Magazines Archives - 2011 Mar

Logistics & SCM
Story 4 - Focus

Forward-looking retailers across the region are beginning to invest in and adopt the latest technologies to enhance the delivery of goods and service.

Singapore retailers leverage technology in logistics and SCM despite costs

Singapore has all the elements of a bustling logistics and supply-chain management (SCM) hub in the region. Cited by Senior Minister of Trade & Industry S Iswaran as having “excellent connectivity, sound infrastructure and a pro-business environment”, the city-state has emerged as a regional leader in last year’s World Bank Logistics Performance Index, ahead of Asian behemoths such as Japan and China.

Increasingly, Singapore has evolved into a “headquarter central” for 17 of the world’s top 25 third-party logistics companies (3PLs), which support world-class brands from different industries, ranging from manufacturing to high-technology, retailing and pharmaceutical.

As such, a number of retail brands continue to leverage Singapore’s hub capabilities to launch their brands in the region. Global FMCG (fast-moving consumer goods) group Unilever, which has set up its regional hub headquarters in Singapore, is one such company well-served by the SCM and logistics environment here.

“On any given day, two billion people use Unilever products to look good, feel good and get more out of life,” states Greg Sullivan, vice-president of Supply Chain at Unilever for South-east Asia and Australasia.

With a portfolio that comprises food, beauty, health and household products, it is no mean feat ensuring that its customers’ needs are met. Making sure that Unilever’s logistics and SCM operations are in optimal condition is key to the company’s success, the logistics specialist continues.

“Ensuring the availability of our products requires expert and dynamic management of our supply network including suppliers, manufacturing units, warehouses and customers. Creating value for consumers with products of the right quality and cost [requires] SCM, manufacturing and logistics to be core competencies at Unilever,” Sullivan reveals.

He notes that while economic growth in the region is boosting discretionary income among consumers, who are increasingly looking to spend on valueadded products, competition across all 31 March 2011 Retail Asia sectors continues to heighten. “The combination of these factors causes huge volatility in demand, requiring a very responsive supply chain,” Sullivan adds.

Mark Goh, a professor at the National University of Singapore’s (NUS) The Logistics Institute (TLI) – Asia Pacific, which is a collaboration between the Georgia Institute of Technology and NUS dedicated to Asia’s logistics education and research, points out the complexities of the retail industry. “You also have to understand that for retailing, it’s not as straight-forward as a buy-sell scenario. Increasingly, it’s becoming more complex because there are simply too many products out there in the marketplace,” Goh explains, citing the sector’s dynamics as the reason behind this.

Industry players in Malaysia’s supply chain adopt green purchasing for sustainability

The supply chain started a long time ago, as required under ISO (International Organisation of Standardisation) 9000 — a family of standards that is all about quality management systems, says Augustine Koh, secretary-general of Green Purchasing Network Malaysia (GPNM), an NGO which promotes green purchasing to encourage buyers, suppliers and manufacturers to adopt sustainable consumption and production methodologies.

The certification, needed for the supply chain to be deemed properly managed, is designed to help organisations meet the needs of customers and other stakeholders. Manufacturers have to ensure that supply sources are reliable because of environmental concerns.

“Environmental issues have come to the forefront since the 1970s,” notes Koh. “Responsible manufacturers now seek ISO 14000 and ISO 14001 documentation and control.” This certification addresses various aspects of environmental management including labelling, performance evaluation, life-cycle analysis, communication and auditing.

The need for this certification was further strengthened by the European Union (EU) guidelines under the Waste Electrical and Electronic Equipment (WEEE) Directive, which became European law in early 2003, setting collection recycling and recovery targets for all types of electrical goods.

The directive also imposes the responsibility for the disposal of electrical and electronic equipment waste on the manufacturers of such equipment. These companies should establish an infrastructure for collecting waste in such a way that “users of electrical and electronic equipment from private households should have the possibility of returning WEEE at least free of charge”.

Furthermore, the companies are compelled to use the collected waste in an ecologically friendly manner, either by pollution-free disposal or by reuse of the collected waste.

According to Koh, the WEEE regulations indicate that if a company wants to supply to the EU, it has to meet those requirements. That is the beginning of the green supply chain.

The rules indicate that no toxic chemicals should be in the products. “It used to be from cradle to grave in the supply chain, but now it’s cradle to cradle, in that you should recycle and give back to the environment. In a green supply chain, you have to be more competitive to meet supply and demand,” she observes.

A green supply chain in the making in the Philippines

t is quite easy for people and companies to say that they are seriously adopting a more environmentally friendly lifestyle, which is de rigueur in these days of heightened awareness of climate change and its adverse effects. Far too few, however, are able to put their money where their mouths are or live up to their lofty promises.

There are various reasons for this but the most prevalent is the fact that going green necessarily entails more imagination, increased effort and, yes, more upfront investments.

There are those in the Philippines, however, who do see the value in becoming more conscious of their impact on the environment and their responsibility to shrink their own sizeable carbon footprint.

The Philippine unit of American doughnut chain Krispy Kreme, for example, is making its mark on the global Krispy Kreme network by leading in green innovations.

According to Krispy Kreme marketing manager Mark Gamboa, Krispy Kreme has significantly increased the use of eco-friendly doughtnutbox carriers in its stores instead of plastic bags. A bigger campaign is in the works, he reveals, to promote the use of eco-bags, which can be recycled.

Gamboa adds that many of the new and upcoming stores are inspired by green architecture. Older stores will soon sport more environmentally friendly architecture features as part of the local Krispy Kreme unit’s campaign to lead the way in green inno- vations that ultimately lead to lower operating costs in terms of lower electricity and climate-control costs.

“We are using a heat exchanger that uses less electricity to heat water. We also use LED in our signages. The use of glass panels also allows natural light to penetrate the stores, thus conserving energy. We use fly-killers too which are food-grade and contain an organic substance that is ozone-friendly, and harmless to the environment and humans. Moving forward, we will start using waterless urinals in the restrooms,” Gamboa elaborates.

Restaurant chain Max’s has tapped the services of a leading Philippine design and architectural company to create a more green design for its 119 stores nationwide.

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