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LSCMS Blog

Blog for updates and happenings in logistics in the Asia-Pacific region

June 30, 2014

Forging Sustainable Supply Chains: It’s No Easy Task

Filed under: Newsletter,Supply Chain Management — admin @ 11:13 am

Podcast.GIFWithout question, creating sustainable global supply chains is a daunting challenge. But the biggest roadblock might be at the retail shelf.

For all the progress that’s been made, there remains a “huge discrepancy” between the supposed willingness of consumers to support sustainable products, and their actual buying habits. Until that gap is closed, items carrying the fair trade label will remain a “niche market,” according to Andréanne Grimard, director of economic development with Solidaridad North America. In this episode, she traces the work of Solidaridad in promoting a remarkable range of products, including coffee, tea, cotton, palm oil, soy, gold, cocoa, textiles, fruits and vegetables. She relates how Solidaridad formed its own importing companies for fair-trade bananas and bluejeans, when it couldn’t find private interests to undertake the task –creating profitable ventures in the process. And she offers a candid assessment of the current state of public awareness of the sustainability issue. The verdict: there’s a lot of work to be done. Hosted by Bob Bowman, Managing Editor of SupplyChainBrain.

[Read more… Curated from Supply Chain Brain]

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June 20, 2014

Most CEOs Say Their Supply Chains ‘Not Optimal’ for Rapidly Changing Retail Environment

Filed under: Newsletter,Supply Chain Management — admin @ 11:09 am

RetailDigitally connected consumers have turned retail models upside down as omnichannel shopping has transformed supply chain from an important business concern to a mission critical one. So profound is this change that 50 percent of CEOs recognize that their supply chain can be a strategic differentiator. However, 83 percent of worldwide CEOs believe that their retail supply chains are “not optimal” for today’s changing retail environment.

Most CEOs Say Their Supply Chains ‘Not Optimal’ for Rapidly Changing Retail Environment
In a global retail CEO survey of more than 400 retail industry CEOs conducted by PwC for JDA Software titled CEO Viewpoint: The Strategic Role of Supply Chain in an All-Channel World, CEOs indicated what they are doing to adapt to this changing environment and establish a new foundation for growth.

As mobile commerce comes of age, one of the biggest challenges facing CEOs is managing the transformation to omnichannel retail. However, only 34 percent of CEOs consider the rise of omnichannel shopping to be an external threat, while only 22 percent said it will have a direct impact on their organization.

“The rise of omnichannel is one of the most transformational shifts that has occurred in retail in recent times,” said Baljit Dail, chairman of the board and interim CEO, JDA Software. “Retailers who don’t understand the strategic alignment of their supply chain with consumer expectations are in danger of becoming non-competitive. This isn’t about making a tweak to the operating model, it requires a massive change. The good news appears to be that there is an emerging group of visionary CEOs who understand that staying competitive during this inflection point requires a dramatic shift of their current operating models to deliver operational effectiveness and top- and bottom-line growth.”

[Read more… Curated from Supply Chain Brain]

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June 19, 2014

Women in Supply Chain: Are the Doors Open?

Filed under: Jobs,Newsletter,Supply Chain Management — admin @ 11:09 am

Podcast.GIFYou’d like to think that the people who manage a global supply chain are as diverse as the pieces that make it up. But that’s not always the case.

To be sure, there are a good number of women occupying senior-level management positions in various parts of the supply chain today. Among them is Lynn Torrel, senior vice president of global supply chain and strategic accounts with Avnet, Inc. She has amassed 18 years of experience managing complex global supply chains for customers of a major distributor of electronics components and computer products. In this episode, Torrel traces the path of her career, and relates how she ended up in supply-chain management. (As with so many people in that discipline, it was something of a sideways journey.) She also offers a candid assessment of the leadership opportunities available to women today, in terms of advancement, mentorship and compensation. Hosted by Bob Bowman, Managing Editor of SupplyChainBrain.

[Read more… Podcast on Supply Chain Brain]

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June 18, 2014

China E-Commerce Needs Better Logistics Support

Filed under: Logistics,Newsletter — admin @ 11:08 am

eccommerce-concept-1-1415244-mAccording to news reports, Alibaba’s plans for a giant initial public offering in New York highlight vast potential for ecommerce in China – and the weak link the logistics industry must fix if explosive growth projections are to be reached.

According to news reports, Alibaba’s plans for a giant initial public offering in New York highlight vast potential for ecommerce in China – and the weak link the logistics industry must fix if explosive growth projections are to be reached. The old warehouses that supply goods to customers across the world’s secondlargest economy are clearly lacking the technology that has given rise to the United States and Europe of Amazon.com. By 2020, China’s e-commerce sector will be larger than those of the US, Britain, Japan, Germany and France combined, consultancy KPMG said in a recent report.

To cope with the China surge, as much as US$2.5 trillion may need to be invested in buying land and constructing warehouses alone over the next decade and a half, according to one builder. That is drawing the attention of global private equity firms such as Blackstone and Carlyle as they seek to benefit from an anticipated investment boom.

[Read more… Curated from Logistics Insight Asia]

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June 17, 2014

Is There Really an Integrated Asia-Pacific Supply Chain?

Filed under: Newsletter,Supply Chain Management — admin @ 11:10 am

asia-pacificSupply chains in the Asia-Pacific (APAC) region pose a unique set of challenges for the organizations that rely upon them. With a land mass four times the size of Europe, transportation and distribution issues are complex and challenging. The region’s diversity, in terms of regulations and political climate, as well as its sheer size makes it difficult to think of an integrated Asia-Pacific supply chain.

Supply chains in the Asia-Pacific (APAC) region pose a unique set of challenges for the organizations that rely upon them. With a land mass four times the size of Europe, transportation and distribution issues are complex and challenging. The region’s diversity, in terms of regulations and political climate, as well as its sheer size makes it difficult to think of an integrated Asia-Pacific supply chain.

Indeed, the contrasts from country to country can be dramatic. Within Asia, the 2012 Enabling Trade Index identifies Singapore as the world leader in developing “institutions, policies, and services facilitating the free flow of goods over borders and to destinations.” Hong Kong ranks second, China 56th, Thailand 57th, Indonesia 58th and India 100th. Some countries apply VAT taxes while others assign a goods and services tax (GST) with rates varying widely, from a five percent VAT in Japan to a 13.5 percent rate in India.

The nature and direction of APAC trade has changed dramatically, as well. Through most of the 20th century, APAC’s supply chain flows moved largely from east to west, as countries with low-cost labor manufactured low-cost products for export. More recently, however, emerging middle classes have made some APAC countries centers of demand, prompting the flow of products imported from Europe and North America. As APAC economies grow, more companies based in Asia (or those with Asian subsidiaries) are manufacturing products for use in their own countries, or for distribution to other Asian countries.

[Read more… Curated from Manufacturing.Net]

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June 16, 2014

European Firms Cooling on China

Filed under: China,Logistics,Newsletter — admin @ 11:11 am

1093355_financial_crisisBEIJING—European companies doing business in China are finding the market less attractive due to rising labor costs, a slowing economy and lack of adherence to the rule of law, the European Union Chamber of Commerce in China said Thursday.

Other factors hurting the business climate, according to the latest survey of 552 Europe-based companies operating in China, include difficulties attracting and retaining staff, market access barriers and “discretionary enforcement of regulations.”

“The economic slowdown is a real game-changer for European companies in China,” said Jörg Wuttke, president of the European Chamber at a news conference. “For multinationals, China is still important but not as important as it was a few years ago.”

Despite Beijing’s promise to enact far-reaching economic reforms, only 53% of the companies polled said they expected to see changes implemented in a meaningful way. “A new sober reality is developing,” the report said. “An abiding sense of pessimism for future performance is setting in.”

Some European companies appear to be voting with their feet, or at least thinking of doing so. While the world’s second-largest economy remains a hugely important market, many said they were scaling back investment plans. Only one in five ranked China as their top destination for new investments, down from a third in last year’s survey.

[Read more… Curated from Wall Street Journal]

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June 10, 2014

Reverse Logistics – the Opportunities outweigh the Challenges

Filed under: Asia Supply Chain Insights,China,Economics,Newsletter — admin @ 1:05 pm

Reverse Logistics is complex and disjointed but represents big opportunities for value creation. It includes the key processes involved in moving product back through the supply chain to accommodate overstocks, returns, defects and recalls, and is defined by the Center for Logistics Management at University of Nevada as “the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal”.

For product returns, Accenture report that on average it takes 12 times as many steps to process returns as it does to manage outbound logistics. The additional steps include activities such as assessing, repairing, repackaging, relabeling, restocking, reselling, recycling and refurbishing, which can result in the cost of reverse logistics being four to five times those of forward logistics. However, best-in-class practitioners can directly correlate their reverse logistics expertise and systems to positive impacts on Customer Satisfaction, Brand Equity, Competitive Differentiation and Profitability.

Reverse logistics is big business – in the USA it is estimated that manufacturers and retailers are now dealing with $100 billion of products being returned on an annual basis. Here in Asia, product returns are destined to expand exponentially, driven by two rapidly accelerating consumer trends – online shopping and the proliferation of electronic gadgets.

Why are products being returned?

According to the Reverse Logistics Association, products are returned for numerous reasons:

What is interesting about these reasons for returns, is how by improving processes within the forward supply chain, companies could surely eliminate many of these returns – for example Late Delivery, Missing Parts, Damaged, Not Functioning – representing some 46% of returns. Furthermore, one could argue that additional diligence during the sales and customer service processes may further reduce the volume of products that are returned due to No Reason, Different than Expected, Not Satisfied with Performance, Did not want Product and Found better competitive product – another 39% of all returns.

In practice however, companies do need to balance their acceptance of product returns in line with their philosophies and policies for their brand, warranties and customer service. The complexity of reverse logistics involves many more transactions than the forward supply chain and the various activities relating to product returns will span across many functional departments – sales, customer service, finance, warehouse, repairs and transportation.

For the majority of these functions, product returns are likely seen as much more of an annoyance rather than a priority. However, with effective returns management providing tangible opportunities for businesses to reduce costs, recover value and improve customer service, appointing one senior leader to be responsible for all aspects of product returns will focus attention and harness the resources to capitalise on the opportunities.

Mark Millar MBA, FCILT, FCIM, FHKLA, GAICD provides value for clients with independent, external and informed perspectives on their supply chain strategies for China and ASEAN. He has been engaged by clients as Speaker, MC, Moderator or Conference Chairman at more than 300 events in 20 countries and is recognised by the Global Institute of Logistics as “One of the most Progressive People in World Logistics”. Mark serves on the Advisory Board of the Logistics and Supply Chain Management Society (LSCMS). mark@markmillar.com

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