SCMAP Perspective #235

Perspective  (#235)

Published in Port Calls, February 1, 2010

LOGISTICS STRATEGIES

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Logistics Strategies

Supply Chain Management continues to evolve, and with it, Logistics Management also continues to evolve, since the latter is part of the former. In addition to the effects of changes in SCM, technological developments and the unfolding business scenarios have their influences.

Every now and then, we spend space for technical publications. This is another one of them. Of course we avoid technical details and attempt to simplify the discussion.

“As the logistics discipline continues to mature, it is relevant, if not crucial, to periodically assess the current state of the field in terms of its classification of key concepts, activities, and events.” This is a direct quote from a research article in the Journal of Business Logistics, Vol. 29 No. 2 2008, entitled “A Logistics Strategy Taxonomy”.

Co-authors of the research are Chad W. Autry (Texas Christian University), Zach G. Zacharia (Lehigh University) and Charles W. Lamb (Texas Christian University). The research makes use of statistical tools: a survey and statistical techniques. The main result of the research is as follows.

The research identified 11 clusters of activities in the discipline of logistics, and measured the importance of each cluster to two types of Logistics Strategy, namely (1) Functional Logistics Strategy and (2) Externally Oriented Logistics Strategy..

As examples, below are the items listed under two out of the 11 clusters of activities.

4. Logistics Social Responsibility

• Environmentally conscious packaging
• Packaging of hazardous materials
• Recycling
• Reusable packaging
• Waste management

3. Inventory & Order Management

• Distribution Requirements Planning
• Inbound freight cost analysis
• Inventory order management .
• Inventory value analysis .
• Manual order transmittal
• Material Requirements Planning
• Order planning for demand smoothing

The importance of each activity cluster to each strategy (two columns) was rated on a scale of 1= not at all important, to 7= extremely important. Significant difference in importance to the two strategies at below 0.01 probability is marked “sig*”, and also in boldface.

The two logistics strategies are described by the authors as follows.

Strategy 1: Functional Logistics Strategy

The primary goal is to achieve maximum logistics efficiency. This is accomplished by focusing on inventory and order management; order processing; and procurement and storage activities, as well as by addressing common functions related to customer service, operational controls, and transportation management.

Strategy 2: Externally Oriented Logistics Strategy. The primary goal is to emphasize the ability to respond quickly and efficiently to changing customer needs, outbound delivery, support and services. This is accomplished by focusing on Interfirm Coordination and Collaboration Activities, logistics social responsibility, Strategic Distribution Planning, and by leveraging supply chain technology and information systems, as well as addressing common functions related to customer service, operational controls, and transportation management

Managers can examine their strategy and look at the activity clusters to determine which are being emphasized by the company, and also look at the company’s performance compared to industry or competitors or internal benchmarks. Based on these comparisons, managers can fine-tune their strategy.

“Managers who are able to identify their current logistics strategy as either FL or EOL (or mostly FL/EOL) can use the activity clusters … and the items that comprise these clusters [shown only in the research article] to prepare a logistics strategy audit form for use during periodic strategic evaluation sessions, i.e., strategic benchmarking versus internal goals. Such a form can then be used to assess which of the activity types and specific activities are being emphasized by the firm and the firm’s performance on these dimensions compared to their industry or major competitors, or versus pre-established internal benchmarks.

“The results of these comparisons can then be used to fine-tune or enhance the latent strategy, and provide strategic direction for the firm’s logistics planning function. Using this technique, it is also possible that some managers who perceive that their firm logistics strategy is unique or innovative may find that their focus is closely aligned with one of the two strategies identified in this study. As a result, they too may find that the activities and clusters that represent alternative strategy types are useful for auditing and fine-tuning their strategies, and for creating greater differentiation based on logistics strategy versus competitors

Soft Skills Seminar Reformatted

SCMAP’s second seminar offering for the year will be a soft skills seminar. Instead of a public seminar, one company has expressed interest in hiring the services of Prof. Ninoy Rollan of Ateneo de Manila, professor in Leadership and Human Resources for an in house seminar.

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

January 15, 2010

SCMAP Perspective #233

Published in Port Calls, January 18, 2010

EDUCATION, INDUCTION

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Last Call – Intro to SCM Seminar

SCMAP is making a last call for its first seminar offering this year. This is the 2-day seminar on Intro to SCM. Readers please note the schedule

• Schedule       : Jan. 25-26, 2010 (Monday – Tuesday)
• Time               : 8:00 am to 5:00 pm
• Venue                        : Astoria Plaza, Escriva Drive, Ortigas Center
• Fee                 : SCMAP members P11,000 VAT included

non-members P13,750 VAT included

• Please make check payable to UniMaC Business Consultancy, Inc.

The 2-day seminar is a capsulized version of the SCMAP-DLSU certificate program in SCM (which is 42 Saturdays long). Facilitators will be the same as the faculty handling the DLSU program. Their topics are:

• Ike Castillo (Avon Cosmetics) : Intro to SCM, Transportation and Distribution Mgt., Strategic Purchasing & Procurement Mgt.
• Al Lagera (PLDT) : Inventory Planning & Control
• Gabby Patag (TNT)  : Warehousing Mgt., Material Handling & Inventory Mgt., Supply Chain Governance

SCMAP-DLSU Certificate Program

Meanwhile the SCMAP-DLSU certificate program in SCM is back on stream. There are 3 modules currently ongoing or about to go on. All schedules are on Saturdays, from 9:00 am to 4:00 pm. Each module is seven Saturdays long. These modules are the following.

• Module 6 – Supply Chain Governance, Faculty Gabby Patag, Dec. 5, 2009 to Jan. 30, 2010
• Module 1 – Intro to SCM, Faculty Ike Castillo, Jan. 16 to Mar. 6, 2010
• Module 2 – Transportation and Distribution Management, Faculty Ike Castillo or Al Lagera, Mar 13 to May 15, 2010

Module 1 – Intro to SCM. This module provides an overview of SCM as a business philosophy and a corporate strategy to drive or turn around the business. The course includes a study of supply chain evolution, a thorough discussion of its scope, and its strategic role in the business and economy today.

Module 2 – Transportation and Distribution Management. This module provides a comprehensive review of transportation and distribution management and its role in SCM. This course includes a thorough description and discussion of the different modes of transportation, pricing methodologies, standards and performance The course dwells heavily on the practices relative to the Philippine setting, while touching as well on global transportation concepts, and best practices in all modes of transportation, as they are applied in distribution channels and distribution management.

Module 6 – Supply Chain Governance. This module tackles special topics and issues in SCM. These include environmental, ethical and social responsibility concerns, governance, change management, creativity and relationship management for effective customer service.

Soft Skills Seminar

SCMAP’s second seminar offering for the year will be the Leading Winning Teams seminar, one of SCMAP’s seminars in the soft skills area. The schedule is Feb. 12, 2010. Venue will be at the Astoria Plaza. The facilitator will be Prof. Ninoy Rollan of Ateneo de Manila, professor in Leadership and Human Resources. Fees for this one day seminar will be P5,500 for SCMAP members and P6,875 for non-members.

Induction

SCMAP’s officials, including directors and committee chairpersons for year 2010, will be inducted on January 29 at the EDSA Shangri-La. To be tapped as keynote speakers / inducting officers are PISA Chairperson Doris Magsaysay-Ho and NCRPO PNP Chief Roberto Rosales. Attendance for non-members is by invitation only.

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

January 15, 2010

SCMAP Perspective #232

Published in Port Calls, January 4, 2010

COLLABORATION, SCM SEMINAR

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Collaboration

The Volume 30 No. 2 issue 2009 of the Journal of Business Logistics included an article entitled “An Analysis of Supply Chain Collaborations and Their Effect on Performance Outcomes”. This particular research work aims to assess the relationship between SC collaboration and business performance. The authors are Zach Zacariah (Lehigh University), Nancy Nix (Texas Christian University) and Robert Lusch (University of Arizona).

The prior literature review mentions that a lot of research work has been done, but emphasizing four key areas. I quote from the article the four areas.

1. Reasons to collaborate or desired collaboration outcomes

• To share resources and combine knowledge, skills and physical assets to create strategic advantage and enhance profits

2.  Circumstances in which collaboration is beneficial

• Where the relationship cannot be controlled by formal systems, companies can create modular or sequential synergies, or to cope with environmental uncertainty

3. Inter-organizational or relationship characteristics facilitating collaboration

• Where firms are interdependent, where there is trust and commitment between them, and they have mutual credibility

4. Processes that influence collaboration outcomes

• Information sharing, knowledge acquisition, joint decision making, and the development of an alliance competence.

The article points out that there has been limited research on company business performance outcomes of a collaboration project. Being published in the Journal of Business Logistics, the article is typically highly technical and not easy to understand for non-techies. We just mention some of the highlights of the research.

• The focus is on collaboration projects between buyers and suppliers
• Out of 10,160 potential respondents (5,000 contacts from the Institute of Supply Management and 5,160 from a supply and value chain center of a university), after qualification and screening steps, the final useable sample numbered 473
• Types of collaboration project reported were

1. New product, service and packaging development                        29%
2. Process innovation                                                                                       26%
3. Supplier development                                                                                 13%
4. Problem resolution                                                                                        9%
5. Negotiation process                                                                                      7%
6. Technology implementation                                                                     5%
7. Relationship development                                                                         1%
8. Others                                                                                                               10%

• The authors developed a theoretical framework relating 6 constructs, namely:

1. Interdependence of knowledge and process
2. Understanding of supply chain partner
3. Collaboration level
4. Operational outcomes (cost, quality, cycle time, customer service)
5. Relational outcomes (trust, credibility, effectiveness of the relationship)
6. Business performance (organizational performance, asset utilization, competitive position, profit)

• A technique called structural equation modeling was used to analyze the data

The research project set up seven hypotheses to be tested:

1. The greater the interdependence of process and knowledge, the higher the level of collaboration among the firms
2. The greater the level of understanding of supply chain partner, the higher the level of collaboration among the firms
3. The higher the level of collaboration, the better the operational outcomes
4. The higher the level of collaboration, the better the relational outcomes
5. The better the operational outcomes, the better the relational outcomes between the collaborating firms
6. The better the operational outcomes, the better the business performance
7. The better the relational outcomes, the better the business performance

Testing of the 7 hypotheses would validate the theoretical framework. Statistical tests performed basically validated the hypotheses at the 99.9% level, except the 7^th hypothesis which was at the 99% level.

Part of the summary reads: Collaboration outcomes (both operational and relational) have a large impact on business performance (asset utilization, improved profitability and stronger competitive position). Finding interdependent supply chain partners, investing time and resources to understand them, and collaborating intensely are critical to achieving successful operational and relational outcomes, and therefore business performance. The above may sound obvious to some, but there is always value in doing research that has gone through the rigors of statistical testing.

Intro to SCM Seminar

SCMAP’s first offering this year is its 2-day seminar on Intro to SCM. Readers please note the change in schedule (formerly Jan. 21-22, 2010).

• Schedule       : Jan. 25-26, 2010 (Monday – Tuesday)
• Time               : 8:00 am to 5:00 pm
• Venue           : Astoria Plaza, Escriva Drive, Ortigas Center
• Fee                 : SCMAP members P11,000 VAT included

non-members P13,750 VAT included

• Please make check payable to UniMaC Business Consultancy, Inc.

The 2-day seminar is a capsulized version of the SCMAP-DLSU certificate program in SCM (which is 42 Saturdays long). Facilitators will be the same as the faculty handling the DLSU program. Their topics are:

• Ike Castillo (Avon Cosmetics) : Intro to SCM, Transportation and Distribution Mgt., Strategic Purchasing & Procurement Mgt.
• Al Lagera (PLDT) : Inventory Planning & Control
• Gabby Patag (TNT)  : Warehousing Mgt., Material Handling & Inventory Mgt., Supply Chain Governance

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

December 27, 2009

SCMAP Perspective #231

Published in Port Calls, Decembe r 21, 2009

SCM SEMINAR, OUTSOURCING

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez

SCMAP Executive Director

Is Outsourcing Going Out of Fashion?

This is the title of a short article in Supply Chain Asia Magazine. Nov./Dec. 2009. The article actually refers to another article in the Economist, which asserts that ‘big is back’, referring to the creation of giant corporations resulting from a number of trends.

The Economist article says that corporate giants are returning because companies are finding contracting to be too complex and too risky.

I remember my old days with Unilever in the 1970s. Unilever, a global company, was always bent on doing everything by itself, except what was obviously not for the company to do, like operating domestic ships for distribution. It had truckers under total control, almost like owning the trucks.

In those days, the term third party logistics was unheard of. But there were already the beginnings of outsourcing. Unilever started contracting toll manufacturers and packers. Other companies, like Johnson & Johnson were also into toll manufacturing.

Manufacturers were afraid of surrendering the distribution function. Reasons included fear of discovery of marketing secrets by competitors. Information on new products to be launched stored in a third party warehouse under third party control would be in the hands of non-employees and could be transferred to competitors. Also non-employees might not adhere to company standards for warehousing, handling and packaging.

The attraction of freeing capital by disposing of assets was not sufficient to overcome the advantage of total control. Likewise for the advantages of flexibility and access to new ideas. Third parties just could not be trusted enough.

Now, with the seeming move away from outsourcing, the Supply Chain Asia article says that actually the new corporate giants are different from those in the past. These companies are more agile, “nimbler, more entrepreneurial and more focused”.

Reasons for the growth of new giants include:

• Companies are finding the contracting process too complex and too risky
• Key suppliers of some companies have collapsed financially
• Companies find regulation too complex
• Companies find difficulty in overseeing the performance of external contractors

The article continues that the real problem is that companies lack the skills, systems and knowledge to manage non-owned resources. Companies have failed to develop their contracting competencies. “Far from going out of fashion, contracting needs a renaissance”.

Intro to SCM Seminar

SCMAP starts its year with its 2-day seminar on Intro to SCM. Readers please note the change in schedule (formerly Jan. 21-22, 2010).

• Schedule       : Jan. 25-26, 2010 (Monday – Tuesday)
• Time               : 8:00 am to 5:00 pm
• Venue                        : Astoria Plaza, Ortigas Center
• Fee                 : SCMAP members P11,000 VAT included

non-members P13,750 VAT included

• Please make check payable to UniMaC Business Consultancy, Inc.

The 2-day seminar is a capsulized version of the SCMAP-DLSU certificate program in SCM (which is 42 Saturdays long). Facilitators will be the same as the faculty handling the DLSU program. Their topics are:

• Ike Castillo    : Intro to SCM, Transportation and Distribution Mgt., Strategic Purchasing & Procurement Mgt.
• Al Lagera       : Inventory Planning & Control
• Gabby Patag : Warehousing Mgt., Material Handling & Inventory Mgt., Supply Chain Governance

Omissions

At SCMAP’s Christmas fellowship last December 10, names of the incoming directors and committee chairpersons were announced. However three names out of nine were inadvertently omitted among elected committee chairs, namely

• Arnel Gamboa          Benby Enterprises
• Gerry Ong                  Cheng Ban Yek
• Yhel Reyes               GAC Logistics

Of the above three, only Yhel Reyes is a newcomer. SCMAP apologized to the three.

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

December 19, 2009

SCMAP Perspective #230

Published in Port Calls, December 7, 2009

2010 ACTIVITIES

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

SCMAP will end the year with its annual Christmas fellowship this Thursday, December 10. The theme is “Let’s Simply Celebrate Christmas…Again”, after last year’s “Let’s Simply Celebrate Christmas”.

SCMAP has released its schedule for 2010. SCMAP will start the year with its planning session, involving the new Board and committee chairpersons on Jan. 13.

A 2-day seminar, Intro to SCM will follow on Jan. 21-22. The induction of 2010 directors and officials will be held on Jan. 29, 2010. The officials to be inducted are listed at the end of this column.

The rest of the year’s activities will include monthly Board meetings from March to November, and six general membership meetings, in February, April, June, August, October, and November.

Next year’s supply chain conference will be on September 23-24, while the shipping immersion course is tentatively scheduled on May 14-17.

SCMAP will maintain its two-fold mission of

• To lead the evolving supply chain management profession in the Philippines by developing, advancing, and disseminating supply chain knowledge and research in the Philippines, and also
• To advocate government policies, rules, legislation and private sector activities that improve supply chain management processes

On the first mission, SCMAP will be conducting seminars. The schedule of seminars in 2010 includes the following.

• Intro to SCM (2 days), Jan. 21-22
• Leadership (1 day), Feb. 12
• Intro to Strategic Procurement (1 day), March 12
• Quantitative Approaches to Logistics Planning (6 hrs.), April 26
• Shipping Immersion Course (3 days), May 14-17
• Warehousing Seminar I (2 days), June 17-18
• Logistics Outsourcing (1 day), July 16
• Warehousing Seminar II (1 day), August 13
• SCM conference (2 days), September 23-24
• Inventory Management (1 day), October 15
• Transportation (1 day), November

The seminars utilize as speakers SCMAP luminaries, past presidents and officers, and industry experts. The seminars have been developed by UniMaC Business Consultancy, Inc.  Among the speakers are Ike Castillo, Malou Santos, Norman Adriano, Gus Arguelles, Al Lagera, Gabby Patag, Ninoy Rollan and Cora Curay.

SCMAP will continue its relationship with DLSU on its SCM program, and also pursue its discussions with UAP over a course in SCM.

To be inducted on January 29, 2010 are the following directors.

Dennis Llovido         Nestle                            Director and President

John Guillermo        Big E Food Corp.      Director and Vice President

Marilyn Lauron         Getz Bros.                  Director and Secretary

Elsie Oafallas           Sr. Marketing               Director and Treasurer

Cora Curay               XVC Logistics              Director and Auditor

Dina Pilapil               IDS Logistics               Director

Pio Bernardo                        Megavia            Director

Danny Cabrera        Zuellig Pharma           Director

Al Lagera                   PLDT                               Director

German Martizano   Unilever                     Director

Also to be inducted are the following committee chairpersons.

Lloyd Dizon               Koldstor                        Committee Chair

Gabby Patag             TNT                                  Committee Chair

Rene Casas              JG Summit Petro          Committee Chair

Remie Co                  Fast Cargo                      Committee Chair

Abbe Daza                Omni Logistics            Committee Chair

Max Yap                    Oriental & Motolite   Committee Chair

Yhel Reyes               GAC                                 Committee Chair

Gerry Ong                  Cheng Ban Yek          Committee Chair

Arnel Gamboa          Benby                           Committee Chair

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

December 4, 2009

SCMAP Perspective #229

Published in Port Calls, November 23, 2009

2010 LEADERSHIP

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Election

At the SCMAP general membership meeting last Thursday November 19, the members present elected the Directors and the Committee Chairpersons for 2010. The elected Directors elected the Officers from among themselves.

Elected were the following:

Dennis Llovido         Nestle                            Director and President

John Guillermo        Big E Food Corp.       Director and Vice President

Marilyn Lauron         Getz Bros.                   Director and Secretary

Elsie Oafallas           Sr. Marketing               Director and Treasurer

Cora Curay               XVC Logistics              Director and Auditor

Dina Pilapil               IDS Logistics                Director

Pio Bernardo                        Megavia             Director

Danny Cabrera        Zuellig Pharma            Director

Al Lagera                   PLDT                                Director

German Martizano   Unilever                      Director
Only four are incumbent directors, five are past directors and one is a first timer director but is also a past committee chairperson. All these translate to continuity.

Even at the committee chairperson level, only one is a newcomer, again reflecting continuity. Assignments to committees will be decided later.

Lloyd Dizon               Koldstor                      Committee Chair

Gabby Patag             TNT                                Committee Chair

Rene Casas              JG Summit Petro         Committee Chair

Remie Co                  Fast Cargo                     Committee Chair

Abbe Daza                Omni Logistics            Committee Chair

Max Yap                    Oriental & Motolite   Committee Chair

Yhel Reyes               GAC                                 Committee Chair

Gerry Ong                  Cheng Ban Yek          Committee Chair

Arnel Gamboa          Benby                           Committee Chair

The election of Dennis Llovido represents a change in leadership at the top. Finally, Cora Curay can take a break, after sacrificing her own time and resources for several years as President. SCMAP insiders are confident that incoming President Dennis Llovido of Nestle will be up to the challenge.

Christmas

SCMAP’s annual Christmas fellowship will be held on December 10. The theme is “Let’s Simply Celebrate Christmas…Again”, after last year’s “Let’s Simply Celebrate Christmas”.

Most companies will be very glad that 2009 will soon be over.

Top Companies.

Based on Business World’s Top 1000 Companies publication, 28 member companies of SCMAP were listed among the top 200. These are the following, with their rank in revenue.

Top 50 (12 SCMAP members)

2-Pilipinas Shell Petroleum, 5-Chevron Phils., 6-Nestle Phils., 7-PLDT, 8-Smart Communications, 14-Zuellig Pharma, 18-Coca-Cola Bottlers, 20-San Miguel Foods, 24- San Miguel Corp., 30-Philip Morris Phils., 31-Unilever Phils., 39-United Laboratories

No. 51 to 100 (8 SCMAP members)

60-Samsung Electronics Phils., 63-Del Monte Phils., 69-Ginebra San Miguel, 70-Wyeth Phils., 79-Metro Drug, 82-Bristol Myers Squibb, 90-IDS Phils., 100-Purefoods-Hormel Co.

No. 101 to 150 (5 SCMAP members)

116-Megavia Corp., 119-San Miguel Yamamura Packaging, 120-Colgate-Palmolive, 139-GSK, 140-Kraft Foods Phils.

No. 151 to 200 (3 SCMAP members)

151-All Asian Countertrade, 179-RFM Corp., 198-Solid Cement

Total SCMAP members in the top 200 = 28. Note that the above list is for 2008, not 2009. It would be interesting to see for 2009, but that would be a year away.

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

November 20, 2009

SCMAP Perspective #228

Published in Port Calls, November 9, 2009

MANDATORY WEIGHING

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

PPA MC 23 – 2009

PPA MC No. 23 – 2009 mandates the weighing of all outbound containers and RORO vehicles before loading onto a vessel.

SCMAP acknowledges that this MC is a good measure to “ensure safety not only in the handling of outbound containers, but also to mitigate risks to the port facilities, cargo handling equipment and the carrying vessels”. In addition, this can minimize damage to roads and bridges leading to the port of loading, and to roads and bridges leading out of the destination port, or ensure compliance to weight limits in destination countries.

The MC, published in the Manila Standard on October 22, 2009, and effective 15 days later, should have taken effect last November 6, 2009.

SCMAP basically shares the concerns expressed by the PLSA, in a letter from PLSA Executive Director Joy Maitim, to PPA GM Atty. Sevilla, with respect to the North Harbor.

PLSA asks – are the cargo handling operators ready to implement the weighing operation with a minimum risk of queuing?

On the absence of a set fee or guideline thereof, PLSA expects “bickering between cargo owners and service providers”, implying delays.

Guideline no. 6 of the MC says “Payment for the use of the weighbridge / truck scale shall be the rates as agreed upon by the service provider and the owner of the cargo / vehicle and as approved by PPA, until such time that the Authority shall have established a standard weighing rate nationwide”.

So, the PPA is deliberately not setting a rate at the start, or even a guideline for the rate. Under the above guideline no. 6, there are four parties at the start – the provider of the weighing service, the cargo owner, the vehicle owner, and the PPA. Not only is the rate not set. It is not clear who will pay for the weighing; the cargo owner or the vehicle owner.

It is like PPA saying let the market decide the weighing fee. Let the (three) parties negotiate. However, the PPA has stated that the rate must be approved by PPA?!!!

In addition, guideline no. 7 prescribes a share of the weighing fee for the PPA, and also of the permit fee required of the weighing service provider. Another source of income for the PPA!!!  We wonder about the logic of this PPA share.

The third concern of PLSA is about a 30 day notice that the PPA must observe. We go along with this.

Since I am writing this on November 6, I have no feedback yet on what happened on day 1.

Election and Fellowship

SCMAP’s election of 2010 directors and officers will be held during its general membership meeting on November 19, 2009. To be elected are 10 directors and 9 committee chairpersons. The 10 directors will elect among themselves the 6 officers

Following that, the annual Christmas fellowship will be held on December 10, 2009. This year’s theme is “Let’s simply celebrate Christmas … again”.

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

November 6, 2009

SCMAP Perspective #227

Published in Port Calls, October 26, 2009

YEAR END ACTIVITIES

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Best Conference

Last month’s Annual Supply Chain Conference was the biggest and best ever. Some indicators – 36 exhibit booths (vs. last year’s 34) and actual attendance at 240. The souvenir program was the thickest ever with 84 pages. Somewhere we muttered during the conference, “Parang walang crisis sa SCMAP”.

The conference was considered to be the best ever, because it had a fully coordinated structure and smooth flow of topics, as well as a great lineup of competent speakers. The conference used the SCOR model of Plan – Source – Make – Deliver – Return – Enable. There have been attempts in the past to unify the topics under the chosen theme, but none were as unified as this year. The entire concept for the conference was developed by past president Ike Castillo, who is in charge of the SCMAP-DLSU program, and was also a conference speaker

The conference flow was quite smooth, despite the difficulties of finding class speakers for the right speaking slots. President and conference chairperson Cora Curay deserves the credit for finding the speakers and for the overall execution of the conference.

Meanwhile Cora herself gave credit for the success of the conference to perks given to sponsors and to divine intervention. Imagine, she said at last week’s general membership meeting, if typhoon Ondoy had arrived one week earlier.

Year End Activities

Following the highly successful annual conference, SCMAP is getting ready to wrap up the year with the remaining activities.

• Election at the November general membership meeting, Nov. 19
• Christmas fellowship, Dec. 2
• Seminar – Quantitative Approaches to Logistics Planning, November 27 tentative

The Leadership seminar scheduled for November 28 will be postponed to next year. SCMAP apologizes to those who have registered, for the inconvenience.

Besides the above year end activities, member companies need to cope with the North Harbor trucking rate increase being imposed by the truckers, as well as the threat of further rising prices of oil products.

As for the reduction of domestic shipping capacity as a consequence of the grounding of Aboitiz vessels, the PLSA stated that there would be no cargo capacity shortage, due to overcapacity in local bottoms by at least 20% vs. 2004, and the expected arrival of additional bottoms. SCMAP members basically agreed at the general membership meeting, even with the usual 4^th quarter peak..

Scenario for 2009

For next year the scenario is mixed. The elections promise increased spending, therefore a big boost to demand. However, the recent typhoons, floods and landslides have resulted in a more lopsided distribution of wealth (many of the poor lost everything, most of the rich were unscathed). The damage to infrastructure, esp. in North and Central Luzon, Metro Manila and Bicol, will also affect the distribution of goods.

Meanwhile the SCMAP Board has lost two directors. Ana Rose Ochoa, current vice president, past president in 2004 and a director of DMAP / SCMAP for 15 years, retired from J&J. After a short vacation, Ochie, as she is fondly called, will pursue other interests, but will also be a consultant to SCMAP and a co-chairperson for membership matters and special projects. Jerson Bitoon, a 2009 director, resigned from his employer SSI Schaefer and will join another company. SCMAP does not have any plans to replace them, as the year is almost over, and elections will be held next month.

SCMAP wishes both Ochie and Jerson well and success in their new endeavors..

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

October 24, 2009

SCMAP Perspective #226

Published in Port Calls, September 28, 2009

POLITICS IN SUPPLY CHAIN

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Politics in Supply Chain

With politics dominating the news due to the coming 2010 elections, we try to recall items we have tackled in the past that link politics to supply chain. These include supply chain connected businessmen or businesses involved with politicians or government agencies.

The clearest example of politics in supply chain that I can think of is the infamous EO 59. EO 59 was crafted during Erap’s term (December 1999) and was pushed by a consortium of powerful business interests – the giant international cargo handlers (ICTSI and ATI) and the domestic shipping lines ICTSI. They sought to monopolize services at the North Harbor”, and later on all ports of the country, under the guise of a “unified contractor”.

Stand of Government Officials on Competition

Most senators we approached years ago in battling EO59 did not seem to care, or at best appeared unable to do anything. One former secretary and a current senator (who will run for a higher position next year) was clearly anti-competition, stating that there was no evidence that two operators (competition) was better than one (monopoly) at the North Harbor

We remember just a few pro-competition government personalities, namely former Secretaries Montemayor, Lito Sarmiento and Willy Villarama, and Rep. Ed Zialcita..

We described as refreshing former NEDA chief Neri’s clear stand on competition. So far nearly all (there are a few exceptions) government executives DMAP/SCMAP has dealt with over its 20 years of existence have been anti-competition, speaking out for monopolies, or just acting indifferent. We have seen this at the President’s level, in the agencies running the transport industry and agencies running the economy (DTI). There have been several Administrators and GMs at PPA and MARINA supporting cartels and monopolies.

Sec. Neri even said boldly that the lack of competition in the ports industry is to blame for the high cost of sea transport in the Philippines. Also that the high cost of shipping goods within and from the country have been a major drag on the country’s competitiveness. Sec. Neri called for Congress to overhaul the PPA’s mandate, and to separate PPA’s commercial and regulatory functions.

Regulatory Capture

More examples of politics in supply chain were brought up in 2006 – 2007 when news of the NBN-ZTE scandal broke out. Sec. Neri stood against monopolies, and spoke out against powerful groups in the shipping and ports businesses, including Enrique Razon of ICTSI and Aboitiz. The names of Razon and Aboitiz were among the oligarchy in Neri’s diagram of the current economic-political scene..

After his pronouncements about the lack of competition in the ports as the reason for the high cost of sea transport in the Philippines, Sec. Neri followed it up with a stronger statement on the capture of state regulatory agencies by big business. According to Secretary Neri, the state regulatory agencies are working largely to benefit big business instead of protecting the interest of the people.

Are there really regulatory captives? Is there evidence? Well there are many signs. We have been writing about them in this column over the years, and in other avenues such as hearings and position papers. Some examples are”

• Renewal of contracts for MICT and South Harbor six years before their expiry in 2013
• The glee of a government official that shippers could now be investigated and sued under RA 9295
• Sham PPA hearings

Former NEDA chief Cielito Habito also echoed what Neri said, making it two personalities to speak out against the form of corruption called regulatory capture.

“Legislatory Capture”

But that is not all, for the problems in sea transport. In previous columns I have written before about DMAP’s complaints regarding two legislative shortfalls.

• Lack of legislation on competition / antitrust
• The need to repeal and replace PD 857

So we also have “Legislatory Capture”, which is the failure of lawmakers to enact appropriate legislation because they have been captured by business / commercial interests.

Executive Capture

Maybe capture goes even higher than the regulatory agencies and the lawmakers? Erap’s endorsement of the North Harbor monopoly could be an example. Or the President’s two TV ‘commercials’ prior to the elections paid for by a large cargo handling firm.

The “Uuy labing-labing” television advertisement showed President GMA announcing cheaper rice now available to the people, and was funded by the country’s largest cargo handler. This advertisement was followed by another advertisement, called the “Uuy hangin-hangin” ad. Here President GMA announces cheaper electricity now available to the people, because of what she claims to be her order to slash the purchased power adjustment from our electric bills. This ad was also released “in cooperation with ICTSI”.

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

September 25, 2009

SCMAP Perspective #225

Published in Port Calls, August 17, 2009

BIGGEST EVER CONFERENCE

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

New Members

SCMAP recently approved the membership applications of

• Manly Plastics, Inc.
• Sara Lee Philippines, Inc.

Corporate membership now stands at 101 and individual membership at 5.

2009 Conference Countdown – 3 Days

SCMAP’s 2009 conference reels off this Thursday, September 17 at the EDSA Shangri-La in the Isla and Palawan ballrooms.

Participant Fees: P13,725 for non-member companies; P10,980 for member companies

Speakers

Keynote Speakers are

• Sen. Mar Roxas
• Dr. Bernardo Villegas

A roster of high-powered speakers will cover the technical sessions:

• Mr. Richard Spence, Senior Director – Consulting, Zuellig Pharma Asia Pacific Ltd. “The Numbers that Matter in These Unprecedented Times”
• Mr. Charlie Villasenor, President and CEO, Transprocure Corporation. “Beyond Cost : Sourcing During Difficult Times”
• Mr. Anthony Tay, APL Logistics. “3PL : Views from the Customers”

“3PL : Views from the Customers”

• Mr. Jesus C. Romero, Globe Business, Head of Enterprise Segments. “Total Solutions Beyond Connectivity”

• Mr. Antonio Rivera III, VP Europe Asia-Supply Chain, Bristol Myers Squibb Phils., Inc. “Manufacturing in a Cash-Strapped World : Capacity is Key, But Cash Is King!”
• Mr. Bengt Sioberg, Handling Innovation. “Rental of Forklifts – the Global Trend”

Why buy responsibility when you can rent reliability?

• Mr. Vicente Dinglasan. Managing Director – Country Customer Unit, IDS Phils.

“Can Logistics Deliver in the Environment of Agility”

• Mr. Danny Halim, Vice President, Industry Strategy, JDA Software Group

“Supply Change” Management: The Future  of Supply Chain Management

• Mr. Irving Guerrero, Vice-President and Factory Operations Head, Phil Recyclers, Inc. “Value Recovery: Turning Costs into Profits”
• Mr. Terry Adams, Principal Consultant – Supply Chain & Logistics, South Asia

Infor Global Solutions (S.E.A.) Pte Ltd. “How GREEN is your Supply Chain”

• Mr. Enrique Castillo, Director, Regional Distribution & Logistics – Asia Pacific, Avon Cosmetics. “The Emerging Educational Route for Supply Chain”

Special features this year are

• Acknowledgment of graduates of the SCMAP-DLSU program in supply chain management
• Launch of an academic program in partnership with the University of Asia and the Pacific

Sponsors

Helping to make the conference a success are the following sponsors for the conference. Fittingly, in SCMAP’s twentieth year of existence, the exhibit is the biggest ever, with over 35 exhibit booths.

• Break sponsor
  • Handling Innovation, Inc.
• Special principal sponsors
  • Boeing Material Handling Corp.
  • Globe Telecom, Inc.
  • Prime Sales, Inc.
  • Qishu Heavy Equipment Corp.
• Principal sponsors
  • Eastern Communications
  • Fast Logistics Corp.
  • GAC Logistics, Inc.
  • IDS (Philippines), Inc.
  • Nestle Phils., Inc.
  • NMC Container Lines, Inc.
  • PLDT Co.
  • SSI Schaefer
  • Unilever Phils.
  • XVC Logistics, Inc.
  • Zuellig Pharma Corp.
• Regular sponsors
  • ABM-Computech
  • Aboitiz Transport Systems Corp.
  • Acer Philippines
  • Ansuico, Inc.
  • APL Logistics Phils., Inc.
  • Dennis International Merchandising, Inc.
  • Fasttrack Solutions, Inc.
  • Lorenzo Shipping Corp.
  • Manly Plastics
  • Metro Structural & Industrial Steelworks Corp.
  • Onestop Logistics Solutions, Inc.
  • Oriental & Motolite
  • Oroport Cargohandling Services, Inc.
  • Solid Shipping Lines Corp.
  • Standard Insurance Co., Inc.
  • Transmodal International, Inc.
  • Vintel Logistics, Inc.
• Cooperating Organizations
  • Cold Chain Association of the Phils., Inc.
  • Epson Phils. Corp.
  • Port Calls

Address inquiries and comments to Ed Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email scmap.org@gmail.com.  Those interested in SCMAP training and other activities are requested to send their e-mail addresses. Visit SCMAP’s website at:www.scmap.org

September 12, 2009

« Previous Page — Next Page »