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

SCMAP Perspective #223

Published in Port Calls, August 17, 2009

SCMAP AND COMPETITION

Fax 551-3207 Email lizaalmonte@yahoo.com.ph

By Ed Sanchez

SCMAP Executive Director

New Members SCMAP will induct two new members at its general membership meeting on August 20, 2009.

1. Eastern Communications
2. Big E Food Corp.

With an ongoing cleanup of membership (inactive, delinquent, resigned), total corporate membership has remained at around 100. The number of logistics service providers remains at its limit of 20% of corporate membership. The membership profile is as follows. Manufacturers 50.5% Food & Beverage 18.2 Other Consumer Goods 11.1 Chemicals & Pharmaceuticals 8.1 Packaging Products 3.0 Petroleum Products 3.0 Construction Materials 4.0 Other Products 3.0 Distributors, Traders & Others 21.2 Logistics Products 8.1 Logistics Service Providers 20.2 Total Corporate Members 100.0% Competition Eastern Communications joins PLDT and Smart as member companies competing in the telecom sector. To be sure, SCMAP looks at competition as healthy. The presence of members in competition in their respective industries is not an issue. All members have a common interest of improving their supply chain processes. In fact DMAP started with a core group including the soap and detergents sector, an intensely competitive group of companies, namely Unilever, Colgate, Procter & Gamble, Johnson & Johnson. Other examples of competitors within SCMAP include Pilipinas Shell and Chevron (oil), Holcim and Solid Cement (cement), Nestle (Milo) and AB Food (Ovaltine), Metro Drug and Zuellig Pharma (pharmaceuticals), Philip Morris and Mighty Corp. (cigarettes), Loscam and Trans-Asia Wood (pallets). This attitude towards competition carries into its official stand against cartels and monopolies, which is reflected in its policy statement on exclusions from membership. “The following are currently excluded from SCMAP membership :

• Companies or partnerships who are operating under a monopolistic or cartel environment, or are in conflict with the majority of SCMAP corporate members, insofar as the advocacies of SCMAP are concerned….”

In terms of activities, DMAP/SCMAP considers among its achievements, its opposition in 1999 to 2002 to the implementation of Executive Order 59 and its monopolistic provisions, selection of the unified contractor with no public bidding, and the subsequent equivalent unsolicited proposal and single terminal operator. SCMAP supports the passing of a law on competition. There have been bills but so far no antitrust law. 2009 Conference Countdown – 31 Days Schedule : EDSA Shangri-La on Sept. 17 – 18, 2009. Participant Fees: P13,725 for non-member companies; P10,980 for member companies Keynote Speakers:

• Sen. Mar Roxas
• Dr. Bernardo Villegas

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”

Sponsors

• Regular sponsor (P45,000)
• Principal sponsor (P90,000)
• Special principal sponsor (P105,000)
• Break Sponsor (P110,000)
• Luncheon sponsor (P220,000)
• Cocktails sponsor (P220,000)

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

August 14, 2009

SCMAP Perspective #222

2009 CONFERENCE

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez

SCMAP Executive Director

Conference Fees and Program

SCMAP has released the participant fees, as well as the lineup of speakers for the 2009 Supply Chain Conference, slated at EDSA Shangri-La on Sept. 17 – 18, 2009.

Participant fees are P13,725 for non-member companies and P10,980 for member companies.

Heading the list of speakers are the keynote speakers:

• From the government, Sen. Mar Roxas
• From the private sector, Dr. Bernardo Villegas

The technical sessions will have:

• Mr. Richard Spence, Senior Director – Consulting, Zuellig Pharma Asia Pacific Ltd. “The Numbers that Matter in These Unprecedented Times”

–  The (R)evolutionary Road to Sales & Operations Planning process

–  S&OP as key enabler to today’s agile supply chain

–  Gaining practical knowledge on S&OP and its impact to balancing service & inventory

–  Mastering the best strategies to reduce inventory : Planning for the Future

–  Is there such a thing as firm hand-shake between supply and demand

–  What numbers matter in today’s climate

• Mr. Charlie Villasenor, President and CEO, Transprocure Corporation. “Beyond Cost : Sourcing During Difficult Times”

–  Strategic Sourcing : How Strategy Fits into the Current Harsh Environment

–  Global Sourcing : It’s impact to value chain in the midst of Difficult Times

–  Collaboration as key to Supplier Relationship Management (SRM)

–  What’s In and Out in Sourcing in Today’s Climate

• Mr. Anthony Tay, APL Logistics

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

–  Business process pain points

–  How it could look like once pain points are addressed

–  Real data business cases / situational examples

• 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!”

–  Start with the end in mind — secure supply, fast cash flow, lowest net working capital

–  Real options in today’s economy:  lease vs. buy!

–  Capability on tap – real partnerships enable real flexibility

• 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”

–  Given the tight planning, the lean manufacturing – can Deliver cope, with this challenge of agility.

–  Re-calibrating, Re-engineering Transport Network to Uphold Business Competitiveness

–  Practical Strategies to Hurdle Challenges through Network and Transport Optimization

–  Understanding the Impact of Oil to Transport and Distribution Network

–  Is Transport Auction Good

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

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

–  The evolving Supply Chain Management blue print

–  What’s next for Supply Chain Management as we know it now

–  Multi-national companies getting on target with the SCM blue print

–  The evolving 2020 Supply Chain Management blue print

–  Recommendations/Call–to-actions

• Mr. Irving Guerrero, Vice-President and Factory Operations Head, Phil Recyclers, Inc.

“ Value Recovery: Turning Costs into Profits”

–  Reverse Logistics in the Real World : Ugly, Expensive, Necessity

–  Reverse Logistics Strategies : From Cost Center to Profit Center

–  A case study in harnessing the value in reverse logistics

• Mr. Terry Adams, Principal Consultant – Supply Chain & Logistics, South Asia

Infor Global Solutions (S.E.A.) Pte Ltd

“How GREEN is your Supply Chain”

–  Coverage is limitless – can cover the entire supply chain work streams

–  How Green is your Supply Chain?

–  Is this “hype” or “need”?

–  How conscious are the supply chain practitioners about their role in ‘greening’ the business?

–  Is there a Green Score Card?

• Mr. Enrique Castillo, Director, Regional Distribution & Logistics – Asia Pacific, Avon Cosmetics

“3PL : Views from the Customers”

–  What’s new in the 3PL front?

–  Has 3PL been successful?

–  What should be done to further maximize the potentials of 3PL?

Sponsors

SCMAP’s 2009 conference is actually a bargain for sponsors, when one considers the benefits, One free participant is P13,725 and a one page advertisement is P9,000.

For a regular sponsor (P45,000), the “net price” of the exhibit booth is P45,000 – P13,725 – P9,000 = P22,275 only !!!

For a principal sponsor (P90,000), the “net price” is P90,000 – 2 x P13,725 – P9,000 = P53,550 only !!! In addition the principal sponsor gets his 30 second AVP shown 8 times during breaks in the 2-day conference.

The conference itself, at P13,725 for non-members (P10,980 for members) is a big bargain when compared to other conferences in South East Asia. SCMAP’s lineup of speakers compares with such other conferences.

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

July 31, 2009

See the SCMAP 2009 Annual Conference Brochure here

Just click any of the images below to zoom in.

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SCMAP Perspective #221

Perspective  (#221)

Published in Port Calls, July 20, 2009

CONFERENCE BARGAIN, MORE ON SECURITY

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Conference Bargain

SCMAP’s 2009 conference is actually a bargain for sponsors, when one considers the benefits, One free participant is P13,725 and a one page advertisement is P9,000.

For a regular sponsor (P45,000), the “net price” of the exhibit booth is P45,000 – P13,725 – P9,000 = P22,275 only !!!

For a principal sponsor (P90,000), the “net price” is P90,000 – 2 x P13,725 – P9,000 = P53,550 only !!! In addition the principal sponsor gets his 30 second AVP shown 8 times during breaks in the 2-day conference.

The conference itself, at P13,725 for non-members (P10,980 for members) is a big bargain when compared to other conferences in South East Asia. SCMAP’s lineup of speakers compares with such other conferences.

More on Supply Chain Security

Less than a year ago, in October 2008, I devoted one column to the subject of supply chain security, starting with the statement “The issue of supply chain security has become one major area of concern in recent years”.

In these days of the global financial crisis and economic crisis in most countries, the subject continues to receive more attention.

Very recently the European Chamber of Commerce has approached SCMAP and offered to provide a brief seminar on supply chain security, particularly the new ISO standard 28000.

At SCMAP’s last general membership meeting last June 25, sponsored by and held at Nestle Philippines, at its North Distribution Center in Meycauayan, a special topic was devoted to supply chain security, more particularly the subject of truck hijacking.

Also recently I received email on warehouse security management from a company called SS7 Security Services Corp. This particular email, rather than directly offering its security services, contains tips on security aspects of warehouse management, under the sub-headings of Receiving, Storage and Shipping. These sub-headings are divided into steps, and for each step, there is a short list of potential problems and a short list of solutions.

I reproduce below nearly 100% (thanks to SS7 Security Services Corp.), the potential problems under Receiving, except for some minor changes I have made. To list all sub-headings, with all the solutions, would make this column too long. I guess this could serve as a test of our knowledge of solutions, or as a handy checklist of problems.

Receiving

Step 1 – Inbound trucker calls for an appointment for the delivery and gives info about the cargo

Potential problems

• Truckers’ personnel may give gifts to receivers to get delivery priority. This can lead to worse corruption. Truckers personnel may not give the right info about the cargo.

Step 2 – Receiver gets the Advance Shipping Notice (ASN) and compares it with the info given by the trucker.

Potential Problem

• There are indications of alterations of the ASN (illegible numbers, items scratched out, things written in)

Step 3 – Trucker arrives and is assigned to a specific receiving bay

Potential Problem

• If a trucker is always assigned to the same receiving bay, collusion between trucker’s personnel and receiver can result.

Step 4 – Seal is inspected

Potential problems

• The seal no. does not match the one on the bill of lading or ASN.
• Trucker’s personnel removes the seal and brings it to your office
• There is only one seal
• There is no seal at all

Step 5 – Load is inspected and refused or accepted

Potential problem

• There is damage to the shrink wrap around pallets

Step 6 – Merchandise is unloaded

Potential problem

• Goods are left on the truck, but a receipt for the full load is signed

Step 7 – Unloaded merchandise is counted and is given final inspection

Potential problems

• Products on a pallet have been stolen
• Small amounts are missing from boxes
• Unloaded merchandise is left on a staging area
• The unloaded truck is still at the receiving door

Step 8 – Damage to the unloaded merchandise is recorded

Potential problems

• Undamaged merchandise is recorded as damaged

Step 9 – Merchandise is put away into its proper place in the warehouse.

Potential problem

• Merchandise goes missing somewhere between the staging area and the storage area

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

July 17, 2009

SCMAP Perspective #220

Perspective  (#220)

Published in Port Calls, July 6, 2009

2009 CONFERENCE

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

SCMAP,s annual conference and exhibit is on at the EDSA Shangri-La on Sept. 17 – 18. Below is an overview.

2009 SCM Conference Overview

The Supply Chain Management Association of the Philippines (SCMAP), a professional organization of companies committed to improving the quality of their supply chain processes and professionalizing their supply chain practitioners, has been organizing annual conferences on distribution and supply chain management for nearly twenty years now. This is in support of its mission of leading the evolving supply chain management profession by developing and advancing supply chain knowledge and research in the Philippines.

The Annual Conference allows some 250 practitioners to come together in a single location for two days to learn, network and share experiences in different areas of supply chain management.

This year’s conference promises to be the biggest, and SCMAP has chosen the theme “Re-calibrating SCM : Opportunities in Unprecedented Times”. The theme follows the SCOR model (Plan-Source-Make-Deliver-Return-Enable) which provides a logical flow of the program and ensures complete treatment of relevant topics, with a background never before seen — the global financial and local economic crises.

The concept is to revisit how supply chain evolved over time and how during these unprecedented times, there is an urgent need to re-calibrate the supply chain management processes and translate the current challenges into opportunities.

The conference flow starts with the state of supply chain management – both from the local, and global perspective, both from the government and private sectors. The proceedings then move on to the different elements of supply chain under the SCOR model — Plan, Source, Make, Deliver, Return, Enable

Different speakers shall talk about how to tap opportunities in each of the elements, how to positively translate challenges in the unprecedented times into recession-proof opportunities. The speakers have been asked to share their own practical experiences about how their respective supply chains have been reconfigured to align with the requirements of the times.

Conference participants can also look forward to a two-day exhibit that will highlight tools and services offered by our business partners

Around 250 participants are expected, representing various sectors, industry groups, manufacturers, distributors, service providers, logistics equipment and software vendors, the academe. SCMAP members and non-member companies will be able to hear from foreign and local Supply Chain experts as they share their expertise in their chosen subject, and network with business partners and counterparts.

Come and join the conference as participants, or as sponsors / exhibitors of your products and services !

2009 SCM Conference Sponsors

SCMAP continues to invite conference sponsors and souvenir program advertisers for its 2009 conference. The conference flyer will soon be released. Logos of sponsors other than regular sponsors will be included.

The following have been added.

• A new category of sponsor has been added – Special Principal Sponsor, with a bigger booth (2.5m x 4m = 10 sqm), and location in the main hallway.
• All sponsors except Regular Sponsors will have an added benefit of showing of their corporate 30-sec AVP 8 times during break or plenary session.

The categories are:

• Special Principal Sponsor                            Donation              P105,000
• Principal Sponsor                                            Donation              P   90,000
• Regular Sponsor                                               Donation              P   45,000
• Cocktails Sponsor                                            Donation              P 220,000
• Luncheon Sponsor (2 slots available)     Donation              P 220,000
• Break Sponsor (3 slots available)             Donation              P 110,000
• Advertiser                                                          Fee     P2,250 to P9,000, vat incl.

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

July 3, 2009

SCMAP Perspective #219

Perspective  (#219)

Published in Port Calls, June 22, 2009

OMNIBUS MERCHANT SHIPPING ACT

Fax 551-3207
Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

The Maritime Industry Authority is circulating a draft of the Omnibus Merchant Shipping Act (OMSA) for comments.

The shipping industry is a special industry. The OMSA makes this very clear in its Declaration of Principles and Policy under Sec. 2 of Part 1 of Chapter 1.

“SEC. 2. Declaration of Principles and Policy.- The State shall endeavor to make the Philippines a leading and major maritime country. To this end -

(a) the State hereby declares the maritime industry to be a key industry that the State shall develop in pursuing its goal to establish a national economy that provides a more

equitable distribution of opportunities, income and wealth for its citizens;. . . . . “

Note that the maritime industry is cited in connection with the State’s lofty goal and the kind of economy it seeks to establish.

The OMSA aims to set up a National Maritime Authority under the Office of the President. Therefore sea transport will be directly under the President, while land transport and air transport will continue to fall under DOTC.

The overall function of transportation will therefore be divided, reporting to the National Maritime Authority (sea) and DOTC (land, air). Transportation infrastructure is also divided between NMA, DOTC and DPWH.

As a result transportation, instead of being coordinated, will be fragmentized. What will happen to RORO? Logistics and supply chains will be more difficult to harmonize.

By the way, the NMA will be headed by a Director General, with the rank of Undersecretary. Of course DOTC is headed by a Secretary. Does this mean anything?

Further on the reorganization and reporting relationships, it is not clear what will happen to the MARINA and the PPA, esp. their regulatory powers. Currently they report to DOTC. Yet the National Maritime Authority will exercise regulatory functions with respect to maritime and port services and facilities, under Sec 3 Powers and Functions item (i). At the same time, Chapter 3 Sec. 16 covers rationalization of maritime agencies but is not definitive.

We found something we totally agree with. This concerns the delineation of ports regulation and ports development functions (Chapter 2 Sec. 20). This is not only absolutely correct. We have advocated for this policy reform for more than 15 years and, therefore, we are pleased that finally this fundamental flaw in our port policy will be addressed.

OMSA is also curiously silent on the issue of cabotage. There are benefits to be derived from the lifting of cabotage, namely promoting effective competition during peak times, with resultant lowering of sea transport cost and improvement in service quality. Yet these must be weighed against the disadvantages, such as over-tonnaging during lean times, which could be detrimental to some local operators.

Returning to the issue of whether or not the transportation function should be split up, this leads to the companion question ‘Is the maritime industry really special?’ Doesn’t the country’s archipelagic geography make it special, and sea transport deserving of direct attention of the President?

The opposing argument is that transportation as a whole requires an overall harmonizing view. Splitting it up by mode will reduce it to disjointed steps. Perhaps a more compelling argument would be to say that sea transport and land transport and air transport are sub-functions of the overall function of transportation. Transportation is just part of the country’s logistics and supply chain processes. Government units should not be organized on “islands” of functions, such as finance, trade and industry, labor, transportation, or health. Government units should be based on processes !?

At this point, we can even venture to say or speculate that a Dept. of Logistics might be better, being process oriented rather than function based?

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

June 19, 2009

SCMAP Perspective #218

Perspective  (#218)

Published in Port Calls, June 8, 2009

SUPPLY CHAIN METRICS

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

We have tackled the subject of supply chain definitions and metrics in earlier issues.  Today we add work on this topic by APQC. We will copy from their write-up

Sometime in 2007, the APQC (formerly known as the American Productivity & Quality Center) sponsored a summit where over 20 supply chain practitioners, consultants and academics got together to develop definitions of supply chain metrics. Their results are contained in a piece of work called a Framework for Process Improvement. The framework is divided into (1) Operating Processes and (2) Management and Support Processes

Under Operating Processes there are 5 categories, (1.0) to (5.0) The supply chain operating process is mainly included under (4.0) Deliver Products and Services. In turn (4.0) Deliver Products and Services is divided into 5 process groups (4.1) to (4.5). Each of these process groups has its own KPIs. Each process group is further subdivided into 3, 4, or 5 processes.

Although we wish to copy here the entire definitions and KPIs down to subdivisions of process groups, that would not be possible, as it would be too long. So, here we reproduce from their write-up down to KPIs of process groups.

(4.1) Plan for and acquire necessary resources (Supply Chain Planning)

This category includes all processes that are involved in planning, including managing the demand for products and services, creating a materials plan, and scheduling production to meet actual demand. Sales and operations planning activities are included in this process group. Key sales and operations planning activities result in the development of the sales and production plan. The processes in this group may be performed regularly (i.e. at the beginning of each period).

Typical KPIs

• Cash-to-cash cycle time
• COGS as % of revenue
• Finished goods inventory turns
• Forecast accuracy one planning period prior to production
• Production schedule attainment for a planning period

(4.2) Procure materials and services

This group of processes used to procure materials and services includes the business activities of procurement planning, purchasing, sourcing, and inventory management. This process can be further broken down into sourcing strategies, selecting suppliers and developing contracts, ordering materials and services, and appraising and developing suppliers.

Procurement includes both direct and general items, for example production parts and products (OEM), repair parts, maintenance, repair and operating (MRO) supplies, and services (administrative and technical). Procurement may also include subcontracted labor resources. Commodity management also falls under the procurement umbrella.

Typical KPIs

• Average supplier lead time in days
• % of purchases via electronic marketplace
• % of purchases via maverick buying
• Total cost of procurement cycle per $1,000 purchases

(4.3) Produce / Manufacture / Deliver product

The process group “produce / manufacture / deliver product” comprises three main high level processes: scheduling production, producing the product and delivering it to the appropriate site, and scheduling and performing maintenance on the capital equipment used during production. Manufacturing is the physical production of finished goods.

Typical KPIs

• Actual production as % of max capable production rate
• Annual WIP inventory turns
• Finished product, first pass quality yield
• Manufacturing cycle time in hours
• Defective parts per million
• Scrap and rework cost as % of sales
• Standard customer lead time (order entry to shipment) in days

(4.4) Deliver product service to customer

This category includes all of the processes that are included in servicing products produced elsewhere in the supply chain. These processes include confirming the specific service requirements, identifying and scheduling resources to meet the service delivery requirements, providing the specific service to the customer, and ensuring that the quality standards are met and the quality of the service is acceptable to the customer.

Typical KPIs

• Annual products accepted for return as % of revenue
• % of units returned from both end customers and retailers/distributors
• % of part numbers on back order
• Obsolescence rate of spare parts and products in inventory
• Ave. cycle time between receipt of mailed returned product to shipping of replacement

(4.5) Manage logistics and warehousing

Logistics is the process that plans, implements, and controls the forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements. This includes defining a logistics strategy, inbound transportation, warehousing, outbound transportation, and managing reverse logistics.

Typical KPIs

• % of sales orders delivered on time
• % of sales orders shipped complete and on time
• Perfect order performance
• Total logistics cost as % of sales

For more details, visit www.apqc.org/pcf/sc.

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

June 5, 2009

SCMAP Perspepective #217

Perspective  (#217)

Published in Port Calls, May 25, 2009

GLOBAL SUPPLY CHAIN FACTS

Fax 551-3207
Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Today we borrow some interesting info about the global supply chain from CSCMP. This was among mailings I received as a CSCMP member last December 2008. I have selected certain information from their publication “Fast Facts on the Global Supply Chain”.

Most of the info are on the US. As we go through the list, we wonder when we will have such kind of statistics in the Philippines.

US Logistics is a Huge Industry.

• US logistics cost in 2007                $1.4 Trillion

Equivalent to 10.1% of GDP

Larger than the GDP of every country except 10 countries

• US truck transport expenditure     $635 Billion

Larger than the GDP of every country except 16 countries

• Transportation related workforce  11.3 million people

8.6% of the total US labor force

An Efficient Industry in US and Europe

• US logistics as % of GDP               1980 = 17.9%

2007 = 10.1%

• China logistics cost as % of GDP 2007 = 22.3%
• India logistics cost as % of GDP  2007 = 17%
• Europe logistics cost as %             2007 = 7.15%
• Europe is “significantly lower due to a combination of less geography and long established transportation infrastructure, including rail, rivers, and highways”.

US Logistics Infrastructure (2005 or latest)

• Highways                                          3.99 million miles
• Rail (Class 1)                                    95,800 miles
• Navigable channels                      26,000 miles
• Pipelines                                           161,000 miles
• Interstate motor carriers          674,000
• Pipeline operators                        2,166
• Marine vessel companies          767
• Air carriers (major)                     17
• Railroads (Class 1)                        7
• Containerized shipments through US ports       >$1.5 billion per day

Grew 94% from 1995 to 2005

• China share of US import container shipments            43%
• US inbound containers share of Los Angeles/Long Beach    36%

World Trade

• World merchandise exports           1963 = $157 Billion

2005 = $10.19 Trillion

• World exports shares                      European Union      = $4.0 Trillion (39%)

US                                 = $904 Billion (8.7%)

China                           = $762 Billion (7.3%)

Japan                           = $595 Billion (5.7%)

• US trade with China                          1981 = $5.7 Billion

2005 = $343 Billion

Supply Chain Impact on Company Valuation

• Companies with well-run supply chains outperform other companies
• Average return of companies        Supply Chain Top 25          = 17.89%

Dow Jones Industrial          = 6.4%

Standard & Poor’s 500        = 3.53%

• Companies employing sophisticated supply chain methods enjoy 12 times greater profit than companies with unsophisticated methods

2009 SCM Conference

SCMAP continues to invite conference sponsors and souvenir program advertisers for its 2009 conference, to be held on Sept. 17 – 18, 2009 at the EDSA Shangri-La Hotel. Conference theme is “Re-Calibrating Supply Chain Management: Opportunities in Unprecedented Times”

The categories are:

• Special Principal Sponsor                         Donation              P105,000
• Principal Sponsor                                        Donation              P   90,000
• Regular Sponsor                                         Donation              P   45,000
• Cocktails Sponsor                                       Donation              P 220,000
• Luncheon Sponsor (2 slots available)     Donation              P 220,000
• Break Sponsor (3 slots available)             Donation              P 110,000
• Advertiser                                                      Fee     P2,250 to P9,000, vat incl.

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

May 22,, 2009

SCMAP Perspective #216

Perspective  (#216)

Published in Port Calls, May 11, 2009

WHAT’S NEW?

Fax 551-3207

Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Aboitiz Remains

The Aboitizes remain in the shipping business as the purchase of Aboitiz Transport System Corp. by KGLI-NM Holdings was aborted, as reported in Port Calls and Business World last week.

Last year KGLI-NM announced its intention to buy $30 million worth of shares of ATS. That announcement last year came like a bolt out of the blue, that the Aboitizes would get out of the business they had been known for for many decades.

The deadline of April 30 lapsed and KGLI was not able to complete the purchase. The termination of the deal was said to be due to “constraints in the debt market”. As a result KGLI-NM forfeited its P100 million option money.

Last Friday, Aboitiz Transport System reported a first quarter net income of P132 million, in sharp contrast to the P36 million loss in the first quarter last year.

Further to the termination of the sale last week, Aboitiz CFO Stephen Paradies was quoted by Port Calls “If an offer comes for the business, we can’t just outright say no. We consider the price whether fair but at this point we’re not for sale”.

The announcement of the first quarter profit came after the termination of the purchase. I suspect that KGLI-NM did not know about the financial result.

In a sense the Aboitizes are back. Everybody thought they were already out.

Deja Vu

The PPA granted ICTSI and ATI an increase in arrastre fees of 15%, to be implemented in two tranches, the first 8% on May 9, 2009, and the remaining 7% on Jan. 1, 2010.

There were a number of oppositors at the hearing, including SCMAP. Oppositors were given an opportunity to submit their formal position papers. SCMAP did. Somehow we did not receive any response to our position paper. Instead we just saw a news item in Port Calls on the granting of 15% to ICTSI and ATI.

This is the way it has always been at the PPA. There is no feedback as to the arguments we raised. We have been here before… countless times.

Hijacks

It appears that the incidence of hijacks is on the rise. Yet incidents are seldom reported in the media. New IDS Logistics GM Leo Jabeguero was greeted in his new job by two hijacks.

Nestle’s Dennis Llovido said they are gearing up to do battle with hijackers now and next year, Dennis predicts a steep rise in hijacks next year, an election year. His prediction is based on Nestle’s experience, as follows: 2006 (election year) = 11, 2007 = 3, 2008 = 6, 2009 to date = 0. Nestle is working on a new system in cooperation with the police and Globe.

2009 SCM Conference

SCMAP continues to invite conference sponsors and souvenir program advertisers for its 2009 conference, to be held on Sept. 17 – 18, 2009 at the EDSA Shangri-La Hotel. Conference theme is “Re-Calibrating Supply Chain Management: Opportunities in Unprecedented Times”

• Principal Sponsor                                        Donation              P 90,000
• Regular Sponsor                                         Donation              P 45,000
• Cocktails Sponsor                                       Donation              P 220,000
• Luncheon Sponsor (2 slots available)     Donation              P 220,000
• Break Sponsor (3 slots available)             Donation              P 110,000
• Advertiser                                                      Fee     P2,250 to P9,000, vat incl.

An added benefit for principal sponsors is the showing of their corporate 30-sec AVP 8 times during break or plenary session.

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

May 8,, 2009

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