SCMAP Perspective #241

Published in Port Calls, May 10, 2010

LOGISTICS GLOBAL COMPARISON

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By Ed Sanchez
SCMAP Executive Director

World Bank Logistics Performance

Supply Chain Asia magazine publishes Supply Chain Indicators as a regular feature. In the latest issue (March / April 2010), the magazine featured the World Bank Logistics Performance Index and Indicators 2010.

The report rates countries according to their overall logistics performance index (LPI), which is a number ranging from 0 (lowest) to 5 (best). Apart from the overall LPI, countries are also rated on six components of logistics performance. These are

1. Customs
2. Infrastructure
3. International shipments
4. Logistics competence
5. Tracking and tracing
6. Timeliness

One hundred countries are rated, with Germany landing at the top (4.11) and Nigeria at #100 (2.59). The top 20 countries are listed below. The Philippines is not among them.

Germany Singapore Sweden Netherlands Luxembourg Switzerland Japan UK Belgium Norway Ireland Finland HK, China Canada US Denmark France Australia Austria Taiwan

4.11 4.09 4.08 4.07 3.98 3.97 3.97 3.95 3.94 3.93 3.89 3.89 3.88 3.87 3.86 3.85 3.84 3.84 3.76 3.71

Out of the top twenty, 13 are from Europe and only 4 are from Asia, the rest being Canada, US and Australia. None are from Latin America and Africa. The bunching of European countries at the top is not unexpected, as they are basically one compact land mass, and they use similar systems. No doubt the formation of EU has contributed to this. Our new logistics management mentor, Japan, is #7 (3.97).

Other East Asian countries are:

23. Korea, Rep. 27. China 29. Malaysia 35. Thailand 44. Philippines 47. India 53. Vietnam 75. Indonesia 79. Bangladesh

3.64 3.49 3.44 3.29 3.14 3.12 2.96 2.76 2.74

Curiously, Latin American countries are rated low, the best performers being

41. Brazil4 8. Argentina 49. Chile 50. Mexico 51. Panama

3.20 3.10 3.09 3.05 3.02

Costa Rica, Dominican Republic, Peru, Honduras, Ecuador, Colombia, Venezuela, El Salvador are even much worse. This is despite Latin America basically being one connected land mass, although not as compact as Europe, and also having basically one language, Spanish-Portuguese. Likewise, African countries are rated low

Of the six components of the Logistics Performance Index, the Best (Top 20) countries rated highest in Timeliness

Timeliness Tracking and tracing Infrastructure Logistics Competence Customs International Shipment Overall LPI (Top 20)

4.279 4.068 4.027 3.936 3.764 3.551 3.924

The overall rank of the Philippines indicates that we are not hopeless on a global comparison; however we are only #9 out of 13 in our part of the world.

Comparing RP with the Best (Top 20), overall we are 0.78 point behind. The worst components are no surprise, Infrastructure (1.46 behind), followed by Customs (1.09 behind). We are close to being at par in International shipments (only 0.15 behind).

ComponentCustomsInfrastructure International shipments Logistics competence Tracking & tracing Timeliness Overall LPI

Top 203.764.03 3.55 3.94 4.07 4.28 3.92

Phils.2.672.57 3.40 2.95 3.29 3.83 3.14

Gap1.091.46 0.15 0.99 0.78 0.45 0.78

Our Asian neighbors (excluding Middle East) fall into 3 groups

• Top 4, those in the Top 20 – Singapore, Japan, Hongkong, Taiwan
• Second group, not in the Top 20, but rated higher than RP – Korea, China, Malaysia, Thailand
• Third group, rated lower than RP – India, Vietnam, Indonesia, Bangladesh

Comparison with the Top 4 is like comparing with the Best above. With the Third group (not shown), RP proves to be superior in all components except Infrastructure, (RP 2.57) vs. Third group 2.62. Our Infrastructure belongs to the bottom.

Below is a comparison with the Second group. Our poor infrastructure shows, as well as Customs, whereas International shipments comes as a mild surprise.

ComponentCustomsInfrastructure International shipments Logistics competence Tracking & tracing Timeliness Overall LPI

2nd Grp3.163.46 3.39 3.41 3.53 3.87 3.46

Phils.2.672.57 3.40 2.95 3.29 3.83 3.14

Gap0.480.88 (0.01) 0.46 0.24 0.04 0.32

Amb. Cesar Bautista and the rest of the NCC have a clear target. We need to improve on the low rated components – Infrastructure and Customs. Basically these are areas where the government must take the lead. A third area needing improvement is Logistics competence. Here the private sector, including SCMAP, can take the lead. Tracking & tracing and Timeliness are also areas for the private sector.

Upcoming Activities

• Logistics Immersion Course – an enhanced version of the erstwhile Shipping Immersion Course; includes topics in basic shipping and beyond, such as a snapshot of the Japan logistics system, infrastructure developments, Philippine economic performance and forecasts for 2010, May 13 – 15.
• Warehousing Seminar I – a 2-day seminar on basics plus advanced topics (wms, lean warehousing), with warehouse visit, June 17 – 18
• Sustainable Manufacturing Forum – a Marcus Evans organized event endorsed by SCMAP, June 28 – 29
• 2010 Supply Chain Conference – SCMAP’s biggest event of the year. A 2-day conference and exhibit, with this year’s theme of “Supply Chain: Key to Driving and Sustaining Operational Excellence, Business Growth and Profitability”, Sept. 23 – 24. Sponsorship and advertisement packages are still available.

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, 2010

SCMAP Perspective #240

Published in Port Calls, April 26, 2010

CHAOS

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Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

North Harbor Chaos

The drama continues at the North Harbor. For its part, SCMAP has taken the following positions

• Objection to the 5% concession fee on ancillary services (letter to PPA Board, March 31, 2010)
• Grave concern over the slow service at the North Harbor starting with the takeover on April 12 (letter to PPA Board, April 19, 2010).

Delays are being experienced in both outbound and inbound shipments, as a consequence of the inadequate and dilapidated equipment of MNHPI, and new systems and procedures not properly cascaded.

Delays will increase shipping cost and affect the distribution and availability of products in the Visayas and Mindanao. Out of stock situations will lead to lost sales, and are bad for the economy as a whole. SCMAP joined PLSA, PSB, cargo handlers and port labor in a press conference last Friday.

Logistics Immersion Course

SCMAP reels off with its first Logistics Immersion Course. The enhanced seminar covers an expanded range of topics beyond just shipping. Topics are:

• Recent MARINA Initiatives, Arhleen Romero, MARINA
• Recent PPA Initiatives to Enhance Port Operations & Services, Hector Miole, PPA

• Role of Shipping in Philippine Logistics & Its Impact on Transport Cost, Cora Curay, SCMAP Vice President & President XVC Logistics
• A Snapshot of Japan Logistics System, Dennis Llovido, SCMAP President & AVP-Transport Head, Nestle Phils.
• New Developments in RO-RO, Jet Acena, Deputy Team Leader, RO-RO, REID Foundation
• Infrastructure Development in the Philippines, Raffy Hernandez, Deputy Team Leader, PPP, REID Foundation
• Philippine Economic Performance and Forecasts for 2010, Ronilo Balbieran, Economist – UA&P, Deputy Team Leader, REID Foundation

The itinerary and schedule are: Manila – Cebu – Manila, May 13 – 15, 2010

Manila – Cebu is via Superferry 1 and Cebu – Manila is by PAL

Fees are SCMAP – P12,999, Non-SCMAP – P16,249.

2010 Logistics Conference

SCMAP is inviting supply chain service providers, suppliers of logistics products, equipment, software and other technologies, and other companies to display their products and services at the 2-day annual supply chain conference with the following theme and schedule.

• “Supply Chain: Key to Driving and Sustaining Operational Excellence, Business Growth and Profitability”
• September 23-24, 2010
• EDSA Shangri-la, Mandaluyong City

Sponsorship and advertisement packages include

• Special Principal Sponsor (P105,000)
• Principal Sponsorship (P90,000)
• Regular Sponsorship (P45,000)
• Cocktails Sponsorship (P220,000)
• Luncheon Sponsorship (P220,000)
• Break Sponsorship (P110,000)
• Advertisement: P9,000, P4,500 & P2,250

Global Logistics Performance

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

April 23, 2010

SCMAP Perspective #239

Published in Port Calls, April 12, 2010

2010 Conference

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Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

SCMAP Conference

SCMAP President Dennis Llovido recently announced the theme for its annual conference and exhibit for 2010: “Supply Chain: Key to Driving and Sustaining Operational Excellence,Business Growth and Profitability”

As in past years, the venue will be the Isla and Palawan Ballrooms of EDSA Shangri-La Hotel in Mandaluyong City. The schedule is September 23 – 24, 2010.

Around 250 participants from various sectors – manufacturers, distributors, service providers, logistics equipment suppliers, software vendors, and the academe, are expected to attend this year’s conference. Leading supply chain experts in the Philippines and abroad are scheduled to share their supply chain expertise on driving and sustaining operational excellence, leading to business growth and profitability.

SCMAP is inviting companies to partner with SCMAP in this undertaking by way of sponsorship or advertisement. This conference can offer companies an excellent opportunity to network with the industry decision-makers and movers, while promoting their products and services.

Reservations will be accepted on a first come first serve basis, by submission of the signed contract form to the SCMAP Secretariat.  Deadlines are:

Confirmation of reservation	Aug 9 (Monday).
Payment of sponsorship contribution or advertisement fee	Aug. 27 (Friday).
Assignment of booths will be based on date of payment.

Sponsorship contributions and benefits are maintained from last year

A. Special Principal Sponsor

Donation

PhP 105,000

• One 10 sq. m. (2.5m x 4m) exhibit booth for products/services.
• Two (2) participants can attend the conference free-of-charge.
• Corporate AVP (30 sec) shown 8 times during break or plenary session
• Company logo in the newspaper advertisement
• Flyers and Brochures in the conference kits.
• One page advertisement in the souvenir program
• Unlimited hand-outs for distribution during the 2 day conference.
• Acknowledgement as Principal Sponsor in the posters, streamers, conference brochure and souvenir program

B. Principal Sponsor

Donation

PhP 90,000

• Same entitlements as Special Principal Sponsor, except for size of the booth, which is 9 sq. m. (3m x 3m), in Isla Ballroom

C. Regular Sponsor

Donation

PhP 45,000

• One 6 sq. m. (3m x 2m) exhibit booth for products/ services in Palawan Ballroom.
• One (1) participant can attend the conference free-of-charge.
• Company Name in the Newspaper Advertisements
• One page advertisement in the souvenir program.
• Unlimited hand-outs for distribution during the 2-day conference.
• Acknowledgement as Sponsor in the posters and streamer, conference brochures and flyers.

D. Cocktails Sponsor

Donation

PhP 220,000

• Entitlements same as Principal Sponsor, plus
• Option to conduct a 45-minute product/service presentation during cocktails.
• Option to display materials indicating cocktails sponsorship during cocktails.

E. Luncheon Sponsor (2 slots available)

Donation

PhP 220,000

• Entitlements same as Principal Sponsor, plus
• Option to conduct a 45-minute product/service presentation during sponsored lunch break.
• Option to display materials indicating luncheon sponsorship during sponsored lunch break.

F. Break Sponsor (3 slots available)

Donation

PhP 110,000

• Entitlements same as Principal Sponsor, plus
• Option to conduct a product/service presentation during the sponsored morning or afternoon break.
• Option to display materials indicating break sponsorship during the sponsored morning or afternoon break.

F. Advertiser

Fee

P2,250 to P9,000 vat incl.

• Advertisement in the souvenir program, whole page P9,000 / half page P4,500 / one fourth page P2,250, all amounts VAT inclusive

SCMAP Training Activities

SCMAP-DLSU Certificate Program in SCM

Module 1 (Intro to SCM) of the SCMAP-DLSU Program in SCM is being offered now. The module will start on April 17 and run up to June 5. As with past offerings of Module 1, the facilitator will be Ike Castillo of Avon Cosmetics, an experienced practitioner and also a past SCMAP president. The fee is P12,000 for participants from SCMAP member companies and P15,000 for non-members..

Shipping Immersion Course

This year’s shipping immersion course will be right after the elections, on May 13 to 15. The activity will include port observation of both RORO and containerized cargo, and a seminar on board Superferry 1 as it sails to Cebu. The seminar will include speakers from MARINA, PPA, SCMAP and UA&P. After a stay in Cebu, the return trip will be by PAL. The invitation flyers will be released anytime.

Warehousing Seminar 1

This is a 2-day seminar scheduled for June 17 – 18. The seminar includes basic functions of warehousing, principles of materials handling and storage, lean warehousing, local practices, trends, with a warehouse visit and critique. Speakers include tested facilitators and experienced practitioners Malou Santos and Norman Adriano, plus a bar coding expert. Both Malou and Norman are past SCMAP presidents.

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

April 9, 2010

SCMAP Perspective #238

Published in Port Calls, March 29, 2010

KEY LOGISTICS DECISIONS 3 & 4

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By Ed Sanchez
SCMAP Executive Director

SCMAP Perspective #237

Published in Port Calls, March 15, 2010

KEY LOGISTICS DECISIONS 1 & 2

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Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Key Logistics Decisions

Sometime in the second half of 2007, I gave a talk, Logistics : An Overview, at an event jointly sponsored by the Japan Transport Cooperation Association and DOTC. I was asked to make it very basic, and so it was.

Today I would like to devote space to a portion of that talk, pertaining to key decisions that companies make which have a major effect on their logistics.

I mentioned four decisions in that talk. Today I will deal with the first two. Next issue I will deal with the other two.

Key Decision #1 – Global / regional factory vs. a factory in every country. Where shall I locate my factory?

If you are the logistics director of an MNC, you would be grappling with questions such as : Should I have a factory in every country in Asia / South East Asia, or should I consolidate my factory in one country? And where should it be?

This is sometimes referred to as the regional sourcing decision. Since the turn of the millennium, MNCs have been consolidating manufacturing in one or a few factories. For example, Colgate consolidated manufacturing outside of the Philippines. Nothing is produced anymore on J. P. Rizal, Makati.. Unilever has also closed down most of its factories, but chose to produce deodorant here. P&G chose to stay in the Philippines. Avon chose to stay here. Nestle has stayed and is even expanding its plants. Three years ago Uniden closed its cordless telephones factory here and chose China. I believe Toyota transmission is still being manufactured here? I believe Texas Instruments has decided to stay here.

So the trend has been to consolidate manufacturing in one or a few factories, with some decisions unfavorable to the Philippines, and others favorable.

.

Considerations in deciding which country are :

• Total cost to serve all countries, i.e., total manufacturing cost + logistics cost
• Service lead times
• Taxes, tariff, government regulations
• Political issues

Key Decision #2 – Customer focus. Which customers shall I directly deal with? Here the choices are (a) one national distributor (b) several regional distributors (c) many small accounts..

The trend here has been from many small accounts to a few distributors, in order to cover the market. As an example, Unilever up to the mid-1980s had 5,000 customers on credit, excluding retailers on cash basis. Imagine how complicated that was. Especially since computers then were of low capacity and slow. Since then Unilever has divided the country and appointed regional distributors. It awarded them to retiring salesmen. The scheme was not successful at first.

Considerations in deciding which set-up include:

• Capability of distributors
• Logistics capability t handle many accounts / big accounts
• Distance from smaller customers
• Complexity in systems, communication

In the next issue we will deal with the other two decisions.

Strategic Procurement Seminar

SCMAP is issuing a last call for this seminar. The seminar is a one-day seminar on Strategic Procurement, with the following schedule.

Date : Friday, March 19, 2010

Time : 8:00 to 5:00 pm

Venue : Astoria Plaza, Escriva Drive, Pasig City

Fees are P5,500 for SCMAP members andP6,875 for non-members. Both figures are VAT included.

The seminar also targets suppliers and logistics service providers, and will encourage them to

• Understand how customers categorize their company and services
• Improve value and competitive advantage to their customers

Target participants may come from the following functions

• Supply chain, Materials, Logistics, Procurement managers and staff
• Finance managers and other corporate executives
• Marketing and Sales professionals

Seminar topics include

• Supply chain and strategic competitiveness
• Clerical, commercial and strategic level of SCM operations
• Prioritizing your efforts
• Understanding your supply market
• Strategic framework for analysis :
• Generic strategies to reduce supply risks and improve value

Seminar speaker will be Augusto Arguelles, Prof. in Operations & SCM at the Ateneo Graduate School of Business, with over 30 years of consulting and managerial experience in several companies and an Advanced Certificate in SCM, UN Intl. Trade Center

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

March 10, 2010

SCMAP Perspective #236

Published in Port Calls, March 1, 2010

SCM TRAINING OPPORTUNITIES

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Email lizaalmonte@yahoo.com.ph

By Ed Sanchez
SCMAP Executive Director

Strategic Procurement Seminar

SCMAP is offering its second public seminar for the year. The seminar is a one-day seminar on Strategic Procurement, with the following schedule.

Date    : Friday, March 19, 2010

Time   : 8:00 to 5:00 pm

Venue : Astoria Plaza, Escriva Drive, Pasig City

Fees are P5,500 for SCMAP members andP6,875 for non-members. Both figures are VAT included.

The seminar targets companies procuring goods and logistics services, and will encourage these companies to

• Raise their level of procurement practice from clerical or commercial to strategic
• Analyze their “spend” to identify what needs most management attention
• Develop appropriate strategies to provide the company the assurance of reliable and value-for-money suppliers and service providers

The seminar also targets suppliers and logistics service providers, and will encourage them to

• Understand how customers categorize their company and services
• Improve value and competitive advantage to their customers

Target participants may come from the following functions

• Supply chain, Materials, Logistics, Procurement managers and staff
• Finance managers and other corporate executives
• Marketing and Sales professionals

Seminar topics include

• Supply chain and strategic competitiveness
• Clerical, commercial and strategic level of SCM operations
• Prioritizing your efforts
• Understanding your supply market
• Strategic framework for analysis :
• Generic strategies to reduce supply risks and improve value

Seminar speaker will be Augusto Arguelles, Prof. in Operations & SCM at the Ateneo Graduate School of Business, with over 30 years of consulting and managerial experience in several companies and an Advanced Certificate in SCM, UN Intl. Trade Center

Gus Arguelles is one of the original group of 10 that established DMAP (Distribution Management Association of the Phils., the predecessor of SCMAP) way back in August 1989.

As with other SCMAP seminars, this one is conducted for SCMAP by UniMaC Business Consultancy, Inc.

Other seminars coming up for SCMAP follow.

Quantitative Approaches to Logistics Planning

This is a 6-hour workshop intended to teach the basics of two tools that might be used to re-design a distribution network and improve a company’s demand forecasts.

Workshop topics

• Forecasting Techniques – Basics of forecasting, types of forecasts, forecasting approaches, ‘recommended techniques’, estimating probable forecast error, steps in preparing a forecast, importance in logistics planning
• Warehouse Site Selection Using Optimization – Issues involved, cost items considered, relevant constraints and other factors, modeling the problem, using Excel to solve the problem, interpretation of model results

Tentative Schedule is on Saturday, April 17, 2010. Fees P4,000 for members / P5,000 for non-members.

Target participants include

• Logistics staff, supply chain analysts
• Managers of logistics and other SCM functions
• Other supply chain and logistics staff, or staff in related and interface functions (finance, distribution planning, inventory management, transportation, etc.) who could be involved in a review of the company’s SC processes

Speaker / Workshop Leader will be Sam Cruz, Operations Research Expert / Consultant, and former OR Manager, San Miguel Corp.

The teaching method uses hands on computer examples in Excel.

2010 Shipping Immersion Course

This is a seminar on board a vessel, covering topics on shipping, ports, maritime issues and other logistics issues. Speakers will be experts from the government and the private sector, from the ranks of service providers, users and the academe.

Tentative schedule : May 14 to 17 (weekend after election). Destination is likely to be Boracay or Cebu. Finalization will depend on ship schedules.

In House Seminars

Meanwhile SCMAP offers in house seminars to companies that have 10 or more participants in a given seminar or workshop.

In house seminars may be on soft skills or technical skills

An in house seminar could be the preferred format if a company wants to cover certain topics more in depth, say warehousing issues. Another example might be the quantitative approaches to logistics planning mentioned above, if focused on the company’s distribution network. In this case the company would want to have the seminar exclusive to the company.

An in house seminar may be the only choice in the case of certain soft skills training, for example teambuilding.

Prof. Ninoy Rollan of the Ateneo de Manila Graduate School of BUsiness, professor in Leadership and Human Resources, handles SCMAP – UniMaC soft skills seminars. The argument for soft skills is that technical skills are not enough and need to be augmented with soft skills (leadership, priority setting, time management, team building, coaching, etc.)

SCMAP-DLSU Certificate Program in SCM

SCMAP-DLSU offering continues. All classes are on Saturdays at DLSU in RCBC Building in Makati.

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

February 27, 2010

SCMAP Perspective #235

Perspective  (#235)

Published in Port Calls, February 1, 2010

LOGISTICS STRATEGIES

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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

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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

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