traditional centers in the developed world, the coming years will experience increase demands from China, India and Middle East, as the outcome of the many M&A activities over the next decade, with companies in the
[ In transport of dangerous goods, strong multi-modal
collaborations through 3PLs have emerged as a
trend in new markets for logistic service providers
of dangerous goods especially chemicals. ]
West being likely targets and fi rms from West Asia and China being the buyers.
India is walking fast on the chemical sector growth engine, wherein the Indian chemical industry has attained a critical size and has the potential to build a US$80 – 100 billion specialty chemical industry by 2020. This makes the Asia Pacifi c region form nearly 42 percent of the global market for chemicals, clearly making it the largest contributor.
In transport of dangerous goods, strong multi-modal collaborations through 3PLs have emerged as a trend in new markets for logistic service providers of dangerous goods especially chemicals. In the chemical supply chain, they off er services such as warehousing, shipping, freight forwarding and other aspects of logistics management. This last mile support gives them a competitive edge and makes for sustainable logistics-as 3PL makes the supply chain network fl exible and adjustable with ability to respond to market changes quickly and eff ectively.
CATALYST FOR CHANGEIn a bid to curb the overall costs and increase the overall effi ciency, technology is playing the role of a catalyst for change. The recession period brought-in a major shift in economic balance across global economy and companies began to look out for lean yet effi cient systems in supply chain. There are technology solutions available for logistic service providers that can enable you to create and store Material Safety Data Sheets (MSDS) for dangerous goods and to produce Transport Emergency (TREM) cards to use when distributing these goods to customers.
The supply chain network is also slowly recognizing the many benefi ts of the transportation management system (TMS) software that has the ability to automatically plan and track outbound shipments, receive alerts when a shipment is going to be late to a customer and proactively alert the customer that there might be a problem. This
[ Dangerous goods refer to items that are potentially dangerous during transportation. ]
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spontaneity of the system makes it very apt for shipments of dangerous goods. As maritime and dangerous goods security evolved, shippers and carriers have taken to the use of tracking devices and alarms for shipping containers. To incorporate this relatively new practice, the IMDG Code now has a new Section 7.5.4 in Chapter 7.4 (Packing of Cargo Transport Units) to elaborate on the ways that these devices may be used safely to monitor dangerous goods shipments.
In the dangerous goods segment, wherein one has to follow a complex trail of procedures and guidelines, tools such as the example of chemical major Dow Chemicals that has a large presence and business importance in emerging markets especially Asia Pacifi c region, had a vision to create and deploy a technology solution supporting its supply chain management-standardizing international transportation and trade logistics into one process at the global level. As the solution BDP International provided, a centralized BDP lead logistics provider (LLP) team oversees the Dow business activity and ensures that the processes, for which BDP is responsible, operate effi ciently and eff ectively within Dow’s overall supply chain across fi ve primary service categories: logistics, communication, documentation, SAP entry and review, and customer service.
In addition to an extensive Customer Order Processing System (COPS), a suite of web-enabled customer service applications provides Dow unrestricted global analysis and control of their supply chain process. SmartTracking, a global tracking and tracing tool monitors the transportation and documentation status and delivery of shipments, proactively reports exceptions, and links all parties involved with a particular shipment was deployed.
Another technology enhancement, SmartDocs, expedites air and ocean export transactions by generating and sending trade documents as paperless transactions via the Internet. BDP’s capability goes further than others by enabling the transfer of all documents in a transaction. On-time deliveries are increased, waiting for documents is reduced, and errors eliminated. Dow also can use Customer Correct, an online corrective action tool, to reduce account problems. Within a few short months, the implementation began.
Step one required transitioning the company’s North American operations, beginning with exports and the
Key benefi ts of TMS• Automation of the freight execution
and payment• Centralized control of overall
transportation, including remote locations
• Notifi cation and alerts of any incidents and quick preventive action
• Alerts regarding updated status of consignment
• In-depth records of tracking/reporting vis-a-vis costs performance
a service model decreases costs, contributes to further effi ciency gains and brings about clear advantages regarding worldwide fl exibility for the chemical major. The solution enables effi cient dispatching with high degrees of automation and fl exibility. LANXESS additionally benefi ts from lower communication costs with logistics service providers as well as lower cost of hardware and operation thanks to the on-demand model.
TMS therefore opens up new possibilities of collaboration, tracking and response mechanism that can customised based on the requirements of the company across its supply chain network for transport of dangerous goods. This helps reduce investments in on-ground logistics infrastructure as upfront capital costs.
corresponding importing countries for those transactions. Within two months, implementation activities had been extended to Asia. Dow operations in Latin America would be scheduled for integration next. The company has already reaped a 20 percent air freight cost savings with 15 months of implementation.
NEW AVATAR OF TMSAccording to ARC Advisory, the transportation management market has emerged from the recession. Further, robust growth is forecast through 2015 as a perfect storm of rising fuel prices, capacity shortages driven by a declining pool of drivers, increasing governmental regulation, increasing numbers of companies committing to becoming green, and the increased maturation of the TMS product set is expected. Certain divisions of a few of the largest chemical manufacturers have adopted this technology to begin early on the realization of its benefi ts.
LANXESS – one of the worldwide leading specialty chemicals companies has opted for a TMS which is fully integrable into the SAP environment and shall be introduced consistently into all parts of the group. An on-demand solution, the software as
[ TMS therefore opens up new possibilities of
collaboration, tracking and response mechanism that can customised based on
the requirements of the company across its supply
chain network for transport of dangerous goods. ]
[ Dangerous goods have special transport requirements to eliminate or minimise the risk of injuring people or damaging property and the environment. ]
A COMPLEX ENVIRONMENTThe logistics service provider, in case of dangerous goods has to face complex environments at all points of supply chain – storage, handling, transport and delivery and the burden of documentation, procedures and guidelines is colossal. The labyrinth of international standards for air and ocean freight, along with myriad local domestic practices makes logistics of dangerous goods a unique and often diffi cult service.
And, as new categories of specially chemicals, enter the transportation chain with new additions of guidelines and permissions for the same, the challenges for the logistics providers handling dangerous goods in the coming years are only going to increase in the times to come. Technology has come as saver in these diffi cult times and promises to act as an cost saving and effi ciency tool for the hazmat industry.
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January – February 2012www.LogAsiamag.comMICA (P) 144/01/2012 PPS1672/01/2012 (028344)
THE YEAR AHEAD
THE MILKMAN’S CHALLENGECOMBINED DISTRIBUTION NETWORKSFMCG INDUSTRY
Industry leaders Share Their Outlook for 2012
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[ Mark Millar ]
RECONFIGURING ECOSYSTEMS
MARK MILLAR says that 2012, the year of the dragon, will see a new focus on reconfi guring global supply chain ecosystems, in many cases to reduce complexity and address volatility.
Key drivers of the need to change include: reduced demand in the developed markets, overcapacity in the container shipping and air cargo sectors, increasing focus on environmental issues and concerns over the uncertainty of oil prices. In addition, companies need to build supply chain resilience to react and respond to the unpredictable disruptions such as accidents and natural disasters that cause massive and immediate impact.
However, the overwhelming driver of the need for change is that the centre of economic gravity has shifted east – we are now fi rmly in the Asia Era and will remain so for the foreseeable future. Global supply chain ecosystems – particularly for consumer goods and high tech products – have traditionally been built around manufacturing in low-cost locations throughout Asia for subsequent export to North American and Western European markets. These developed markets are experiencing a variety of economic, political and fi nancial challenges all of which are impacting consumer demand, resulting in some slowdown of high tech exports from Asia.
The low-cost labor-intensive production outsourced to Asia during recent decades has gradually expanded economic prosperity, thus creating rapidly emerging consumer markets. In Asia, there are signifi cant numbers of predominantly young people who now have disposable income – many for the fi rst time – and who are technologically enabled, permanently connected and globally aware. The Asia Era has millions of digital natives with money to spend!
In contrast to the USA and Europe, most domestic markets in Asia are experiencing rapid economic growth and increasing consumer spending. Hence, multinational brands are looking specifi cally to the Asia consumption markets for more volume,
revenue and growth – and therefore need to revisit and reconfi gure the structure of their supply chain ecosystems in order to better serve these local markets. However, many challenges have to be overcome in order to enable eff ective and effi cient logistics networks for distribution of consumer products. Reviewing the Enabling Trade Index compiled by the World Economic Forum (WEF) provides some insights into key challenges – and strengths – on a country by country basis for sixteen major markets in Asia. There is a wide range of scores on the key dimensions of border administration and transport infrastructure, likewise for market access and business environment.
Acquiring the insights and knowledge of the issues in each market, together with capabilities to develop appropriate supply chain solutions will be key enablers of competitive advantage for organizations seeking to capitalize on the groundswell of opportunities in these exciting markets.
Such organizational expertise is largely human-capital dependent and hence we will see accelerating demand for supply chain and logistics professionals who have the tribal-knowledge that can only be accumulated through on-the-ground experience in problem solving and fi nding ways to make-things-happen. There will be increasing pressure on the supply and demand imbalance of trained, skilled and experienced supply chain and logistics professionals in Asia. The skills shortage is one logistics challenge that is common throughout all developing markets inAsia – particularly in rapidly developing China, India and Vietnam.
In China the diffi culty of recruiting skilled professionals is exacerbated because of its scale and also due to China’s leading role in global supply chains. At the same time, the scale of the sector gives it a larger pool of experienced workers than
in other countries. India’s leadership role in global commerce has developed in areas such as telecommunications and business process outsourcing. This has resulted in a smaller pool of experienced talent to fi ll the expanding demand in the logistics sector. As India plans to modernize many sectors, in particular the retail trade, there will be increasing demand for experienced logisticians.
In Vietnam, the majority of the population are young and well educated, with English spoken quite widely. Thus there is a large pool of potential workers for the logistics sector, however, as in many other countries, there are not enough young people choosing the logistics sector as their career path. Therefore in Vietnam, we are also seeing skills shortages in the logistics sector.
Attracting more talent into the fi eld of logistics and supply chain management, and subsequently nurturing them with training and mentoring through career development programs will be the only way to address the need to expand the talent pool. We all share collective responsibility to demonstrate leadership in this industry wide challenge of skills shortages. The rapid emergence of the Asia Era will require companies to adapt and adjust their business models accordingly – reconfi guring their supply chain ecosystems to focus on the multiple markets throughout the Asia region. Businesses that successfully address this challenge will become empowered to gain competitive advantage and drive profi table business growth during this exciting year of the dragon.
Mark Millar is an independent speaker, consultant and advisor for logistics and supply chain activities in China and the Asia Pacifi c region. ([email protected])
© 2011 Datamax-O’Neil. All rights reserved.
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