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supplych in
A
The Magazine for Supply Chain & Logistics Professionals in Asia | Jan/Feb 2017
sia
Connect. Communicate. Collaborate.
A Night o f G l it z & G l a m o u r ts its 10th annual
Asi a hit the hea dlin es aga in as the not-for-profit organisation hos
Supply Chain
ber 2016 at Orchard Hotel. pg 43
Awards and gala dinner on 17 Novem
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content
3 About us
7 News Snippets
11 Features
11 International Trade Agreements On Possible Standstill : What Will Keep Businesses Standing?
15 How to Achieve a Patient-Centric Supply Chain with IoT
19 How India Can Clean Up Supply Chains By 2019
23 Dialogues
23 Interview with Mr Steven Hill : Material Handling Equipment – The Bedrock of Supply Chain
27 Interview with Mr Muhammad Aidil Abdullah : The Assassin Deliveryman
31 Strategy & TECHNOLOGY
31 Logistics 4.0: Supplying the Future Today, with Tomorrow’s Lighting Technology
35 A Holistic Manufacturing Sourcing Location Strategy Beyond Labour Cost
37 Gaining Visibility into 2017: 3 Defining Trends for the Supply Chain Industry
39 The Digital Supply Chain: Five Technologies to Watch
41 Delivering Online Purchases to Your Doorstep
43 EVENT
43 A Night of Glitz & Glamour
SCA 2
Board of Advisors The Shippers Council
Dr Robert Yap Chairpersons:
aboutus Executive Chairman, YCH Group
(Chairman of the Board)
Jaya Moorthi Sinniah Pillai, Schneider Electric
Ingeborg Veelenturf, Coach
Mr Paul Bradley Tan Boon Hao, 3M
Chairman & CEO, Caprica International Fausty David, AFCI
(Vice Chairman of the Board) Travis Wong, Baker Hughes
Stephan Bietz, Bosch
LSPs Representatives Edwin Sia, Corning
Supply Chain Asia Team Mr Onno Boots, Geodis Wilson Andreas Wendtland, Dell
Mr Khoo Seng Thiam, FedEx Express Allen Wan, Diageo
Paul Lim Mr Laurent Simon, Kuehne + Nagel
Wu Junli, Economic Development Board
Founder/President Bjorn Jensen, Electrolux
Paul.lim@scasia.org Shippers Representatives Roland Chong, Estee Lauder
Ms Ingeborg Veelenturf, Coach
Christina Yeo, Givaudan
Editorial Ms Joy Rice, Diageo
Michael Tyler, GlaxoSmithKline
Elliyani Mohd Ali Mr Michael Tyler, GlaxoSmithKline
Mr Koh Jin Kiat, Harley-Davidson Steve Perry, GlaxoSmithKline
Manager/Lead Editor
Koh Jin Kiat, Harley-Davidson
Yani@scasia.org
Peter Chiong, Harley-Davidson
Vendors & Supporting Organisations
Alice Po, Hitachi Asia
Production & Design Mr Sundi Ayer, Accenture
Selynn Chew Mr Vijay Anand, IBM Roxane Desmicht, Infineon
Creative Designer Mr Brian Miles, SSI Schaefer Ethan Sim, Intel
Selynn@scasia.org Leow Yeou Yi (YY), J&J Vision Care
Government/TACs/Academics Jorgen Preben Bager, LEGO
Advertising Sales Mr Lee Eng Keat, Economic Development Kevin Cheong, Molex
General Enquiry Board Victor Soh, MSD
Editor@supplychainasia.org Dr Mark Goh, The Logistics Institute-Asia Grace Tang, Oracle
Pacific (NUS) Hameed Ibrahim, Rolls Royce
Administration & Finance Mr Jonathan Lim, Spring Oliver Nicolai, TEVA Pharma
Jane Lim Mr Tony Lugg, Transported Asset Protection Christine Lee, Verifone
Administrator Association Lucas Tan, Zuellig Pharma
Jane.lim@supplychainasia.org
Carol Chong Senior Professionals
HR/Career Services Mr Wayne Hunt, AsiaPac Executive Insights
Carol.chong@supplychainasia.org Mr Peter Woon, Ecohub Global
Mr Turloch Mooney, TACT
General Enquiry
Admin@supplychainasia.org
Available at
The Procurement Council Supporting Orgs
Chairperson: Chartered Institute of Logistics and Transport
Peter Woon, Ecohub Global Global Logistics Council of Taiwan
Nanyang Polytechnic
John Lim, ConocoPhilips National University of Singapore
Tiow Wei Yeong, Diageo Ngee Ann Polytechnic
Sebastian Chua, Health Promotion Board Singapore Polytechnic
The views and opinions expressed or implied in
Supply Chain Asia Magazine (MCI (P) 022/05/2016) Philippe Ruffier, Mundipharma Singapore Management University
do not necessarily reflect those of Supply Chain Asia Michael Koh, T-Systems Temasek Polytechnic
Community Ltd. No responsibility is accepted for the
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All information is correct at time of printing.
3 SCA
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Supply Chain Asia your community of choice.
5 SCA
SCA 6
news
snippets
Asia remains integral to world’s manufacturing strategy
Asia’s sophisticated electronics supply chain and massive labour pool are two obstacles
standing in the way of President-elect Donald Trump’s pledge to make US companies bring
manufacturing jobs home.
When Jabil Circuit Inc., the world’s third-largest contract manufacturer by revenue,
needed to quickly ramp up production of its electronics components a few years ago,
the company was able to add 35,000 workers in China in less than six weeks. Jabil’s
experience underscores the integral roles of China’s armies of migrant workers and Asia’s
decades-old supply chain in global electronics production. It is an issue Mr Trump will
need to address if he wants to bring large-scale production back to a US economy that
Washington, DC think tank Economic Policy Institute estimates has lost more than 5.4
million manufacturing jobs and 82,000 factories between 1997 and 2013.
The President-elect has threatened to impose a 45 per cent tariff on Chinese imports to
the country. This move could hurt companies manufacturing in China, such as Apple, Dell
Technologies, and HP Inc. It would drag down China’s GDP by 4.8 per cent and Chinese
Keppel Logistics aims to stay exports to the US by 87 per cent in three years, according to Daiwa Capital Markets Hong
relevant with e-commerce Kong’s Kevin Lai.
Staying relevant in a fast-changing sector
is a key strategy for Keppel Logistics,
said chief executive Desmond Gay. This
is why the company – a wholly-owned
unit of Keppel Telecommunications &
Transportation – embarked on a S$4.6m
acquisition of a majority stake in
e-commerce logistics company Courex in
October 2016.
Courex is a third-party logistics service
provider that supports the needs of
retailers, from last mile delivery to
international shipping and warehousing. It
counts Singapore Airlines and Hachi.Tech
among its clients. Keppel Logistics holds
a 59.6 per cent stake in Courex, while the
remaining 40.4 per cent is held by founder Australia looks to boost supply Australia is one the world’s largest
Mr Joe Chua, who continues to lead the chains to cash in on Asian dining agricultural exporters, with shipments
company. boom hitting a record A$44.5bn ($32.83bn) last
year, according to government statistics.
Mr Gay noted that the acquisition came as a Australia’s Prime Minister Malcolm
“natural progression” for Keppel Logistics, Turnbull said his government will develop But high supply costs and the difficulty
as it moved to expand from its traditional a plan to uncork freight and supply chain in finding space on air freight means
B2B (business to business) business into blockages that threaten to prevent local producers are struggling to meet growing
the B2C (business to consumer) space, or exporters from capitalising on Asia’s dining Asian demand – undermining the country’s
the e-commerce market. boom. ambition to boost rural exports to soften
the impact of a slowdown in its mining
sector – a so-called “mining to dining
boom”.
7 SCA
China is transforming Southeast
Asia faster than ever
China’s investment is transforming its Gap, M&S join movement to disclose global supply chains
smaller Southeast Asian neighbours like
never before while helping turn Cambodia, An increasing number of apparel brands are disclosing lists online of their factories, mostly
Laos and Myanmar into bigger destinations in Asia, as the public release of supply chain information becomes a tool for them to show
for its exports. their commitments to promoting healthy workplaces for their subcontractors.
That is driving some of the world’s fastest In September 2016, US clothing brand Gap made its supplier list available -- consisting of
economic growth rates and providing nearly 900 garment factories in Bangladesh, Cambodia and other countries. The company
Chinese companies with low-cost said it had revised its disclosure policy for supply chain information seeking to promote
alternatives as they seek to move capacity global sustainability.
out of the country. It is also helping Asia’s
largest economy and nations in its orbit According to Human Rights Watch, an international nonprofit non-governmental group, at
adapt to what looks more and more like least four major retailers, including Gap, C&A of Germany and British store chain Marks
a new era of waning US commitment to & Spencer, have disclosed their supplier list in 2016. Previously, Gap was known for its
the region from a more inward-looking negative stance on the disclosure due to what it called “competition reasons.”
administration of President-elect Donald
Trump. Earlier adopters of the disclosure, include US sports brand Nike and H&M, the Swedish
fast fashion chain. Nike’s supplier list includes details about its contract factories, such as
China is investing in everything from the number of workers by location and the proportion of female and immigrant labour.
railroads to real estate in Cambodia,
Laos and Myanmar -- the frontier-
market economies of the Association of
Southeast Asian Nations. China Minsheng
Investment Group and LYP Group,
headed by Senator Ly Yong Phat, signed
a US$1.5bn deal to build a 2,000-hectare
city near Cambodia’s capital, Phnom
Penh, with a convention centre, hotels,
golf course, and amusement parks, the
official Xinhua News Agency reported.
The spending equals roughly one-tenth of
the country’s US$15.9bn gross domestic
product.
Seoul allays concerns about acknowledged that the country faces
economy numerous uncertainties domestically
and globally, but he will work closely
South Korea has sought to assuage with relevant ministries to “successfully
concerns over the economy and political navigate through these tough times” and
uncertainty following President Park Geun keep the economy “strong and stable”.
Hye’s impeachment vote, with two key
ministers pledging that the government The move came as prosecutors indicted
is doing all it can to stabilise Asia’s fourth- former presidential aide Cho Won Dong
largest economy amid headwinds. and former vice-culture minister Kim
Chong as part of their investigations into a
Finance Minister Yoo Il Ho, addressing corruption and influence-peddling scandal
foreign media in December 2016, involving Ms Park and her good friend Choi
Soon Sil.
SCA 8
YCH Group launches iconic retail
hub in Xiamen
YCH Group, one of Asia Pacific’s leading
integrated end-to-end supply chain Asia laments Trump’s rejection of Trans-Pacific Partnership
management and logistics partner, has
announced the launch of its retail hub in President-elect Donald Trump says he wants to pull out of the Trans-Pacific Partnership
Xiamen, China. The project is managed but other Pacific Rim leaders are vowing to push market-opening efforts they say are vital
by YCH Group on behalf of XPD-YCH for growth. The possible decline of the 12-nation TPP could give a boost to alternative
Logistics, a joint venture between YCH initiatives including one promoted by China in which the US is not taking part.
Group and Xiamen Port Development, a
subsidiary of the Xiamen Port Group. Trump’s message, in a brief video, was issued after President Barack Obama and other
leaders of the Asia-Pacific Economic Cooperation group, meeting in Peru, called Sunday
The four-storey retail hub will be the first for fighting the backlash against trade highlighted by Trump’s victory and Britain’s vote to
major mall in the region. Envisioned as an leave the European Union.
iconic lifestyle-centric mall, it will serve the
needs of the population in the immediate Promoters of the TPP say it is a step toward building a wider, pan-Pacific free trade zone,
vicinity and the rapidly growing city of though critics object it would shift too much control over regulation to companies from
Xiamen. Spanning 55,000 square metres governments and the public.
with a built up space of 100,000 square
metres, the facility was converted from
XPD-YCH Logistics’ existing warehouse in
Xiamen, and will be fully operational from
15 December 2016.
This initiative is timely as Xiamen is
currently one of the fastest growing cities
in China, growing at 6.7 per cent with a
population of 4.4 million. China has also
overtaken the US to become the world’s
largest retail market in 2016 with total
sales of US$4.886tr. Aside from local
demand, the mall also aims to cater to
the burgeoning Chinese retail scene
while playing a key role in strengthening
Xiamen’s status as one of China’s most
popular tourist destinations. Xiamen
received 1.63 million tourists from home
and abroad, and raked in RMB1.853bn in
tourism revenue according to statistics
released by the Xiamen Tourism Bureau Lego opens its first factory in Asia
on 7 October 2015.
Lego’s first Asian factory opened in eastern Zhejiang province, China, on November 2016.
It is expected to supply up to 80 per cent of the products the Danish company sells in the
booming Asian market.
The news plant in the city of Jiaxing will employ 1,200 people. It represents an investment
of more than €100m. On its way to becoming the most sustainable plant Lego has ever
built, the factory is in the process of getting 20,000 solar panels installed on its roof over
the coming few months. They will eventually reduce the plant’s carbon dioxide emissions
by more than 4,000 metric tons annually, and provide seven per cent of the factory’s total
electricity.
But Lego won’t be the only manufacturer churning out colourful building blocks. A
variety of knockoff products are already swamping the Chinese market, prompting some
economists to question the new factory’s prospects.
9 SCASCA 10
features
International Trade Agreements
On Possible Standstill What Will
Keep Businesses Standing?
by Frans Kok, General Manager, Asia Pacific, AEB
F
or the world, 2016 has been a year of unpredictability to say the least.
The collapse of the seventh largest container carrier in the world is just one example out of many. Hanjin Shipping’s crisis has
consolidated the logistics industry further, leaving about US$14bn worth of cargo stranded. In the wake of such an industry-shocking
event, carriers announced an increase in container freight rates by as much as 50 per cent. This has led to a significant increase in global
freight costs as retailers scrambled to secure shipping services ahead of the year-end peak holiday shopping season.
Just when we thought that the world economy is taking a turn and emerging from the financial doldrums of the 2008 financial crisis, 2016
emerged to be a year of political uncertainties. This trend, along with the unpredictability of the global economy, will continue into 2017.
In the post-BREXIT and post-Trump victory world, free trade agreements are currently in jeopardy.
If President-elect Donald Trump were to upend deals, such as the North American Free Trade Agreement (NAFTA), and with talks of the
Trans-Pacific Partnership (TPP) in disarray, the rise in tariffs can add a high percentage cost for cross-border trade with the US. This impact
could reverberate globally. In light of this, how can businesses in Asia look into other forms of costs savings to mitigate the rising costs
in logistics and shipping in the next 12 months?
External trade costs, such as tariffs and third-party logistics (3PL) service fees, could take a significant hike in 2017, especially if trade deals
are suspended or dismantled. In order to balance rising external costs, businesses must look internally to reduce operational logistic costs
through either the adoption of new technology, or cutting down the excess in current supply chain processes. This means that a business
will take either of two distinct routes - changing their current logistics infrastructure to adapt to new technologies, or further analysing
their current supply chain processes to cut away fat to create a lean and efficient supply chain.
11 SCA20 of the 20
Top Logistics
Service Providers
Get Better Results
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SCA 12Adopting digital in supply chain Businesses would no longer have to AEB foresees freight cost management
worry about the time-consuming tasks of having a critical role in creating a more
Digital transformation has been long auditing their freight invoices and would efficient supply chain while offsetting
forecasted in many industries across enjoy savings on both their freight and higher trade tariffs and global trade costs.
various processes, including the need operational costs. Supply chain managers
for businesses to further automate their would have access to analyses, ad hoc Crucially, companies must take immediate
supply chain management. Given the reports, alerts, and dashboards that help action, whether through digitalising or
current global economic and political them reconcile invoices and corrections in analysing their current supply chain. If
environment, 2017 is when businesses a more efficient manner. not, they risk drowning amidst rising trade
will likely begin to look into adopting costs brought on by the potential end of
digital strategies and tools to manage the With on-going audits that can be trade deals and isolationist policies.
unpredictable situations brought about by automated, businesses will have more
the current climate. Failure to do so means transparency in their supply chains. They
businesses will, in the long run, become are able to embark on data-driven decision-
less and less competitive. making and planning, and the benefits are
enormous.
As part of digital transformation, more
and more businesses will migrate their Visibility equates to profitability
processes to the cloud. Businesses that
are based in countries equipped with the Through the use of digital tools and data
digital infrastructure will find it be easier to analytics, companies can utilise real-time
develop their digitisation efforts. visibility to help manage their freight costs.
Businesses will only need to pay for what
For companies, where a large part of their they ship, and can make more informed
successes are driven by their strength in decisions about shipping operations to
managing their supply chains in a highly improve their bottom line.
efficient manner, their ability to further
manage their operational costs in logistics For example, carrier costs is an area where
will determine their business profitability. organisations often overspend. Most
And in order for businesses to do that well, businesses examine their carrier costs
the reluctance to adopt any digital tools only where there is a variance, without
or to further automate their supply chain realising that the daily choices that they
management processes can no longer be make have an impact on their business
an option. It is now a must. profitability.
Managing freight costs using digital Equally as important, businesses can
tools make more informed decisions about
their shipping operations to improve their
One of the ways in which businesses bottom line. By having real-time visibility
can cut down their operational costs is to on freight volume, they are able to
better manage their freight costs. consolidate their freight and negotiate for
better shipping costs.
As part of efforts to further automate their
supply chains with the objective of cost Businesses can also be more proactive in
savings, companies need to look into a examining spend. As a result, they can be
more efficient freight cost management more strategic in carrier selection where
through the use of digital tools that will they are able to better choose the right
allow them to have more visibility of their carriers and shipping options.
supply chains. About the Author
At the operational level, once the manual
With companies becoming increasingly tasks of freight management have been Currently based in Singapore, Frans
wary of the accuracy of their freight bills, automated, businesses can focus on has more than 20 years experience in
more companies are expected to seek out value-adding activities. These activities the IT and Automotive Industry, serving
better cost effective auditing services in can include discrepancy negotiation and the logistics and supply chain needs of
2017. Freight charges can represent up to resolution with forwarders, while keeping customers from many countries in the US,
ten per cent of a company’s total expense, a sharp eye on freight invoices without Europe and Asia.
so cutting freight costs is an excellent way sacrificing quality control.
for companies to make up for increased He has extensive experience in
costs in other areas, such as trade tariffs. In the upcoming months, topics related International Sales, Marketing and
to digital transformation and supply chain Business Development, and a strong
Given that many businesses lack the automation are going to be discussed more background in both direct and indirect
manpower and skillsets needed for freight seriously within the logistics industry. sales for Mobile Application, Supply Chain
auditing, engaging in a service provider to With an eye on saving significant costs, Management, Enterprise Applications and
perform a thorough audit is crucial. This is time, and effort for all parties involved. Integration Platforms.
especially true for SMEs in the Asia Pacific
region.
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SCA 14How to Achieve a Patient-Centric
Supply Chain with IoT
by Alex Maxwell, Vice President, Life Sciences and Healthcare, DHL Supply Chain, Asia Pacific
F
or life sciences and healthcare companies in Asia Pacific, the region is a complex beast. It is home to nearly 3.7 billion people, which
makes up more than 50 per cent of the global population. By 2025, the region’s medical technology market is expected to hit a value
of US$190bn while the ageing population is expected to grow to 1.1 billion people. The region also accounts for two-thirds of the
global disease burden caused by major chronic respiratory ailments.
While there is a huge market for life sciences and healthcare services, meeting these demands can be difficult. One of the main reasons
is the diversity of market segments. Each country presents its own challenges in terms of geography and population spread. In countries
like India and China, extending healthcare services to rural regions can prove particularly difficult. Vast distances, challenging terrain,
and poor transportation infrastructure hamper logistics efforts. As a result, many underdeveloped areas suffer from low availability of
healthcare services.
Financial concerns also discourage patients from adopting several healthcare offerings. Asia Pacific customers are more frugal in their
spending as many economies are still developing. For example, annual healthcare expenditure per capita was US$367 in China and
US$107 in Indonesia. This is a far cry from those in the US and UK, which were US$9,145 and US$3,598 respectively. In India, many are
unable to afford the high costs of healthcare. The Indian government estimates that high healthcare costs drive as many as 63 million
Indians into poverty annually.
The region also suffers from a lack of life sciences and healthcare talent. For instance, the Singapore government estimated that the
nation requires 30,000 more healthcare professionals to take care of its ageing population by 2020. In Vietnam, there is only an average of
seven to eight healthcare workers for every 10,000 Vietnamese—drastically lower than the global average. This shortage could decrease
the quality of care, resulting in longer waiting times and limited patient-physician interactions.
15 SCACreating a patient-centric supply chain At the same time, IoT allows companies
with Internet of Things to facilitate device upkeep, ensuring that
they are constantly in tip-top condition
In order to treat these market ailments, for patients. Sensors can provide critical
it is important to rethink the way updates about devices for maintenance.
organisations operate their healthcare They can notify logistics providers to
supply chains. With new innovations in send replacement parts as soon as a
the realm of Internet of Things (IoT), a cure fault is identified. Remote clinics can
can be quickly realised. Advancements in also apply this technology to alert supply
medical devices, sensors, and logistics chain operators to replenish medical
technologies can shape supply chains to supplies when they run low. Overall, these
better suit the growing needs of patients efficiencies will bring down operating
and requirements of organisations in the costs and product wastage, allowing
life sciences and healthcare sector. companies to control their budgets better.
Reaching out with mobile medical Adopt a proactive approach to patient
technologies treatment
Life sciences and healthcare organisations Over time, companies can respond more
can take advantage of the recent intelligently to patient requests and
emergence of mobile healthcare emergency situations as more data is
technologies. There is immense potential collected. Life sciences and healthcare
for these innovations to push the companies can have a bigger picture of
boundaries of medical offerings and break patient conditions and epidemiological
the limitations imposed by distances. patterns, empowering them to create
Treatments like haemodialysis have been better services and deliver treatments
mobilised so patients living in remote proactively. For instance, collated patient
areas with kidney diseases do not have data can help practitioners keep track
to travel far for their dialysis. These mobile of the number of cases for a particular
capabilities can be extended to diagnostic disease, which can allow them to prepare
devices as well, broadening the types for or prevent a potential outbreak.
of healthcare options available for this
unreached market. In terms of logistics, operators can
streamline the supply chain from end-
Equipped with these highly portable to-end. They can optimise medical
solutions, companies can work with supply inventories to ensure that supplies are
chain experts to deliver them rapidly to easily accessible and adequately stocked.
patients. Transport fleets today can also be RFID technology can also help operators
outfitted with the latest sensors, allowing identify temperature requirements of
logistics operators to optimise fleet certain drugs. This allows them to allocate
utilisation and plan routes strategically to trucks with temperature-controlled
ensure that treatments are delivered in the environments to ship these products so
shortest time possible. that they are ready to be administered
upon arrival.
Improve the efficiency of healthcare About the Author
services Build a healthcare supply chain that
cares Alex Maxwell is DHL Supply Chain’s
The power of IoT also allows life sciences regional business development lead in
and healthcare companies to achieve more IoT has the potential to streamline the Asia Pacific. Based in Shanghai, China,
with less. Sensors on mobile treatment supply chain so it is more sensitive to he oversees a portfolio across the region,
and diagnostic devices collect important patient needs. As the countries in Asia which covers 132 customers, in 14
patient data and feed them back to a Pacific continue to develop, patient countries occupying in excess of 500,000
cloud-based central database. This saves demands will only grow more complex sq. metres of warehousing space. The Life
healthcare professionals tremendous over the next few years. It is time for life Sciences and Healthcare sector generated
amount of travelling and administrative sciences and healthcare companies to around 18 per cent of DHL Supply Chain’s
time. With patient information being explore the possibilities of IoT to vaccinate annual revenue in 2015.
channelled to them instead of the other against operational inefficiencies, logistics
way around, professionals can focus issues, and rising operating costs. Alex has over 20 years’ experience in the
on what they do best—diagnose and logistics industry, 14 of which has been in
prescribe treatments for patients. Asia Pacific working in the Life Sciences
and Healthcare sector, based out of
Hong Kong, India, and Shanghai. He has
been with DHL Supply Chain since early
2012. Prior to that, he worked for major
pharmaceutical companies, including
Novartis, Dade Behring Diagnostics and
Fenwal Blood Technologies.
17 SCAWarehouse Labor
Management ™
“We were able to reduce our workforce
by 20%, but actually increase throughput.
We estimated that has saved us about
a million dollars”
John Guy, Vice President of Supply Chain and Distribution,
Briggs and Stratton Corporation
Read more about how
JDA’s labor management
solution can help your business
here: jda.com/wlm-scaHow India Can Clean Up
Supply Chains By 2019
by Vikas Argod, Manager, Supply Chain Operations & Sivaram Murthy, Senior Consultant,
Integrated Demand and Supply Planning, Chainalytics
S
wachh Bharat Abhiyan. Translated from Hindi, this phrase means “Clean India
Mission” and it represents a massive campaign by India’s government to clean the
country. The effort is sweeping, covering everything from roads and infrastructure to
solid waste in more than 4,000 cities and towns. The goal is equally ambitious: Clean India
by Mahatma Gandhi’s 150th birthday. That is 2 October, 2019, which gives the country less
than three years to significantly reduce roadside litter and solid waste.
Even with the help of three million government employees and students, grassroots
efforts and behavioural changes are unlikely to be effective without reforming, improving –
and in some cases, creating for the very first time – waste management and infrastructure
supply chains. Successfully meeting the goal of a cleaner India will require action from the
government on three key fronts: packaging research, policy integration and establishing a
supply chain centre of excellence.
19 SCAGlobal Leader in Warehouse Management Warehouse Labor Slotting Manhattan Management Management Optimisation SCALE™ Supply Chain Technology That’s Scaled to Fit, Ready to Run www.manh.sg +65 6306 3600 aseaninfo@manh.com
Investing in less wasteful packaging Supply Chain Centre of Excellence for As Mahatma Gandhi once said, “the
solution management difference between what we do and what
As the last step in the product cycle, we are capable of doing would suffice
packaging does not always enjoy as By creating a supply chain centre of to solve most of the world’s problems.”
much attention as manufacturing or excellence (CoE), India can reduce Closing that gap by investing in packaging
transportation – but it is the first step in inefficiencies and prevent every state, city, research, integrating waste management
the waste cycle. That makes it a great and municipality from having to reinvent policy, and creating a supply chain centre
place to start for anyone looking for ways the wheel. A CoE can develop a successful, of excellence would be the best tribute
to boost sustainability and/or reduce efficient, and repeatable solution that local the current administration could provide
waste. India’s government can achieve officials can use in building solid waste for his 150th birthday.
quick results by incentivising the private supply chains. Everything, from process
sector to use more biodegradable and maps, technology options, organisational
recyclable packaging. One mechanism structures, and skilled resources, should
that can be used is to waive the Swachh be provided by this CoE. This provides a
Bharat Cess, India’s 0.5 per cent service single repository of information that all of
tax, for companies that show year-over- India’s cities can draw from, freeing them
year reductions in non-biodegradable and/ up to dedicate resources to planning and
or non-recyclable packaging [in the GST construction instead of development.
world, when India gets there, a similar
incentive scheme can be designed]. It also keeps the national government
from having to get directly involved with
These incentives should be augmented waste management infrastructure at the
by investing in the type of packaging local level. Setting up a think tank that
improvement research that is better suited gives both the private and public sector
for the government than the private sector. access to the best information empowers
Funding institutions, like the Council of them to handle implementation. It also
Scientific and Industrial Research, Indian gives entrepreneurs the intelligence they
Institutes of Science Education and need to build disruptive marketplaces
Research, National Institute of Design, that ultimately reduce transaction costs,
and Indian Institute of Packaging, with organically bolstering efficiency. Solutions
grants will yield multiple solutions focused that are advised by research and best About the Authors
entirely on reducing waste. practices from a national government
level, optimised by private entrepreneurs,
Integrating policy with waste and implemented by local authorities will
management serve waste management needs best.
With such vast geography that includes If India invests in creating institutions and
mountains, deserts, coasts, and tropical skillsets that promote “clean India” supply
rainforests India is also home to more chains, it will realise a much better return
than a billion people with tremendous than getting involved in directly managing
cultural diversity. That makes a “one size those chains itself. We can expect a large
fits all” approach to waste management percentage of effort from the government
problematic, which is why individual cities to focus on sewage and human waste Vikas Argod is Manager of the Supply Chain
are addressing the issue on their own. streams because the most glaring Operations Competency at Chainalytics.
This is vital because the desert regions of problem that India wants to eliminate by Vikas specialises in warehouse operations,
India cannot implement water intensive its deadline is open defecation. That is a transformation programme management
operations to deal with solid waste, and fairly simple goal to measure success on and service delivery processes in project-
for some areas, a hub and spoke model as opposed to the more ambiguous goal based business environments.
makes more sense than centralised waste of “significantly reducing roadside litter
processing. and solid waste.”
This need for solution independence However, the impact that the country can
also presents itself in national policy. For have on its environment by thinking about
example, “Make In India,” Food and Safety all of its supply chains and waste streams
Standards, and the National e-Governance is large. Multinationals conducting
Plan all use separate standards for waste business in India can also participate by
management. It is better to integrate introducing their own initiatives to reduce
waste management into every existing packaging waste, whether incentivised by
and new policy than to create a unique the government or not.
department or policy for it. However, at
the national level, every regulation and Sivaram Murthy brings experience in
policy that needs a waste management providing supply chain management,
component should have one integrated supply chain analytics, demand analytics,
and make sure that it is compatible with inventory management, product
the requirements that other departments management and technology services
are implementing. and solutions to sectors including retail,
manufacturing, financial services and
education.
21 SCAReduce costs the From automatically tracking and adjusting
inventory levels, to fine-tuning prices in real
smarter way with time based on market demand, the Quintiq
integrated planning and optimization platform
advanced analytics will enable you to maximize revenues and
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A Dassault Systèmes companydialogues
Mr Steven
Hill
Managing Director
Southeast Asia
Crown Equipment
23 SCAMaterial Handling Equipment:
The Bedrock of Supply Chain
With so much emphasis on dazzling supply chain innovations, such as high-end artificial
intelligence, delivery drones and self-driving trucks, it is important not to ignore the
transformation of the more basic, but extremely critical, material handling equipment
(MHE) aspect of the whole supply chain operations. Investing in high-quality MHE, such
as lift trucks and fleet management systems, will go a long way to success.
“This is evident when you see that 88 per cent of the Fortune 500 companies, 92 per
cent of the top 50 e-commerce companies in the US, 70 per cent of the top 10 green
companies in the world, and 60 per cent of the top 50 innovative companies count
among Crown’s customers,” said Mr Steven Hill, Managing Director, Southeast Asia,
Crown Equipment.
Having worked in the industry for over 30 years in Europe, Australia and Asia, Mr Hill has
an extensive knowledge of what is important within the supply chain and warehousing
industry today and in the future, knowing it has been developed through delivering
business productivity improvements to both global and local SME companies.
In this issue of Supply Chain Asia magazine, Mr Hill shares his thoughts on the
company’s operations, the potential growth of Asia Pacific region, and what excites him
about being part of the industry.
SCA 24Having worked in the MHE industry for Reports suggest that the MHE industry
over 30 years in Europe, Australia and was estimated to be worth $115bn in
Asia, how different is the industry in the 2015 and will reach a total market size
different regions? of US$148bn by 2021 at a compound
annual growth rate of 4.31 per cent. Is
There are numerous differences between this an accurate forecast? Why or why
Europe, Australia and Asia, which not? Which region is set to spend the
businesses working across these regions most?
need to manage to survive and succeed.
Important variances include language and There is sound evidence to suggest the
cultural differences, regulatory differences forecast market size of $148bn by 2021
and wide-ranging economic climates. is credible and the industry is set for
continued growth.
In certain Southeast Asian countries, land
for warehousing is becoming increasingly Economic reports vary by country and
limited. In these areas, the trend for industry but all indicators suggest that
warehouses is to go ‘up, not out’, with both growth within the material handling
multi-storey facilities and taller, narrower industry, especially within Southeast Asia,
aisles. This is a contrast compared to will continue for the foreseeable future. In
Australia, where there is more space and particular, we are witnessing an increasing
warehouses are generally single-storey. number of manufacturing businesses
establishing new facilities in Thailand,
Differences across regions are further the Philippines and Vietnam. Increased
compounded by operational budgets employment opportunities within the
and respective local industry’s ability to region are boosting the average disposable
support the latest technology offerings. In income which is, in turn, helping to drive
Australia, the quality of fleet management demand for local access to well-known
systems, such as InfoLink, have become international household brands.
an increasingly important factor in medium
and large-sized entities selecting their This leverages the need for the opening
MHE partner, due to its ability to reduce of new warehouse facilities to house and
administration work and the emphasis on deliver these in-demand goods in these
safety and reducing workplace incidents in countries, as well as the stock from the
that region. This technology has a strong emerging manufacturing ventures.
following with the larger global companies
in Southeast Asia but its use among small Can you share with us Crown’s
to medium-sized entities is not as strong. operations in Asia Pacific?
Crown Equipment’s Asia Pacific operation
began in 1966 with the establishment of
the Australian headquarters in Smithfield,
Sydney.
With the experience gained in Australia,
Crown set up operations in Southeast Asia
in 1978 with the Southeast Asia regional
headquarters now located in Singapore.
This proved to be a solid launching pad for
the rest of the region and Singapore now
hosts the recently-built Southeast Asia
Parts Distribution Centre located in Tuas,
in the country’s west.
The Asia Pacific region is serviced through
an extensive retail branch network
structure, which includes locations across
Australia, New Zealand, Singapore,
Thailand, South Korea, the Philippines,
Indonesia, Malaysia, Vietnam, Taiwan
and China. Crown recently launched in a
number of new locations with branches
in the growth hubs of Johor, Malaysia;
Rayong, Thailand; and Clark in the
Philippines. Additional new locations are
being established in South Korea and
Vietnam.
25 SCAOut of the different material handling This semi-automated approach to When you work with Crown you are
equipment, Automated Guided Vehicles automating the warehouse is becoming working with people in possession of
(AGV) and Automated Storage/Retrieval widely accepted because it offers great product knowledge and a thorough
Systems will witness maximum growth flexibility and increased productivity at understanding of warehouse supply chain
due to increasing demand arising from the same time and is a natural step in the requirements. Knowledge is a major factor
different industry verticals. technology evolution that is underway in separating Crown from the competition in
the warehouse and in the manufacturing the Asia Pacific region.
Product introductions such as InfoLink sector. Technologies that we are focused
fleet management solutions, our service on have an important application in existing Our customer-centric culture is another
technician communication tool, our turret warehouses as well as warehouses of the important factor. We care about our
stockpicker range and our Battery Health future. customers and their business becomes
Monitor Technology are examples of our business. We are structured in a way
Crown innovations that are available to Traditionally, warehouses only offer that provides them with the solutions
businesses at a manageable cost, while labour-intensive positions. Moving they require. Our customer focus can be
providing fully-tested and proven real- forward, is it possible for heavy labour seen in our drive to vertically integrate
world performance, efficiency and safety to be completely eliminated from in manufacturing, for quality control and
advantages. warehouses? What does the future parts availability. It also manifests itself in
warehouse employee look like? our ability to offer total MHE solutions –
Crown is taking the same approach with making it easier on the customer – as well
its rollout of automated solutions, utilising In warehouses around the world, a number as our reach truck and high warehouse
technology to help customers address of roles and functions are in the process storage specialisation.
specific needs. of transitioning away from labour-intensive
arrangements to more automated, A strong influence on the development
For example, Crown recently unveiled in streamlined processes. Improvements of our core values is Crown’s ownership
the UK its Auto Fence and Auto Positioning in both technology and safety standards structure. As a family-owned business
System solutions that leverage radio have been triggers. However, the need for that’s grown over the decades, we have
frequency identification (RFID) technology people in the material handling industry got a strong understanding of what is
to help enhance safety and productivity. remains strong. important to businesses large and small.
Auto Fence controls or limits forklift An obvious positive result of our approach
operation near a hazard or where greater In the past 10 years, the greatest example can be seen in our global leadership of the
caution is required. The Auto Positioning of warehouse operational change has electric lift truck market and the following
System automates travel and lift functions been driven by consumer demand, which figures can’t be ignored. This is evident
for the most efficient path between the is linked to the growth in e-commerce. when you see that 88 per cent of the
forklift and its destinations. Fortune 500 companies, 92 per cent of the
Business models are constantly striving to top 50 e-commerce companies in the US,
Do you feel there is enough interest in reduce on-hand inventory, to reduce the 70 per cent of the top 10 green companies
the Asia Pacific region for the adoption burden of stock holding, to drive increased in the world, and 60 per cent of the top
of automation in warehouses and stock turns and to supply goods ‘just 50 innovative companies count among
manufacturing plants? Is technology in time’. Online trading acceptance and Crown’s customers.
adoption growing at an acceptable consumer support have driven demand for
pace? smaller average picks and higher carton What excites you most about being
distribution frequency. involved in the MHE industry?
There is definitely interest and, I would
say, a lot of curiosity in the Asia Pacific In turn, this has adjusted the warehouse Whenever a business or person needs to
region around automation, which would picking process for business models that pick-up and move something larger than
suggest a level of support for technology operate within this channel, which is then one person can carry, a material handling
adoption. Customers are recognising supported by the appropriate MHE and solution is required.
that automation comes in many forms, labour solution.
adopting a range of solutions from semi- I really enjoy being able to work across
automation to optimise specific tasks to The future warehouse will still have a a vast industry sector which includes
fixed automation through to AGVs. need for people within its operating manufacturing, transport, warehousing,
environment to optimise task completion FMCG, retail, pharma, shipping, industrial,
Often, it is a mix of manual and automated speeds. We believe that technology is the construction, agriculture and services, to
solutions that best fits a customer’s unique future but it requires people management, name a few. There is never a day when
situation. Many customers are adopting accurate measurement and quality control I do not learn something new from the
semi-automated solutions that enable to provide its true impact. material handling industry or from within
them to operate more traditionally when my own company.
appropriate while they are free to employ In your opinion, what makes Crown
automation when it is most effective. stand out from its competitors? What excites me the most are the constant
Crown’s QuickPick Remote order picking opportunities to improve our business
tool is often utilised in this manner. Crown stands out from its competitors and make significant enhancements to
in a number of ways. One of the most the growth of Crown in the Southeast
important reasons is that the company Asian region, which makes my job really
is bolstered by large numbers of factory- worthwhile.
trained staff. We are not a distributor and
we make the equipment, including up to
85 per cent of its componentry.
SCA 26Mr
Muhammad
Aidil
Abdullah
Singapore Group Leader,
Qxpress Pte Ltd.
27 SCAThe Assassin Deliveryman
T
he e-commerce market in Singapore is expected to be worth US$5.4bn (S$7.46bn)
by 2025, according to a recent report by Temasek and Google. The report states
that the Republic’s e-commerce market was valued at US$1bn in 2015, with online
shopping making up 2.1 per cent of retail sales – the highest proportion of all Southeast
Asian countries surveyed. By 2025, Singapore’s e-commerce market is expected to
make up 6.7 per cent of all retail sales, behind Indonesia’s eight per cent.
It is no surprise then that e-commerce giants are preparing to battle for a market share
of Singapore’s burgeoning e-commerce market. Alibaba has already developed strong
investments in the region through Lazada and SingPost, while Amazon has recently
released plans to launch in Singapore in 2017. Lazada has also recently acquired online
grocer, RedMart. It is expected to be a stormy and uncertain period for the e-commerce
players, least of all the e-commerce logistics providers themselves. How can the smaller
players hold the fort against the monstrous might of their competitors?
“It may be an advantage to have deep pockets, hi-end technologies and huge facilities.
But I truly believe it is the last mile delivery service that makes the real difference. In
order to succeed here, global companies, such as Amazon, must first understand the
local culture. In that sense, our company comes out tops,” says Mr Muhammad Aidil
Abdullah, Singapore Group Leader, Qxpress Pte Ltd.
In this issue of Supply Chain Asia, Mr Aidil shared with us his modest beginning as a
deliveryman, the company’s plans for the future, and the potential impact of Amazon on
Singapore’s e-commerce industry.
SCA 28But two months into his first job in UPS,
he was brought to the office and tasked
to carry out an unbearably menial job –
tearing papers.
“I did not exactly have a choice, so I did
what I was told. Then, after lunchtime,
one of UPS’s senior executives from the
US sat down with me, showed me the
papers that he tore, and compared them
with mine. His papers were cleanly and
carefully torn while mine looked untidy
and uneven. Clearly, I was not putting my
heart into tearing the papers. I only did
it because I had to. That was a wake-up
call to me. I learnt that regardless of the
task given to me, it is important for me to
do it with pride and passion. I carry that
lesson with me until now,” shares Mr Aidil,
who eventually became part of UPS’s
brokerage team that handled all customs-
related matters.
After leaving the company 13 years later,
he held managerial posts in SingPost,
DPex Worldwide Express, and DHL
before finally ending up at Qxpress,
an e-commerce logistics provider that
specifically catered to Qoo10 sellers and
customers in Singapore with more than
40,000 orders to fulfil per day—not an
easy task, considering Qoo10 currently
leads Asia’s online marketplace with 2.5
million registered users to date.
Learning to tear papers with pride But unlike his first job in the industry, he
did not join Qxpress just to get his feet
Like many leaders who fell in love with the wet. He believes in Qxpress’s vision, and
industry, Mr Aidil did not initially plan to was prepared to dive into the company’s
be in the logistics industry. In fact, when project headfirst right from the start.
he first saw a UPS deliveryman wearing a
neatly ironed, long-sleeve shirt and black, “A close friend of mine was the first
shiny shoes, in 1990, he poked fun at him. delivery vendor for Eurasia, which is now
Qxpress. Due to that connection, I have
“I thought he was crazy running around known the company when they first
in that outfit in this weather. So imagine started with a storeroom at Chai Chee, to
my surprise when I was offered the same having a warehouse now in Serangoon.
job as a UPS deliveryman when I left My friend started with managing about
the army! I was young and adventurous 400 parcels a day to over 1,000 for the
though, so I just accepted the role. In company. I felt that I was a part of this
the end, I enjoyed my experience and company even before officially joining it.
that kickstarted my passion for last mile That is how much I love and care about
delivery,” says Mr Aidil, who continues to Qxpress,” he adds after joining the
be in the industry for over 20 years. company in 2014.
29 SCAA tough environment for newcomers While having suitable infrastructure
“When the competitor first came into the and technology are important, talent
Mr Aidil has already held a discussion with market, we initially lost some volume, management is still key to ensure that the
the team regarding Amazon’s potential but we quickly regained it in a month. company can further improve its standing
impact on Singapore’s e-commerce So yes, it is possible we will feel a pinch in the industry. Mr Aidil is a hands-on
market, and he remains confident that again for a short while, but as long as we leader in this aspect, and he regularly
Qxpress will continue to prevail in the continue to carry out our services well makes his rounds in the warehouse and
storm. at a competitive price, I believe we will even personally trains new drivers on the
maintain our market share. Customers road. His love for the company means he
“Firstly, we have a headstart in the may be momentarily enticed by Amazon has set a high standard for the company
industry. We understand the local culture, but they will come back. Qoo10 may be and adopts a no-nonsense attitude with
and we have built trust and understanding more affected by Amazon’s entry into the his staff.
with the buyers and sellers. We have a market but Qxpress will continue to carry
relatively low turnover rate, which gave out e-commerce delivery services for other “I know they call me the assassin behind
our local deliverymen a chance to build sellers and buyers,” shares Mr Aidil, who my back, and playfully warned the
relationships with our clients. Unless takes pride in the company achieving more others when I am on the ground doing
our service level drops, this relationship than 99.9 per cent attempted delivery and my rounds. It is funny, because I do not
is not something our clients can easily more than 95 per cent successful same- think I am a fierce person. But I take my
toss aside. I believe this is one of our day delivery. work very seriously, and I actively seek
advantages,” explains Mr Aidil, who first feedback from my staff on what we are
saw the potential growth of e-commerce Preparing for the battleground doing wrong and how we can help them
during his stint in DHL when the company do their job better,” says Mr Aidil, who
went through tonnes of e-commerce Despite the positives, Qxpress is not leads a warehouse team of more than 60
parcels daily. resting on its laurels. There are plans staff, and an outsourced fleet of more than
to proceed with a 30,000 square feet 250 vehicles.
In addition, Mr Aidil believes Qxpress warehouse next year and to consider
Courier Operations system will ensure that adoption of technologies, such as a Coming from a background of a
the company continues to stay relevant. It conveyor system. The company is also deliveryman, Mr Aidil is especially critical
provides an extensive level of visibility to already looking at ways to streamline its of the drivers and expects the very best
the company’s delivery. This means that operations processes and manpower. out of them.
they can log into the system the night
before to check 80 per cent of the delivery “At the end of the day, as long as we “Drivers will make or break Qxpress. I love
volume for the next day. To Mr Aidil, this continue to maintain our costs and meet this company too much to let it go down
is one of the unique features provided by the demands of the customers, we will the drain,” states the 47-year-old.
Qxpress’s system, and refers to it as “the stay ahead in the game. There will be
best system for delivery vendors”. teething issues of course, but we aim to Mr Aidil often reiterated his passionate
solve them before Amazon settles down,” belief in the importance of good last mile
Finally, Qxpress has had experience in this adds Mr Aidil. services. Does this mean he miss being a
situation before. When a new competitor simple deliveryman again?
entered the industry with attractive
promotions and islandwide marketing, He takes a moment to think over his
some of Qxpress’s clients have actually response, smiles and replies with a simple
switched to its new rivals’ services. “yes”.
SCA 30You can also read
