LSCMS Blog

The Malaysia Institute for Supply Chain Innovation (MISCI) plans to commence a new research project into the halal logistics sector given growing demand for such services, and the need for consistency in maintaining certain food handling conditions.

MISCI was formed earlier this year as a joint venture between the Malaysian government and the Massachusetts Institute of Technology’s Centre for Transportation and Logistics in the US.

“We are engaged in discussions with industry partners and seeking to appoint personnel who are active in the halal logistics space,” said Mahender Singh of the MISCI according to London’s Containerisation International. “Our excellence as a world class centre for supply chain education and research, and the fact that Malaysia is a leading country in the halal trade, puts us in a unique position to understand these fast-growing supply chains.”

Mr Singh said halal logistics represents a major opportunity for manufacturers and service providers. “This is at a time when many companies are searching for new growth opportunities around the globe with two billion Muslims,” he said.

One problem with halal food is that companies handling it need to adhere to Sharia law. The report said that traceability of cargo from origin to destination is becoming a critical concern as it offers a means of monitoring contamination during its journey.

It said that 30 per cent of halal trade is expected to involve food items, and according to Sharia law these products must be kept “clean and pure and segregated from non-halal goods”.

China’s highest authority on climate change, the Chinese Academy of Science, has dismissed conventional wisdom on dangers posed by global warming as well as the harm supposedly done by carbon emissions, as reported recently in Hong Kong’s South China Morning Post.

“We are not experiencing the most dramatic climate change in recent history,” said Liu Yu, the academy’s Institute of Earth Environment deputy director. “In northern China, the warmest period occurred from 401-413 AD, which had an annual mean temperature 0.16 degrees Celsius higher than today’s.”

Global air, sea and land transport sectors have been faced with huge expenses to meet rising regulatory compliance costs, some of which are set in ways to drive smaller operators out of business.

The timing of China’s statement, based on a study of Tibetan tree rings, is also significant because of the current international climate change talks in Durban, South Africa and China’s opposition to carbon taxes imposed by the European Union on aircraft flying in and out of EU territory.

Continuing, Prof Liu said: “Popular belief is that industrialisation has led to the fastest rate of warming witnessed by humans, that we are at the warmest time of the modern era and that we are causing global warming by emitting carbon dioxide into the atmosphere. None of that fits the records in tree rings.

“The climate change debate has more political significance than scientific. Diplomats can sit at negotiating tables talking about carbon caps while scientists have not reached an agreement on the role of carbon dioxide in global warming,” he said.

“Political decisions must be based on sound scientific foundation, or they will be useless, if not dangerous,” he told the SCMP in an extended interview.

Prof Liu has studied untouched forests dating back thousands of years along the remote Tibetan Plateau to assess current weather patterns and said that tree rings are key to understanding and predicting climate change.

For more than a decade, he has run simulations on computers to determine annual temperatures in the region over the past 2,485 years.

Prof Liu said the sun, and not man-made factors. cause climate changes. “We believe that the sun and atmospheric circulations play a vital, if not decisive, role,” he said.

Reports completed in 2010 by EyeForTransport.

List of Reports

European Supply Chain Horizontal Collaboration Report – January 2010
North American Logistics Technology Report – Feb 2010
European Logistics Technology Report – Feb 2010
European Hi-Tech and Electronics Supply Chain State of the Industry Report – Feb 2010
Medical Devices Supply Chain Report (Worldwide) – March 2010
Pharma and Healthcare Supply Chain Report (Worldwide) – March 2010
Marketing Supply Chain Solutions to Healthcare (Worldwide) – March 2010
North American 3PL Market Report – March 2010
IT in the Trucking Industry and Private Fleets Report (North America) – May 2010
North American Sustainable Supply Chain Report – June 2010

The concept of Combined Distribution Networks (CDN’s) is fairly easy to comprehend. A basic and simple definition would be:

“A CDN is the combination of the supply networks of different companies in the Supply Chain to achieve increased efficiencies and effectiveness.”

Collaboration of this nature is not unheard of and can be considered merely an extension of the theory of Supply Chain collaboration. There exists some real world examples in support of such implementation. The challenge in implementing an effective CDN would be between companies that would otherwise be competitors. The potential for recognizing increased efficiencies and effectiveness in overall performance in individual companies who implement CDN’s of this nature is staggering.

Current Supply Chain collaborative techniques allow growing businesses to reduce costs and improve customer service. In a Combined Distribution Network, detailed analysis of companies SKU-level product information is conducted over a period of time. This data will allow us to clearly understand the current transportation and warehousing structure as well as to establish an accurate cost baseline by which all optimization would be evaluated.

Purchasing, Inventory Management and Technology requirements could also be targets for a hybrid of the CDN theory.

Once the historical network baselines are developed, the analysis phase of the CDN can start by first scrutinizing the product flows, then using both the production information as well as customer consumption to determine the appropriate placement of warehouses and the transport network.

All models in the CDN will balance real world operational constraints put in place by companies involved in the CDN model with the need to service a majority of customers within a specified time frame, all whilst factoring in current market conditions for transportation rates into and out of each distribution market.

The further development and implementation of a CDN (ideally amongst competitors) will enable companies to optimize customer service whilst at the same time improve shareholder and stakeholder value.

After a complete and thorough analysis has been completed, a comprehensive RFQ can be built and 3PL’s with the capability to meet both or a part of the requirements invited to bid.

The final and perhaps most important reason why CDN’s should be further explored is the positive impact on the environment. Much has been done and needs to be done in the area of reducing the impact our Supply Chains have on the environment. The carbon footprint of individual products, from point of supply, to point of consumption are already being measured. CDN’s is one of the many ways these can be reduced.

From preliminary discussions with Supply Chain practitioners, there are a number of reasons why people feel CDN’s will not work. The main hurdle it would seem is the need to get stakeholders to overcome the common mindset that competitors should be treated as the enemy.

By Raymon Krishnan

20/02/2008

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