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The Role of Trust in Supply Chains

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The Role of Trust in Supply Chains

October 2018
Authors:
Simon Popley, Senior Partner Leadership & Coaching, Logistics Executive Group

Does your leadership culture focus on trust as a key to successful supply chains?

Successful supply chain, freight and logistics activity have always been, and are increasingly so, dependent on a high degree of collaboration and trust. Trust is an important part of a high performing, cohesive businesses and the teams that drive them.  Trust is also pivotal across all areas of the supply chain with suppliers, customers, partners, leaders and teams at all levels of operations.

In today’s dynamic traditional and eCommerce, omnichannel, artificial intelligence, Industry 4.0, machine learning, 3D printing, robots, cobots, and the digital supply chain and the last mile conundrum, building cohesive teams to manage / lead change, enabling and reinforcing trust at all levels, from a technology and human perspective, is critical to success.

eCommerce is booming, blockchain continues to press as a significant supply chain and logistics enabler. Blockchain is a term widely used to represent an entire new suite of technologies. Whilst the upsides of blockchain technology are widely heralded, there is mistrust around the technology as it is yet to be fully understood by many across the supply chain landscape.

Retail eCommerce sales worldwide as predicted by eMarketer, will increase to $4.058 trillion in 2020. Having said that, eCommerce customers are becoming more aware of fraudulent practices and trust is crucial. The onus on rapidly increasingly numbers of eCommerce players is to build trust through transparency of processes, especially through their main customer interface, their website.

What is Trust and Its Role in Supply Chains?

Understanding the nature of trust is important. The problem with a word like ‘trust’ is that we all believe we understand it. ‘Trust’ in at least that sense, is taken for granted. That makes it all the more critical to ensure all parties involved in any given supply chain activity or process, are well aligned.

Key elements of trust are honesty, loyalty, fairness, openness and competence.

Many Supply Chain and Logistics organisations are well advanced in leadership development and executive coaching programs.  Leadership through enhanced engagement including building trust with customers, suppliers and internal team members, is increasingly a top priority for many.  Trust is a multifaceted complex phenomenon, which integrates psychological processes and group dynamics.

The adoption of leadership development and executive coaching as an effective business tool / process in the supply chain and logistics industry to improve business outcomes, is about 10 years behind other sectors (e.g. banking / finance / insurance / media) but the value proposition of this investment is increasingly being understood and leveraged.

Trust may present as a trait, a process or an emergent state and exist at individual, team, and leadership, organisational and inter-organisational levels. Trust evolves over time, developing, building, declining and resurfacing in relationships.

Without trust, supply chains would cease to function, it represents the unwritten view of a shared reality which allows organisations and the people that drive them, the confidence to collaborate and transact.

 

Building trust in an organisation:

Trust and respect form the foundation of quality business (and personal) relationships.

Common issues we regularly see in supply chain and logistics organisations, often in 3PL / CL and Freight Forwarding organisations,  that undermine trust are:

  • Conflicting agendas of internal management teams and between suppliers and customers.

Often there is a strong talent pool across leadership teams, but they are not all aligned to overall strategic plans, or the plans are not reinforced to the team creating competing priorities and divisions that are running their own agenda often varying off the agreed strategic (or operational path).

  • Poor people and mission management and leadership skills in key executive positions.

Often talent is sourced/promoted based on short term commercial performance only and the people skills and emotional intelligence (EQ) is lacking.  Without EQ trust can be compromised.

  • Competition between BUs / operating divisions.

Competition functions, departments and units.  The old sales v’s operations mentality. Finance v’s IT etc. Negatively focused internal competition is inherent in many organisations and needs to be called out and addressed.  The atmosphere is often tense with BUs / divisions not helping each other to achieve the organisation’s strategic and tactical objectives.

A key aim of most organisations is to grow and thrive, but to achieve this, internal and external partners must attain a high level of trust in each other.

More supply chain organisations are leveraging coaching expertise for team building initiatives, to ensure their organisation possesses a desire to improve team engagement and trust.  If trust within and between your teams is lacking or severely broken, addressing the underlying issues can be not only a valuable investment, but ultimately the difference between wider business success or failure.

 

 

Simon Popley is senior partner, leadership and coaching, and Carly Amado is a Senior Associate, talent and coaching of the Logistics Executive Group. The Logistics Executive Group is celebrating its 20th Anniversary of talent acquisition, development and deploying bespoke and coaching programs from their offices throughout Australia, Asia, India and Dubai. Contact Simon Popley at simonp@logisticsexecutive.com, or Carly Amado at carlya@logisticsexecutive.com.

Simon Popley
Senior Partner Leadership & Coaching, Logistics Executive Group

Simon is an executive coach and leadership development consultant with over 20 years of senior leadership and coaching experience in a wide range of industry sectors including health care, financial services, Government and consulting. Simon specialises is coaching leaders and executives who want to take their leadership to the next level of development. Simon has worked with a wide variety of clients in Government, private enterprise and the not for profit sector. Simon works and partners with both individual leaders and their teams.

Carly Amado
Senior Associate, Talent and Coaching, Logistics Executive Group

An experienced HR professional with over 15 years’ experience across the Logistics, Transport and 4PL industry in Australia & NZ, Carly has recently joined Leadership Executives as a Senior Associate in our Melbourne office. She works closely with our global team on numerous projects varying from search to consulting both locally and across the group.

NEWS

Influential CPOs to Share Purchasing Plans at Procurement Week Summit

Australia’s most influential CPOs from both the public and private sectors will reveal their proven procurement transformation strategies and set the scene for innovation at the Procurement Week Summit from December 4 to 7 in Sydney this year. This flagship summit builds on organiser Quest Events’ established lead over five years in the procurement summit space, bringing together 40+C-suite speakers playing a direct role in procurement reforms. Key sectors represented include the three tiers of government, energy, technology and telecommunications, building and construction, healthcare, higher education and manufacturing. The broader narrative focuses on leadership, business transformation, transparency and a deeper engagement with the providers of goods and services.

Read More

LogiSYM goes Digital – Registration Open for First-of-its-kind Global Forum

As digital transformation defines a new era in the global supply chain industry, LogiSYM Digital brings knowledge sharing on par with the times with its first-ever online mini-symposium that will allow thought leaders and critical thinkers across multiple countries to participate at the same time. Register now for the pioneering event, currently scheduled for 10.10.2018, for the opportunity to join open discussions and network with industry experts from discrete and process manufacturing industries, and be part of a global team to participate in an industry and world first.

Register Now

GO Joins Singapore’s NTP in Trade Digitalisation Efforts

Get GO Global (GO), a leading digital lead logistics provider in Asia, has announced that GO is coming on board the Singapore NTP, the national trade information management platform, to offer its GO FREIGHT on-demand freight forwarding services to Singaporean companies engaged in the B2B import or export of goods.The GO FREIGHT platform offers instant freight forwarding quotations, bookings, payments and tracking of B2B shipments. Available and accessible on any device, the GO FREIGHT platform cuts down historically slow and manual search, quote and booking processes that take days or weeks. GO FREIGHT will be available on GO’s website and is expected to be also available on the NTP at or around November 2018.

 

UPCOMING EVENTS

LogiSYM Digital
22 November 2018
Singapore, Dubai, Kuala Lumpur

Today, digital technologies are making way for a supply chain that goes well beyond what was originally thought to be possible with a traditional setup. The supply chain of today has the ability to perform very complex activities with superb precision and outstanding agility.LogiSYM Digital 2018 adopts this thinking as well and will run for the first time globally a mini-Symposium in various countries on 10.10.18 simultaneously.

http://logisym.org/digital2018

Procurement Week 2018
December 4 – 7 2018
Stamford Plaza Sydney Airport | Sydney | Australia

Procurement Week will unite the industry as a whole at the only one-stop-shop procurement event in the country. Australia’s definitive procurement industry event will feature international keynotes, new and cutting edge content streams, in depth learning sessions, a CPO Summit, interactive exhibition area and unparalleled networking. Procurement Week will be the must attend event for anyone working in procurement – from junior buyers, sourcing, category and contract managers right through to the CPO.

http://www.procurementweek.com.au/

SUPPLY CHAIN LOGISTICS DIGITAL TRANSFORMATION AND DISRUPTIVE INNOVATION FORUM
28 – 29 November 2018
Shangri-La Hotel Singapore

This conference brings together senior supply chain logistics industry leaders, influential technologists, and directors from all over the region, for a high profile gathering of refreshing, new thought leadership and collaborative discussion the game changing impact of digital transformation and disruptive innovation in supply chain and logistics management.

www.claridenglobal.com/conference/supplychainsg-2018/

Disrupting the Leadership Trap

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Disrupting the Leadership Trap

August 2018
Authors:
Simon Popley, Senior Partner Leadership & Coaching, Logistics Executive Group
Kim Winter, Chief Executive Officer, Logistics Executive Group

Many in the logistics and supply chain sector routinely work more than 60 hours a week. How do you get out of this trap?

Leaders working in demanding roles tend to get little or no time to develop their own leadership ability. Focused on getting the job done and developing their own people, their own leadership growth often goes by the wayside. Australians work some of the longest working hours in the developed world, a study has found. About one in five Australians, or two million people, work more than 50 hours a week, the University of Sydney study shows, and many in the logistics and supply chain sector routinely work more than 60 hours a week.

Another trap that limits leadership development is underinvestment in the area by organisations. Research by Australia’s leading human performance technology specialist DTS International found that more than one in five companies (21%) have no leadership programs at all, while 36% of organisations are yet to establish a leadership development strategy. Only 58% of organisations spend more than US$1,000 per learner on training for senior leaders, compared to just 39% for high potentials and 32% for mid-level management.

The lack of investment – of both time and money – is at odds with a plethora of evidence that indicates the magnitude of potential returns. For example, a recent report by the Human Capital Institute states that organisations that allot more than 31% of annual training and development budgets to leadership development are 12% more likely to report increased revenue.

Train to survive
However, underinvestment in leadership development isn’t just a missed opportunity, it’s a major threat to a company’s long-term success. The fact of the matter is – when your leadership gets stale, so do results and the teams and leaders working with you. Everything becomes an effort and leadership feels like it’s sucking your will to live, rather than energising you and lifting up your people.

The fallout of neglecting your own leadership development is that you only have the same old skills, experiences and advice to hand down to your leaders and teams. It becomes a bit like leadership beans on toast, each and every night. After a while, the people to whom you serve your leadership learnings get bored and stop hearing the messages you want them to hear.

Your messaging is experienced as bland and your followers begin to feel that you have nothing new to offer or inspire them with. Preaching career development to them also invites hypocrisy that further diminishes your own leadership standing. This is demonstrated by the fact that only 7% of senior leadership in an international survey by Deloitte finds themselves capable of developing ‘millennial’ leaders, signalling an impending leadership vacuum. This vacuum often leads to team member disenchantment, poor staff retention, resulting in high turnover (in a traditionally talent short logistics & supply chain market) and unnecessary recruitment costs.

Here are a few practical ideas to assist you in developing some new thinking and raise the energy to revive your leadership.

Tips for revitalising your leadership

  1. Set time aside to think about your current leadership – getting time to think about what changes you need and want to make is crucial. You may need to improve your ability to delegate work to be able to create this space to think: remember, thinking is working!
  2. Ask for feedback from your direct leader and other leaders in your business – what areas do they see in which you need to develop further? What is it they most notice about your leadership? Feedback is the fertile soil in which great leadership grows, without feedback we cannot grow. Feedback can also be hard to process and deal with if you are unfamiliar with getting feedback – think about working with a coach to navigate this journey.
  3. Discuss taking on new leadership challenges. Take on leading a new team or project. Get involved in a different work experience that takes you outside of your current comfort zone. If you are beginning to feel the slight discomfort of being outside of your familiar way of leading, you are probably beginning to grow – this is good pain!
  4. Read some latest thinking and research in leadership development. Read something about leadership you would not usually look at, and share this with another leader.
  5. Develop your ability to reflect on your own leadership experiences. Consider reflective journaling as a means to develop greater insight into your own leadership practice from viewing situations from multiple perspectives. Learn to become comfortable with the ambiguity that leading creates.
  6. Find and join a leadership community of practice – build your own leadership network. The CEO Institute in Australia also organises various networking events, such as the CEO Connect Conference and the CEO Institute Summit that feature top industry leaders. Chief Executive Women is specifically geared towards empowering women through leadership networks that aim to close the gender gap in senior leadership roles across Oceania.
  7. Attends events and conferences that are specifically geared towards leadership development, that offer the opportunity to learn directly and network with inspiring leaders in your field and beyond. A good example is the Annual Leadership Summits organised by the Australian Institute of Management across the country. Logistics Executive Group, an Australia-based international talent management and executive coaching firm, also organises year-round networking events, including a CEO Breakfast Series and the international LogiSYM Conference Series
  8. Undertake some coach training to become a better-skilled coaching leader so that you are more effectively able to develop the potential of your own people.
  9. Find yourself a qualified and experienced coach and begin a conversation about how to grow and develop your leadership capability.

Regardless of your seniority level and the nature of your organisation, effective leadership is necessary for your success, as well as the success of your team and your stakeholders. Therefore you cannot afford to let your leadership style get stale. Yes, it takes some time and some sweat, some investment on your behalf as well as your organisation and perhaps even the odd tear or two, but the reward is well worth the effort.

The most fruitful outcome is when your own leadership style becomes an example for others. This stimulates a domino effect as your mentees, peers and even seniors attempt to emulate your strategy and foster creative, productive and effective leadership across the organisation. Be the change you wish to be, as Gandhi said. The power rests with you.

Simon Popley
Senior Partner Leadership & Coaching, Logistics Executive Group

Simon is an executive coach and leadership development consultant with over 20 years of senior leadership and coaching experience in a wide range of industry sectors including health care, financial services, Government and consulting. Simon specialises is coaching leaders and executives who want to take their leadership to the next level of development. Simon has worked with a wide variety of clients in Government, private enterprise and the not for profit sector. Simon works and partners with both individual leaders and their teams.

Kim Winter
Chief Executive Officer, Logistics Executive Group

The founder of Logistics Executive Group, Kim delivers 40 years of executive leadership experience spanning Corporate Advisory, Executive Coaching, Public Speaking, Trade Facilitation and Executive Search & Recruitment across the Supply Chain, Aviation, Logistics, FMCG, Retail, Resources and Industrial sectors. Operating from the company’s offices in 12 countries. He is a regular contributor of thought leadership to industry and media, is a professional Master of Ceremonies, frequently invited to Chair international events on contemporary / future industry trends and leadership issues.

NEWS

Tap Into Malaysia’s Logistics Evolution at Logisym Malaysia 2018 on 24 and 25 July 2018

LogiSYM, the premiere Supply Chain Symposium and Summit across Asia and Oceania, returns to Malaysia for its fourth edition this year on July 24 and 25 at the Hilton Hotel Petaling Jaya in Kuala Lumpur. As always, the symposium will bring together over 300 leaders in the logistics and supply chain industry and bridge the gap between supply chain concepts and technology. It will also showcase the benefits generated from increased supply chain pipeline velocity, profitability and performance, and offer unrivalled networking opportunities as the largest symposium of its kind in Malaysia. With limited passes remaining, you may reserve yours here: http://logisym.org/malaysia2018/

 

Kim Winter, CEO of Logistics Executive Group, to MC RWTA 2018

Kim Winter, the Founder and CEO of Logistics Executive Group, will MC the 77th edition of RWTA’s (2018) Annual Conference. The event will be held from 19 to 21 September at the Peppers Noosa Resort & Villas Sunshine Coast in Queensland, Australia. The RWTA (Refrigerated Warehousing & Transport Association of Australia) is a critical part of the Australian cold chain network and is also an Affiliate Partner of Global Cold Chain Alliance (GCCA). The annual conference is a flagship event for the Oceania cold chain industry, bringing together hundreds of market leaders for stimulating discussions and exposure to the latest and greatest in the industry.

 

Participate in Asia Trade Centre’s Survey on the US-China Tariff War

The Asia Business Trade Association (ABTA) is conducting a survey of senior business executives to find out how MNCs view the looming trade war between the U.S. and China and the direct and indirect consequences to organisations’ value chains. The Centre will combine survey results with other data and analysis to publish a report summarizing an understanding of business perceptions of the trade war, and contingency strategies they will undertake, should the trade war escalate will be made available to all survey respondents. Individual responses will be kept confidential and no respondent-level data will be published. To participate, please follow this link and complete the questionnaire: https://tinyurl.com/ABTAsurvey

 

UPCOMING EVENTS

LogiSYM Digital
10 October 2018
Singapore, Dubai, Kuala Lumpur, Sydney

Today, digital technologies are making way for a supply chain that goes well beyond what was originally thought to be possible with a traditional setup. The supply chain of today has the ability to perform very complex activities with superb precision and outstanding agility.LogiSYM Digital 2018 adopts this thinking as well and will run for the first time globally a mini-Symposium in various countries on 10.10.18 simultaneously.

http://logisym.org/

 

Hands Up Kenya
September 2018
Nairobi, Kenya

‘Hands Up Kenya’ is a not-for-profit initiative that brings together a network of successful international and Kenyan entrepreneurs, business leaders and changemakers who are eager to give back to their communities by removing the barriers that prevent Kenyan youth from achieving their full potential.

http://handsupkenya.com/

 

77th RWTA Conference & Exhibition
19 – 21 Septmeber 2018
Peppers Noosa Resort & Villas Sunshine Coast QLD Australia

Details will be released shortly containing information about Speakers, Social Events, Sponsorship Opportunities and Exhibition Packages. Information and Registration will be available through their Conference Website soon!

http://www.rwta.com.au/

 

Supply Chain Innovation Summit
18 – 20 September 2018
InterContinental Festival City Hotel, Dubai

Part of the Supply Chain Innovation Week. Becoming elastic, integrated and customer-centric in the ecommerce era.

https://akolade.com.au/events/supply-chain-innovation-2018/

Leadership Development – Money up in Smoke?

By | CEO Newsletters | No Comments

Leadership Development – Money up in Smoke?

July 2018
Authors:
Simon Popley, Senior Partner Leadership & Coaching, Logistics Executive Group
Kim Winter, Chief Executive Officer, Logistics Executive Group

Year after year, organisations invests large sums in an attempt to improve their leadership capability as a means to create organisational cultures which deliver for customers and shareholders. Whether the organisation operates within upstream or downstream, manufacturing, resources, operations, logistics or wider supply chain, in the majority of cases, many of these leadership development interventions deliver none of the intended promised changes in performance.

In recent years, Leadership Development strategy and programs have begun to find traction in the resources sector and throughout the Australia Supply Chain. However, poorly designed, deployed and executed, the failure of leadership development programs can actually result in increased organisational cynicism and a further decline in employee engagement, as employees perceive management wasting money they have been asked to cut or save.

Leadership development begins to be perceived as a waste of time, where leaders are seen to indulge themselves in management “love in’s” and off- sites in stylish hotels. The leaders who attend leadership development programs that fail to deliver can also be left feeling helpless, as despite completion of such programs they are still unable to cope with the demands their leadership roles expect of them.

When the promised changes do not eventuate, and when employees do not experience the change in leadership behaviours promised, cynicism and resentment are natural and predictable responses. If you want to understand how leadership development is viewed in your organisation – ask someone who is not privy to it. If the results of such programs are not visible here, it is likely they are not creating the change you seek.

New research from the Centre for Workplace Leadership at the University of Melbourne, Australia, funded by the Australian Federal Government on the state of Australian leadership was published recently. The findings point to mediocre leadership capability being a systemic issue leading to poor business performance across Australian organisations. Many of these organisations are global brands, some operating in the Gulf in the Petrochemicals space. Without too much of a stretch of the imagination, it is likely the findings might be similar for organisations in other countries as approaches to leadership development globally are not that diverse.

Why do leadership development programs fail?

If an organisation were a garden and you were the gardener, which plants would you give water and attention too? The new shoots, the seedlings and smaller plants or the mature trees? One of the key findings of this research points to a huge underinvestment in frontline leadership. For every $10 spent on senior leaders, only $1 is invested in developing frontline leadership. This has negative implications for creating a pipeline of future leadership and is impacting business performance.

financial stock market graph on technology abstract background Again imagine you are the gardener, conditions are harsh and you only have limited water and resources to spare. Do you pour it over the established trees? Or do you sprinkle it over your precious seedlings who have just broken through the soil? At the moment, from a leadership development perspective, we seem to be preoccupied with watering the trees, a strategy which has not delivered the required change. For organisations to flourish, it is clear we need to think differently about where investment is focused and how the development of leadership throughout the leadership lifecycle is approached.

Many businesses in Australia and NZ tend to be very hierarchical with most investment in the highest level of executive leadership. Treating leadership development as an elitist reward for making it to the senior ranks does nothing to move the organisation forward into a high performing space, focusing leadership development on so-called HIPO talent neglects the leadership experienced by the majority of employees in the organisation. Employees inherit failing unsupported leaders because the organisation does not consider them high performing. This is a perfect recipe for low employee engagement, something we are all too familiar with. It is also a dereliction of a duty of care to those employees. Ineffective leadership fails to serve the legitimate aims of the organisation and also fails to recognise the potential and of individuals and teams.

Designed to fail?

The way leadership development programs are designed and structured is a key reason why they fail to deliver the desired change in leadership capability. Many development programs focus on what is termed horizontal development that is the acquisition of new skills and information. The premise being that leaders lack the required skills and information, therefore to become effective leaders they need to acquire new skills and information. This approach is actually leadership training and should not be confused with leadership development, and it does have its place. Leaders need to acquire new skills and information as thinking in the leadership space evolves. However, it is not this acquisition of new information that builds inspiring leaders.

What fuels leadership development is exposure to real work situations where a leader’s perspective-taking capacity is challenged and where, as a result of the experience, the leader is able to appreciate multiple differing perspectives simultaneously. That is to say, the leader is now able to sit comfortably with situations others might describe as paradoxical. The development experience may be described as the “heat” in the experience, the leader is taken out of their own comfort zone where they are stretched into unfamiliar territory where growth happens. Exposure to being mentally stretched in real work situations provides leaders with the capacity to grow and develop, it is this realisation that cascades ongoing future development for many leaders. The knowledge that discomfort gives way to development and growth.

Many leadership development programs are designed without first undertaking an extensive diagnostic process that identifies the key issues within any system which limit the development of leadership talent. It is unlikely that a diagnostic process undertaken internally can deliver the required insight, the premise being you can’t see the problem if you are already part of it. Internal politics and power relationships may also bias findings which identify unpopular issues that require attention. This is not to say that an external diagnostic is not subject to bias. The promise of an ongoing business relationship with a leadership development provider may be sufficient to taint the messaging the provider communicates to an organisation. The organisation is given what it wants to hear rather than what it needs to hear. Perhaps the answer resides in a collaborative approach driven by a strong desire for authentic understanding?

Many third-party providers of leadership development programs are selling products and tools or what some term leadership systems. The sale of these products or systems forms the basis of the intervention. It is not necessarily what the organisation needs. It is unlikely that a range of leadership products will meet the unique needs of the organisation in question. It is not to say that certain leadership development tools are not useful, they can be. It is just to say alone they are not the solution to all leadership woes, buyer beware.

We have all heard the adage it takes a village to raise a child, well it also takes a whole range of other people to help create amazing leaders. Leadership development programs need to involve stakeholders as an integral part of the developing leader’s growth journey. Gaining feedback from these stakeholders regarding areas for development and also progress against set goals is a wonderful way to develop leaders and also a fantastic way to engage and build trust with key stakeholders, this is where being vulnerable builds capital in relationships.

There is a great pressure on leadership development practitioners throughout Australia & NZ, to deliver changed leaders quickly. Nonetheless, one must not forget that real change does not occur overnight. The industrialised world may have accelerated at light speed over the last 200 years, however, human evolution moves at a much a slower pace. Human beings are slow to change and change is hard for people to make. Leadership development programs need to be long enough to achieve the goals of development programs and embed new ways of leading. Leadership development programs that run over a few months have little chance of effecting sustained change.

There is also a need for support structures to be in place such as coaching and mentoring programs to support leaders while they make sense of new ways of seeing the world and embed those changes in the way they lead. Support is a key element of success in development programs, for many leaders being experienced differently by others is a painful process, support to develop new ways of leading and these new ways of sense-making of the world is key to success. The structures created by leadership development program need to be left in place once the program has ended to ensure leader growth continues, they should not be considered temporary structures.

Key elements of successful leadership development programs

  1. Ensure a thorough collaborative diagnostic process is undertaken by an external independent party which creates a clear understanding of the systemic challenges facing developing leaders in your organisation.
  2. Focus the investment where it will have the greatest sustainable impact on your pipeline of leadership.
  3. Continually adapt your approach to leadership development, understand that any leadership development program needs to continually evolve. What might deliver success today may not deliver the same success tomorrow. Successful leadership development is contextual, always be aware of the context. Programs that adapt to changing conditions remain relevant and deliver results.
  4. Leadership development programs need to be designed around exposure to real work situations. Real work situations provide the context and real-world experience for developing leaders where development can be directly translated into their daily leadership roles.
  5. Successful programs provide differing ways for leaders to develop dependant on their individual needs and context. No one size fits all, the approach must be multifaceted.
  6. Involving stakeholders in the development of leaders is a key element to assist in generating insight and supporting change. It is also a great way to build relationships with stakeholders.
  7. Build and maintain support structures such as coaching and mentoring programs to support and embed new ways of making sense of situations and to help embed new approaches to leadership.
  8. Identify clearly the ROI the BU / organisation expects from the program(s), initiate related agreements, and hold all stakeholders accountable for the investment.

Logistics Executive Group are celebrating their 20th Anniversary of engaging with customers to develop and deploy bespoke talent acquisition, leadership development and executive coaching programs from their offices throughout Australia, Asia, India and The Middle East.

Simon Popley
Senior Partner Leadership & Coaching, Logistics Executive Group

Simon is an executive coach and leadership development consultant with over 20 years of senior leadership and coaching experience in a wide range of industry sectors including health care, financial services, Government and consulting. Simon specialises is coaching leaders and executives who want to take their leadership to the next level of development. Simon has worked with a wide variety of clients in Government, private enterprise and the not for profit sector. Simon works and partners with both individual leaders and their teams.

Kim Winter
Chief Executive Officer, Logistics Executive Group

The founder of Logistics Executive Group, Kim delivers 40 years of executive leadership experience spanning Corporate Advisory, Executive Coaching, Public Speaking, Trade Facilitation and Executive Search & Recruitment across the Supply Chain, Aviation, Logistics, FMCG, Retail, Resources and Industrial sectors. Operating from the company’s offices in 12 countries. He is a regular contributor of thought leadership to industry and media, is a professional Master of Ceremonies, frequently invited to Chair international events on contemporary / future industry trends and leadership issues.

NEWS

Tap Into Malaysia’s Logistics Evolution at Logisym Malaysia 2018 on 24 and 25 July 2018

LogiSYM, the premiere Supply Chain Symposium and Summit across Asia and Oceania, returns to Malaysia for its fourth edition this year on July 24 and 25 at the Hilton Hotel Petaling Jaya in Kuala Lumpur. As always, the symposium will bring together over 300 leaders in the logistics and supply chain industry and bridge the gap between supply chain concepts and technology. It will also showcase the benefits generated from increased supply chain pipeline velocity, profitability and performance, and offer unrivalled networking opportunities as the largest symposium of its kind in Malaysia. With limited passes remaining, you may reserve yours here: http://logisym.org/malaysia2018/

 

Kim Winter, CEO of Logistics Executive Group, to MC RWTA 2018

Kim Winter, the Founder and CEO of Logistics Executive Group, will MC the 77th edition of RWTA’s (2018) Annual Conference. The event will be held from 19 to 21 September at the Peppers Noosa Resort & Villas Sunshine Coast in Queensland, Australia. The RWTA (Refrigerated Warehousing & Transport Association of Australia) is a critical part of the Australian cold chain network and is also an Affiliate Partner of Global Cold Chain Alliance (GCCA). The annual conference is a flagship event for the Oceania cold chain industry, bringing together hundreds of market leaders for stimulating discussions and exposure to the latest and greatest in the industry.

 

Participate in Asia Trade Centre’s Survey on the US-China Tariff War

The Asia Business Trade Association (ABTA) is conducting a survey of senior business executives to find out how MNCs view the looming trade war between the U.S. and China and the direct and indirect consequences to organisations’ value chains. The Centre will combine survey results with other data and analysis to publish a report summarizing an understanding of business perceptions of the trade war, and contingency strategies they will undertake, should the trade war escalate will be made available to all survey respondents. Individual responses will be kept confidential and no respondent-level data will be published. To participate, please follow this link and complete the questionnaire: https://tinyurl.com/ABTAsurvey

 

UPCOMING EVENTS

LogiSYM Malaysia 2018
24 – 25 July 2018
Hilton Hotel Petaling Jaya, Malaysia

LogiSYM Malaysia 2018 will look at how Innovation is necessary for the Supply Chains of TODAY and how Resilience in supply chain design, policy and approach is needed in the face of growing uncertainties and developments in the global strategic landscape.

http://logisym.org/malaysia2018/

 

Hands Up Kenya
September 2018
Nairobi, Kenya

‘Hands Up Kenya’ is a not-for-profit initiative that brings together a network of successful international and Kenyan entrepreneurs, business leaders and changemakers who are eager to give back to their communities by removing the barriers that prevent Kenyan youth from achieving their full potential.

http://handsupkenya.com/

 

77th RWTA Conference & Exhibition
19 – 21 Septmeber 2018
Peppers Noosa Resort & Villas Sunshine Coast QLD Australia

Details will be released shortly containing information about Speakers, Social Events, Sponsorship Opportunities and Exhibition Packages. Information and Registration will be available through their Conference Website soon!

http://www.rwta.com.au/

 

Supply Chain Innovation Summit
18 – 20 September 2018
InterContinental Festival City Hotel, Dubai

Part of the Supply Chain Innovation Week. Becoming elastic, integrated and customer-centric in the ecommerce era.

https://akolade.com.au/events/supply-chain-innovation-2018/

Trade Wars and A Digital Revolution – How will Global Trends Impact Emerging Markets in 2018?

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Trade Wars and A Digital Revolution – How will Global Trends Impact Emerging Markets in 2018?

March 2018
Author: Bushra Ali, Business Intelligence Specialist, Logistics Executive Group

While the most qualified soothsayers anticipated a relatively smooth-sailing 2018 for global markets, recent signs of a ‘trade war’ between the US and China has rolled back some of the cautious optimism that started off the year, especially for emerging economies.

As global stock markets take a foreboding plunge and capital flight seeks safer pastures, emerging market assets have taken the largest tumble. Unsurprisingly, Asian manufacturers have been worst hit, with mainland Chinese equities dwindling 3% in the past week since the impending (but temporary) US tariffs will directly hit China’s annual $60 billion exports to the US. The Turkish lira has also gotten caught in the cross-fire, tumbling to record lows against the dollar and euro this week.

While it may be too early to anticipate where the war of words between two economic superpowers will lead this time, it is tempting to believe that the threat of ‘deglobalisation’ is here to stay and unravel the decades-long boom that has benefited many rising tigers, especially in Asia. The resurgence of populism and its protectionist agenda in the US and Europe inspires pessimism in rising economies that have long banked on the developed world as their biggest export markets.

In such unpredictable times, what is one to make of the relatively sundry forecasts that started the year, particularly for the logistics and supply chain industry? In order to reconcile these with current circumstances, it is important to consider the evolving position of emerging markets in the context of the global economy.

Developing economies have long been the rising stars of the global logistics and transport industry. This is by no means a coincidence. The supply chain industry is an important component of the economic growth and maturity of a country, facilitating domestic and international trade, the development of competitive advantage in key industries, and the opportunity to diversify and foster capability in new industries.

This decade, we have already witnessed important milestones that indicate the rising significance of logistics and supply chain activity – both cross-border and domestic – in the developing world. One example is Asia becoming the largest 3PL market in the world (by annual revenue), outgrowing both Europe and North America. Another is Africa’s lead in global air freight demand growth for the past several quarters.

The growing significance of the logistics and supply chain industry in developing regions that are home to the majority of the world’s population indicates an opportunity that has so far mostly been tapped by dominant global players. However, as governments realize the strategic value of the sector and seek to play a greater role, the playing field has evolved and made way for domestic players that are not only competing with global leaders, but also forming strategic partnerships to capitalize on pooled competencies and resources. Public and private investments in logistics and supply chain continue to grow, and governments are also taking an increasingly active role in amending regulations and legislation to boost this further. The most recent example of the latter is India’s implementation of a nation-wide Goods & Services Tax (GST) that has ironed out inconsistencies and confusion caused by state-to-state variation in legislation.

Consequently, emerging markets are increasingly able to diversify their risks and dependencies, particularly in the logistics and transportation sector which is being recognized for its ability to support the development of other sectors. As noted in the 2018 edition of the Agility Global Emerging Markets Index, developing markets are buying a larger share of each other’s exports and integrating their production. This is especially true in Asia, where China’s neighbours have significantly benefited from setting up ancillary industries to supply and facilitate China’s manufacturing boom.

While much of manufacturing activity in the developing world continues to serve the export market, there are still signs of rising domestic consumer appetite. The emergence of e-commerce and development of domestic logistics infrastructure have been key factors propelling these consumer markets, while the development of new urban centres across China’s long-neglected Western region creates opportunity to multiply economic activity across new hubs.

Many emerging markets have adopted similar strategies to foster investment opportunities and diversify their economies, with Saudi Arabia announcing its largest public budget among a series of other socio-political and economic reforms this year and even Africa stepping up its game with the development of new e-commerce-oriented logistics infrastructure across key economies. Furthermore, the progress of China’s Belt and Road Initiative offers the promise of creating new avenues for trade and stronger regional economic ties in the Global South.

One especially interesting and relevant trend is the opportunities digital disruption is creating for emerging economies. By playing an increasingly important role in pioneering technologies that shall likely define the future of logistics, developing markets are not only enhancing their own competitive advantage through the optimisation of supply chain activities, but also adding more value and creating new, complementary industries. “For many years, emerging markets have aspired to move up the value chain and reduce their dependence on the West,” John Manners Bell, CEO of Transport Intelligence and Lead Researcher for the report notes, adding, “It seems that this is now starting to happen.”

These developments clearly indicate a shifting dynamic between emerging markets and developed economies. However, it would be naïve to assume that this assures the former’s immunity to potential friction and trade battles that loom on the horizon. Perhaps the most important signifier of their true robustness will become clear in the wake of short-term shocks that have already begun to ripple through emerging equity and asset markets.

Nonetheless, it would still be reasonable to allow the uncertainty to foster more hope than fear that, in the long term, the re-negotiated terms of trade between the developed and developing world will foster a dynamic that is better for all. After all, the issue at the heart of the current dispute – lack of adequate protection for intellectual property– is pertinent to the continued success of developing economies as well, particularly as innovation becomes an increasingly strategic part of their competitive advantage in global markets.

In the meantime, what can you – as an organization dealing local, regional and global economies – do to ensure you are well-equipped for the bumpy road ahead? The first place to start would be a thorough health check to ensure that your supply chain is performing to best practice standards and that you have a detailed understanding of where further efficiencies can be realised and/or leverage obtained to capitalise on new market opportunities.

Indeed, there couldn’t be a better time to conduct a supply chain audit to review processes and understand where the next cost driver is going to come from in the wake of ongoing transformations. For more information on how you can undertake this assessment with our team of qualified and experienced international experts, feel free to reach me at bushraa@logisticsexecutive.com.

 

Sources:

Agility Global Emerging Markets Index

http://slideplayer.com/slide/1619715/

https://www.reuters.com/article/emerging-markets/emerging-markets-emerging-assets-tumble-as-trade-war-fears-balloon-idUSL8N1R51KJ

https://www.forbes.com/sites/kenrapoza/2018/03/23/hawkish-fed-probably-worse-for-market-than-china-trade-war/#114daf155014

Bushra Ali
Business Intelligence Specialist, Logistics Executive Group

Bushra Ali is a business intelligence specialist at Logistics Executive Group in the Middle East. She has a degree in Economics and Chinese from Williams College, Massachusetts, USA. She specializes in market research and economic analysis using qualitative and quantitative tools including STATA, R and Python. Her past research spans topics including behavioural economics, consumer behaviour, renewable energy markets, education and social entrepreneurship. Her research has been published by the London-based Overseas Development Institute (ODI). In addition to English, she is fluent in Mandarin, Arabic and Urdu/Hindi.

NEWS

KIZAD, Go Global launch Abu Dhabi Logistics City

Khalifa Industrial Zone Abu Dhabi (KIZAD) has recently announced the first ever ‘on-demand’ warehouse in the Middle East in partnership with Get Go Global, the leading online booking system for a whole host of business needs from an initial 10,000 square feet (1,000 square meters). The announcement was made at the launch of KIZAD Logistics City, which offers a breakthrough pay-per-use model for warehousing services enabling prospective customers to negate a capital expenditure.

 

Hands Up Kenya partners with Youth & Success Association for ‘Youth in Leadership’ Conference

Hands Up Kenya has partnered with the Youth & Success Association (YASA) to host its conference series in 2018. Co-founded and led by Sheila Atieno, a former Mandela Fellow and Africa Representative in the WHO, YASA is one of the largest youth organisations in Kenya with a growing presence across Africa. YASA organises a range of youth leadership, mentorship and training programs to prepare combat youth unemployment, foster entrepreneurship, and prepare African youth for leadership and innovation as African countries emerge on the horizon as dominant emerging economies. Hands Up Kenya and YASA will host their first event – the ‘Youth in Leadership’ Conference on May 26 at the Kenyatta University Amphitheatre in the Kenyan capital of Nairobi.

 

LogiSYM Singapore 2018 returns on May 16 & 17 2018

LogiSYM Singapore 2018 returns for the fourth time this year on May 16 and 17. The 2018 edition will be hosted at the prestigious NUSS Kent Ridge Guild House and focus on ’Supply Chain Resilience and Innovation’. As Asia’s premier logistics & supply chain event, LogiSYM Singapore 2018 will bring together 300+ shippers, manufacturers, 3PLs, forwarders, logistics professionals, educators and technology solutions providers from around Asia.

 

Prepare yourself and your team for Supply Chain excellence with the CSCMP SCPro™ Certification

Virtually every function that creates value in a company is touched by the supply chain. Ensuring that you and/or your team understands the integrated end to end supply chain is a real competitive advantage. SCPro™ is a three-level certification program from The Council of Supply Chain Management Professionals (CSCMP), through which supply chain professionals can hone a broad array of essential industry skills, and master the complete range of end-to-end global supply chain functions. Students analyse real world case studies and develop a comprehensive project to achieve true results like ROI. CSCMP is the leading worldwide professional association dedicated to education, research and the advancement of supply chain management professionals. Visit the Logistics Academy website or contact an advisor at mylam@logisticsexecutive.com to learn more and register.

 

UPCOMING EVENTS

LogiSYM Singapore 2018
15 – 16 May 2018
NUSS Kent Ridge Guild House, Singapore

LogiSYM Singapore 2018 will look at how Innovation is necessary for the Supply Chains of TODAY and how Resilience in supply chain design, policy and approach is needed in the face of growing uncertainties and developments in the global strategic landscape.

http://logisym.org/

 

Home Delivery World 2018
18 – 19 April 2018
AmericasMart Center, Atlanta, GA

The annual retail logistics conference & exhibition.Warehousing to the customer doorstep. We cover the entire delivery cycle. Addressing the topics that matter most – New Business Models, Customer Loyalty, Smart Technology and Warehousing. Walk away with actionable insights to apply to your business to drive effeciencies and revenue.

http://www.terrapinn.com/conference/home-delivery-world/index.stm

 

GPCA’s Responsible Care Conference
6 – 8 May 2018
InterContinental Festival City Hotel, Dubai

The conference will showcase best regional learnings across the chemical and petrochemical sector and define the future direction of Responsible Care companies in the region. World-class industry leaders will share their accomplishments in the areas of environment, health safety & security (EHS&S) across the entire value chain. The conference provides a unique opportunity to network and learn from renowned international and regional industry experts about leadership, EHS&S operational advancements, regulatory, collaboration and the industry’s future direction.

http://gpcaresponsiblecare.com/

 

GPCA Research & Innovation Conference
11 – 13 March 2018
The Oberoi, Business Bay, Dubai, UAE

The GPCA Research and Innovation Summit serves as a platform to discuss ways and means for creating a culture of innovation within the regional chemical industry.

http://www.gpcaresearch.com/

New Beginnings are Overrated. Let 2018 be Your Turning Point.

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New Beginnings are Overrated. Let 2018 be Your Turning Point.

January/February 2018
Author: Bushra Ali, Business Intelligence Specialist, Logistics Executive Group

 CEO_Newsletter_JanFeb2018_1

The industry slowdown from the past few years has indicated the best response to a crisis is neither abandoning ship nor refusing to change course. It is simply the ability to reevaluate your position and pivot if necessary in order to avert risk and minimize losses.

Welcoming the new year is always a bit more complicated than it seems. At first, there’s a sense of unbridled optimism and excitement inspired by the cheerful fervor of the December holidays. However, once the mist from the fireworks has disappeared into thin air and it’s time to return to business as usual, there’s always the slightest hint of scepticism, if not outright dread – what’s next?! And what will it mean for the industry bubble I inhabit?

The global logistics and supply chain sector has been struggling to reconcile mixed signals since 2015. The combined effect of falling oil prices, Brexit, the dawn of Trumponomics and a manufacturing slowdown in key Asian markets have caused the industry to exercise caution and shift gears in a bid to remain profitable and achieve targets for growth and expansion.

However, macroeconomic trends and forecasts for 2018 to 2020 indicate that many of these pressures are expected to ease somewhat starting this year, with rising economic and industry-level transformations providing new opportunities to overcome the challenges of previous years. For example, oil prices took off on the strongest note since mid-2015 this January 1st, while the rise of decentralized technologies such as blockchain offer the possibility to circumvent bureaucratic inefficiency and dramatically improve supply chain visibility. New emerging markets, particularly in the Middle East (Egypt, Oman) and Africa (South Africa, Nigeria, Kenya) have risen to prominence and opened up fresh avenues for growth. The hype around artificial intelligence (AI) is finally beginning to pay off with a range of new machine learning applications making it possible to overcome skill and labour shortages and optimize processes for significant gains in business performance.

With internet penetration rates rising rapidly across the developing world, vast untapped opportunities are fostering appetite for global expansion among both established players and fledgling entrants. Rising M&A activity in the logistics and supply chain sector across Asia and Africa indicates that there is opportunity for both types of players to work in tandem in the quest to conquer uncharted territories. According to PwC, 2017 saw a total of 248 transactions take place in the global transportation and logistics sector, a rise of 18% in volume and 5% in value compared to 2016. With the explosive rise of e-commerce across the globe, it comes as little surprise that e-fulfillment remains one of the most competitive, sought-after yet challenging avenues for growth and profitability. At the same time, rising infrastructure investments across Asia and Africa also provide attractive possibilities for the development of logistics and supply chain sectors in these regions.

These promising developments should be enough to cause one to breathe a sigh of relief and trust that the worst of this decade is past.  However, the shake-up of the past few years, and the winners and losers that have emerged in its wake indicate that neither unbridled dread nor hopeless optimism is the key to robust business performance. Rather, it is a commitment to systemic adjustments and strategic realignments that allows a business to succeed in an industry that is highly vulnerable to both macroeconomic shocks and digital disruption. In other words, the best response to a crisis is neither abandoning ship nor refusing to change course. It is, very simply, the ability to re-evaluate your position and pivot if necessary in order to avert risk and minimize losses.

CEO_Newsletter_JanFeb2018_2“It is also important to keep in mind that sometimes the best answers do not lie within, and a fresh perspective from the ‘outside’ can not only make way for more objective insights and holistic analyses, but also specialized recommendations and a window into the successes and failures that have defined other partners and competitors in your industry,” notes Darryl Judd, COO and Global Director of Corporate Advisory services for Logistics Executive Group. Judd notes that the use of business intelligence and market experts has become increasingly relevant to the logistics and supply chain industry as industry leaders world-over see these resources as crucial to keeping up with rapidly evolving markets. “Our clients are also increasingly recognizing the importance of drawing on benchmark data, such as those found in Ti reports, to understanding business performance in the context of the wider industry,” Judd further highlights.

Logistics Executive Group has been conducting supply chain audits, designing and equipping modern facilities and pioneering supply chain improvement and optimization programs for a variety of logistics and supply chain players across the world for the past three decades, using internal resources and expertise that are costly for organizations to acquire on their own.

Another instrumental piece of the equation that one can no longer afford to be sidelined is the strength, quality, productivity and agility of an organization’s workforce. “Technology in the hands of talent that is not adequately qualified, agile or equipped to succeed is akin to handing a Ferrari to a first-time driver – excessively risky and expensive,” asserts Kim Winter, Global CEO of Logistics Executive. “Disparities in business performance and success between overachievers and underachievers in the sector is strongly correlated with the talent attraction and management strategies of a firm,” he adds, citing the recently published World Bank special report on the human capital challenges facing the logistics and supply chain industry globally.

One of the key challenges noted in the report is the lack of capacity and capability to develop a targeted and successful talent strategy can be challenging for both large-scale multinationals with expansive geographic footprints and smaller LSPs. “This is the problem we saw nineteen years ago when we established our recruitment and human capital consulting division at Logistics Executive Group,” notes Winter, adding, “Today our specialist expertise in the area appears to be more relevant than ever, and we feel very well positioned to harness our own global experience and footprint to help our clients develop targeted and successful talent attraction and management strategies within a wide range of geographies and industry segments.”

Digital transformation is really only the tip of the iceberg when it comes to the changes, opportunities and threats that loom on the horizon for the global logistics and supply chain industry. Shifting socio-political dynamics and their interplay with economic factors, and even evolving cultural norms are inspiring moments for pause and reflection from board rooms to warehouses to cargo docks. Perhaps it’s time to take a look around the room and wonder about the ones still around, whether colleagues, well-wishers or competitors. Clearly, each of us is doing something right if we’ve survived recent storms, and perhaps in the coming few years if we were able to pool those strengths together through the right talent and strategic advice from known industry experts, we may even be doing significantly better.

Bushra Ali
Business Intelligence Specialist, Logistics Executive Group

Bushra Ali is a business intelligence specialist at Logistics Executive Group in the Middle East. She has a degree in Economics and Chinese from Williams College, Massachusetts, USA. She specializes in market research and economic analysis using qualitative and quantitative tools including STATA, R and Python. Her past research spans topics including behavioural economics, consumer behaviour, renewable energy markets, education and social entrepreneurship. Her research has been published by the London-based Overseas Development Institute (ODI). In addition to English, she is fluent in Mandarin, Arabic and Urdu/Hindi.

NEWS

IATA FACE-UP Competition finalists to present at 2018 World Cargo Symposium in Dallas this March.

The International Air Transportation Association’s FACE-UP Air Cargo Career Competition has selected its top three finalists from among several innovative theses on air cargo logistics. Finalists were selected based not only on the innovativeness of their ideas, but also their potential to transform the air cargo industry. The qualifying candidates will present their theses to an audience of current and aspiring leaders in global aviation at the 2018 World Cargo Symposium (WCS) that will be held between March 13 to 15 in Dallas, USA.

 

Space Autonomous Drones demonstrates innovation in action at LogiSYM Dubai 2018

Space Autonomous Drones, the first licensed commercial drone provider in the Middle East, orchestrated the delivery of roses via drone at LogiSYM Dubai 2018, which was held on February 13 and 14 at the Jumeirah Creekside Hotel. Presenting the technology at the event, CEO of Eniverse Technologies Mohammed Johmani further announced the launch of Doorbox, a door-to-door drone delivery service that will transform last mile delivery across the UAE and wider GCC region.

 

LogiSYM partners with SCLAA to launch LogiSYM Australia 2018

LogiSYM and the Supply Chain and Logistics Association of Australia (SCLAA) will bring the LogiSYM conference series to Australia this year. The announcement was made by Mark Skipper, Director of SLCAA, and Dr. Raymon Krishnan, Director of LogiSYM and President of the Logistics and Supply Chain Management Society (LSCMS) at LogiSYM Dubai 2018 this February. LogiSYM Australia will be held in Sydney in November, 2018. 

 

Hands Up Kenya Inaugural Conference will be held on May 26 at the Kenyatta University Amphitheatre

Hands Up Kenya has partnered with Kenyatta University to launch the first event in its conference series on May 26, at the prestigious Kenyatta University Amphitheatre. The event will provide an opportunity to over 1500 youth to connect with and be inspired by successful entrepreneurs, community leaders, and world-renowned artists from Kenya and around the world. The initiative has also recently announced Gilad, former deputy Israeli ambassador turned Kenyan singing sensation as a Hands Up Kenya Ambassador, alongside Sheila Atieno, Founder and CEO of the Youth And Success Association. 

 

UPCOMING EVENTS

LogiSYM Singapore 2018
15 – 16 May 2018
NUSS Kent Ridge Guild House, Singapore

LogiSYM Singapore 2018 will look at how Innovation is necessary for the Supply Chains of TODAY and how Resilience in supply chain design, policy and approach is needed in the face of growing uncertainties and developments in the global strategic landscape.

http://logisym.org/

 

Home Delivery World 2018
18 – 19 April 2018
AmericasMart Center, Atlanta, GA

The annual retail logistics conference & exhibition.Warehousing to the customer doorstep. We cover the entire delivery cycle. Addressing the topics that matter most – New Business Models, Customer Loyalty, Smart Technology and Warehousing. Walk away with actionable insights to apply to your business to drive effeciencies and revenue.

http://www.terrapinn.com/conference/home-delivery-world/index.stm

 

GPCA Plasticon
14 – 15 March 2018
The Oberoi, Business Bay, Dubai, UAE

TPlastiCon is an annual GPCA event that caters to the plastics segment of the petrochemical industry. The conference provides up to date views and trends and developments in the regional and global plastics conversion industry including detailed information on specific trending topics.

http://www.gpcaplastics.com/

 

GPCA Research & Innovation Conference
11 – 13 March 2018
The Oberoi, Business Bay, Dubai, UAE

The GPCA Research and Innovation Summit serves as a platform to discuss ways and means for creating a culture of innovation within the regional chemical industry.

http://www.gpcaresearch.com/

Averting a Human Capital Crisis in Logistics and Supply Chain Management

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Averting a Human Capital Crisis in Logistics and Supply Chain Management

September 2017
Author: Bushra Ali, Business Intelligence Specialist, Logistics Executive Group

CEO_Newsletter_September2017_1As technological innovation and automation takes centre stage in the world of logistics, there is one crucial component of success in the industry that is alarmingly in danger of being overlooked. The first of its kind investigation on the effectiveness and competencies of human capital in logistics and supply chain management by the World Bank has revealed that the shortage of qualified labour is one of the key constraints facing the sector in both developed and developing countries. Moreover, there is little attention being paid to the strategic management of human resources necessary for effective recruitment, retention and training of staff. Authored by experienced academics at the Kühne Logistics University in Hamburg, Germany, the report notes that between 2001 and 2005, HRM issues were discussed in less than 5% of the articles published in the three leading logistics journals.

The research, which utilized data from an online survey of logistics companies worldwide as well the World Bank Logistics Performance Index from 2016, confirmed that the shortage pervades all occupational levels in the industry. However, there seems to be little uncertainty about the factors that contribute to this shortage. The lack of prestige and perceived lower status of operational logistics workers seems to be an almost universal phenomenon, making it difficult for the sector to attract the cream of the crop in terms of talent. Moreover, this poor cultural perception also affects the retention and performance of existing workers, who seem to demonstrate lack of discipline, motivation, attention to detail and commitment to learning necessary for consistently effective performance.

At the administrative and operational (‘blue-collar’) level, survey results indicate that staff tend to be particularly lacking in their knowledge and receptiveness to training. Most interestingly and pressingly, however, the report highlights that the lack of personal skills, as well as leadership and management skills is especially acute on the managerial and supervisory levels. Since staff at these levels are often recruited from the lower rungs based on technical skills and knowledge, they often lack the training and leadership experience necessary to make strategic decision and long-term plans.

The problem is of special concern to emerging markets with rapidly expanding logistics sectors, and current leaders are aware of it. “The World Bank reports highlights a problem that isn’t necessarily unknown to the industry,” noted Kim Winter, CEO of Logistics Executive. “However, it provides profoundly useful insight into the depth of the crisis that makes it clear that a more proactive approach to human capital development is integral to meeting year-on-year growth targets for the industry,” he added.

The clear majority of survey participants highlighted recruitment at the managerial level to be the biggest HRM challenge they expect to face in both developed and emerging regions in the future. This is seconded by concerns about the ability for firms to keep salaries and benefits competitive in order to attract the best talent. Succession planning and the provision of adequate training follow.

CEO_Newsletter_September2017_2Based on these findings, the authors of the report discuss numerous potential strategies and solutions to help leaders in the industry cope with these human resource challenges. They urge managers to invest in employee retention through training, the improvement of working conditions, more competitive salaries and benefits as well as defining a clear and lucrative path for career advancement.

They also propose significant adjustments to training endeavours, especially in developing markets, with input from 36 experts in logistics education and training from major world regions who were also interviewed for the project. One of the most important among these is the move away from internal training to a healthier mix of both internal and external resources. While most firms in both emerging and developed regions indicated that they already offer such a mix, evidence suggests that developing countries tend to more frequently opt for internal programs that deviate little from ‘on-the-job’ instruction. Materials, resources and approaches utilized in most training programs also tend to be outdated, and do not focus on preparing employees for the adoption of new technologies that must inevitably be introduced for the business to remain competitive in the current landscape.

However, the quality, accreditation and applicability of external resources must also be carefully gauged before they are utilized for training purposes. As is an established best practice in the industry, the researchers encourage managers to seek programs offered by reputed logistics associations, including the Chartered Institute of Logistics and Transport (CILT), European Logistics Association (ELA) and The Association for Operations Management (APICS). Such programs offer the additional benefit of association membership, which can be an effective motivator and also facilitate career development for company employees. Industry associations such as the Logistics Supply Chain Management Society (LSCMS) also offer numerous training and certification programs that are up-to-date and incorporate a wider range of specialist expertise that can be offered through an internal program.

Another increasingly popular avenue for external training is private enterprises that offer tailored programs for a variety of crucial skills and competencies in logistics. An example is Logistics Executive Group’s Logistics Academy, that offers internationally accredited training programs ranging from specialized short courses, certificate based and diploma e-learning products to MBAs in collaboration with reputed partners including the Australia Logistics Academy (ALA), Council of Supply Chain Management Professionals (CSCMP) and SMC University.

While hand-on learning experience can be gathered on-the-job, it can be further facilitated through games and simulations, such as McKinsey’s famed Model Warehouse approach, and even VR technology. Such measures can help business maximize efficiency in the longer run through the prevention of costly mistakes as well as faster gains on worker efficiency.

Nonetheless, the upfront cost of investing in such training endeavours remains debilitating for most firms in emerging markets. This is especially given the dispersed nature of these markets, in that they are often dominated by MSMEs who do not have adequate resources to spare and cannot reap the benefit of economies of scale in the long run. Furthermore, smaller companies are also often bootstrapped to the point where they cannot afford to divert employee time and attention from revenue-generating activities. However, a recent surge in M&A activity in many of these regions, including MENA, China, India and Latin America suggests that these markets are already in the process of responding to these pressures through consolidation.

The rise of international 3PLs also bodes well for addressing the lack of adequately trained staff in the sector. In order to offer specialized services and expertise for various regions, 3PLs already have the incentive, and increasingly, the scale, to set aside relatively generous training budgets for their employees that also prepare employees to adjust to local and environmental factors in different regions. However, since logistics is a “boundary-spanning” activity, human capital errors and inefficiencies at any point in the supply chain have consequences for the overall performance of the firm. Therefore, firms must be cautious about relying on outsourcing part of their activities to iron out human capital inefficiencies across the entire pipeline of their operations.

Finally, given the crucial role logistics and supply chain management plays in the performance of most economies, the public sector in both developed and developing regions cannot afford to remain detached from the sector’s current and, most likely prolonged, human capital crisis. Among the most useful steps governments could take include establishing coherent regulatory frameworks and competence standards for the sector as well as investing in vocational programs and public-private partnerships that promote training and skill development. In fact, the latter (establishing quality vocational training and apprenticeship programs) is cited as the main factor behind the success of various European countries, including the UK and Germany, in mitigating their human capital crunch.

Bushra Ali
Business Intelligence Specialist, Logistics Executive Group

Bushra Ali is a business intelligence specialist at Logistics Executive Group in the Middle East. She has a degree in Economics and Chinese from Williams College, Massachusetts, USA. She specializes in market research and economic analysis using qualitative and quantitative tools including STATA, R and Python. Her past research spans topics including behavioural economics, consumer behaviour, renewable energy markets, education and social entrepreneurship. Her research has been published by the London-based Overseas Development Institute (ODI). In addition to English, she is fluent in Mandarin, Arabic and Urdu/Hindi.

NEWS

Logistics Executive Group welcomes Bushra Ali to the global team

Logistics Executive Group is pleased to announce the appointment of Bushra Ali, Business Intelligence Specialist to its global Corporate Advisory Team. With a degree in Economics and based in Dubai, Bushra will strengthen the groups research and analytical capabilities, whilst working with clients on market entry and feasibility studies.

 

Logistics Executive Group to partner the Last Mile ASEAN event in Bangkok on 28 – 29 September.

The two-day event will immerse you in inspiration, learning and networking with over 150 industry experts from leading e-Commerce, retail, postal operators, courier & express companies and fulfilment & logistics companies to debate current issues and form business relationships on a global scale. To register, visit this link: http://www.lastmileasean.com

 

Dates for LogiSYM Dubai 2018 announced.

The 2nd Annual LogiSYM Dubai will be held on the 12-13th February 2018. With a focus on digital disruption, e-commerce and the regions continued transformation, the popular event is back by Dubai Trade and will feature more than 50 international and regional speakers. Call for sponsors and speakers is underway. If you would like to participate then contact Myla at LogiSYM – myla@logisym.org

 

UPCOMING EVENTS

LogiSYM Malaysia 2017
24 – 25 October 2017
Kuala Lumpur, Malaysia

LogiSYM Malaysia 2017 promises to be a highly unique event, with the focus being to provide a platform for mid- to senior-level shippers to hear from the leading solutions in and surrounding the logistics and supply chain industry. The structure of the symposium is such that delegates will have more interactivity with supply chain peers, allowing the development of ideas and for delegates to acquire actionable take-aways to integrate back at the office.

http://my17.logisym.org/

 

Indonesia Transport, Supply Chain and Logistics
10 – 12 October 2017
Jakarta, Indonesia

Indonesia Transport, Supply Chain and Logistics (ITSCL) is the Indonesia’s the most anticipated international event in Indonesia for the world’s Transportation, Supply Chain & Logistics players. It’s where you need to be to strengthen your presence, build business alliances and develop potential businesses with Indonesia. present as the preferred venue to strengthen presence and enhance visibility of logistics and supply chain solution in Indonesia marketplace. This event will be much anticipated as a perfect platform to provide insights with expectations, challenges and opportunities for the transportation, shipping, port and logistics service providers and manufactures, also to showcase the cutting-edge logistics products and services.

http://www.transport-supplychain-logistics.co.id

 

The 12th Annual GPCA Forum
27 – 29 November 2017
Dubai, UAE

Transforming to meet continuing and new headwinds is an imperative for the chemical industry, and one which the 12th Annual GPCA Forum will meet head on and discuss. Register now and save up to 500USD. Please contact us to receive the Quote Code.

www.gpcaforum.net

 

The 8th International Saudi Transtec Exhibition & Conference
5 – 7 December 2017
Dammam, Kingdom of Saudi Arabia

Saudi Transtec is the definitive meeting place in the Middle East for logistics and supply chain professionals, linking logistics buyers from FMCG’s, Retail, Pharma, Oil & Gas, Manufacturing and Automotive with the leading logistics service providers in the region. Freight forwarders, shipping lines, rail providers, ports and warehousing providers will be joined by materials handling suppliers, supply chain consultants, certification bodies and ITC providers, all showcasing their products and services to a qualified audience of over 5.000 professionals.

http://www.sauditranstec.com/

Partnering to Meet Australia’s Logistics Infrastructure Challenge

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Partnering to Meet Australia’s Logistics Infrastructure Challenge

October 2017
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

The miraculous narrative of China’s success as a country that has dragged itself from a third world status to today’s economic powerhouse, has been the greatest most awe-inspiring economic success story of our generation. Since the 1990s China quadrupled its 1 million kilometres of highways and built a high-speed rail network from scratch, which it plans to extend to 30,000 kilometres by 2020. The sheer size of the stations, their efficient management and the fast trains that run up to speeds of 300 kilometres an hour are a testament to China’s extraordinary infrastructure build over the past two decades which has become representative of the country’s rapid economic development and improved living standards across the country.

This achievement has been copied by other emerging economies, such Singapore and Dubai. They share a commonality as their dictatorial governments employ long-term strategy views, devoid of the restrictions imposed by the short election cycles of Western democracies. This affords them the ability to formulate long-term plans, rather than the drawbacks of short-term election cycles which divide world democracies such as America and Australia.

The Chinese government can afford an expansive certainty of governance and policy direction that spans decades, not the few years allowed by a political term. They can make the tough, unpopular decisions independent of populist support. China can, therefore, afford to invest in infrastructure as a key driver of economic growth, not just to fix short-term problems. This investment in infrastructure is protected by a $US 3 trillion in foreign currency reserves, which China was able to accumulate over its 30 years of export success. Whenever exports slow, the Chinese bolster economic activity by investing in infrastructure. In this way, they can continuously maintain a steady level of economic growth.

Since the end of 2007 and the onset of the GFC, the Renminbi (RMB) has appreciated considerably against a range of major currencies. This has, in turn, strengthened the purchasing power of Chinese investors, as overseas investment has become relatively cheaper.

One Belt One Road
In keeping with their long-term view, China’s “Belt and Road Initiative” is the most ambitious strategy ever to be undertaken. This underlying ambition behind the “Belt and Road” is to build better trade routes, including infrastructures such as roads and rail networks, between Asia, Africa and Europe so they can raise 850 million Chinese, or one-eighth of the world’s population, into the middle class by 2030.

The Chinese government has called on countries along the proposed routes to establish a secure and efficient network of land, sea and air passages, lifting their connectivity to a higher level. A staggering $US3 trillion ($4 trillion) in foreign currency reserves, accumulated during more than three decades of China’s stunning export success will fund the project.

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Already examples of China’s infrastructure success with the “Belt and Road” abound. From a new deep water port in Kenya to railways throughout East Africa and roads and hospitals in Guinea-Bissau. The figures are vastly unfathomable, with the Export-Import Bank of China financing trillions in financing, including direct investment, soft loans and commercial loans.

The amount of money invested into Asian infrastructure between 2015 and 2025 will be worth about 60% of the world’s infrastructure spending.  According to PwC and Oxford Economics, in roads alone, the Philippines, aided by Chinese investment, will increase its infrastructure spending by about 300% between 2010 and 2025, and China about 250%.  In fact, many countries in Asia, in particular, seem to be competing for Chinese investment.

Projections by the OECD suggest that Asia’s share of the global middle class will grow from around 35% in 2015 to 80% by 2050.  The result is that the long-term strategic partnership with China is fast pacing the development of the Asia market compared with Australia.

While the Australian economy is attractive, it is losing its market share due to lack of infrastructure investment. Australia’s solid economic performance, a diversified economy and low-risk environment bode well for business, with 26 years of uninterrupted economic growth and a AAA sovereign risk profile.  Australia is well placed, as even though it is home to only 0.3% of the world’s population, its GDP accounts for 1.7% of the world’s economy.

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However, the imposition of short-term policy windows as a result of changing governments and lack of bipartisan support, means that investment in infrastructure has suffered. The political landscape only allows for a horizon of 3 years between elections (in recent times even less). Policy direction and investment vacillates severely every few years with the rise and fall of governments. As a result, there is a long-term neglect of significant asset investment and a lack of cohesion and strategy in infrastructure management.

According to the Australian Bureau of Statistics, China now ranks as Australia’s fifth largest investor with 4% of investment stock.  It sits behind the United States (24%), the United Kingdom (13$), Japan (10%) and the Netherlands (6%), equal to Singapore (4%) and ahead of Canada (3%).

Mining remains on China’s investment agenda. A total of AU$1.29 billion was invested in the sector in 2015.  This makes the Australian infrastructure sector attractive to Chinese investors, with recent ventures including the 99-year lease of the Darwin Port to the Landbridge Group for AU$506 million.  The port acquisition followed Australia’s first investment as a country in over a century of over $1.3bn in a railway linking South Australia and the Darwin port which was first planned more than a century ago.  While many critiqued the project within Australia, it was ground-breaking in terms of the extent to which Government was able to incorporate private sector financing.

While such investment by the Australian government is impressive, it comes nowhere near that of China.  This may be why the country was not included in initial versions of the One Belt One Road Strategy when it was initially announced in 2013, even though Asia presently represents 10 of Australia’s top 12 export markets. There is an urgent need for investment and a comprehensive National Freight and Supply Chain Strategy to guide infrastructure investment and reform, if Australia is to realise its place as a competitive Asian Trade Partner.

Mark Birrell is the chairman of Infrastructure Australia, and he says that greater foresight will be essential when it comes to infrastructure planning in order for Australia to have a thriving economy over the long term.

“Infrastructure has to be developed and planned with a long-term focus”, he says, “Avoiding the problems of previous election campaigns where projects were developed in isolation and the needs of infrastructure users gained little publicity.”

Australia’s infrastructure problems are only going to increase.

Road Freight

As a major producer and exporter of bulk commodities and other merchandise, Australia expects road freight to grow by 50% and rail freight to increase by 67% to 2030.  Rail freight growth is driven by continued growth in mineral and agricultural exports, and demand for consumer goods driven by population growth.

Domestically Australia is experiencing unprecedented population growth with the country on target to expand to more than 30 million people by 2031.  This will mean that the population of Australia’s four largest cities, Sydney, Melbourne, Brisbane and Perth will increase by close to 50%.

Total domestic land freight is expected to grow to service this population by 80% between 2011 and 2031.  As favourable as this sounds, such rapid growth may result in increasing major transport disruption and delays if there is not an equal investment in land freight infrastructure.  It is critical that this is addressed as the annual cost of congestion in capital cities could exceed $53 billion by 2031, up from $13.7 billion in 2011.

Domestically, the majority of economic activity occurs in the country’s major cities, according to the Australia Infrastructure Audit, which found they contributed $854 billion to the economy in 2011 and are projected to add $1,621 billion in 2031.  Investment and reform are therefore desperately needed to increase capacity and better manage domestic demand.

The Australian Logistics Council has estimated that the logistics industry contributes close to 14.5% of GDP annually.  Spending on infrastructure in this area will, therefore have a compounded benefit on the Australian economy.

Rail

The percentage of freight carried on rail is static or declining as far as Australia’s capital city ports are concerned. This is juxtaposed with the well-documented projection that the freight task is expected to double in the next twelve years or so.  As a result, congestion is set to cost $20 billion by 2020 if no action is taken and, according to the latest ABN Amro report, between $380 billion and $455 million will have to be spent on public infrastructure over the next 10 years.

Shipping

Australia is not prepared to cope with these challenges with major container terminals, for example in Melbourne reaching capacity.  In the next decade 6,000 TEU container ships will be calling into Australia compared to the current levels of 4,500 TEU vessels at Australian ports.   This growth will challenge the current decline of general cargo and standard user berths in many capital city ports, even though shipping is by far one of the most environmentally friendly forms of transport on a per tonne-kilometre basis.

The amount of freight carried on rail is static or declining in capital city ports.  Upgrading the logistics chain between port and rail, as well as developing better handling facilities at the berth are vitally necessary and overdue.  Investing in ports is the critical means of participating in the region’s wider growth.

The opportunities and challenges are clear.  

To meet this need Australia is leading the world in the way it engages with private sector investment to fulfil major capital works.  The Australian Government has committed over A$50 billion for current and future infrastructure investments for the period 2013–14 to 2019–20 onwards to address the improvements required for Australia to remain competitive. This investment is combined with contributions from government and the private sector.

If the country does not rapidly catch up with the advancements being made by its competitors in the Asia Region, who have already partnered successfully with Chinese investors to create more efficient price points and services, it will lose its market standing in the region.  There is some debate as to whether Australia can close the gap in time to meet the rate of demand in the Asia Region.

In its 2016 report, Infrastructure Australia stated that by 2031, Asia would represent about two-thirds of the world’s middle-class population, creating a massive demand for Australian produce and skills.  If Australia is to take advantage of this growth, it needs to be infrastructure ready.

Partnering to meet the Gap

As an island nation, Australia is dependent on well-functioning seaports and airports to trade with the world.  Its economic competitiveness is closely linked to the quality of its national supply chain infrastructure, its ports, railways, roads and airports.  They connect Australian goods and services to domestic and overseas markets.

The increasingly wealthy and demanding consumers in countries such as Japan, the Republic of Korea, Singapore, Malaysia, Thailand and China want high-quality products, including fresh produce, as quickly and as cheaply as possible.  This offers a great reason for countries such as Chinese and Australia to unite for mutual gain.

It is hoped that in the future a partnering between China and Australia will forge a mutual advantage to meet the service requirements of these new consumers.  Such a collaboration would enable Australia to fund its gap in logistics infrastructure and overhaul these at a pace that would ensure it is ready to take advantage of the stratospheric opportunities that lie ahead in a growing market, while China would benefit from a solid source of investment return.

Darryl Judd
Chief Operating Officer, Logistics Executive Group

In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

NEWS

Logistics Executive Group to partner with LogiSYM Dubai 2018

The 2nd Annual LogiSYM Dubai will be held on the 13-14th February 2018. With a focus on digital disruption, e-commerce and the regions continued transformation, the popular event is back by Dubai Trade and will feature more than 50 international and regional speakers. Logistics Executive Group will be one of the lead partners during the event providing some of its latest research and what papers. REGISTER NOW!

 

Call for speakers and sponsors to LogiSYM Dubai 2018 & LogiSYM Oman 2018

Are you interested in being a speaker or being part of a panel? We are on the lookout for more speakers and ideas to incorporate into our conference and we would love to hear from you! Contact BushraA@LogisticsExecutive.com for more details.

 

Logistics Executive Group to partner with Hands Up Kenya Initiative

Logistics Executive Group is to get in behind Hands Up Kenya, a not-for-profit leadership empowerment initiative. Through this partnership, Logistics executive Group plans to help Hands Up Kenya broaden its network of mentors and established professionals who are keen to enhance Kenyan youth’s access to professional mentorship, employment and career development opportunities. Hands Up Kenya in launching its flagship conference series, starting with an inaugural event in March, 2018 in Nairobi. Each event will feature a variety of leadership and professional development opportunities such as workshops, speeches, an on-site career fair and networking events. Through these events and platforms, the initiative aims to promote tools and approaches that have been proven to elevate standards of living, promote business creation, build robust communities and empower youth to grow and fulfil their potential.

 

UPCOMING EVENTS

LogiSYM Dubai 2018

13 – 14 February 2018
Jumeirah Creekside Hotel, Dubai, UAE

LogiSYM Dubai 2018 brings together over 300 people across a variety of practices and professions. Who should attend? Anyone in Logistics & Supply Chain working to: put an idea into action, get inspiration from industry leaders, connect with potential collaborators, manage an effective team, or understand the trends affecting the future. If you want to be prepared for the changes in the supply chain industry, then you need to be at LogiSYM Dubai 2018!

http://dubai2018.logisym.org/

 

The 4th Asia-Pacific 3PL & Supply Chain Summit

20 – 21 November 2017
Novotel Clarke Quay, Singapore

The rise of eCommerce has created a dramatic shift in the landscape for 3PLs, manufacturers and retailers in Asia-Pacific. Next day delivery, full visibility and product customization are now standard expectations from both B2B and B2C customers. This fact has made it imperative for distribution and warehousing strategy to adapt. Increasingly, companies are innovating and embracing digitalization to broaden or defend their market share.
The 4th Asia-Pacific 3PL & Supply Chain Summit brings together leaders in logistics, supply chain, manufacturing/retail and eCommerce throughout the region. Over 200 attendees choose to make this high level gathering their primary event for addressing the key challenges that face the increasingly dynamic supply chain and logistics industry.

https://events.eft.com/3pl-asia/

 

The 12th Annual GPCA Forum
27 – 29 November 2017
Dubai, UAE

Transforming to meet continuing and new headwinds is an imperative for the chemical industry, and one which the 12th Annual GPCA Forum will meet head on and discuss. Register now and save up to 500USD. Please contact us to receive the Quote Code.

www.gpcaforum.net

 

The 8th International Saudi Transtec Exhibition & Conference
5 – 7 December 2017
Dammam, Kingdom of Saudi Arabia

Saudi Transtec is the definitive meeting place in the Middle East for logistics and supply chain professionals, linking logistics buyers from FMCG’s, Retail, Pharma, Oil & Gas, Manufacturing and Automotive with the leading logistics service providers in the region. Freight forwarders, shipping lines, rail providers, ports and warehousing providers will be joined by materials handling suppliers, supply chain consultants, certification bodies and ITC providers, all showcasing their products and services to a qualified audience of over 5.000 professionals.

http://www.sauditranstec.com/

The Supply Chain is Knitting Up a Storm

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The Supply Chain is Knitting Up a Storm

April 2017
Author: Author: Cassandra Lee, General Manager – North Asia & Greater China, Logistics Executive Group

 

Take note: next season’s big fashion statement will be “Responsible Innovation”

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Supply Chain fashion innovation, aka the science behind the manufacture of garments, first disrupted the fashion industry and then the entire world all those centuries ago and became the catalyst for change that we now know as the industrial revolution.

Today if you were asked to think of “fashion” and “revolution”, you would probably conjure up a Vivienne Westward design or Kim Kardashian’s infamous Paper Magazine cover. This is all thanks to the clever marketing of fashion houses. The more fashion has become a tool of mass manufacturing and market consumption, the more it has tried to persuade us that it actually stands for the opposite: the rarified, exclusive, customized, individualized creations that are tailored to our “specialness”. I’m sure we have all succumbed, to have fallen head over heels with the idealization, the grooming of our inner narcissist by the flattering, fashion ads that promise to bring out our inner James Bond or Audrey Hepburn with the spritz of an eau de perfume (probably manufactured in China under quality controls and chemicals they are not obligated to disclose).

The reality is that the revolution of fashion manufacture has been stifled by the opening of third world markets because there was no longer an impetuous to produce technological efficiencies if money can be as easily saved through the use of “cheap” labor.

Not surprisingly, fashion manufacture started to lag in the innovation stakes… until now.

A constant stream of news articles has forced us to face the fashion folly of our ways. We would still like to believe that those expensive, Italian branded sweaters have been hand-knitted in the rarified air of Milan and not in the same Bangladesh sweatshops that push out product for Kmart, but we can no longer deny what has been tagged in the media as “fashion’s dirty little secret”.

So the fashion bigwigs have worked out that the love affair will soon be over unless they change their ways. That is where those buzz words come in: “Responsible Innovation”. The overused decrier “sustainability” is so yesterday Darling..

In Copenhagen in May this year, over 1,200 fashion, political, and business leaders gathered, from all over the world to address the worrying turn in consumer sentiment towards the industry. The dilemma was how to stem the jaded, popular sentiment without damaging profits? How to acquiesce without sacrificing the bottom line?

The answer was there the whole time of course: technology… and so the wheel comes full circle.

Once again it is predicted that the fashion world will become a major disruptor by using its high profile to revolutionise. Of course the technology was there the whole time but now, due to public pressure, it will be used and we will no doubt be hearing all about it on the catwalks from Paris to New York. H&M have already pushed out their “sustainable,” “Conscious, Exclusive” range. Chanel have even started doing a “Green” collection with “high fashion ecological” materials.

Of course this may all be feel good tokenism… or it may be the beginning of a new way of order, a new way of doing the business, just like the industrial revolution that started in the weaving rooms of England and Scotland of so long ago. Sustainability will be replaced with Innovation as the whole industry is exposed to the technology of an open transparent media who insist on closing the loop and pushing towards change.

This could be yet another new avenue for supply chain professionals to demonstrate their finesse as business leaders and augmenters of change. Supply Chain and Logistics Leaders everywhere, grab your algorithms, your ERPs and dashboards, from Copenhagen to New York and Paris, the revolution is high!

 

Cassandra Lee
General Manager – North Asia & Greater China, Logistics Executive Group

Based in our Regional Headquarters of Hong Kong, she operates in a global capacity and leads the North Asian Business streams of Consulting, Executive Search and Training and associated teams in the delivery of Talent Management, Education and Talent Acquisition services.

With more than 16 years Industry experience Cassandra has provided senior level executive recruiting and consulting services to organizations around the world, which delivers profitable leadership change to key organisations. Cassandra exemplifies excellence in her innate ability to connect executive talent with businesses across the supply chain.

Cassandra’s proven and highly successful approach melds strategic analysis with aggressive process-driven search execution. She works with companies, not for them. As such, she has become one of the leading executive recruiters in her field today and a thought leader in Talent Management and Learning & Development with a loyal client base and extensive professional network, including supply chain, procurement, retail and business leaders at all levels of business operations globally.

NEWS

LogiSYM Singapore 2017 | Last Call to Register.

The Asia-Pacific region’s premier Supply Chain Symposium and Summit. Learn from the world’s top thinkers and doers in a series of main stage talks over two days. LogiSYM Singapore 2017 speakers offer pragmatic, real-world insights that transcend Logistics & Supply Chain sectors. Have you registered for the event?

http://logisym.org/2017.

 

Innovate to lead: Advancing cross-border e-commerce in Asia

To say cross-border e-commerce is taking off like a rocket would be an understatement. With a growth rate of about 25% per annum and a market size expected to reach $1 trillion by 2020, the opportunities are tremendous. But how can retailers capitalize on this trend? Join DHL E-commerce CEO Charles Brewer and Quintiq APAC general manager Kris Kosmala in an exclusive webinar this May 3, as they take a deep dive into the latest consumer trends and emerging digital technologies in the e-commerce space.

Register Here.

 

UPCOMING EVENTS

9th GPCA Supply Chain Conference
2-4 May 2017
Abu Dhabi, UAE

Held under the theme ‘Agile and Efficient GCC Supply Chains – The Role of Technology’, the 9th GPCA Supply Chain Conference will offer delegates an exclusive opportunity to explore the benefits of supply chain digitization in a complex and changing marketplace environment. Attendees will hear from global industry experts about how leading supply chain organizations have leveraged innovative technologies to improve the agility and efficiency of their supply chain operations.

www.gpcasupplychain.com/

 

The 4th MENA Cold Chain Forum
16 – 17 May 2017
Dubai,UAE

The 4th Edition of the MENA Cold Chain Forum will take place in Dubai from 16 – 17 May 2017. The event has established itself as must-attend event for all stakeholders who are involved in making the pharmaceutical cold chain process flawless for the region. This Annual event has successfully attracted professionals from different Ministries, Food & Drug Authorities, Pharmaceutical Manufacturers, Healthcare Providers, Pharmacy Chains, Shipping, Transport and Logistics Companies, Distribution Houses, Airports and Customs, Airlines, Storage and Warehousing Companies, Supply Chain Solution Providers, Temperature Controlled Packaging Systems, Temperature Monitoring Systems, GPS Manufacturers and Data Loggers.

www.menacoldchain.com/

 

LogiSYM Singapore 2017
17 – 18 May 2017
NUSS Kent Ridge Guild House, Singapore

The region’s premier Supply Chain Symposium and Summit, LogiSYM Singapore 2017 focuses on bridging concepts, practice and technology in supply chain management, real world implementation and benefits that result in increased supply chain pipeline velocity, profitability and performance.

logisym.org/2017/

 

Supply Chain Innovation Summit 2017 China Focus
25 – 26 May 2017
Shanghai, China

Supply Chain Innovation Summit 2017 China Focus (SCCN2017) is the Annually Supply Chain Innovation Summit(4th Edition) organized by Ace Events, announced to be held on 25-26 May 2017 at Shanghai China. With the theme “Digitalization. Revolution. Success.”, address the topics across Supply Chain Innovation, Digitalization, Visibility, Innovative Supply Chain Technologies, e-Commerce Supply Chain, Cross-Functional Collaboration, etc. it was developed from and for supply chain and logistics professionals as a globally involved conference.

www.scinno-cn.com

The Grey Invasion

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The Grey Invasion

August 2017
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

Is an aging population all doom and gloom?

CEO_Newsletter_August2017_1Population change is a hot topic these days for all sorts of reasons. There is a deep fear, as demonstrated in developed countries like Germany and Japan in the 1990’s that our able workforce is shrinking and that the consequence of this will be shrinking productivity and a smaller economy. It is feared that this would result in a poorer lifestyle. According to the United Nations, the key concern we should all be focusing on is aged population growth. Staggeringly, they project that the number of people over the age of 65 is due to double in the next 25 years. That will amount to 1.1 billion people or 13% of the population. If we break that down to a figure closer to home, that will be a ratio of 26 out of every 100 people over the age of 65 by the year 2035.

Of course there will be variances around the globe that will determine fluctuations and variances in this number. Richer, more developed countries will have a higher proportion whilst countries that are still developing will rise at a lower rate as they still have a strong birth rate.

So how is the world meeting this unprecedented development? We thought we would ask our staff across the world how various governments are meeting the challenge.

“In Australia we seem to find that people are living longer but also working longer” said Mr Kim Winter, Global CEO of the Logistics Executive Group. “Our aging population is highly skilled and they have a strong work ethic”. The aging population in Australia is living longer and is expected to increase substantially with the retirement of the Baby Boomers. To counter this effect on GDP, the Australian Government has extended the legal retirement age and made personal wealth and superannuation a factor of eligibility for pension entitlements. They are also trying to ensure that taking measures to ensure that all segments of the population have the ability to skill up and find employment, including women. New immigrants will also offset the loss of younger workers.

“Here in Singapore,” says Carmel Perales, General Manager, South East Asia of Logistics Executive Group Singapore “education is playing a very important role in ensuring older people work longer”.

“It makes sense that older people will find it harder to work longer in more labor intensive, less-skilled jobs”, she added. The Singapore Government have invested in initiatives to encourage older workers to upskill while promoting the value of wisdom and experience to counteract any prejudice about aging.

“There is no doubt that higher-skilled employees have a better quality of life” said Cassandra Lee, General Manager Hong Kong & Greater China “They get paid more and their work is less physically demanding which means that they can stay in the workforce longer”. She added.

CEO_Newsletter_August2017_2Technology is also making it easier for the over 65 workers to stay employed by offering more flexible work place alternatives. For example, the internet and now facilitates working from home rather than the obligatory requirement of commuting to an office. “Technology also means that there is less demand for unskilled labor as a lot of manual labor is now being replaced by machines,” continued Ms. Lee. “In Hong Kong, just like Singapore, there is an emphasis on education and skilling the younger generation so that even if there is a smaller working population, they will have the skills to manage and productivity will not decrease as technology picks up the shortfall of a disappearing workforce”.

Labor saving, capital intensive technology innovations will offset the shortfalls that may be encountered due to a smaller workforce. “In Dubai we have experienced a boom in technology investment” said Mr Kim Winter, Global CEO of the Logistics Executive Group. “It will continue to be fascinating to see how the population will change as the workforce needs change.” He added. “In the Middle East, already there has been a growth in the number of expatriates who are well educated and highly skilled and it is expected that this will continue as Dubai moves from its adjustment phase from development to a highly skilled economy”.

“Overall what this means is that out of necessity there is going to be a global shift in the perception of our older generation” said Mr Winter. As an employee himself who has entered into his silver years, Mr Winter has firsthand experience. “I can attest that being older does not necessarily mean that you want to rush out and buy a set of golf clubs. I lead a more demanding life today than I did when I was much younger”.

There is a slow but growing body of evidence that shows that skilled, aged workers are equally as productive as their younger counterparts. Due to their high degree of skill and experience, their retirement would cause a debilitating loss to the industry, if these older workers were to retire. However, there will have to be changes made at different levels from government policy, company practices and the individual mentality so that an older workforce can be supported and encouraged to flourish.

Government policy level
As detailed above, policies will need to be put in place that encourage older people to stay in the workforce. This will include upskilling, changing perceptions and countering age discrimination, changing pension age and restructuring taxation to encourage older workers to remain in employment on some level.

Company level
To counter this a lot of companies are setting up mentoring systems that allow prospective retirees to train their replacements. At Bosch for example, older workers are asked to sit down for a formal interview so that their younger successors can ask them questions and capture their advice and experience before they retire. “There is so much that an older, wiser head can offer in terms of mentoring in the area of leadership” said Mr Winter who is also the group leader in Logistics Executive Group’s Coaching Consultancy.

Personal level
Older workers have to be able to be more flexible than ever before. They need to be prepared to take leadership from younger, less experienced managers. They need to be prepared to change careers, to upskill and to work under different conditions of employment in terms of pay and hours.

So what does this mean for the logistics and supply chain industry? There has been a barrage of information in the recruitment space written about the “skill shortage” but not very much on how the industry is going to meet the challenge of an aging workforce. Perhaps age has not been a very sexy topic in the past and as a result the logistics and supply chain industry is critically lagging behind in how to address this growing issue.

Ironically it will probably be the older generation itself that will lead and develop this change. Make way for offices filled with grey bearded hipsters boasting the latest smart gadgets. After all, for several decades, women’s magazines have purported that “30 was once the new 20” and then that crept up to 40 and so on. We are all living longer, aging better, earning more and are better educated with a greater spending power that will have more influence. Make way for the grey tsunami!

Darryl Judd
Chief Operating Officer, Logistics Executive Group

In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

NEWS

Logistics Executive Group and Sharaf Aviation Academy announce a partnership to deliver first-class Logistics Training to the Middle East & Africa

Logistics Executive Group and Sharaf Aviation Services Academy have entered into a long-term partnership to deliver specialist supply chain and logistics E-learning and facilitated programs across the MENA region. For over a decade, Logistics Executive Group has dedicated its expertise to the development and enrichment of -a global community of supply chain and logistics professionals via its Logistics Academy education platform. Together, Sharaf Aviation Services Academy and Logistics Academy will broaden the range of specialist education that will help organizations in the region to meet the gap in training of their workforce, giving them a ‘best in class’ service.

Read More

 

UPCOMING EVENTS

LogiSYM Malaysia 2017
24 – 25 October 2017
Kuala Lumpur, Malaysia

LogiSYM Malaysia 2017 promises to be a highly unique event, with the focus being to provide a platform for mid- to senior-level shippers to hear from the leading solutions in and surrounding the logistics and supply chain industry. The structure of the symposium is such that delegates will have more interactivity with supply chain peers, allowing the development of ideas and for delegates to acquire actionable take-aways to integrate back at the office.

www.logisym.com/events/logisym-malaysia-2017/

 

LogiSYM Dubai 2018
February 2018
Dubai, UAE

LogiSYM Dubai 2018 is back following the success of the inaugural 2017 conference. Supported by Dubai Trade, the event will cover the key dynamics of the GCC and Africa landscapes whilst tackling some the regions key challenges such as the introduction of VAT. LogiSYM Dubai Call for Speakers 2018 – Share your know-how, insight or innovation. Be a speaker at the 2017 edition of the world’s leading event for Logistics and Supply Chain – find out more email: Andi@LogiSYM.org

www.logisym.com/

 

Indonesia Transport, Supply Chain and Logistics
10 – 12 October 2017
Jakarta, Indonesia

Indonesia Transport, Supply Chain and Logistics (ITSCL) is the Indonesia’s the most anticipated international event in Indonesia for the world’s Transportation, Supply Chain & Logistics players. It’s where you need to be to strengthen your presence, build business alliances and develop potential businesses with Indonesia. present as the preferred venue to strengthen presence and enhance visibility of logistics and supply chain solution in Indonesia marketplace. This event will be much anticipated as a perfect platform to provide insights with expectations, challenges and opportunities for the transportation, shipping, port and logistics service providers and manufactures, also to showcase the cutting-edge logistics products and services.

http://www.transport-supplychain-logistics.co.id

 

The 12th Annual GPCA Forum
27 – 29 November 2017
Dubai, UAE

Transforming to meet continuing and new headwinds is an imperative for the chemical industry, and one which the 12th Annual GPCA Forum will meet head on and discuss. Register now and save up to 500USD. Please contact us to receive the Quote Code.

www.gpcaforum.net

 

The 8th International Saudi Transtec Exhibition & Conference
5 – 7 December 2017
Dammam, Kingdom of Saudi Arabia

Saudi Transtec is the definitive meeting place in the Middle East for logistics and supply chain professionals, linking logistics buyers from FMCG’s, Retail, Pharma, Oil & Gas, Manufacturing and Automotive with the leading logistics service providers in the region. Freight forwarders, shipping lines, rail providers, ports and warehousing providers will be joined by materials handling suppliers, supply chain consultants, certification bodies and ITC providers, all showcasing their products and services to a qualified audience of over 5.000 professionals.

http://www.sauditranstec.com/

VAT in UAE

By | CEO Newsletters | 3 Comments

Topics Covered

Introduction
General information
GCC VAT Agreements
VAT Mechanics
Other VAT Important Information

Who Started It

In 1954, Maurice Laure, French, invented indirect tax ( VAT). His idea was quickly adopted because it forced taxpayers at all levels in production process to administer and account for tax themselves, rather than putting the burden only on retailers or requiring assessment by tax authorities.

Who is Taxable Person?

Taxable person means any person (corporation or not) conducting an economic activity for the purpose of generating income.

VAT Payment System

Payment will be done via e-services online.

TAX PERIOD AND PAYMENT DEADLINES

VAT period is every quarter (3 months) and deadline for payment is 28 days after tax periods.

It’s widely known the GCC region is about to embark on a structured change to it’s fundamental taxation model with the introduction of VAT (Value Added Tax) from 1st January 2018. Driven by dealing oil revenues and the need to diversify economic activities, governments throughout the GCC are fully committed to the introduction of VAT to ensure they are in the position to balance the books. Yet businesses throughout the GCC and those trading across the region are struggling to understand just what the introduction of VAT is likely to mean to their operations, although committed to its introduction and having announced the framework, the inherent lack to detail and the nearing deadline of its introduction means for many businesses confusion is riped amongst their finance professionals.

The UAE government has recently started as communication program consisting of seminars and forums, the latest of which was held last 3rd week in Dubai with the aimed to answer many of the questions facing businesses, the Ministry of Finance is working diligently to ensure that there is no disruption to their intended commencement.

So what does VAT mean? And where do we stand today with what we do know about the framework and regulations.

The UAE Ministry of Finance hosted several sessions related to VAT upcoming regime in GCC. The session aimed to send clear message to market about VAT go-live and the preparation needed for each tax person.

THE BELOW INFORMATION WERE CONFIRMED

UAE had worked with IMF to study the shift from being oil and hydrocarbons dependent towards the most reliable source of revenue which is VAT. This will help the country funding high quality services to public.
VAT is part of economic agreement with entire GCC countries. Unified excise tax and VAT will benefit the region.
FTA (Federal Tax Authority) shall be in charge of managing, collecting federal taxes and related fines, distributing tax- generated revenues and applying tax related procedures in force in UAE.
UAE to implement VAT on 01 January 2018 while rest of GCC will have till January 2019 to implement.
UAE VAT registration opens during Q3 2017 (voluntary) and Q4 2017 (mandatory).
Threshold is based upon turnover of AED 375,000 (mandatory) while AED 187,500 (voluntary).
GCC VAT Agreement Structure is composed of 15 Chapters discussing from VAT definitions, scope, due dates, calculation, exemptions (refund), tax deductions, obligations, information exchange between members of each state, transitional provisions and appeals.
VAT groups will be available
GCC agreement relating to:
1. Health
2. Education
3. Real Estate
4. Real Estate
5. Education
6. Local transport (i.e. metro)

Member of each GCC country will have the right to choose whether to zero or exempt above mentioned categories.

Guidelines on basic VAT terminologies such as:

Standard rate (5%) across GCC

Vatable Supply

Zero rated items which will allow deductions or refund if exempt

Zero Rated

Exempt

Reverse charges

EXEMPTIONS and REFUNDS:

Exemptions will be applied to charitable institutions, companies related to international event hosting (i.e. Expo 2020).
  • Farmers and fishermen are exempted from VAT.
  • FTA to issue guidelines on repayment/ refund of tax.
  • Tax refund for tourist, provisions is still being work out.
  • Tax refund for international organizations (i.e. diplomatic missions).
  • VAT on CAPEX is immediately deductible.
  • FOREX is not taxable.
  • Processing fee for remittance is taxable.

VAT is collected by registered suppliers down to entire supply chain.

VAT is payable by both businesses and individuals.

Not all business will be VAT registered supplies.

MECHANICS OF VAT

It applies to every single member in supply chain process.

Each person in supply chain will deduct VAT on preceded chain (ref, below image).

Collecting, deducting , remitting to government is borne finally by end consumer. Businesses only act as agent.

WHAT KINDS OF SUPPLY

GOODS

the passing of ownership of physical property or the right to use that property as an owner to another person (buying goods).

SERVICES

anything which is not supply of goods is supply of services (Example: car rental is services).

ELECTRICITY?

Is it goods or services? Answer: goods.

VAT invoices contains:

  1. Sequential no.
  2. Date of invoice
  3. Name, address and Tax registered number
  4. VAT invoices should be kept for 5 yrs.
  5. VAT returns should be printed and hard copies to be filed properly for FTA checking purposes.

Services/Goods only which started from 2018 will be vatable. VAT will be collected only after 31 Dec 2017 when services /actual construction runs in 2018 January.

WHERE TO CHARGE?
GOODS – where it is?
SERVICES – where you are?

REPORTING OF TRANSACTIONS AT EMIRATES LEVEL
Should be filed where the transaction occur.
– For services, location of the customer.
– For goods, location of supplier.

VAT Groups

Entities with VAT Group will be treated as one entity.

  • VAT is applicable to ALL intercompany transactions.
  • VAT is applicable to subsidiaries
  • VAT groups will allow different companies to form one group to obtain one (1) registered number.

FTA will check if all companies is controlled (at least 51% owned) by one person.

BAD DEBT RULE
– 6 months lapse from credit period
– Written off from the books of account.

UAE and EU VAT system is similar in terms of INTRA GCC trade system.

VAT PAYABLE FORMULA: VAT on Sales (Output tax) – VAT on Purchases and Expenses (Input TAX) = NET VAT payable to FTA.

FTA AUDITS

FTA to conduct selection base audit (risk base).

FTA does not require companies to have external auditors.

FTA will call the companies to audit ( 5 days before the on-site audit) to allow preparation of documents.

FTA might conduct surprise visits/audit if there is illegal activity being informed.

APPEALS TO FTA (3 TIER PROCESS)

LEVEL 1:

Reconsideration by FTA officer.

LEVEL 2:

Tax committee (1 judge, 2 tax experts, not from FTA)

LEVEL 3:

Normal court system.

Meryjhel Casinas
Senior Consultant – MENA, Logistics Executive Group

Meryjhel is a highly-experienced finance professional with a Bachelor of Science in Accountancy and Certificate from CIMA-UK. Meryjhel has over 13 years of experience in financial accounting reporting, business analysis, budgeting and project management. She is a subject matter expert on accounting in courier, logistics and freight forwarding. Meryjhel has worked with government and consulting previously with Accenture. In addition, Meryjhel lead finance functions for one of the world’s largest logistics companies, FedEx Corporation with stints in the United Arab Emirates, Kenya and Afghanistan. She gained mastery of skills to manage finance functions, strategy development and leadership on her experienced in Middle East, Africa and Asian markets.

2017 Total Logistics Report Released

By | CEO Newsletters | One Comment

2017 Total Logistics Report Released

February 2017
Author: Kim Winter, Chief Executive Officer, Logistics Executive Group

 

CEO_Newsletter_February2017_2Logistics Executive Group announces the release of the Total Logistics 2017 Report, by partner Transport Intelligence (Ti).

The Report examines the dynamics of each logistics segment. Key elements of the report including some highlights by David Buckby, Economist at Ti, including the following:

  • The logistics industry has undergone a transformation in terms of the major logistics service providers which have come to dominate the market.
  • Ti’s new report examines the dynamics of each logistics segment that have caused the industry to transform.
  • For the first time, this report includes Ti’s unique total logistics market sizing, segmentation by logistics market from top to bottom, and forecast growth to 2020.
  • Major developments, such as the ‘Internet of Things’, ‘autonomous vehicles’ and ‘3D printing’ are all assessed in detail.

This report offers a concise, easy to understand view of the industry. In addition, for the first time, Ti has sized the total logistics market and is offering a breakdown of the industry by logistics market, as well as forecasts to 2020.

Ti’s CEO, Professor John Manners-Bell explained, “The global logistics industry is vast, both in terms of market size and the huge numbers of people employed in the sector. It is therefore surprising that its role in the development of the global economy is generally overlooked.”

According to Manners-Bell, “Without the inexpensive and reliable transport of freight, manufacturers would not be able to tap into the cheap labour resources based in remote locations throughout the world. Nor would retailers be able to provide ever-increasing levels of service to their customers, ensuring shelves are always stocked whilst inventory is kept to a minimum”.

This report examines all the pressures which have led to the emergence of today’s vibrant global logistics industry – from both the ‘demand’ (i.e. manufacturing and retailing) and the ‘supply’ (i.e. logistics provider) side perspective. In addition to the roles of the contract logistics and freight forwarding sectors, it also examines the dynamics of the express parcels, container shipping, air cargo, road freight and intermodal industries.

Whilst global macro-trends are highly important to the long term future of these sectors, conversely it is the structure and competitive nature of these sectors which has a ‘bottom up’ influence on supply chain management and hence global economies. For example, hyper-fragmentation and price competition in the European road freight industry has been a key input into the formulation of manufacturers’ and retailers’ centralised distribution strategies.

Manners-Bell continued, “What is clear is that after a turbulent period of transformation, there is no sign that change in the logistics industry is slowing down. A powerful mix of demand and supply side factors means that further re-structuring is possible, if not probable.”

A key statistics from the report is that global economic growth in 2016 was just 2.3% according to World Bank.

What’s the outlook for logistics?
2016 has been the weakest year for the global economy since the Great Recession of 2008-09. That is the clear and simple message of the World Bank’s most recent Global Economic Prospects report. Global economic growth was just 2.3% in 2016, down from 2.7% in 2015. Weak US performance and recessions in large commodity-dependent economies curtailed growth. In emerging markets, the disparity between growth of commodity exporting nations compared to importing nations was vast:

CEO_Newsletter_February2017_1The struggles of commodity exporters’ overall economic growth are thought to have spilled over and negatively affected their logistics sectors. This is apparent in the findings of the forthcoming Agility Emerging Markets Logistics Index 2017 report, due to be released later this month, which features a composite index that ranks emerging markets based on their logistic industry prospects. Index scores and rankings of several major commodity exporters have suffered while importers have been far more resilient.*

Looking ahead, some of the World Bank’s key expectations for 2017 are:

  • Global growth is projected to rise from 2.3% in 2016 to 2.7% in 2017. However there is substantial uncertainly around this baseline figure. The World Bank asserts there is a 50% chance that actual growth will be between 2.0% and 3.2%.
  • Political uncertainty (largely associated with Brexit and Donald Trump) has been identified as a key risk which could curtail growth in 2017.
  • On the other hand, possible fiscal stimulus, especially in the US, represents a substantial upside risk to the outlook.
  • Rising oil prices are expected to help boost three leading commodity exporters – Brazil, Russia and Nigeria – from recession in 2017. However metals and agriculture commodity prices overall are expected to remain more or less flat to 2019.
  • World trade volume growth was just 2.5% in 2016. It is expected to increase to 3.6% in 2017. Although new trade restrictions reached a post-crisis high in 2016, encouragingly, most emerging markets “still have a large untapped potential to move up the value chain, by shifting to more complex and higher domestic value-added products”.

Main take-outs regarding the logistics industry are first, that unsurprisingly, the expectation of slightly higher economic growth in 2017 is good news, but don’t count in any way on the global economy to deliver a more favourable environment in 2017 than in 2016, as more uncertainty surrounds these forecasts than in previous years.

Ditto for world trade growth. And finally, it is quite possible that growth in global ‘supply chain complexity’ has slowed down significantly over the last five years or so – not good news for logistics providers, especially forwarders.

The Report outlines Consolidation & Fragmentation across the Logistics Industry as outlined in the below diagram.

CEO_Newsletter_February2017_3

Although growth in supply chain complexity encompasses all manner of considerations, one possible proxy for it is growth in global value chains. Global value chains measure the extent to which production processes are fragmented across countries – the iPhone contains parts from at least 10 different countries. It seems that growth in fragmentation of production has slowed significantly since 2010, and it does not appear that it will pick up to rates seen in years past. The Report also provides an excellent insight into global Exports trends.

CEO_Newsletter_February2017_4

*Many of the forward-looking issues that the World Bank’s Global Economic Prospects report addresses are also questions that have been asked of over 800 supply chain and logistics executives in the upcoming Agility Emerging Markets Logistics Index 2017 survey. For example: How will economic growth in emerging markets fare in 2017? What do you think will be the most significant drivers of the global economy in 2017? How concerned are you about growing protectionism and moves away from free trade?

For the logistics industry’s take on global economic prospects and to purchase a copy of the Full Report, follow this link.

 

Ti has also released 2017 Global e-commerce Logistics report

The report includes an exploration into how e-commerce trends are disrupting ‘traditional’ e-commerce logistics as rapid growth sees businesses searching for a comfort zone that they may never find and logistical challenges still need to be overcome in last-mile and fulfilment operations.

The report offers readers valuable insight into the development and prospects of this market. A key theme examined throughout highlights e-commerce itself as the disrupter to ‘traditional’ e-commerce logistics. Presented from multiple angles (global and regional, fulfilment and last-mile, and from retailers and LSPs) the report offers comprehensive analysis on e-commerce logistics trends which could provoke further developments and innovations within the industry.

To Purchase a copy of the 2017 Global e-commerce Logistics Full Report, follow this link.

Kim Winter
Chief Executive Officer, Logistics Executive Group

The founder of Logistics Executive Group, Kim possesses 35 years of executive leadership experience spanning Executive Search & Recruitment, Corporate Advisory, Trade Facilitation, Executive Coaching & Leadership Development, across Supply Chain, Aviation, Maritime, E-Commerce , F&B, Logistics, FMCG and Retail.

A professional public speaker and event MC and regular contributor to industry media, Kim is a Director of companies in Australia, Asia, India, and the Middle East and is the Founder of Australian registered charity Oasis Africa Australia www.oasisafrica.org.au providing freedom from poverty through education to over 8000 orphaned children in Kenya’s slums since 2006.

NEWS

IATA 2017 Air Cargo Innovation Awards Finalists

The second edition of the IATA Air Cargo Innovation Awards received 46 entries from across the industry from small start-up companies to large multinational corporations. Submissions covered a wide-range of topics including drones, ULDs, special cargo and dangerous goods. Applicants used cutting edge and emerging technologies such as block chain and big data to develop innovative solutions to benefit the industry.

View list of finalists here.

 

LMFAsia 2017 | Last Call to Book Your Space. Free Registration for Trade Visitors.

Have you registered for the event? Delegates and visitors from Akamai Technologies, BliBli.com, Estee Lauder, FlipKart, Lazada, Maybank, PayPal, PricewaterhouseCoopers, NTUC, Watsons, Zalora and more will be attending the event. Mingle with these industry practitioners in our networking sessions and use the business matching tool to meet your potential partners face-to-face.

http://www.lmfasia.com.

 

UPCOMING EVENTS

Heavy Iran
3 March 2017
Tehran, Iran

On April 27, 2016, the 1st International Conference “HEAVY IRAN 2016” successfully took place. It was attended by more than 60 delegates from Iran, Iraq, Russia, Kazakhstan, Uzbekistan, UAE, Germany, Belgium, Netherlands and Turkey. The Conference was sponsored by Russian “Volgo-Dnepr” and Italian “Cometto”. This year Heavy Iran will be held on March 3, 2017./span>

heavy.world/conference-heavy-iran.php

 

VCI FASHION & LUXURY SUPPLY CHAIN LEADERS ROUND TABLE 2017
3 March 2017
Hong Kong

The VCI Fashion & Luxury Retail Supply Chain Leaders Round Table to be held on March 3, 2017 in Hong Kong is a small room event with 80+ selected international fashion & luxury brands, vertical e-tailers, and marketplaces attended. It is by invitation only and is exclusive for VPs & Directors of Supply Chain/ Logistics/ Merchandizing/ Marketing/ Strategy.

www.vcintegration.com/events/id_84

 

FACE Summit
13 March 2017
Abu Dhabi, United Arab Emirates

TFACES is the annual Future Air Cargo Executives Summit for young professionals under 36 with the ambition to become the next generation of Air Cargo leaders and industry decision makers, which is held in conjunction with IATA’s World Cargo Symposium (WCS). IATA organized the first FACES in 2013 to highlight the important role young leadership plays in the future growth of the air cargo industry. Since then, other five editions of the summit allowed the newest generation of industry executives to express their viewpoints and make a sound contribution to the global air cargo agenda.

www.iata.org/events/wcs/Pages/faces2017.aspx

 

11th World Cargo Symposium
14 – 15 March 2017
Abu Dhabi, United Arab Emirates

The World Cargo Symposium (WCS) is the largest and most prestigious annual event of its kind and the only one to bring together key stakeholders from the entire air cargo supply chain. IATA’s 11th annual World Cargo Symposium will continue to move the industry from talk to action with this edition. WCS 2017 will feature plenary sessions, specialized tracks, workshops and executive summits, tackling aspects related to Technology & Innovation, Security & Customs, Cargo Operations, and Sustainability.

http://www.iata.org/events/wcs/Pages/index.aspx

 

LogiSYM Singapore 2017
17 – 18 May 2017
NUSS Kent Ridge Guild House, Singapore

The region’s premier Supply Chain Symposium and Summit, LogiSYM Singapore 2017 focuses on bridging concepts, practice and technology in supply chain management, real world implementation and benefits that result in increased supply chain pipeline velocity, profitability and performance.

logisym.org/2017/

 

Man versus Machine

By | CEO Newsletters | One Comment

Man versus Machine

March 2017
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

 

The biggest transformation since Henry Ford’s Model T

According to an Oxford University study in 2013, it was predicted that automation would replace half the workforce in the US alone in the next two decades. The big concern for many today is that the accelerated adoption of automation in the logistics industry will destroy jobs, as technology replaces humans.

This fear is understandable. Transurban’s Scott Charlton at the AFR Business Summit, declared that this is only the beginning of a major transformation. New technologies are merging rapidly in all sorts of new ways. “Everyone knows about electronic and autonomous vehicles. But we’ve got intelligent transport systems, Mobile-as-a-Service, and other technologies that are combining now in different ways to fundamentally change transport”. Charlton describes this as the biggest transformation of the transport sector since Henry Ford’s Model T and there is more to come.

Here are a few figures that highlight how staggering this change is:

CEO_Newsletter_March2017_11. The robot invasion
Populist governments globally are exalting protectionist policies to save jobs. However, there is no stopping the robots. The use of robotics will increase in the logistics industry by 15x in the next 4 years, according to a new report by Tractica. It is estimated that this will initiate a staggering extra US$4.44b in investment by 2022. According to the report, titled “Warehousing and Logistics Robots,” there were an estimated 40,000 robotic units shipped worldwide in 2016 but by 2021, there will be 620,000. They predict robotic shipments to reach $22.4 billion by the end of 2021, up from an estimated $1.9 billion in 2016.

Companies like Amazon and Google are competing to invent advanced warehouse technology. Ford is also experimenting with co-bots (collaborative robots) in a factory in Germany. Magazino has “seeing” robots with advanced computer vision, that can select items off a shelf, pick them up, and bring them into a sorting machine—which is arguably a big advantage when it comes to smaller “picking” tasks that often require a human worker. It’s also a benefit when it comes to a missing barcode or improperly placed item on a shelf.

CEO_Newsletter_March2017_22. Rise of the Internet of Things (IoT)

The Global Internet of Things (IoT) market reached USD 598.2 Billion in 2015 and the market is expected to reach USD 724.2 Billion by 2023. Further, the market is projected to register a CAGR of 13.2% during the forecast period 2016-2023 globally, according to Researchnester. In another report, Forrester found that 58% to 77% of surveyed organizations consider locating objects, containers, and personnel as the top fundamental functions of IoT solutions. If we just look at the retail industry alone, Juniper Research forecasts that by 2020, retailers worldwide will spend $2.5B on IoT-related hardware alone, including beacons, RFID tags, sensors, and their installation costs. This investment represents a nearly fourfold increase from 2015.

CEO_Newsletter_March2017_33. E-commerce and Omni-Channel Solutions
The growth of E-commerce can be seen in real numbers. According to a recent report by DHL the cross-border, e-commerce market accounted for USD 300 billion Gross Merchandise Value (GMV) in 2015. It is expected to grow at a rate of about 25% p.a. by 2020. This represents unrivalled growth on a global scale with 20% of cross-border purchases worth over USD 200.

If we consider China alone, according to the State Council of the People’s Republic of China, in 2016 the country became the largest retail e-market in the world with a value of sales of US$4.886 trillion, compared to US$4.823 trillion in the US. This growth will continue as it is estimated by Alibaba and Accenture that the retail e-commerce market to overseas consumers will reach $994 Billion by 2020.

DevelopmentofCrossBorder

The biggest transformation in the workplace since Henry Ford’s Model T

This transformation has been painful for many, particularly the low-skilled. However rather than a threat, the addition of automation will likely yield new jobs and opportunities for businesses as they make processes faster, safer and more efficient. As a result, the logistics market will actually grow and its workforce along with it.

Culture of adaptors
To be successful throughout this upheaval, leaders need to bring their people along with them. They need to inspire, to be the front-runners that set precedents, control and at the same time, unleash imagination. Employees need to upskill and demonstrate geographical flexibility. To have the mental stamina to embrace the endless flux that new waves of technologies will bring and jettison fear of the new. The logistics industry of the future will employ highly skilled professionals in positions that do not exist today. Their willingness and ability to acclimatise and assimilate new technology are critical.

Widening skill gap
The annual Logistics Executive Employee Survey consistently highlights the importance of leadership in inspiring and retaining. No doubt, as technology impinges more and more on day to day norms, this will become more critical. To be successful, an investment in technology needs to be equalised with an adequate investment in workforce attraction, training, and development.

To stay competitive, leaders must empower and delegate more. For example, at Amazon, Bezos offers his employees 95% prepaid tuition at fulfillment centers in in-demand fields. This encourages them to “be owners from day one,” according to Teal Pennebaker, Corporate Communications Manager. By determining their own study choices in this way, Amazon is also allowing staff to take ownership and “pioneer” their own careers.

The new head of Microsoft, Satya Nadella, who has been praised for turning around his company in the last 3 years, agrees that he has had to “listen” more. As opposed to Bill Gates, he encourages open collaboration, similar to Amazon’s empowering training plans. This offers employees the confidence to take risks and exchange ideas.

The bottom line is that automation can actually enhance the logistics workforce, as long as people are brought along on the journey through good leadership. The adage coined by Doug Conant, President, and CEO of the Campbell Soup Company many years ago, that “to win in the marketplace you must first win in the workplace, ” rings truer than ever in today’s age of disruption.

Darryl Judd
Chief Operating Officer, Logistics Executive Group

In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

NEWS

LogiSYM Singapore 2017 | Last Call to Register.

The Asia-Pacific region’s premier Supply Chain Symposium and Summit. Learn from the world’s top thinkers and doers in a series of main stage talks over two days. LogiSYM Singapore 2017 speakers offer pragmatic, real-world insights that transcend Logistics & Supply Chain sectors. Have you registered for the event?

http://logisym.org/2017.

 

Innovate to lead: Advancing cross-border e-commerce in Asia

To say cross-border e-commerce is taking off like a rocket would be an understatement. With a growth rate of about 25% per annum and a market size expected to reach $1 trillion by 2020, the opportunities are tremendous. But how can retailers capitalize on this trend? Join DHL E-commerce CEO Charles Brewer and Quintiq APAC general manager Kris Kosmala in an exclusive webinar this May 3, as they take a deep dive into the latest consumer trends and emerging digital technologies in the e-commerce space.

Register Here.

 

UPCOMING EVENTS

9th GPCA Supply Chain Conference
2-4 May 2017
Abu Dhabi, UAE

Held under the theme ‘Agile and Efficient GCC Supply Chains – The Role of Technology’, the 9th GPCA Supply Chain Conference will offer delegates an exclusive opportunity to explore the benefits of supply chain digitization in a complex and changing marketplace environment. Attendees will hear from global industry experts about how leading supply chain organizations have leveraged innovative technologies to improve the agility and efficiency of their supply chain operations.

www.gpcasupplychain.com/

 

The 4th MENA Cold Chain Forum
16 – 17 May 2017
Dubai,UAE

The 4th Edition of the MENA Cold Chain Forum will take place in Dubai from 16 – 17 May 2017. The event has established itself as must-attend event for all stakeholders who are involved in making the pharmaceutical cold chain process flawless for the region. This Annual event has successfully attracted professionals from different Ministries, Food & Drug Authorities, Pharmaceutical Manufacturers, Healthcare Providers, Pharmacy Chains, Shipping, Transport and Logistics Companies, Distribution Houses, Airports and Customs, Airlines, Storage and Warehousing Companies, Supply Chain Solution Providers, Temperature Controlled Packaging Systems, Temperature Monitoring Systems, GPS Manufacturers and Data Loggers.

www.menacoldchain.com/

 

LogiSYM Singapore 2017
17 – 18 May 2017
NUSS Kent Ridge Guild House, Singapore

The region’s premier Supply Chain Symposium and Summit, LogiSYM Singapore 2017 focuses on bridging concepts, practice and technology in supply chain management, real world implementation and benefits that result in increased supply chain pipeline velocity, profitability and performance.

logisym.org/2017/

 

Supply Chain Innovation Summit 2017 China Focus
25 – 26 May 2017
Shanghai, China

Supply Chain Innovation Summit 2017 China Focus (SCCN2017) is the Annually Supply Chain Innovation Summit(4th Edition) organized by Ace Events, announced to be held on 25-26 May 2017 at Shanghai China. With the theme “Digitalization. Revolution. Success.”, address the topics across Supply Chain Innovation, Digitalization, Visibility, Innovative Supply Chain Technologies, e-Commerce Supply Chain, Cross-Functional Collaboration, etc. it was developed from and for supply chain and logistics professionals as a globally involved conference.

www.scinno-cn.com

The Asian E-commerce Frenzy

By | CEO Newsletters | One Comment

The Asian E-commerce Frenzy

November 2016
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

 

The Logistics industry is poised for growth as Asia supersedes the USA to become the largest online retail market in the world.

ceo_newsletter_november_1“There is no doubt that Asia will set the agenda for ecommerce in the next five years. Its trajectory has been wild and its not set to slow down anytime soon. In fact, it will grow by the equal size to the largest market outside of Asia and most mature e-commerce market in the world – the USA”. Said Darryl Judd, COO of Logistics Executive Group, a specialist supply chain advisory firm.

There is a plethora of recent statistical evidence to support this. The Asian middle class is projected to expand to over 1.7 billion people, and China, India and Indonesia will be the top 3 countries of e-commerce growth in the next 2 – 3 years [1]. In fact, China is expected to exceed $1 trillion in e-commerce transactions, accounting for more than 40% of total worldwide e-commerce transactions by 2018 [2]. According to the recently released Bain-Google report, online retail sales across South-East Asia could hit US$70bil (RM283.5bil) by 2020. While this does not yet match the pace of China, now a more than US$500bil (RM2,025bil) market – multinational retailers are finding it harder to ignore the region’s emerging influence.

B2C E-Commerce sales in Asia are projected to increase by double-digit rates through 2019, with India and countries in Southeast Asia especially. In 2014, Indian companies, including Flipkart and Snapdeal, and Chinese platforms like Meituan and Dianping accounted for nine out of the top ten E-Commerce investment deals in the region.

“This is having a profoundly innovative and expansive impact on the logistics industry” continued Darryl Judd. “The e-commerce sector’s very existence is contingent on the underpinning of a solid and sophisticated logistics function. In fact, it could be said that e-commerce businesses are really sophisticated logistics businesses in disguise” he went on to add.

Once again, there is a vast amount of research coming out of Asia to support this. For example, we can expect 1.1 trillion more parcel deliveries per year due to current e-retailing sales (as a percentage of all retail sales) at current average order values and parcel sizes. This converts to an estimated 350 million more pallets a year between now and 2020! “It will most likely be much more than this, as e-retailing continues to grow” commented Darryl Judd.

Along with an increase in consumer markets, other factors for growth include increased internet penetration, strengthening trust in online payments, development of delivery infrastructure and E-Commerce regulations, which will all boost B2C E-Commerce growth.

According to Business Wire, (March 22, 2016) other countries earmarked for growth include Thailand, Vietnam and the Philippines, which currently account for less than a 1% share of domestic retail sales.

Some of the major regional players in the E-Commerce space in Asia include online retailer and marketplace Lazada, online classifieds platform OLX and online clothing merchant Zalora. Also global E-Commerce websites such as Amazon.com, Aliexpress.com and eBay.com rank high in popularity among Internet users in Asian countries. “An example of how these online retailers have transferred themselves into high powered logistics providers is evident if we take Amazon as an example” said Darryl Judd.

“Amazon has evolved through several stages of its life. The company started its life as an ecommerce company, it then transformed into a full technology provider offering a platform for others, and most recently it has evolved into a freight company in its own right. This gives them a license to wholesale sea freight to others.” He went on to add “They have just also just agreed to lease up to 60 B767-freights just for domestic within the USA, meaning they now compete directly with UPS, DHL and Fedex who previously provided Amazon with aircraft. 60 planes is a lot and a big investment! Exclaimed Darryl.

“Whilst they say they need extra capacity and assurance of service during peak periods, how long will it be before they compete directly with the other express companies? They already in many places operate their own delivery vehicles (Amazon Prime)” he concluded.

Other characteristics shaping the e-commerce, Asia expansion include the use of smartphones and the increase in population due to urbanisation.

Indonesia and China have a higher rate of mobile phone usage per person than “old-fashioned” internet usage from a PC or laptop. The volume of mobile traffic generated by smartphones is now twice that of pc’s, tablets and routers and is predicted to grow ten-fold by 2019.

Urbanisation in Asia will continue to produce a higher population with more concentrated, consumer markets. The number of savvy technology users will also grow as the number of Generations X, Y and Millennials increase. The net impact will result in an increase in demand for e-commerce services.

What do these developments in technology and urbanisation mean for the logistics industry? “We are going to need a far bigger and more resilient logistics and warehouse network that is far more integrated across urban areas and cities to support this vast increase in urban online demand” said Darryl Judd.

An innovative solution that has already emerged as a response to growing consumer is the proliferation of e-fulfilment DC’s on the outskirts of urban areas. This includes smaller urban facilities within urban community catchment areas and a variety of collection options. They have been mainly set up to support swift response times, especially with the advent of same day delivery.

ceo_newsletter_november_2There have been growing innovations in Last Mile Delivery in Asia, based on this growing consumer expectation. “Click and Collect” innovations and urban lockers are becoming an increasing part of some consumers daily lives with many variations taking place which are customised to the consumption needs of different cities and countries.

The adoption of smart lockers, for example is a growing trend in Asia to solve the last mile problem for cities with large and diverse populations. In Beijing the “parcel cube” services have taken off in business districts, universities and urban centres. It allows users to pick up and store their products from cabinets. These smart lockers automatically generate a unique collection code, which is texted to the intended recipient who can then collect the parcel anytime.

Smart Urban Warehouses are also growing. They are becoming an integral part of the last-mile delivery with new smaller facilities to support key urban locations.

The one important takeaway is that the advent of e-commerce cannot be ignored. “Whilst this will mean new complexities and increased investment, the potential rewards are huge.” concluded Darryl Judd. “Our consulting company has seen clients looking to embrace these opportunities with an increase in assignments aimed at new freight and warehouse setups geared at providing new e-commerce, logistics services”.

There is no doubt that the logistics industry, as partner to e-commerce, is going through a unique period of transformation. This transcends sectors and is resulting in a huge step forward in innovation and customized, client experiences and a very exciting time to be in the industry!

[1] (2014, December). The New Age of the Asia Pacific Retail Market

[2] (2014, December 23). Retail sales worldwide will top $22 trillion this year.

Download PDF

 

Darryl Judd
Chief Operating Officer, Logistics Executive Group

In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

NEWS

What disrupts your China export supply chain?

Ti is undertaking research into the Chinese sea freight market to investigate shipping experiences in one of the world’s premier export markets. We would appreciate your insight, and as a thank you for your participation we are offering everyone that takes part a FREE whitepaper. *In addition, all participants will be entered into a draw to win an iPad.

Shipping goods by sea is a vital part of supply chains, with nearly 90% of all the world’s goods moved by sea. All too often, though, retailers, manufacturers and a wide range of logistics service providers must deal with inefficient processes, shipments being held up at ports and unreliable tracking.

How would you improve the shipping experience? Tell us now by taking the survey.

www.surveymonkey.co.uk/r/BTKJRJP

 

Logistics Academy CSCMP Quick Courses on Sale

This month only purchase the CSCMP Quick Course Bundle and receive a 15% discount of overall price. Enrolments before 30th December will receive a VIP delegate ticket to LogiSYM Dubai. Logistics Academy CSCMP Quick Courses allow you to learn core supply chain topics online, at your own pace, and when it’s convenient for you. Consisting of a series of Thirteen (13) courses,, the CSCMP Quick Courses are highly educational Supply Chain and Logistics courses that are designed by carefully selected faculty for entry to mid-level professionals. Backed and supported by the US Based Council of Supply Chain Management Professional. For more information or to sign up, click below. Coupon code: LEQC15OFF

www.logisticsexecutive.com/academy/cscmp-quick-courses.

 

Air Cargo Innovation Awards 2017

Internet of things, digital, drones, big data, virtual reality, robots… Innovation is not just talk! The air cargo industry is no different from the others: it needs to re-invent itself, adapt to new customer expectations, embrace new technologies, challenge the status-quo to be more efficient and attractive for customers, business partners, investors, employees. The second edition of the IATA Air Cargo Innovation Awards aims at encouraging new ideas to enrich customer experience and/or to improve competitiveness of air logistics.

Submit your idea by 31 January 2017.

 

UPCOMING EVENTS

7th International Saudi Transtec Exhibition & Conference
 5 – 7 December 2016
Damman, KSA

Now in its 7th year and with the support of the Saudi Ministry of Transport, the two day conference will bring together senior stakeholders from across the KSA & GCC to address the major commercial, regulatory and technical issues facing the industry in the region today. With record levels of planned investments into the KSA’s transporation and logistics sector, the future potential for Saudi Arabia as a logistics gateway to the GCC seems assured. Strategically located as a MENA hub, the KSA provides a supply chain nucleus that has taken huge steps in recent years to become a world leading centre of excellence – from heavy industry and oil and gas to the export of consumer goods, the KSA remains an attractive supply chain partner for the Gulf region.

www.sauditranstec.com

 

Logisym Dubai: Beyond 2020–Connecting Supply Chains, Creating the Future
24 – 25 January 2017
Dubai, UAE

LogiSYM Dubai 2016 is a unique two-day conference set in Dubai, United Arab Emirates from 24 to 25 January 2017. A premier event for Logistics & Supply Chain professionals, educators, Information Architects and Usability Practitioners, LogiSYM Dubai 2017 will bring together professionals from around the region. With EXPO 2020 just around the corner and the UAE forging ahead as the regional’s leading supply chain hubs, this year’s theme: ‘Beyond 2020 – Connecting Supply Chains, Creating the Future’ looks at the opportunities, supply chain and consumer mobility and sustainability.

www.logisym.com/events/logisym-dubai-2017

 

11th World Cargo Symposium
14 – 15 March 2017
Abu Dhabi, United Arab Emirates

The World Cargo Symposium (WCS) is the largest and most prestigious annual event of its kind and the only one to bring together key stakeholders from the entire air cargo supply chain. IATA’s 11th annual World Cargo Symposium will continue to move the industry from talk to action with this edition. WCS 2017 will feature plenary sessions, specialized tracks, workshops and executive summits, tackling aspects related to Technology & Innovation, Security & Customs, Cargo Operations, and Sustainability.

http://www.iata.org/events/wcs/Pages/index.aspx

One Road, One Belt Impact in Asia and Europe

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One Road, One Belt impact in Asia and Europe

September 2016
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

  • Potential Impact and what does this mean
  • How to prepare for this and explore the benefits

ceo_newsletter_september_1There has been so much hype about the One Road, One Belt (OBOR) project. It has been compared to the Marshall Plan however, it is over 12 times this. Superlatives have been flowing since it was first announced by Xi Jinping in 2013. It has been hyped as the Fourth Industrial Revolution.

In China alone apparently over one million documents have been published about it, according to Theresa Fallon’s article “Xi Jinping’s Belt & Road Initiative: How to Win Friends & Influence Europeans”. Xi Jinping has positioned it as the third phase of China’s reform from which it will emerge as a regional leader in international trade that coincides with the emergence of new Chinese led multilateral financial institutions.

As the names suggest, it will connect China via land and sea with the rest of the world. The belt mainly follows the historic Silk Road through Central Asia, West Asia, the Middle East and Europe Southeast Asia, Oceania and Africa.

The Maritime Silk Road will continue through Southeast Asia, Oceania and North Africa and includes the highly contiguous South China Sea. China also plans to connect inland cities to the Indian Ocean to seaports on the east coast, including the transport of oil from Iran and Iraq directly to China by rail which will affect trade through the Malacca Strait.

Investment scope:
The Chinese Government has estimated the cost of this enterprise to be in the staggering realm of US$8 trillion. They emphasise that investment will need to be market-based, were “markets decide on the most efficient allocation of resources” according to Financial Secretary JohnTsang Chun-wah and financing underwritten on international standards. China’s Silk Road Fund of USD 40 billion will finance infrastructure projects linked to OBOR, according to the European Institute of Foreign Studies.

Many countries in the Belt have rushed to join the China-led Asian Infrastructure Bank (AIIB) which some suggest is China’s answer to the American Trans-Pacific Partnership and The Transatlantic Trade and Investment Partnership. The AIIB is dedicated to lending for infrastructure projects with an authorised capital of $100 billion, 75% of which will come from Asian and Oceanian countries.

Implications

Political:
The Chinese government has officially promoted it as a means of creating cohesion through inter-governmental cooperation on a macro level and be underpinned by the development of soft infrastructure in areas such as trade, investment, and customs cooperation. The aim of “financial integration” through joint efforts AIIB and BRICS (Brazil, Russia, India and China) signing of MOUs in bilateral financial regulation is to establish efficient regulatory control mechanisms.

However, there have been mutterings of an underlying geopolitical push behind OBOR. Russia, in particular, has raised concerned about the influence China will have over Central Asia. India and other countries have expressed security concerns in the Indian Ocean Region including the issues in the South China Sea and President Obama’s Asian Pivot Policy are all matters of delicate consideration.

Economic:
“How many world-class airports does a country need?”

“By 2020, China might well have the best infrastructure in the world. What then—should we tear down some structures to rebuild them?”

These were the questions asked by Mr Shen, Professor at Fudan University.

The intention of OBOR was, according to some analysts, to find new markets for China’s growing excess capacity of products like steel and construction materials. For example, the Chinese Railway Group is building a high-speed train from Belgrade to Budapest on the proviso that Chinese construction materials are used.

Alternative thinking is that it will provide a long needed stimulus for Asia that will relaunch global economic growth. It will address the “infrastructure gap” paradox that even though the world is flush with savers’ money, infrastructure cannot attract private investors because they do not trust governments to regulate their deals.

Internally China will be able to move its industrial and manufacturing to other parts of Asia and by doing so address domestic pollution and environmental damage. This trend is already occurring in China in any case due to rising labor costs.

Assessing the Risk

ceo_newsletter_september_2Financial:
There has been a concerning trend for OBOR funding to come not from commercial banks or multilateral institutions like the AIIB as originally planned but from Chinese bilateral policy banks like China Development Bank and Exim Bank, which are known for their risk appetite. Domestically Chinese banks have always been protected so it will be interesting to see how they manage in the international market.

Many underdeveloped countries require so much initial investment to get up to a standard that it is hard to see how this could return a profit and not be seen as aid. Chinese officials insist that OBOR is not a costly geopolitical project offering charitable government aid projects but strictly based on commercial terms. However, in countries like Pakistan financial losses have been reported and Venezuela a write-down on loans.

Political:
There have been delays in some parts of the OBOR due to political and economic instability in regions such as the Middle East. Local business investments need government support in policies, and investment protection to facilitate continued grow. Some of China’s partners pose economic, political and social risks. These factors could induce economic uncertainties which China needs to safeguard against in order to ensure their investments are sound.
There is also a worrying truth in the expression: “strategic economic benefits often coincide uncomfortably beside strategically defensive benefits”. China’s expansionist ambitions are feared by countries which have remained cautious in their approach to negotiations based on the impact of the conflict in the South China Sea. These countries are asking for more depth and detail as reassurance that their intentions are not expansionist which makes for a slower process.

Seizing the Opportunity
‘It does not matter if it’s China or someone else, it has to happen,’ said Ronnie Chan, the Chairperson of property developer Hang Lung.
Chan pointed out that there is burning demand for infrastructure throughout the developing world that needs to be addressed for economies to continue to grow.

The rationale may be global connectivity but from a business standpoint, there are clear opportunities at a time of rapid accent of the renminbi, including currency swaps, trade financing deals, and offshore bond issuance. OBOR will encourage Chinese firms to invest outwards, and RMB internationalisation will play a significant role in this process.

The International Monetary Fund statistics confirm that by 2020, countries along the land and maritime belts will account for 50% of global GDP and generate opportunities for both China and its increasingly international corporations.

Government agencies in advanced economies are promoting OBOR as an investment to be seized with both hands. These agencies prove an excellent starting point for companies who are interested in finding out more about how they can benefit from the opportunities presented by OBOR.
OBOR holds tremendous export potential for products technologies and services to enter the country. Even though the Chinese economy has slowed, optimism remains high. China aims to double its 2010 income levels by 2020 as the country moves from exports to services and increases in domestic consumption, from manufacturing to innovation and technology focus. The Chinese domestic consumer market is growing, both through e-commerce and retail and is projected to become the largest in the world, opening up an enormous new customer base that has a taste for luxury goods. Aside from the construction industry benefiting from infrastructure investment, there will be additional opportunities created through OBOR initiatives in other industries such as e-commerce, logistics, finance and education.

In the short-term, foreign investors who have already substantially invested in developing integrated supply chains in China will be able to find new uses for their services, rather than relocating elsewhere. For example, Alstom, the French power equipment giant, that rebuilt a turbine factory near Beijing now plans to supply its Chinese hydropower partners as they bid for dam contracts in third countries.

Long term, however, there are substantial gains to be made through collaborations. Chinese companies have the money but multinationals offer technology, experience and good local relationships. Partnerships with members of the host country can ease challenges such as different standards, cultures, financial and legal frameworks.

This knowledge transfer is central to China’s plan to transition to a higher value-added economy. Pfizer, for example, has committed to staging their global R&D operations in Shanghai, despite concerns about IP protection in China. They will open up their R&D processes, and in return the collaboration will offer them access to the large domestic market which will expand as healthcare reform takes shape, as well as good tax incentives.

In weighing up the risks and benefits, whether it meets all its promises remains to be seen, but OBOR cannot be ignored. Local businesses can get on the front foot by keeping an open mind and being up to date on how their particular industry can partner with Chinese counterparts to seek out and exploit opportunities the OBOR will offer for years to come. Whatever the case, it is well and truly happening, so entrepreneurs belt up if you want to take advantage of the opportunities!

Download PDF

 

Darryl Judd
Chief Operating Officer, Logistics Executive Group

In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

NEWS

Visit Logistics Executive Group blog Supply Chain ViewPoints

Supply Chain Viewpoints is an interactive industry forum for opinion, industry trends and comment. It is a single source of information on What’s happening in the world of logistics and supply chain and will feature white papers and industry research. We welcome industry contribution and input. For more information see:

www.supplychainviewpoints.com.

 

Logistics Academy CSCMP Quick Courses on Sale

This month only purchase the CSCMP Quick Course Bundle and receive a 15% discount of overall price. Enrolments before 30th March will receive a VIP delegate ticket to LogiSYM Dubai or LogiSym Malaysia. Logistics Academy CSCMP Quick Courses allow you to learn core supply chain topics online, at your own pace, and when it’s convenient for you. Consisting of a series of Thirteen (13) courses,, the CSCMP Quick Courses are highly educational Supply Chain and Logistics courses that are designed by carefully selected faculty for entry to mid-level professionals. Backed and supported by the US Based Council of Supply Chain Management Professional. For more information or to sign up, click below. Coupon code: LEQC15OFF

www.logisticsexecutive.com/academy/cscmp-quick-courses.

 

Quintiq World Tour 2016

Logistics Executive Group would like to offer our subscribers FREE access to the latest event in the Quintiq World Tour 2016, a series of conferences and open forums on supply chain planning and optimisation held by Quintiq in cities around the world including London, Paris, Sydney and Philadelphia.

The Singapore event will take place on Oct 4th at the Marina Bay Sands Convention Centre and will explore how supply chain managers can make best use of big data to optimise business performance. During the forum, delegates will be invited to examine their businesses from a fresh perspective to help them uncover new operational opportunities via the latest analytics and optimization technology.

REGISTER HERE.

 

UPCOMING EVENTS

GLCS LogiSYM Malaysia 2016
12 – 13 October 2016
Kuala Lumpur, Malaysia

GLCS LogiSYM Malaysia 2016 promises to be a highly unique event. Building on the success of the past 4 years, the 2016 Fifth Annual Global Logistics and Supply Chain Symposium will focus this year on providing a platform for mid to senior level shippers to discuss and explore innovation, excellence and what changes we can expect to see in the Asian supply chains of tomorrow. We will hear from leading solutions providers in the industry and explore best practice collaboration case studies.

www.logisym.com/events/logisym-malaysia-2016

 

Indonesia Transport Supply Chain & Logistics
19 – 21 October 2016
Jakarta, Indonesia

Indonesia Transport, Supply Chain and Logistics (ITSCL) is the only dedicated transport and logistics event in Indonesia, with the aim of being a key partner of industry and the Indonesian government, showcasing the government’s aspirations of efficient infrastructure and helping it to achieve its objectives of the Blueprint of National Logistics System Development. ITSCL is leading platform to discover new products, ideas and technologies for transport and supply chain industry. ITSCL will bring opportunities for sourcing, networking and learning all together in just one place over 3 days.

www.transport-supplychain-logistics.co.id

 

Breakbulk Middle East
23 – 26 October 2016
Abu Dhabi, UAE

Following the success of the inaugural Breakbulk Middle East event, this second conference and exhibition will see even more of the world’s largest EPCs, logisticians and transport providers come together in Abu Dhabi. Megaprojects in the region — oil & gas, electricity, water, renewable energy, infrastructure — will be the focus for new business opportunities.

http://www.breakbulk.com/events/middle-east-2016/

 

Logisym Dubai: Beyond 2020–Connecting Supply Chains, Creating the Future
24 – 25 January 2017
Dubai, UAE

LogiSYM Dubai 2016 is a unique two-day conference set in Dubai, United Arab Emirates from 24 to 25 January 2017. A premier event for Logistics & Supply Chain professionals, educators, Information Architects and Usability Practitioners, LogiSYM Dubai 2017 will bring together 300 professionals from around the region. With EXPO 2020 just around the corner and the UAE forging ahead as the regional’s leading supply chain hubs, this year’s theme: ‘Beyond 2020 – Connecting Supply Chains, Creating the Future’ looks at the opportunities, supply chain and consumer mobility and sustainability.

www.logisym.com/events/logisym-dubai-2017

Navigating Talent Challenges in North Asia

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Navigating Talent Challenges in North Asia

October 2016
Author: Cassandra Lee, General Manager – North Asia & Greater China, Logistics Executive Group

Successfully navigating talent challenges across North Asia – A topic spoken about in Seminars and Conferences repeatedly across the region, yet a subject that so many fail to truly comprehend let alone excel at.

Lets break down some of the key elements of North Asian Talent Challenges and gain insight as to how one of the Worlds largest Express logistics providers has risen to the challenge and delivered returns.

Full Employment

Hong Kong is suffering this challenge currently with unemployment at circa 3.5% nationally. This present numerous challenges, one of which is salary pressure and this heavily impacts a vast array of business at an operational level for any front line staff.

Across the supply chain, if there is not front line staff processing orders, providing customer service, loading planes and trucks and delivering goods there is a phenomenal negative impact on the economy.

Whilst skilled workers demand higher salaries and customers demand lower prices, how does an organisation fill these roles and keep the equilibrium balanced? Ms. Donna Kong, VP, Human Resources, DHL Express, Hong Kong who well knows this challenge shares that whilst “finding people with the right skillset is no doubt important, but even more so is finding those with the four key attributes of speed, a can-do attitude, passion and getting-it-right first time”. Very simple solution, right? However, putting that into action and driving alignment across an organisation strategically to embrace applying a pragmatic approach is not always easy, and takes a true business partnering HR approach and a commitment to training and development – more on that later, – but if an organisation as large as DHL Express can align and hire with a focus on attitude – there is no excuse for anyone else.

At Logistics Executive, we know that seeking talent that is motivated to execute the task at hand is fundamental to achieving the desired outcome. This principle applies to talents at all levels of spectrum and extensive, tangible evidence of the application of this fundamental has been the passion of my personal guru of Talent – Mr. Lou Adler. (Side note – If you have never heard of Lou Adler, you simply must do yourself, your team and your organisation a favour and immerse yourself. I was fortunate to start reading his material over 15 years ago and have had the gift of his personal training.)

Equality in the Workplace

ceo_newsletter_october_2Traditionally, some roles across the supply chain have been largely dominated by one gender vs. the other. It’s exciting to see the role of women becoming so prominent and very highly represented across most functions of the supply chain and very heavily in particular countries. However, some more culturally traditional markets have required a little more education and support to achieve this.

Mr. Akira Endo, VP, Human Resources, DHL Express, Japan, shares how they have taken a balanced performance and capability oriented view on talent through initiatives such as ’Women in Leadership’, which is a volunteer based group of men and women in DHL Express Japan assisted by HR, to help increase the share of women in leadership positions. This program has been so successful in starting to break down the barriers that DHL’s customers now look to them to share their program to drive a wave of change across Japan.

This is further reinforced by DHL’s global initiatives such as the Employee of the Year recognition program, which is celebrated at a regional and local level.

Talent Retention

Probably the biggest issue most organisations have had to face and many continue to struggle with. During the peak of China’s growth, I repeatedly challenged some organisations that double-digit staff turnover is not and never should be acceptable under any circumstances. Whilst many clients heeded our advice and focused on realigning expectations, hiring programs, leadership capability and made sensible and sustainable investments to develop their teams – there were some in the industry that found them on the mouse wheel of constant hiring.

No matter whether the economy is in a boom or bust mode, you simply must be training and developing your talent. Failure to do this will be at an organisation’s own peril and honestly it will likely result in spending more money on hiring practices than what your training investment would be and has significantly less yield from our experience. There is a vast array of training initiatives available in the Industry and Logistics Executive has proudly been awarded as the sole global education partner to CSCMP, the American Council of Supply Chain Management Professional, a pre-eminent industry body with effective online quick courses and supply chain management essential programs to deliver accredited training outside of the US. Training that is on line, affordable and effective to support organisations to retain and develop their teams.

From an organisation perspective, DHL Express is a shining example of consistency in training and development and reaps the rewards of high talent retention. Known in the Logistics Industry as a leader with in-house training programs, DHL has elevated training standards to a new level with the award winning Certified International Specialist (CIS) program. The program provides world class comprehensive training on the fundamentals of international shipping, company strategy and culture to all employees, with managers being accredited as trainers to lead and facilitate a successive series of internal training. Mr. Akira Endo shares that “the program has been a great success and resonates with employees who see management take the time to invest in the staff. The managers are trained to pass on knowledge to the staff and are well placed to answer questions in the context of the business. And the end result shows that both the yield is higher and employee satisfaction is greater.”

In Hong Kong, Ms. Donna Kong also shares her insight on the CIS training program. Within DHL Express, this program has been rolled out to over 100,000 employees globally including the entire Hong Kong team which has seen “enhanced engagement and service levels across the board” according to Ms. Kong.

Its no surprise that with consistent execution of local and regional initiatives that the HR teams in DHL Express Japan and Hong Kong have been driving that both countries have been awarded the “Best Companies to Work For” accolade by the Great Place to Work Institute.

With evidence such as this, the critical pillar to the ongoing success of both countries is their consistency in driving initiatives that support the ongoing training and development of their teams. It is a path that requires a holistic and strategic approach, yet one which clearly brings great rewards to the employees, the organisation and its customers and is a shining example of effective application for the Logistics Industry.

Special thanks to the contributors in this article:

• Ms. Donna Kong – VP, Human Resources, DHL Express, Hong Kong
• Mr. Akira Endo – VP, Human Resources, DHL Express, Japan

CEO_Newsletter_June_12Click here to download a copy of the North Asia Salary Trends Report

 

Download PDF

 

Cassandra Lee
General Manager – North Asia & Greater China, Logistics Executive Group

Based in our Regional Headquarters of Hong Kong, she operates in a global capacity and leads the North Asian Business streams of Consulting, Executive Search and Training and associated teams in the delivery of Talent Management, Education and Talent Acquisition services.

With more than 16 years Industry experience Cassandra has provided senior level executive recruiting and consulting services to organizations around the world, which delivers profitable leadership change to key organisations. Cassandra exemplifies excellence in her innate ability to connect executive talent with businesses across the supply chain.

Cassandra’s proven and highly successful approach melds strategic analysis with aggressive process-driven search execution. She works with companies, not for them. As such, she has become one of the leading executive recruiters in her field today and a thought leader in Talent Management and Learning & Development with a loyal client base and extensive professional network, including supply chain, procurement, retail and business leaders at all levels of business operations globally.

NEWS

Now Availaible: Global Express and Small Parcels 2016

Logistics Executive & Ti are excited to announce The Global Express and Small Parcels 2016 report is available for purchase today. This dynamic new report examines the composition of the sector over time, highlighting the recent strategic decisions that have been made to accommodate changing customer expectations, as well as analysing the sustainability of these choices.

Purchase Here..

 

Logistics Academy CSCMP Quick Courses on Sale

This month only purchase the CSCMP Quick Course Bundle and receive a 15% discount of overall price. Enrolments before 30th March will receive a VIP delegate ticket to LogiSYM Dubai or LogiSym Malaysia. Logistics Academy CSCMP Quick Courses allow you to learn core supply chain topics online, at your own pace, and when it’s convenient for you. Consisting of a series of Thirteen (13) courses,, the CSCMP Quick Courses are highly educational Supply Chain and Logistics courses that are designed by carefully selected faculty for entry to mid-level professionals. Backed and supported by the US Based Council of Supply Chain Management Professional. For more information or to sign up, click below. Coupon code: LEQC15OFF

www.logisticsexecutive.com/academy/cscmp-quick-courses.

 

ALA Diploma & Advanced Diploma Courses

The ALA Diploma in Logistics Management is offered as an online a six-module diploma incorporating various areas of the logistics functions including electives in Purchasing, Warehousing & Distribution, Transportation, Supply Chain Management and Logistics Technology. The ALA Advanced Diploma in Logistics & Operations Management continues as a ten-module advanced diploma, incorporating further electives from the various logistics functions and a business research project to illustrate competency in understanding how all the various components of logistics fit together.

Learn more..

 

UPCOMING EVENTS

Logisym Dubai: Beyond 2020–Connecting Supply Chains, Creating the Future
24 – 25 January 2017
Dubai, UAE

LogiSYM Dubai 2016 is a unique two-day conference set in Dubai, United Arab Emirates from 24 to 25 January 2017. A premier event for Logistics & Supply Chain professionals, educators, Information Architects and Usability Practitioners, LogiSYM Dubai 2017 will bring together 300 professionals from around the region. With EXPO 2020 just around the corner and the UAE forging ahead as the regional’s leading supply chain hubs, this year’s theme: ‘Beyond 2020 – Connecting Supply Chains, Creating the Future’ looks at the opportunities, supply chain and consumer mobility and sustainability.

www.logisym.com/events/logisym-dubai-2017

The Pros and Cons of External Project Management

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The Pros and Cons of External Project Management

August 2016
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

 

Can external third party project managers (PMI) really add value?

CEO_Newsletter_August_3We all know about “continuous improvement” and the ongoing cycle of revision and evaluation that runs through every organization and every job these days, as companies endlessly strive to stay competitive. Depending on how this is approached, change can either be a curse or an opportunity particularly if the change is large and disruptive to your organization. That is where project management plays a key role in turning change into an opportunity.

Mareike Walter-Paschkowski, Regional Consultant at Logistics Executive Group and a qualified Prince2 expert, adds her perspective, “In short-term, complex projects often require skills, avenues of approach and resources that are in most organizations not used or developed on a day-to-day basis. That is where outsourced project management services should come in.”

According to the Project Management Institute, a project is defined as:
“a temporary endeavor undertaken to create a unique product, service or result… it is temporary in that it has a defined beginning and end, defined scope and resources… a specific set of operations designed to accomplish a singular goal… and includes people who don’t usually work together – sometimes from different organizations and across multiple geographies.

The development of software for an improved business process, the construction of a building or bridge, the relief effort after a natural disaster, the expansion of sales into a new geographic market — all are projects.

And all must be expertly managed to deliver the on-time, on-budget results, learning and integration that organizations need.

Project management, then, is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.”

Today project management language permeates our everyday business vernacular. Concepts like TOC (theory of constraints) and BRM (benefits realization management) have colonized our daily language. The project management industry has grown exponentially with Institutes like PMI and concepts like Prince2 sprung up to meet the complexities of this new modality. In the case of Prince2, it is not only a tool but a methodology that you can be trained and certified in with different levels of certifications for professionals available (i.e. Prince2 foundation or Prince2 practitioner etc.)
It is, therefore, no wonder that middle managers may find it daunting when deciding on whether or not this additional layer of external expertise will bring value to their organization.

There are both pros and cons to be carefully weighed up when evaluating whether an outsourced project management team is the right solution for your company.

The benefits:
Amping up your workforce skill gaps: As mentioned above, there are specialist skills involved in project management. Bringing in external consultants will allow you the flexibility to fill these specific skill gaps that are only needed for the short-term.

Charging up workforce capability:
Often staff levels are stretched and there is no room for the extra workload involved in executing projects. Introducing external consultants can supplement the team’s skills. If the skill makeup of the external team is carefully put together, it can free up permanent staff members and allow them to get involved and gain exposure to new skills and experiences outside of their comfort zone. It can also keep staff free to get on with daily business or even unburden the overloaded workforce.

CEO_Newsletter_August_2Budget considerations:
One of the foundations of professional project management is a tight consideration for financial management. On the outset, even though bringing in an external team may seem costly, it will save money over the life cycle of the project. This is based on the expertise they will bring to your team to keep to deadlines, projected budgets and project deliverables. Project Managers use time management, quality and risk tools that allow them to access and thoroughly understand the cost breakdown at every level of the business from team, task, project, business unit or company. These tools can also save a lot of money, by offering transparency over the whole project. They can identify if any negative impact is likely and which strategies to develop to handle these in case of occurrence They also can gain complete visibility on these costs for everyone in the organization so that resources are fully utilized or expeditiously redeployed if needed.

Transparency is another benefit over the entire project which is obtained through the use of tools such as project plans and status reports.

Overall flexibility:
Unlike the commitment of employing a fulltime project manager, the ability to fine tune or redirect resources and cash flow can be very competitive way of enhancing business agility.

Risks and pitfalls:
Lack of permanent staff buy-in: One of the key factors in project success comes down to how your permanent team respond because the need for change has to be understood and embraced for it to work. No matter how good the project is planned it will fail if there is no buy-in. This comes down to communication and consultation from the very start.

Project Sponsor:
The only way a project will succeed is if it is championed by a leader at the very top of the organization from beginning to end. Executive buy-in will communicate a clear mandate from top to bottom of the organization so it does not run off course.

Build on existing skills and talent:
Permanent staff may feel left out of the process and disengaged if they are not consulted. “On the flip side, this can be turned to an advantage as a project may be an excellent opportunity to develop existing staff. It is a good idea before commencing to make sure that if possible these staff are included as much as is practical. If, for example, you have a staff member who has identified WMS design as part of their career development, it may be a good idea to include them in your warehouse management system implementation on some level. “This will not only increase employee engagement but you’re your company’s skill inventory.” added Mareike.

Weaker connection between the external project team and the organization: The external team will not know the culture of the organization or have the internal relationships that internal staff can leverage. This can be overcome by having excellent communication and following the steps outlined above to win staff buy-in. Conversely, there is a benefit to having a clear untarnished perspective as an external consultant that will allow fresh ideas and perspectives.

Time wasted in explaining the company:
External project managers need to be briefed on all the complexities that are involved and this takes time which may be saved by utilizing an existing team. However, this can be overcome if there is clarity outlined in the planning stages. If clear outcomes and measures, results and timeframes are clarified from the beginning of the project so that both external consultants and the company are satisfied with the targets they are trying to achieve and they understand the variables and allow for them.

“First of all key project stakeholders (internal & external) need to agree on the project charter, which covers project objectives & constraints, scope, stakeholders, target benefits, budget and spending authority. This makes sure that expectations are aligned from the beginning and increases the probability for a successful project execution. In this way, both parties can equally appreciate what will make the project successful so that when it is completed they can both walk away feeling satisfied” concluded Mareike.

Differences in culture:
CEO_Newsletter_August_1The external consultants and the internal team will probably need to work closely together. This could pose a problem if there is some discrepancy or clash between the ethos of the two cultures of the organization. The external consultants need to understand and be mindful of the existing company culture and to make concessions if needed. The more they can immerse themselves in their client’s company culture, the more successful they will be integrating into the change process and creating buy-in.

Another risk could be that the project is simple enough to be handled internally but due to the wrong evaluation you bring onboard external support without the right foundation. This adds unnecessary complexity instead of reducing it.

Through our own experience at Logistics Executive Group, we have found that the best way to succeed in our external consulting is to apply expertise, in areas such as Project Management always with an honesty and profound respect and sensitivity around our customer requirements.

While every situation needs to be assessed on its own merits, it is clear that project management methodologies can definitely add value to an organisation’s inventory. The benefits of bringing in an external team to manage can offer immeasurable benefit and advantage as long as there is a justified business case, thorough planning and engagement measures put in place from the outset.

What has your experience been with external project management? Have I covered off all the pros and cons? It would be interesting to hear your thoughts on the subject.

Find out more about our consulting services here:
www.logisticsexecutive.com/advisory

For information on Logistics Executive Salary Survey which includes project management salaries please find a free link to our website here:
www.logisticsexecutive.com/wp-content/uploads/2015/05/2015-Southeast-Asia-Salary-Guide-Low-Res.pdf

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Darryl Judd
Chief Operating Officer, Logistics Executive Group

In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

NEWS

Are you getting the full ROI of your sales and operations planning (S&OP)?

In this webinar, you will learn why S&OP implementations are often not meeting the ROI expectations. Root causes are diverse: stakeholders have different interests, processes are complex to follow, lack of visibility, and each company has its own specific challenges on top of that. During the webinar we will discuss solutions overcome those challenges. You will discover the best practices you need to follow in order to get the full benefits out of your S&OP process.

To register, please click here.

 

ALA MasterClass Malaysia – SPECIAL OFFER!

Special offer – sign up before the end of September and receive 10% the price. Commencing from October 2016. This 6 module Masterclass for ALA Diploma for Supply Chain Management & Operations will kick off in Kuala Lumpur, Malaysia. HRDF certified. Your number one pathway to a Diploma in Supply Chain with any 6 MasterClass! Slots are limited and registrations now open. Enter discount code: ALAMY10OFF

Learn more..

 

Visit Logistics Executive Group blog Supply Chain ViewPoints

Supply Chain Viewpoints is an interactive industry forum for opinion, industry trends and comment. It is a single source of information on What’s happening in the world of logistics and supply chain and will feature white papers and industry research. We welcome industry contribution and input. For more information see:

www.supplychainviewpoints.com.

 

Logistics Academy CSCMP Quick Courses on Sale

This month only purchase the CSCMP Quick Course Bundle and receive a 15% discount of overall price. Enrolments before 30th March will receive a VIP delegate ticket to LogiSYM Dubai or LogiSym Malaysia. Logistics Academy CSCMP Quick Courses allow you to learn core supply chain topics online, at your own pace, and when it’s convenient for you. Consisting of a series of Thirteen (13) courses,, the CSCMP Quick Courses are highly educational Supply Chain and Logistics courses that are designed by carefully selected faculty for entry to mid-level professionals. Backed and supported by the US Based Council of Supply Chain Management Professional. For more information or to sign up, click below. Coupon code: LEQC15OFF

www.logisticsexecutive.com/academy/cscmp-quick-courses.

 

UPCOMING EVENTS

8th Annual Air Cargo Handling Conference
20 – 22 September 2016
JW Marriott Marquis Hotel, Dubai, UAE

Taking place in the melting pot of activity that is Dubai, the show is set out to be the global air cargo handling sector’s premier annual gathering.

www.achconference.com

 

GLCS LogiSYM Malaysia 2016
12 – 13 October 2016
Kuala Lumpur, Malaysia

GLCS LogiSYM Malaysia 2016 promises to be a highly unique event. Building on the success of the past 4 years, the 2016 Fifth Annual Global Logistics and Supply Chain Symposium will focus this year on providing a platform for mid to senior level shippers to discuss and explore innovation, excellence and what changes we can expect to see in the Asian supply chains of tomorrow. We will hear from leading solutions providers in the industry and explore best practice collaboration case studies.

www.logisym.com/events/logisym-malaysia-2016

 

Indonesia Transport Supply Chain & Logistics
19 – 21 October 2016
Jakarta, Indonesia

Indonesia Transport, Supply Chain and Logistics (ITSCL) is the only dedicated transport and logistics event in Indonesia, with the aim of being a key partner of industry and the Indonesian government, showcasing the government’s aspirations of efficient infrastructure and helping it to achieve its objectives of the Blueprint of National Logistics System Development. ITSCL is leading platform to discover new products, ideas and technologies for transport and supply chain industry. ITSCL will bring opportunities for sourcing, networking and learning all together in just one place over 3 days.

www.transport-supplychain-logistics.co.id

 

Breakbulk Middle East
23 – 26 October 2016
Abu Dhabi, UAE

Following the success of the inaugural Breakbulk Middle East event, this second conference and exhibition will see even more of the world’s largest EPCs, logisticians and transport providers come together in Abu Dhabi. Megaprojects in the region — oil & gas, electricity, water, renewable energy, infrastructure — will be the focus for new business opportunities.

http://www.breakbulk.com/events/middle-east-2016/

 

Logisym Dubai: Beyond 2020–Connecting Supply Chains, Creating the Future
22 – 23 November 2016
Dubai, UAE

LogiSYM Dubai 2016 is a unique two-day conference set in Dubai, United Arab Emirates from 22 to 23 November 2016. A premier event for Logistics & Supply Chain professionals, educators, Information Architects and Usability Practitioners, LogiSYM Dubai 2016 will bring together 300 professionals from around the region. With EXPO 2020 just around the corner and the UAE forging ahead as the regional’s leading supply chain hubs, this year’s theme: ‘Beyond 2020 – Connecting Supply Chains, Creating the Future’ looks at the opportunities, supply chain and consumer mobility and sustainability.

www.logisym.com/events/logisym-dubai-2016

Recent Australian Election Results Focus on Manufacturing

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Recent Australian Election Results Focus on Manufacturing

From London to Whyalla there is a call for more Government intervention

July 2016
Author: Maria King, Corporate Communications Manager, Logistics Executive Group

This has been strongly evidenced in the recent Australian election results were minority parties like the Nick Xenophon Team have shocked the two major Australian political parties to capture several key seats in the Senate and Lower House. As I write this they are narrowly contesting the seat of Grey, which is a traditionally staunch conservative Liberal seat. The fight in Grey hinges on Government funding to keep the steelworks industry alive there, which employs 6000 people.

According to Australian Senator, Nick Xenophon, his political aim, as an independent is to “drag both parties back to the center.” The growing popularity of minor political parties follows a global trend of popular disillusionment with the establishment that has spawned the likes of Brexit, Trump, Sanders and now the election of minority parties in Australian politics. It is clear that people are worried about their jobs and the future.

CEO_Newsletter_July_7

Senator Nick Xenophon standing outside of the Whyalla Steelworks

In Australia, the manufacturing sector has been a key focus of this concern. While the country had a robust manufacturing sector in the past, recently Australia has slipped behind Luxembourg to take the last place in the OECD nations in terms of manufacturing jobs as a share of total employment, according to a report from the new Centre for Future Work. The report, released in June 2016, identified policy settings that have contributed to the dramatic and unusual decline in Australian manufacturing and made some key recommendations.

“What is inevitable, is that any developed country which opts out of manufacturing will be opting out of over two-thirds of world merchandise trade,” said Jim Stanford, Director of the Centre for Future Work.

“There is abundant international evidence that smart, pro-active government engagement, aimed at deliberately enhancing strategic, high-value, export-oriented manufacturing, is not only possible – it is essential for modern industrial success.” Prophetically, Mr Stanford added that “Governments are not powerless in this area. There are clear policy options to encourage manufacturing, and there is strong community support for politicians to take them up.”

CEO_Newsletter_July_6The Future Work report makes a good argument for the promotion of manufacturing and its importance to the Australian economy. It puts forward a case for a more focused and interventionist contribution by Government to further develop this sector.

CEO_Newsletter_July_8It will be interesting to see how the new Government in Australia shapes up and whether the lessons have been learned. It is hoped we will see a major policy shift and investment in the Manufacturing and Supply Chain sectors. A staunching of the “Brain Drain” of Australian Professionals in Supply Chain, Logistics, Manufacturing and Innovation disciplines who, due to the decline of their sector, have been moving off-shore for career opportunities. While this has been of enormous advantage for emerging economies around the world, it will eventually lead to a decline in-country if it proceeds.

If you are a Logistics, Supply Chain professional I would be interested to hear your thoughts.

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Maria King
Corporate Communications Manager, Logistics Executive Group

Maria has been working in the Supply Chain and Logistics Industry for almost two decades in her capacity as a Human Resources and Communications Professional. In that time, she has managed a variety of diverse challenges, including: project management, corporate communications and content management, and human resources initiatives.

NEWS

2016 Supply Chain Innovation Survey Launched

2016 Supply Chain Innovation Survey produced by CHAINalytics in collaboration with Logistics Executive Group and apicsAU is now open. We invite you to take part in the survey which aims to identify the level of supply chain innovation within organisations. It also aims to assess the extent of innovation in supply networks and provide research direction for the appropriate stakeholders i.e. research institutions, industry and relevant policy makers. The objective of the study is to identify the key dimensions driving future supply chains. The 2015 study identified 10 key insights into supply chain innovation. This year’s study will build on those findings. This is a global initiative, open to all organisations. It is not limited to any particular industry.

Click here to answer the survey..

 

Logistics Executive Group launches Supply Chain ViewPoints

Launched this week, Supply Chain Viewpoints is an interactive industry forum for opinion, industry trends and comment. It is a single source of information on What’s happening in the world of logistics and supply chain and will feature white papers and industry research. We welcome industry contribution and input. For more information see

www.supplychainviewpoints.com.

 

Are you getting the full ROI of your sales and operations planning (S&OP)?

In this webinar, you will learn why S&OP implementations are often not meeting the ROI expectations. Root causes are diverse: stakeholders have different interests, processes are complex to follow, lack of visibility, and each company has its own specific challenges on top of that. During the webinar we will discuss solutions overcome those challenges. You will discover the best practices you need to follow in order to get the full benefits out of your S&OP process.

To register, please click here.

 

UPCOMING EVENTS

ERC Asia Pacific Conference & Exhibition
20 – 21 September 2016
Bitec, Thailand

The 15th Efficient Consumer Response (ECR) Asia Pacific Conference & Exhibition is the region’s must-attend event, which gathers C-level executives and professionals of retailers, manufacturers and service providers from retail and consumer goods industries to provide insightful perspectives on the dynamic consumer-driven retailing environment.

www.ecrthailand.com/ecrap

 

4th CCA Pharma & Bioscience Conference
19 – 20 September 2016
Dubai, UAE

The 4th CCA Pharma & Biosciences conference will take place between the 19th – 20th September 2016 at the JW Marriott Marquis Hotel Dubai. It will again be organized in close cooperation with EVA International. Hear more about the challenges and solutions of dealing with temperature sensitive pharmaceuticals in the extreme conditions of the Middle East.

http://coolchain.org/

 

8th Air Cargo Handling Conference
20 – 22 September 2016
Dubai, UAE

After the 2015 success of the Air Cargo Handling Conference’s asian debut at the Shangri-La Hotel in the enchanting city of Bangkok, the 8th outing for this industry-leading event will for the first time see over 300 delegates assemble in the middle east in the regional hub of Dubai from 20th – 22nd September 2016.

www.achconference.com/

 

GLCS LogiSYM Malaysia 2016
12 – 13 October 2016
Kuala Lumpur, Malaysia

GLCS LogiSYM Malaysia 2016 promises to be a highly unique event. Building on the success of the past 4 years, the 2016 Fifth Annual Global Logistics and Supply Chain Symposium will focus this year on providing a platform for mid to senior level shippers to discuss and explore innovation, excellence and what changes we can expect to see in the Asian supply chains of tomorrow. We will hear from leading solutions providers in the industry and explore best practice collaboration case studies.

www.logisym.com/events/logisym-malaysia-2016

 

Indonesia Transport Supply Chain & Logistics
19 – 21 October 2016
Jakarta, Indonesia

Indonesia Transport, Supply Chain and Logistics (ITSCL) is the only dedicated transport and logistics event in Indonesia, with the aim of being a key partner of industry and the Indonesian government, showcasing the government’s aspirations of efficient infrastructure and helping it to achieve its objectives of the Blueprint of National Logistics System Development. ITSCL is leading platform to discover new products, ideas and technologies for transport and supply chain industry. ITSCL will bring opportunities for sourcing, networking and learning all together in just one place over 3 days.

www.transport-supplychain-logistics.co.id

 

Logisym Dubai: Beyond 2020–Connecting Supply Chains, Creating the Future
22 – 23 November 2016
Dubai, UAE

LogiSYM Dubai 2016 is a unique two-day conference set in Dubai, United Arab Emirates from 22 to 23 November 2016. A premier event for Logistics & Supply Chain professionals, educators, Information Architects and Usability Practitioners, LogiSYM Dubai 2016 will bring together 300 professionals from around the region. With EXPO 2020 just around the corner and the UAE forging ahead as the regional’s leading supply chain hubs, this year’s theme: ‘Beyond 2020 – Connecting Supply Chains, Creating the Future’ looks at the opportunities, supply chain and consumer mobility and sustainability.

www.logisym.com/events/logisym-dubai-2016

 

The 7th International Saudi Transtec Exhibition & Conference
5 – 7 December 2016
Dammam, KSA

After a successful trade show in 2015, SAUDI TRANSTEC is already geared up for the 2016 edition. By attracting a very targeted audience for the participating companies, SAUDI TRANSTEC has once again proved that this is a strong trading platform where increasing your distribution network, strengthening business relationship and sharing industry developments.

www.sauditranstec.com/

Changing Role of Psychometric Testing

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Changing Role of Psychometric Testing

Will there continue to be a role for Psychometric Assessment in management processes?

June 2016
Author: Keng Pang, Senior Consultant – Asia, Logistics Executive Group

In recent years there has been a trend for employers to develop a more inclusive workforce that incorporates all sorts of differences including geographic and cultural boundaries, gender, age or anything else. This is where psychometric testing has really come into its own as an impartial testing tool. It is particularly useful as employers move towards strategies aimed at hiring a more diverse workforce were these assessments provide information on skills and abilities in areas that are usually hard to measure like behaviour.

Their impartiality is also an enormous advantage in assisting organisations meet the increasing legislative requirement for equality in the workforce.  Psychometric testing in this instance can provide a transparent, evidence-based recruitment tool that satisfies equal opportunity standards.

They will also be used more widely as other recruitment measures are outdated, such as the new trend by companies such as Google and Ernst & Young to remove graduate requirements from their recruitment processes becomes more prevalent.

Even universities are moving away from placing a value measure on their degrees as new research suggests that when hiring decisions are made more on a candidate’s soft skills better decisions are made.  As Universities remove grading from their assessments, testing can be used as a replacement means of assessing ability in different areas such as literacy, as required by job roles.

More companies than ever are using psychometric testing.  According to the (May 2015) Aberdeen Group study, 71% of Best-in Class companies used psychometric testing. This was an increase in their use by 13% which correlated with an increase of 15% year-on-year improvement in hiring manager satisfaction.  They also state “Businesses that use pre-hire assessments are 36% more likely than all others to be satisfied with their new hires.”

DISC training, such as Logistics Executive Group’s Myprofile, provide valuable information about how a person is likely to behave and react in certain situations. This is of huge benefit to managers, teams and to individuals as it offers a deeper insight into how they can benefit from their differences and how to communicate and motivate each other. “We have been incorporating Myprofile in our recruitment process since 2005 to help us find the right person, with the right attitude and the best talent for our clients. Our clients tell us that Myprofile is one of the fastest, most cost effective and easiest ways to identify the best candidate for the job,” said Kim Winter, CEO of Logistics Executive Group.

CEO_Newsletter_June_6Myprofile provides a report for each applicant assessed that features:

  • A profile summary for each applicant
  • Style graphs indicating intensity of each behaviour
  • Preferred working conditions for this person
  • How to communicate effectively for maximum performance
  • Key behaviour traits
  • Value to the organisation
  • Career choices that best suit this person’s behavioural style
  • Management style and strengths
  • Work style review
  • Is this person good for the job?

Different psychometric tests also assess cognitive ability such as critical thinking, numerical or abstract thinking that can be tailored to the requirements required by specific roles in the hiring process.

Whilst psychometric testing is known in today’s business world for its role in the recruitment process, in assessing candidate suitability, it has enormous potential for various ongoing uses.

It has the potential for multiple uses to engage existing employees, build teams and assist in career development. As an interactive tool it can build an employer brand by for example incorporating a questionnaire on an employer’s website or it can be used an ongoing tool that gauges and manages corporate culture. Employers are also using assessments in internal talent development and to help employees further their own careers. For example, at cut-e, they’ve built an internal assessment for Dubai Duty Free which assesses the strengths, interests and behavior of their 7,000 staff at Dubai Airport. Individuals can then be automatically identified and matched with future jobs that might suit them.

It is clear that psychometric assessment is a part of the human resources function that is here to stay but what about its use in other areas? It can be uses to attract talented candidates by incorporating trends like gamification on websites.  Gamification is the process of incorporating elements of a game to other areas of activity such as online marketing to encourage engagement. “Gamification is really exciting because it makes the hard stuff fun” says Kim Winter. For example, easyJet use various interactive questionnaires on their website that allow candidates to find out more about the company.

App-based psychometric testing is another area that will develop as a means of providing candidates with a more user friendly experience that is more user friendly and inclusive in keeping with the trend of a more diverse and geographically challenged candidate pool.

“The bottom line” continued Kim Winter, “is that companies want the best people working for them and to cultivate an environment that will bring out their best.  Psychometric tools can provide an ongoing way of helping managers achieve this in ways that are only limited by our imagination”.

As part of their consultative process, Logistics Executive Group offers a complete set of tools to enable managers and their staff find work satisfaction from Assessments for Recruitment and Selection, Professional Development, 360 Degree Surveys, Graduates, Team Effectiveness Measures, Team & Team Member Personality Profiling, and Executive Team and Board Reviews.

It is predicted that the use of psychometric tests will only continue to grow and develop in all sorts of exciting ways. Darryl Judd envisages that the use of psychometric testing can only continue to evolve. “In time they will become immersed in new and exciting ways. They will continue to enhance our work environment and enrich our personal satisfaction through a deeper self-awareness. This can only be a positive thing.” It is also incredibly useful thing in a work environment that is continuously more demanding in pace, complexity and change.

CEO_Newsletter_June_12To find out more about the psychometric services offered by Logistics Executive please visit our website: www.logisticsexecutive.com/talent/online-behavioural-skill-assessments/myprofile-online-behavioural-assessments

 

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Keng Pang
Senior Consultant – Asia, Logistics Executive Group

Keng has a total of 20 years of working experience; of which 17 years were focused on the logistics industry, in both Singapore and China. She has accumulated experiences in a 3PL environment for sectors in high-tech manufacturing, luxury retailers , FMCG, Oil & Gas, Chemical and Banking and Financial industry.

The 10 years of general management experience has sharpened her insight into customers’ needs and constraints versus the market trends enabling her to understand corporate and shareholders’ perspectives. This has enabled her to make important and critical decisions and effectively manage resources, focusing in areas which reap desired results.

Keng is also a PMC trained Business Advisory Consultant and has also been trained in assessing Organization Business Excellence.

NEWS

NEW Global Freight Forwarding 2016 Report – Available to download today!

The brand NEW report Global Freight Forwarding 2016 is now available to download.

The 2016 edition of Ti’s Global Freight Forwarding report contains market sizing and forecasting data, profiles of the 15 largest freight forwarders, as well as trade lane analysis and an examination of the technology supporting and disrupting the industry.

Purchase report here.

To learn more, please contact us.

 

FREE TRIAL: Myprofile Behavioural Assessment

This month Logistics Executive Group is offer a free trial to its Myprofile Behavioural Assessment system. Simply contact us at [email protected] logisticsexecutive.com. Using Myprofile helps you find the right person, with the right attitude. Myprofile is one of the fastest, most cost effective and easiest ways to help identify the best candidate for the job. It also improves retention, eliminating costly hiring mistakes and improves effectiveness in the workplace.

To find out more about Myprofile, visit our website here.

 

UPCOMING EVENTS

Home Delivery World West 2016
31 August – 1 September 2016
California, USA

Home Delivery World West returns to San Diego as the most innovative and comprehensive event where high level executives in retail and etail logistics and operations gather.

http://www.terrapinn.com/conference/home-delivery-worldwest/

 

GLCS LogiSYM Malaysia 2016
12 – 13 October 2016
Kuala Lumpur, Malaysia

GLCS LogiSYM Malaysia 2016 promises to be a highly unique event. Building on the success of the past 4 years, the 2016 Fifth Annual Global Logistics and Supply Chain Symposium will focus this year on providing a platform for mid to senior level shippers to discuss and explore innovation, excellence and what changes we can expect to see in the Asian supply chains of tomorrow. We will hear from leading solutions providers in the industry and explore best practice collaboration case studies.

www.logisym.com/events/logisym-malaysia-2016

 

Indonesia Transport Supply Chain & Logistics
19 – 21 October 2016
Jakarta, Indonesia

Indonesia Transport, Supply Chain and Logistics (ITSCL) is the only dedicated transport and logistics event in Indonesia, with the aim of being a key partner of industry and the Indonesian government, showcasing the government’s aspirations of efficient infrastructure and helping it to achieve its objectives of the Blueprint of National Logistics System Development. ITSCL is leading platform to discover new products, ideas and technologies for transport and supply chain industry. ITSCL will bring opportunities for sourcing, networking and learning all together in just one place over 3 days.

www.transport-supplychain-logistics.co.id

 

Logisym Dubai: Beyond 2020–Connecting Supply Chains, Creating the Future
22 – 23 November 2016
Dubai, UAE

LogiSYM Dubai 2016 is a unique two-day conference set in Dubai, United Arab Emirates from 22 to 23 November 2016. A premier event for Logistics & Supply Chain professionals, educators, Information Architects and Usability Practitioners, LogiSYM Dubai 2016 will bring together 300 professionals from around the region. With EXPO 2020 just around the corner and the UAE forging ahead as the regional’s leading supply chain hubs, this year’s theme: ‘Beyond 2020 – Connecting Supply Chains, Creating the Future’ looks at the opportunities, supply chain and consumer mobility and sustainability.

www.logisym.com/events/logisym-dubai-2016

Logistics Industry Consolidation Continues Into 2016

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Logistics Industry Consolidation Continues Into 2016

May 2016
Author: Kimble Winter, Chief Executive Officer, Logistics Executive Group

MERGER SIGN BELOW OFFICE BUILDING

There has been unprecedented growth in mergers and acquisitions within the Logistics and Supply Chain industry since 2015. The impact of this is potentially going to change the industry in far-reaching ways if it continues.

“Globally, in our offices in the Middle East and Asia in particular, we have noticed a growing demand for corporate advisory services in Mergers and Acquisitions practice,” said Darryl Judd, who leads Logistics Executive Group’s Corporate Advisory Services. “There has a been a marked increase the number of qualified client approaches since Q3 last year and this demand has continued into 2016. The Middle East and Asia remain the most active with customers wishing to expand their business footprints or add strategic niche operations to meet new challenges and ensure their competitiveness” he added.

According to Supply Chain Quarterly’s annual survey[1], CEO’s would predict every year that there would be an emphasis on acquisitions. However, counter to this survey prediction, relatively few large-scale acquisitions occurred in the logistics industry between 2008 and 2014. The Supply Chain Quarter’s staff found this puzzling so in their 2014 survey they asked CEOs why merger and acquisition activity continued to lag behind expectations.

Some said this was because acquisitions were overpriced, some mentioned post-acquisition integration problems, others stated they had achieved the desired scale through previous acquisitions and organic growth. In early 2014 however this began to change on an unprecedented scale. There was a new wave of large-scale mergers and acquisitions in the logistics industry. Incredibly, between 2014 and September 2015, US$20 billion was spent on acquisitions in the industry. This buying frenzy is continuing to this day.

The trigger for these acquisitions clustered around four categories: consumer demand pressures, globalisation, financial considerations and economic conditions. Consumer demands have increased considerably with the advent of e-commerce which has enabling consumers to reach further geographic markets and for business to find seamless solutions to provide them with their purchases.

Companies have had to manage multi-channel retailing and consumer relationships in a more sophisticated, complex method that is heavily integrated with logistics services and technology. Barriers are starting to breakdown, not just in terms of geography but in regards to information sharing and traditional industry roles. Businesses are starting to trust 3PL ‘s more with their sensitive company information and this has allowed these providers to integrate and manage their services better.

CEO_Newsletter_May_6Thanks to the emergence of e-retailing with the phenomena exemplified by Amazon and its Asian counterpart, Alibaba, 3PL’s are under more pressure than ever to provide customers with a broad range of services within an expanding geographical footprint. Acquisitions provide an efficient way of achieving this. Often in countries like India and China where there are some restrictions on foreigners doing business, it is easier to achieve a footprint through acquisition rather than with a direct investment.

We are also finally experiencing an emergence from the Global Financial Crisis. Despite the economic slowdown in China, various wars in parts of the world like Syria and other indicators of market volatility there seems to be an overall feeling of cautious confidence.

However, Penske and Capgemini Consulting’s annual State of Logistics Outsourcing Study of September 2015 suggest that this sudden trend could be attributed to what they call “defensive acquisitions.” According to this theory, one player makes a move at domino effect occurs. If one 3PL starts to expand by acquisition the others think, from a defensive point of view, that they also need to follow suit in order to stay competitive.

CEO_Newsletter_May_5Regardless of these various reasons, it seems that consolidation is going to remain a dominant theme in the logistics and supply chain sector that is set to continue. In their predictions for global logistics 2016, Gartner says they expect that by 2020 the top ten, global 3PL’s will control 80% of the world’s logistics volume. They expect logistics service providers will evolve to meet the fast-paced, specialist demands of different market segments. They will evolve into a relatively small number of these huge global 3PLs who will be serviced by small niche players who will work for them on a contract basis.

A report by PWC seems to support this theory. In their study, PWC found total M&A activity in 2015 nearly doubled from the previous year with an increase from US$87 billion to US$172.7 billion. PWC also found that the number of what they call “megadeals” globally (which PWC defines as being of US$1 billion or more) grew considerably in 2015 to 28 deals which are up from 17 deals the previous year. This growth constituted an increased the average deal value to US$771 million up from US$376.7 million in 2014.

It is predict that the result of this industry consolidation is that the balance of power will shift from shippers to 3PLs, which according to Supply Chain Digest[2] may lead to a major infection point in the supply chain. “It is a compelling argument” continued Darryl Judd. “3PL’s have tried for years to provide more sophisticated services for their customers. Since the GFC, the role of Logistics has really stepped up to become a critical business function”.

“Logistics service providers are becoming less interested in competing by way of lower prices and more interested in competing by way of offering. They are setting up long term relationships based on infrastructure investment and industry knowledge.” In this way, the logistics function is continuing to take prominence as a critical business success driver rather than the backroom appendage. “Consumers will continue a faster, more efficient logistics service and this will be the deciding factor that will either make or break a business so their reliance on 3PL’s will only increase” concluded Darryl Judd.

No doubt there are exciting times ahead for the industry and the acquisition phase will continue for some time to come.

[1] Supply Chain Quarterly – Quarter 3 2015
[2] “Supply Chain Graphic of the Week: 3PL Industry Consolidation Continues at a Rapid Pace” Supply Chain Digest Feb 11, 2016

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Kimble Winter
Chief Executive Officer, Logistics Executive Group

The founder of the company, Kimble is an acknowledged specialist in Executive Recruitment across Logistics and Supply Chain sectors. A dynamic and engaging senior executive with 35 years leadership experience spanning Corporate Advisory, Executive Coaching, Public Speaking, Search & Recruitment across the Supply Chain, Logistics, FMCG, Retail, Resources, Industrial, Disaster Relief and Humanitarian sectors. Kimble has built an international reputation as the founder (1999) of Logistics Executive Group which delivers whole of lifecycle business services including Search & Executive Recruitment, Corporate Advisory, Online Education and Executive Coaching / Mentoring.

Leading for the Future with EI

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Leading for the Future with EI

April 2016
Author: Mareike Walter-Paschkowski, Regional Manager Middle East & Africa, Logistics Executive Group

Various trends and developments force companies and organizations to rethink and refocus on how to attract and develop talent for the future. Below I would like to highlight 2 trends that will have an impact on most organizations and one fascinating way to approach this.

Industry 4.0 seems to be the current buzzword in the economic world, I mention this as it was a regular theme that was discussed when the top management of the 350 biggest companies around the globe were interviewed by the World Economic Forum in order to analyze the impact of recent developments in industrial automation. This as yet unpublished study predicts that due to increasing use of automation and the proceeding digitization of the working environment and processes the industrialized countries will lose 5 million jobs within the next 5 years. This will mainly affect jobs in offices or administrative positions with highly standardized duties, indicated by the fact that automation changes have already taken place in most factories and manufacturing plants. In contrast the study predicts that only 2 million new jobs will be created and the majority of these will require specialists in the areas of I.T. and technology. What we also see is that many companies still underestimate the importance of certain skills (i.e. change management, project management, communication and conflict management) it is essential to utilize this development in the best possible way. Businesses that are able to meet individual employee expectations will win the battle for talent in the future.

CHALLENGE NUMBER 1:
Support current and future employees to gain the hard and soft skills needed to face the changes coming with the Industry 4.0.

CHALLENGE NUMBER 2:
Create a comprehensive, forward looking HR strategy that respects the values and strength of individuals in their organization.

A sustainable footprint is more than ever on the agenda for organizations, companies and individuals. Faced with developments such as climate change, shortage of natural resources and a shifted awareness of clients and employees to more sustainable products & services, making a transition to a sustainable business presents significant opportunities. Companies that are ahead of the game, leading the way to embedded sustainability into the very core of their strategy and operations, are the ones most likely to succeed in the face of current and future challenges. In 2005 the World Summit on Social Development identified 3 areas to focus on, including economic and social development as well as environmental protection. What we actually see today is that most companies and organizations still focus more on the economic and environmental aspect of sustainability. The social aspect is largely ignored and the impact widely underestimated. To get the most out of sustainability activities, companies will have to take all 3 areas of sustainability into account, as they are interrelated and as such influence each other.

CHALLENGE NUMBER 3:
Implement and integrate a comprehensive sustainability strategy that generates a shift from “nice to have” to “business as usual”.

CHALLENGE NUMBER 4:
Focus on the people aspect of sustainability even if its more difficult to calculate the business case behind these activities.

Taking all of the above into account, it can be safely assumed that the 21st century is an era of rapid modernization and change and this pertains to politics, the economy and increasingly towards social systems. Stability and predictability are factors we can no longer rely on in today’s world. From a human resource perspective these developments create the need for urgent and fundamental change in the way we attract, manage and develop people.
Historically, IQ was the most important factor for a successful career. But today people and especially leaders need to develop many additional qualities which will enable them to effectively deal with stress, ever changing work processes and a lack of job security. In this new viral world, personal impressions make a difference, emotions and personal values have increasingly made their way into our professional and business lives.

That’s why it’s even more important to understand the dynamics of how and why some people handle change and challenges more successfully than others.

Many concepts have been evolved to explain what enables certain people to be more successful than others, and today’s understanding is that Emotional Intelligence (EI) is one factor in this. Certainly this is not a new insight as the impact and processes behind EI have been widely examined over the last 20 years but facing Industry 4.0 as well as the trend into a sustainable business it might be the perfect time to have another look at what is really driving successful people.

What is EI?
Following Travis Bradberry and his book “Emotional Intelligence 2.0” (2009) there are 3 factors that make a person “tick”. IQ, EI and Personality. According to his findings there is no known connection between IQ and EI and it’s not possible to predict emotional intelligence based on how smart someone is or what kind of personality he has. Another finding is that IQ and personality (for adults) stay stable over a lifetime and doesn’t change. Interestingly for EI there is a uniform understanding that the related skills build up on each other and – independent of age – can be enhanced with suitable training.

A famous theoretical model created by Daniel Goleman includes 4 main aspects of Emotional Intelligence: Self-Awareness, Social-Awareness, Self-Management and Relationship-Management.

He defined EI as “the ability to recognize, understand and manage our own emotions and to recognize, understand and influence the emotions of others. In practical terms, this means being aware that emotions can drive our behavior and impact people (positively and negatively), and learning how to manage those emotions – both our own and others – especially when we are under pressure.”

Leader_1

Is there a link between leadership styles and EI?
Furthermore his consulting firm Hay/McBer analyzed the relationship between EI and leadership styles. They found 6 distinct leadership styles, each springing from different components of emotional intelligence. The research summarized the styles, their origin, when they work best and their impact on an organizations climate.

The main findings were summarized as following:

  • The 6 styles, taken individually, appear to have a direct and unique impact on the working atmosphere of a company (climate), division or team, and in turn, on its financial performance.
  • The research indicates that leaders with the best results do not rely on one leadership style, they use most of them in a given week – seamlessly and in different measure – depending on the business situation.
  • According to report, the visionary leadership style has the most positive effect on working atmosphere of a company, but 3 others Affiliate, Democratic and Coaching, follow close behind. That said, the research indicates that no style should be relied on exclusively and all have at least short term uses.

How to measure your EI?
There are various tools and platforms available that support individuals and organizations to measure and understand Emotional Intelligence. The EQ-I (Bar-On) is a self-report instrument to assess those personal qualities that enable some people to possess better emotional well-being than others. The Emotional Competence Inventory (Goleman) is a 360 degree instrument, where people evaluate the individuals within an organization (Individual Feedback Reports), or the organization as a whole (Work Force Audits). These audits can provide an organizational profile for any size group within the company. In addition there are various training and certification programs available which enable leaders or people in HR related functions to broaden and professionalize their EI skills and expertise. Finally for all employees coaching and mentoring programs can add an incredible value to understand and develop Emotional Intelligence.

What are the Pros and Cons?
When EI found its way into the corporate world various studies and reports have analyzed the impact and significance of EI. Especially in the beginning most research illustrated highly positive outcome for organizations if they focus on EI in their Talent Acquisition and Development programs. Recent examples such as the Global Empathy Index (2015) from the Lady Geek advocacy agency shows that businesses are more profitable and productive when they act ethically, treat their staff well, and communicate better with their customers. The top 10 companies in the Global Empathy Index 2015 increased in value more than twice as much as the bottom 10 and generated 50% more earnings. (For more details go to https://hbr.org/2015/11/2015-empathy-index).

Another example is the EI Consortium that publishes various points that build a case for how emotional intelligence contributes to the bottom line in any work organization. In addition they publish latest research findings that support the positive outcome of EI in the business world. One example: For 515 senior executives analyzed by the search firm Egon Zehnder International, those who were primarily strong in emotional intelligence were more likely to succeed than those who were strongest in either relevant previous experience or IQ. In other words, emotional intelligence was a better predictor of success than either relevant previous experience or high IQ. More specifically, the executive was high in emotional intelligence in 74 percent of the successes and only in 24 percent of the failures. For the full details go to http://www.eiconsortium.org/reports/business_case_for_ei.html.

But as it is with all tools and methods: “Poison is in everything, and no thing is without poison. The dosage makes it either a poison or a remedy” (quote Paracelsus).

Said that, critical voices have come up and new studies show the potential downside of EI. Review finds that, in many studies, poor research methodology has exaggerated the significance of EI. A group of Austrian psychologists for example, reported a correlation between EI and narcissism, raising the possibility that narcissists with high EI might use their “charming, interesting, and even seductive” qualities for “malicious purposes,” such as deceiving others. Another study with college students shows, that people with high EI might be more over-credulous due to overconfidence in their ability to read others.

What to take away?

  • Creating Awareness around Emotional intelligence has never been easier. There is no lack of information and no shortage of partners who can help you to develop, implement and audit a business model that will support you in getting it right. There are various tools and services (training programs, mentoring & coaching) available that help individuals and organization to measure EI and to develop and increase required skills such as Self-Awareness, Social-Awareness, Self-Management and Relationship-Management.
  • To be effective, individuals and especially leaders will need more than ever to be able to influence others through gaining their respect and enlisting their passions. And the more EI skills a leader has at his disposal, the more flexible and seamless he can switch styles depending on the situation and in turn the better the outcome will be. A leadership coaching style is the least utilized but it’s also maybe the most effective style to add to your soft skills portfolio.
  • Higher emotional intelligence translates into better performance. Especially in jobs that require extensive attention to emotions (this counts for all jobs with social interaction such as sales, marketing, project management and all leadership or management roles).
  • There’s a fine line between motivation and manipulation in relation to EI. People could use emotional intelligence for nefarious ends, but more often, emotional skills will be simply instrumental tools for goal accomplishment.
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Mareike Walter-Paschkowski
Regional Manager Middle East & Africa, Logistics Executive Group

Mareike is a dynamic and engaging Supply Chain project management professional with more than 12 years professional experience in managing complex logistics and supply chain projects. As Practice Leader of Logistics Executive Group in the Middle East, she delivers whole-of-lifecycle talent management including Corporate Advisory Services, Executive Search and Executive Coaching across the supply chain, logistics, FMCG, retail, resources, industrial, disaster relief and humanitarian sectors. A hands-on Consultant working in a team in Dubai together with their offices in Sydney, Melbourne, Singapore, Hong Kong, Shanghai, Chennai, Mumbai, Delhi and London, Mareike holds a PRINCE2 (Projects IN Controlled Environments) foundation and practitioner certification of APMG International.

Winners and Losers in the Supply Chain as Oil Prices Tumble

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Winners and Losers in the Supply Chain as Oil Prices Tumble

March 2016
Author: Darryl Judd – Chief Operating Officer, Logistics Executive Group

In any volatile market situation, there are going to be winners and losers. The decline in oil prices will have broad implications for transportation and logistics companies – some positive, some negative. Clearly, the impact can vary greatly on a company-to-company basis and the impact of the dramatic price fall in the oil sector will eventually work its way down the supply chain.

iStock_000005557758_Double-1200x808

At the recent Logisym Singapore 2016 Supply Chain conference, the subject of the boarder impact of the volatile oil prices on our supply chains took centre stage with mixed views of what it meant and just how we will see ourselves through this challenging cycle.

What is clear is that suddenly the world is awash with oil. When oil was trading above US$100 a barrel and new technologies made the extraction of shale oil possible at a relevantly affordable cost, we saw a rush of new supply onto an already flattening global market. Stockpiles grew well beyond daily demand and yet producers still pumped greater and greater amounts of crude. Oversupply and under demand – The perfect storm?

It is little wonder that the surge in production and weaker than expected global demand for crude has sent oil reserves soaring and prices tumbling. The drop in the oil price over the past 12 months is by far the biggest shock for the global economy has seen since 2008. Whilst in recent weeks, we have seen headlines that Saudi Arabia and Russia will cap productions at February levels and a bounce in oil prices back up to US$40 per barrel, the volatility is likely to continue.

Similar episodes of oversupply and falling demand in the past tell us the consequences are likely to be both profound and long lasting. Normally, economists would add “positive” to this list, but there are more doubts are surfacing than ever before.

A fact that was underlined by Mr. Tony Nash, Managing Director of Complete Intelligence, a specialist economic advisory firm at Logisym. “Global trade in 2015 fell by over 14%. It’s therefore no surprise that demand for oil is soft and with output high, this is not about to change anytime soon”.

CEO_Newsletter_March_Quote
The scale of the current oil shock is difficult to exaggerate. While financial markets and commentators were obsessed by rising geopolitical tensions and the latest twists in central banks’ policies in the US, Europe and Japan, even larger forces in oil markets went largely unnoticed. A “key concern” of the International Monetary Fund was the risk of an oil price spike caused by geopolitical tensions. Instead, rising production and weaker demand growth have left suppliers competing to find willing customers.

Yet most economists still agree with Christine Lagarde, IMF Managing Director, who last month said that “it is good news for the global economy”. The positive effect on growth should arise because oil consumers tend to spend more of their gains than oil producers cut their consumption.

What Ms. Lagarde failed to mention is that trade is down and the trickle down to consumers is being offset by job losses, lower salaries and markets struggling to maintain any form of positive growth (when inflation is taken into consideration).

Stephen King, chief economist of HSBC, is likely to be closer to the mark when he says that lacklustre demand in China, Japan and Europe over the summer was the primary cause of the collapse in prices so the traditional “lower oil prices good: higher oil prices bad” story is no longer so obviously true.

He argues that optimism following an oil price fall in economic estimations is based on positive supply-side developments for the western developed world, but “there are plenty of situations where falling oil prices are merely symptoms of a wider malaise”.

And so, just who are the winners and losers?

Dollarphotoclub_83727577-e1452179761318First, companies that spend a significant part of their resources on transportation benefit from lower oil prices by making considerable savings in the supply chain. So do logistics and shipping companies, because they are able to save directly from lower fuel prices. The airline industry is a winner from the low oil prices with around one third of the industry costs associated with fuel.

The impact on manufacturing businesses is mixed. Sectors that rely on imports (e.g. manufacture of machinery, transport equipment, computer and electronic products) could benefit as transport costs fall and overseas suppliers pass on the savings from lower oil prices. However, exporters could experience stiffer competition from overseas businesses that also become more competitive due to lower production and transport costs. The question being asked in supply chain circles is clear – is the rush to near-shoring now dead?

The financial services sector also benefits from the increased economic activity, as it facilitates the reallocation of capital and other resources to the sectors that want to invest in response to rising levels of demand. Although the other services sectors will benefit through a small increase in demand for their products, the rate of output and employment growth in these sectors will likely be outpaced by growth in the winning sectors.

Net importers of oil, such as European countries, benefit from lower oil prices. Energy imports to the EU cost around $500 billion in 2013 and 75% accounted for oil. With average prices for Brent at around $109/barrel in 2013 compared to the 2015 average of $54/barrel, the EU is experiencing 50% savings. China, the world’s second-largest net importer of oil, is an obvious winner despite the slowdown of the economy. Based on 2013 figures, every $1 drop in the oil price saves an annual $2.1 billion, according to the Economist. While Chinese export prices remain at the same level, in the long run low oil prices will benefit the economy on the whole and enable the government to reduce energy subsidies.

Clearly, the losers are the oil and gas companies with debt to service. The oil service sector will also likely face a phase of transition, given the reduced amount of capital expenditure invested by oil and gas companies. In the United States, there are now virtually no wells that are profitable to drill.

Chevron, Royal Dutch Shell and BP have all announced cuts to their payrolls to save cash, and they are in far better shape than many smaller independent oil and gas producers. Job losses will impact local economies in the short term.

Electric vehicle manufacturers lose. While the medium-term trend towards the electrification of road transport should continue, cheaper fuel for motorists is likely to slow down the uptake of electric vehicles in the short term. The same applies to alternative fuels such as biofuel.

So, how far do we have to go?

shutterstock_218095567With global trade heading downwards and capital drying up, it’s clear we may have a way to go before the cycle turns. Adding to that analysts at Deutsche Bank said that “history shows the potential for geopolitical tensions in the Middle East to push oil prices higher”, and the possibility of instability in the region could interrupt production. Low prices themselves could provide a catalyst, as cheap oil undermines the outlook of Middle East economies.

According to the International Energy Agency (IEA), “There may be light at the end of what has been a long, dark tunnel ” for oil”. In its latest monthly market update, the global watchdog speculates prices may indeed have bottomed when international benchmark Brent crude fell to $27 a barrel early last month. Since then, there have been signs of a natural attrition on supply and, crucially, a deal to freeze production at January levels, which could eventually rebalance a heavily oversupplied market.

It pointed to outages in Iraq, Nigeria and the United Arab Emirates that took 350,000 barrels a day off the market in February alone, as was reporting the Financial Times. Iranian production post-sanctions is also rising more gradually than expected, adding 220,000 barrels last month compared to claims it would boost output by 500,000 immediately.

Overall, global supplies eased 180,000 barrels last month – and exports from high-cost exploration areas such as the US and South America could fall more sharply than expected this year. However, the IEA also noted that stockpiles are at record levels and that it would take the remainder of this year for supply and demand, currently out of kilter, to the tune of two million barrels a day, to reach equilibrium.

In short, prices will be more stable at current levels around $40 a barrel and will not plough depths of $20 or below as some analysts once predicted. But neither will they rise substantially until next year.

While the negative impacts of oil arrive immediately, the positive effects take longer to materialise. While oil might act as a depressant for now, it will become a stimulant later. One thing is clear – it’s going to be a long waiting game.

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Darryl Judd | Chief Operating Officer, Logistics Executive Group
In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

Agile Performance Management

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Agile Performance Management

February 2016
Author: Niharika Davar – Consulting Partner, Human Capital, Logistics Executive Group

It’s that time of year again. HR departments are winding up their annual performance review cycles, trying to compile ratings and get decisions and approvals for annual pay increases (or not). The feverish activity most likely started a few months ago with emails and follow up chasing line managers to complete performance reviews, fill up forms online or on paper. The end goal quite often is to arrive at a set of ratings that will form the basis for annual pay reviews. More often than not these end up being a small percentage of pay leaving many employees dissatisfied. Where then is the process serving to improve performance, motivate and engage employees or build capability to achieve organizational objectives?

3036166-poster-p-1-the-7-step-formula-for-a-performance-review-that-actuallyAre the outcomes really worth the organizational time and energy that has gone into this process? More and more organisations are coming up with a resounding “No”. A Deloitte survey showed that just 10% of respondents believe that the process is a good use of their time. In a world where uncertainty prevails with cycles of boom and bust getting shorter, the so-called time-tested annual goal-setting exercises and backward looking assessment processes no longer seem to fit.

As companies recognize that leadership, employee engagement, building capability and agility to respond to ever changing external stimuli are critical to success and survival, they also realise that effective performance management is a key lever. Done well, it can drive high individual performance and engagement, impact organization results and be a process that individuals and their managers look forward to.

A fresh approach to managing performance is critical. The way forward is to keep the good bits of the traditional model and ditch the bits that don’t directly relate to improving individual performance and building capability. Companies leading this transformation are redefining the way they set goals, develop employees and assess performance.

So what might this new agile avatar of performance management look like?

Business man pointing to transparent board with text: Time For R

Agile and aligned goals: Traditionally individual goals are set once a year on the basis of the annual business plan/financial budget. While the connection is somewhat nebulous and individuals sometimes can’t see where they fit into the big picture, let’s assume for a minute that the “cascading” of goals has been done well. In most performance management systems these goals cannot be changed and we might arrive at year-end review to find that a large part of the activity during the year has only a remote linkage to the set goals. In a world where the past no longer accurately predicts the future, the annual budgeting process has become somewhat akin to crystal ball gazing. While quarterly business reviews allow for course correction, individual goals remain static. A sure recipe for year-end confusion, gut feeling “halo” or “horns” ratings and loss of credibility for the process. In recent research, Deloitte have concluded that companies who manage goals quarterly generate 30% higher returns from that process than companies who manage them annually.

How do we make the process agile?
Individual goals should be reviewed and adapted regularly to stay relevant and keep up with changing business needs, with a focus on approach and behaviours to deliver improved outcomes; the “how” to support the “what. While the high level purpose and outcomes of a role would remain the same, the measurable objectives need to change dynamically to respond to changing internal and external conditions. Individuals need to have clarity and alignment on the role they play in the business and understand the expectations of various stakeholders. Goals should be specific, collaborative and qualitative with financial/volume and activity targets serving as a point of reference for the best possible achievement.

Regular check-ins and frequent feedback: Regular structured one to one conversations between manager and team members need to replace mid and end year reviews. The conversation should be a dialogue during which goals and progress are reviewed, challenges are discussed, and agreement reached on how to do better. The individual’s fitness for current and future roles, development needs, and progress are an essential part of the conversation. The manager acts as a coach, listening, reflecting and supporting the individual to come up with solutions to continuously improve performance and build for the future. Feedback should be real-time so that employees know how they are perceived and what they need to change.

Future focus: An effective agile performance management process is forward looking with greater emphasis on growth and development for the business and individual rather than a post-mortem evaluation of the past.

Separated from compensation: Performance conversations which happen once a year, with an end goal of providing a rating as input for a pay review, are not conducive to openness and honesty. Much of the time is spent talking about the ratings themselves sometimes deteriorating into a tug of war between manager and employee. They tend to drive alienation rather than collaboration within teams. Companies that remove ratings are seeing the conversations shift from justifying past performance to thinking about growth and development. The result is better employee development, engagement and motivation. Performance ratings and forced ranking are going out of the window with a growing belief that reducing human beings to numbers or factors and forcing them into a bell curve is counter-productive.

The shift to redefining performance management as a continuous, forward-looking, agile process designed to improve results and support employees to be the best they can be is gaining traction. Large global organisations are leading the way, including Adobe, Accenture, Microsoft and even GE, long seen as the leader in performance ranking and forced distribution.

It is seen as the next big move for HR whose role will change from driving and monitoring a year end form-filling and compliance process to facilitating high performance, developing managers’ coaching and feedback skills and providing real time support for just-in-time training and development.

While there can be no argument that agility, continuously improving performance and building capability are the need of the hour, the discussion is not complete without acknowledging that this also means a radical shift in compensation and reward practices. Interesting and exciting times ahead for HR!

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Niharika Davar | Consulting Partner, Human Capital, Logistics Executive Group
Niharika Davar has over 30 years of experience in HR across Asia Pacific, the Middle East North Africa and Turkey. She has worked in leadership roles with large global organisations including Royal Dutch Shell and DHL and is an expert in successfully enabling organisations to set up and implement best in class people processes and practices to significantly improve organizational effectiveness.

News

Logistics Executive Group Launches “The Knowledge Centre”
The Knowledge Centre, is the industries first online portal housing all of the latest research, white papers and industry articles in one place. Featuring global sector reports from Logistics Executive Group’s research partner Ti, the portal is home to a wide array of informative industry related articles, features, white papers  and the most recent transport data. The library can be accessed 24/7 and is found here.

Logistics Executive Group Partner with Logisym Dubai 2016
Logisym’s inaugural Middle East event, Logisym Dubai 2016 – Beyond 2020 will be held 22-23rd November 2016. As a partner to the event, Logistics Executive Group will provide the event with the latest business research and supply chain trends. The third event in the series, Logisym Dubai is expected to attract 300+ delegates along with more than 50 local and international speakers.

Logistics Academy CSCMP Quick Courses on sale
This month only purchase the CSCMP Quick Course Bundle and receive a 15% discount off overall price. Enrolments before 8th March will receive a VIP delegate ticket to LogiSYM Singapore or LogiSym Malaysia.  Logistics Academy CSCMP Quick Courses allow you to learn core supply chain topics online, at your own pace, and when it’s convenient for you. Consisting of a series of Thirteen (13) courses, the CSCMP Quick Courses are highly educational Supply Chain and Logistics courses that are designed by carefully selected faculty for entry to mid-level professionals. Backed and supported by the US Based Council of Supply Chain Management Professional. Click here for more information. Coupon code: LE2016CSCMP

Upcoming Events

Logisym Singapore
9 – 10 March 2016,
Singapore

Logisym Singapore 2016 once again promises to be a highly unique event, with the focus being to provide a platform for mid- to senior-level shippers to hear from the leading solutions in and surrounding the logistics and supply chain industry. The structure of the symposium is such that delegates will have more interactivity with supply chain peers, allowing the development of ideas and for delegates to acquire actionable take aways to integrate back at the office.

www.logisym.com/events/logisym-singapore-2016

Home Delivery World USA
30 – 31 March 2016
Atlanta, Geogia, USA

Home Delivery World USA is the only event to bring together retailers to learn about innovations across home delivery, click & collect, and ecommerce. While there are many retail conferences in the US, this event uniquely covers the entire delivery cycle, from warehousing to customer doorstep, gathering perspectives from big box retailers to innovative subscription service companies, and best in class carriers, 3PL, fulfilment and other delivery solution providers. With out of the box speakers from The Home Depot, Costco, Sears, Polyvore, Office Depot, and Alibaba, on-floor seminars led by Home Delivery experts Cagney Global Logistics, ProStar Logistics, SprintShip and Doorman, an innovation showcase for start-ups to pitch their retail idea to retail entrepreneurs and VCs, networking lunches and interactive roundtables, the event created a truly inspiring environment to help the industry further their business. Even the Mayor of Atlanta, Kasim Reed, joined the conference in support of the industry.

www.terrapinn.com/conference/home-delivery-world/index.stm

Ti’s Future of Logistics
10-11 May 2016,
London, United Kingdom

The subject of innovation forms a core part of Ti’s Future of Logistics conference series, the first to be held in Singapore, October 2015 and will be continued at the second in London, June 2016. Ti have now successfully run over 10 conferences in Europe, Dubai and Singapore and in 2016 will be bringing the conference series to London for the first time.

www.ticonferences.com/london/2016

Trans4
24 – 26 May 2016,
Doha, Qatar

Trans4 exhibition is a major marketplace for transport services, attracting leading professionals from Qatar, the Middle East and the world. Issues concerning the development of the Qatari transport system are discussed, and new information systems are developed for interaction between different modes of transport, aimed at successfully addressing logistics issues in the global market for transportation and logistics services. Being focused primarily on Rail, Cargo and Airline transportation services, the Trans4 exhibition demonstrates the full range of industry solutions – from transport and forwarding services to software and equipment for cargo handling.

www.trans4qatar.com

ME Translog
5 – 7 September 2016,
Muscat, Oman

ME Translog will be a mega event, where local, regional and international exhibitors will showcase latest technologies, best practices, pioneering research, advanced trends, and innovative products and solutions , to meet the requirements of governments, businesses, industrial and commercial entities, aviation, construction, infrastructure, manufacturing, oil & gas and utilities sectors for more efficient and even fast Logistics and Transport services.

www.metranslog.com

GLCS Logisym Malaysia
11 – 12 October 2016,
Kuala Lumpur, Malaysia

GLCS LogiSYM Malaysia 2016 promises to be a highly unique event. Building on the success of the past 4 years, the 2016 Fifth Annual Global Logistics and Supply Chain Symposium will focus this year on providing a platform for mid to senior level shippers to discuss and explore innovation, excellence and what changes we can expect to see in the Asian supply chains of tomorrow. We will hear from leading solutions providers in the industry and explore best practice collaboration case studies. The structure of the symposium is such that delegates will have more interactivity with supply chain peers, allowing the development of ideas and for delegates to acquire actionable take-aways to present back at the office.

www.logisym.com/events/logisym-malaysia-2016

How process excellence will help sustain your business through economic turbulence

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How process excellence will help sustain your business through economic turbulence

January 2016
Author: Katharina Albert – Practice Leader EMEA, Corporate Advisory & Supply Chain Consulting, Logistics Executive Group

The Gulf economies will face a challenging year 2016 amidst unresolved political tensions and an oil price that is likely to remain low for many more months to come.

The UAE had to revise its GDP from forecasted 4.5% to actual 3% as per IMF’s World Economic Outlook (October 2015). With the big oil & gas companies under spending cuts, many small and medium sized businesses are severely affected.

So what do the SME’s in the region need to look out for?

Beware of the over-optimistic approach
The UAE’s leadership has a great vision for 2020 and beyond, although their plans are ambitious so business owner’s will need to make a clear distinction between the UAE’s vision and a realistic growth forecast. Understanding which sectors and clients will be positively or negatively affected by short/mid-term trends will be an imperative for all businesses in the market.

The real-estate and construction sector is closely linked to government vision and spending, while the oil and gas sector is mainly depending on global demand and supply. A growth vision for the country does not mean that every business is entitled to the same share of 3-5% growth automatically.

Just because it is extremely easy to receive loans from the banks again, it does not mean it is wise to take it and make hasty investments that are difficult to repay if the economy slows unexpectedly.

Nowadays every business needs to define their own strategy even more closely related to their industry and market conditions. It is best to review which clients to target on a quarterly basis as well as to discuss which client accounts are likely to decrease business and identify clients that may be lost altogether in order to create back-up plans to ensure continuity of business. With this in mind the head of sales should present a professional strategy adjusted to economic trends and sales targets that are realistic to achieve and plan with. And yes, sometimes we need to openly communicate if market conditions can become more challenging in order to prepare an early plan on how to overcome difficult times.

Understanding economic cycles
The UAE’s economy has advanced and will naturally follow cycles of economic growth and consolidation like many other developed and mature markets. It is important to understand when it is the right time to invest in expansion and when to keep reserves for slowing periods. In the year 2014 we saw a healthy growth and for 2015 many companies had ambitious plans to expand, buy new equipment and built new facilities to increase production output. It is important to get realistic numbers to justify such an investment, including years of slower growth rates and potential under-utilization of brand-new and state-of-the-art facilities, which could prolong the ROI considerably.

The vast supply of real estate and land is luring business owners to build something new instead of maximizing productivity at the current facility. We have seen new and modern factories and warehouses that were not even utilizing 15% of their actual capacity for many months until the management decided to act.

Instead of building something new, many existing facilities still have a lot of potential. My advice is for companies to put-aside some money to invest in continuous improvement campaigns over the next years.

Making the best out it
The industrial sector is expanding, but still not reaching its full potential and competitiveness despite the advantage of low labour and infrastructure costs, the availability of high-tech equipment and low-tax environment. According to our experience this potential can quickly be reached by having a clear focus on achieving process excellence. In the recent years the focus was on buying better machines, getting foreign consultancies to design state-of-the-art facilities, trying to implement fashionable IT systems or finding quick fixes for the old.
All of this does not help, if the work force and middle management run their organisations with the old mind set. If companies just try to grow by working around their old inefficiencies and think they can grow by throwing more resources at the task then it sadly won’t be the case. So why are businesses in Europe and US still highly competitive despite the higher costs they face? Because they had no other option to succeed other than focusing on optimizing their business processes and product quality.

Now it’s the time for the SME’s in the region to face this task and stop excuses.

Some global players have already successfully proven that their business model can be implemented in the Middle East and have gained market share from formerly well-established local companies. Nevertheless even some local corporations have insourced knowledge and talent to optimize their business model and process efficiency and are now successfully competing world-wide.

So we are not advocating to stop investing in new facilities and equipment, but we are suggesting that organizations first improve operations and become lean and profitable and then invest into further expansion and growth.

Achieving process excellence
1. Form a process excellence team
Depending on the size of the company, the process excellence team can be many shapes and sizes, usually 1-4 people is sufficient for SME’s. We recommend having at least one full time person allocated solely for managing process improvement projects, with part-time support from the other team members or young graduates hired as interns for the duration of the project. The head of process excellence should have a background in industrial engineering, supply chain management or any other field related to analytical and holistic systems thinking. This position could be filled by an internal candidate or an external advisor hired on a short term contract. With the aim of having a balanced mix of young as well as experienced team members bringing both internal and external views, as well as all major departments represented by a point of contact is the right approach to move forward.

When assigning part-time team members who are already fully utilized in their current position, ensure that they have sufficient support to handle their existing day-to-day tasks so that they can dedicate their efforts and the required time to their process improvement campaigns. Chose motivated employees looking for a career opportunity or challenge as well as talented communicators from under-utilized departments. It is important that this process excellence team has the full support of the top management as well as being trusted and respected by the workforce in order to achieve a high success rate.

2. Getting started
Communicate with everyone in your organization announcing the establishment of the new team and its objectives. Preferably all employees should be asked beforehand to see who has an interest in joining. After all team members have been selected, they should be introduced and their skills and qualities highlighted as to why they have been appointed. State clearly that this team has direct top-level support to review the as-is situation and that all employees are encouraged to communicate their process-related concerns and suggestions with the team members.
The project team should have a full-time inauguration week with lean workshops, training in project management, process mapping, setting and measuring of KPI’s, change management, scenario analysis, feasibility studies and ROI calculation etc. These can be organized by internal resources (if available) or externally sourced. This week will also serve as time for team-building activities and getting to know each other better. The atmosphere in the team needs to be balanced and harmonious as they may have to withstand objections later from colleagues or entire departments trying to maintain the status quo.

3. Project Management and Communication
After the team have spent some time with each department mapping out / verifying the current processes (including material and information flow), identifying lead times, waiting times, inefficiencies, opportunities etc. they should compile a list of possible projects. Each project should have a short description of scope, estimated project time, objectives, estimated saving potential, if any investment required, departments and stakeholders concerned and proposed team members to work on it. These should be discussed in a joint meeting to clarify which projects to prioritize and which can be run in parallel. Once the top-level management gives the go ahead, one team member should be assigned to project manage and generate a brief weekly status report for the team and the management. A company-wide monthly newsletter will help to keep the entire workforce informed of the progress and upcoming initiatives, keeping a positive dialogue and involvement and avoid fear of change and rumors to spread.

4. Methodologies
As mentioned before, the process excellence team should be well versed in a variety of methods and approaches used for continuous improvement in all areas from sales, customer service, production, order fulfillment, logistics as well as finance and admin processes. We have listed below a brief summary of effective tools which the team should utilize during process excellence projects:

• Value Stream Mapping (VSM): a special type of flowchart to depict the material and process from supplier to customer and distinguishing between value-adding activities and non-value-adding activities when analyzing the overall lead time. It helps to highlight which steps need to be improved to smoothen the overall process flow and shorten lead times.

• 5S (from Japanese translated as “sort”, “streamline”, “shine”, “standardize”, and “sustain”). 5S is a system to reduce waste and optimize productivity through maintaining an orderly workplace and using visual cues to achieve more consistent operational results.

• Bottleneck analysis: Identify which part of the business process limits the overall throughput and improve the performance of that part of the process (can use simulation).

• Simulation: Tool to model the business processes and facility layout virtually to study the system behavior by running several scenarios to find the optimal layout, process flow and utilization of resources (e.g. number of staff, space and equipment required). It is a great decision-making support tool when analyzing existing or newly designed production and logistics facilities as well as entire supply chains.

• TPM – Total Productive Maintenance: Getting workers involved in maintaining their own equipment, and emphasizing on preventative and proactive maintenance will lay a foundation for improved production (fewer breakdowns, stops, and defects).

• Kaizen (Continuous Improvement) is a strategy where employees at all levels of a company work together proactively to achieve regular, incremental improvements to the business process. Nurture this culture by organizing events focusing on improving specific areas of the company.

• KPI (Key Performance Indicator): Metrics designed to track and encourage progress towards critical goals of the organization. Strongly promoted KPIs can be extremely powerful drivers of behavior – so it is important to carefully select KPIs that will drive desired behavior.

Earning the benefits
Many of the lean tools were initially developed by Toyota to improve their own production system, but this time these tools have been further developed and adapted to suit many different types of organizations, such as the logistics sector and even non-producing and service oriented firms. Management and the workforce need to understand that successfully achieving process excellence is also due to change management as it is often a huge cultural change for an organization it is not a quick fix project or just a six sigma belt certification course. If pursued consistently and with continuous top-level support, many millions of dollars of savings are possible with comparably low investments required. All of the above mentioned lean tools will be of tremendous help to successfully implement a sophisticated IT system, or in supporting a move to a newer and larger location or even simply boosting productivity and output from the existing facility.

These incremental savings will assist in funding continuous improvement budgets as well as ensuring healthy margins even in less prosperous years. Lean initiatives help to generate product and process innovation as well as high workforce morale. Plenty of talent and positive engagement can be unleashed from the existing work force once they are encouraged and awarded by contributing their ideas. In addition it helps organisations to attract and retain talent that keeps developing which in turn helps to stay one step ahead of the competition.
Embarking on the lean journey is a fantastic New Year’s resolution.

By the end of 2016 companies that have successfully adopted the process excellence approach will be able to look at a transformed organization with great prospects for the years ahead.

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Katharina Albert | Practice Leader EMEA, Corporate Advisory & Supply Chain Consulting, Logistics Executive Group
Katharina is a material flow simulation expert with more than 8 years of experience in the logistics, manufacturing, aviation and oil & gas sector. She holds a Master’s degree in Systems Engineering & Industrial Management from Germany and has established her own practice in 2011.

Katharina’s consultancy style is unique as she is focussing on the optimization of material and information flow as well as lean facility design by applying sophisticated methodologies and 3D simulation. Her analytical thinking and holistic approach has helped many organisations to substantially increase their productivity and profitability.
Modern supply chains should be lean and flexible, yet resilient to potential disruptions. Advanced planning and decision support for all stakeholders are vital for long-term success. Katharina enables organisations to improve the utilization of resources, their operational planning and strategic decision making.

Efficacy of the New Trans-Pacific Alliance

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Efficacy of the New Trans-Pacific Alliance

December 2015
Author: Camila Osorio, Regional Executive Search Consultant, Logistics Executive Group

How effective will the new Latin American and Asian Partnership be in boosting trade?
In October 2015, twelve countries from the Pacific Region signed a multilateral free trade agreement aimed at boosting trade and investment. These countries represent 40% of the global economy and one third of world exports. They are comprised of three Latin American countries, which are listed in the Trans-Pacific Partnership (TPP) as: Chile, Mexico and Peru. In addition, other countries like Colombia are also planning to join this alliance. The question therefore is will this partnership boost the trade between the two Pacific Regions?

The influencing factors involved, which are cover in more detail below, include: The current deficit in the trade balance, a high dependence on commodities and the challenge in overcoming cultural disparities.

A Deficit in the Trade Balance
According to the ALADI (Latin American Integration Association), CAF (Latin American Development Bank) and CEPAL (The United Nations Economic Commission for Latin America and the Caribbean, known as ECLAC, UNECLAC or in Spanish CEPAL, a United Nations regional commission to encourage economic cooperation) in the first semester of 2014, the trade deficit of Latin America with Asia Pacific was USD 38 billion.

Only Brazil, Chile and Venezuela have a trade surplus with the Asia Pacific (APAC). The remaining countries of Latin America have a large deficit. This is led by Mexico whose deficit with Asia is around USD 50 billion.

The main Asian trade partner with Latin America is China, however, China has not signed the TPP. In 2014, trade with China increased by 5.5%, whilst the trade with rest of Asia decreased. Therefore, it is astounding to note that 70% of the whole Latin American trade deficit with APAC, is with China. This suggests that the Trans Pacific Partnership (TPP) itself, won´t bring more equity to the trade balance between Latin America and Asia. To achieve this equity, it will need the Latin American governments to adopt internal policies that foster exports from the region.

High Dependence on Commodities
Latin America needs to explore other markets rather than commodities. The region needs to consider the Asian Market as a consumer rather than as a producer, which only imports commodities, such as minerals, from Latin America. Mexico is leading in exporting non-commodity goods. The country is the largest exporter in the world of flat screens and the fourth of computers, microphones and speakers. The biggest market share for these products is US and then Canada.

The role of Small and Medium Enterprises
As mentioned, Latin America needs to make a shift towards exports from Latin American countries to Asia. This shift has to be from natural resources, which are low value products, produce by few large firms, to high value added products. Latin American governments have seen the opportunity to make this shift by investing in Small and Middle Size Enterprises (SME’s), since their products have higher value. Hence, increasing the participation of the Latin American SME’s in the trade with Asia should be one of the priorities of the Latin American governments.

On the other hand, foreign companies who want to expand their operations in Latin America should evaluate the value of SME’s in the value chain. According to ECLAC, these SME’s represent 35% – 40% of Latin America’s GDP and amount to 90 – 98% of all the firms in the region. Therefore, SME’s are attractive for Merger and Acquisition deals, since they provide higher flexibility to the Supply Chain. However, the foreign direct investment from Asia in Latin America amounts to only USD 9 billion compared to USD 158 billion from the United States, with Japan being the biggest investor from Asia. This indicates that Asian companies’ investment in Latin America remains low and there are big opportunities for partnership among the regions.

There are different factors influencing the current trade situation of Latin America with Asia. Soft factors, such as cultural differences, may be challenging attempts to boost trade in the region and reducing the deficit in the trade balance.

Do cultural differences play a role?
Other Free Trade Agreements were already in place among some of the countries, like the North American Free Trade Agreement (NAFTA), Association of Southeast Asian Nations (ASEAN), the Pacific Alliance recently created, and the Community of Latin American and Caribbean States (CELAC) to name a few. Despite these trade agreements, trade balances continue to show high inequality.

Javier Huerta, Latin Department Manager at CWCC (an advisory firm), affirms, “One of the challenges of the bilateral investment, is the mutual lack of trust among the different cultures. There is a lack of knowledge in Latin America about Asia, specifically about China”. The large geographical distance and the lack of direct flights are contributors that explain why China’s market and culture are unfamiliar to many Latin Americans. Therefore, both Regions have local stereotypes about the other, which restrain them from establishing workable trade partnerships.

Javier, who advises Latin American companies that want to establish their footprint in Hong Kong and China, encourages his clients to learn more about their target markets. Of high relevance are skills that enable them to learn how to earn their Asian partner´s trust in order to close a deal. To tackle this challenge, several summits like the China-LAC Business Summit, have been created to promote economic and trade cooperation with Latin America and the Caribbean region. It is therefore very important to have an understanding of each country’s culture and market. Being able to develop the skills to manage cultural differences is an essential competency to gain in this diverse, global marketplace.

Another challenge is the language barrier as a large percentage of the population in Latin America and China do not speak the common business language of English. This is why companies like IFB International Freightbridge are teaching Spanish to employees who are responsible for operations with Latin America. In addition, “hiring Latin Americans in China has improved the communication among the operations function there”, according to Jack Han, Regional Director for Latin America.

Javier and Claudia Lopez from Kerry Logistics, agree that finding the right partner in Latin America is another key variable. There is a complexity in the supply chain in Latin America due to, among others things, the noticeable gaps in infrastructure, which increase transportation costs and lead times. Therefore, “finding domestic, logistics providers and offering products that are new in Latin America, (an example of which is Kerry Logistics’ offering of Integrated Logistics)”, have a significant impact on increasing margins. The Ti-Logistics Executive Latin America Report has a detailed SWOT analysis of the Domestic Logistics Providers, as well as country profiles analysis with the respective vertical markets opportunities that denote this.

Without a doubt, the TPP brings new opportunities for boosting the trade among Latina America and Asia. However governments and companies need to identify strengths and weaknesses and overcome the existing challenges which include the four areas mentioned above: the deficit in the trade balance, the current high dependence on commodities, low participation of SME’s in the trade between the regions and cultural barriers in or to make the best out of this alliance. The opportunities of a successful partnership between the two regions are endlessly and overall there is a lot of optimism that this agreement will be highly successful.

References:
Observatory Latin America Asia Pacific, 2014. Statistical Bulletin LATIN AMERICA – ASIA-PACIFIC. Bulletin Number 5. Retrieved from www.cepal.org.
ROSALES. O, INOUE, K and MULDER, N. Rising concentration in Asia-Latin American value chains. Economic Commission for Latin America and the Caribbean (ECLAC). Chile, June 2015. Retrieved from www.cepal.org
Transport and Intelligence Report 2015. Latin America Transport and Logistics 2015. Pg 140. Retrieved from www.logisticsexecutive.com

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Camila Osorio | Regional Executive Search Consultant, Logistics Executive Group
Camila holds a MSc. in Operations and Supply Chain Management and a Bachelor in Chemical Engineering. She has previous experience in a multinational chemical company, which provides expertise in the areas of: Supply Chain, Operations, Process Improvement, Quality Management, Manufacturing, and Chemical industry. Furthermore, she has experience in the Latin American market.
Camila is based in our Hong Kong Regional Headquarters and works as Regional Consultant for the North East Asia Region. She speaks English and Spanish.

The Return of Expat, FIFO and Interstate Employees

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The Return of Expat, FIFO and Interstate Employees

November 2015
Author: Stefanie Moran, General Manager – Australia, Logistics Executive Group

Not a month goes by without new challenges impacting on national or regional employment markets. In recent weeks, we’ve seen the resurgence of the North American economy with strong domestic job numbers, the invisible credit bubble in China finally come to surface, leading to wild fluctuations in the money markets as the central government intervenes to control monetary flows and then the impact of global commodity prices including oil trading at record lows. And that’s without talking about the Syrian refugee crisis affecting parts of Europe – markets that are already depressed and struggling to receive the long-awaited economic bounce following the global financial crisis. If nothing else it makes news….

Whilst on the surface, all these ups and downs have an impact on our consumer confidence; it is the global corporate employment departments that are struggling to keep pace with the major changes in the movement of their workforces. None more so than in Australia with the long enjoyed resources boom having experienced a slowdown in recent years, with its impact felt by thousands of FIFO and relocated workers looking to return home having enjoyed the benefits of the job market that the boom created.

With more than a decade of experience in advising companies on best practice talent management in the supply chain logistics sector, I’ve witnessed the many highs and lows of this fickle industry, to the global and Australian economies and overall changes to the candidate market.

And through of all of these ups and downs, it’s the last three years in which the supply chain executive talent acquisition market has experienced the most dynamic change – and whilst some of this change has been predictable, such as the continued transition of manufacturing offshore, transformation of the service sector and the impact of e-commerce on retailing, a less recognized impact has been the return of the Expatriate or FIFO worker.

Media business sections reinforce the cyclical decline in mining and resources employment. Many expats who gained high paying domestic resource sector roles in a high demand market or chose to obtain premium offshore roles with higher salaries are ever increasingly seeking to return to Australian based positions. With a decline in domestic industry investment, the downscaling/transition to production phase or deferment of many major projects, a decline in a wide range of resource related employment opportunities has resulted Although Australia’s employment marketplace seek.com.au’s recent Employment Trends report found that job advertising in Australia increased in September, with the trend of improvement continuing, it also cited that the “Mining, Resources and Energy” category has produced a 41% decline in job postings and an increase of +31% in applications per job since 2013”*. A clear sign of the challenges ahead.

Trevor Cameron, Asia Pacific Procurement Manager at Cristal Mining is all too familiar with the current mining and resources FIFO conditions “Unfortunately the risk associated with employing returning FIFO employees is sometimes just too high, they have made a deliberate choice to join the expat FIFO market to chase big money at the expense of security”

Certainly within the Australasian markets, there has been an increased focus on assisting executives and specialist workers who are returning home to Australia and or capital cities from roles previously abroad or in remote FIFO locations. A large part of this assistance is in preparing the candidate for the their ‘new’ employment landscape and ensuring that they are set realistic goals and expectations relevant to today’s market – particularly position and benefit alignment to the localised marketplace.
In working with executives to help them understand the reality of the Australian market place, flush with high quality talent in what is a candidate saturated market, minimal job growth in capital location and a reduction in the availability of FIFO roles, mentoring and providing professional coaching to candidates has been one of the cornerstones of our activity in recent times.

Helping professionals realign and better understand their place in the market such as salaries, benefits and job positioning, whilst working with them to develop the necessary interview skills and professional resumes is becoming an increasingly important part of our talent management services.

Much like many of our overseas markets where recruitment lead times are long and candidate management complex, the key to talent acquisition in this changing market of Australia, means that partnering with customers closely from the start of the job design process to onboarding has become essential.

Ensuring transparency around job expectations of the both candidate and the customer, whilst managing the engagement has become a more important factor in successful hiring.

Project managing both parties to be open minded and working with customers to help them look beyond the direct employment limitations (such as salary caps, location or seniority) but to assess the additional value that the returning candidate may bring isn’t always straight forward – particularly if there are questions around whether they will stay long term or see the immediate opportunity as a stop gap until something better comes along. Likewise, ensuring candidates see long-term opportunities / challenges and does not get bored within the role even if it means a sideways shift. The same applies for location changes, it is just not that simple and this needs to be managed and handled in a professional and sensitive manner.

In managing this dynamic market shift and fast-tracking talent management requires learnt knowledge and sector expertise. For HR and Business Managers, this means partnering with trusted advisors who bring specialist talent management skills and extensive networks where by candidate reach goes beyond local market.
Engaging specialist, long established Executive Talent / Search Firm helps accelerate your talent programs and to bridge the gaps in communicating these issues with executives going through this change.

In dealing with these talent marketplace shifts daily and across multiple markets, Executive Talent / Search Firms will be able to provide relevant knowledge and market intelligence that goes beyond just the sourcing and hiring process. They will bring a degree of expertise that ensures the HR process management is aligned to the talent market and reach across domestic and international networks to attract untapped talent pools whilst providing comfort of knowing who’s who and what they bring.

Like all high performing supply chain’s in today world – its starts with business-to-business, relationship-to-relationship and individual-to-individual collaboration built on trust, value and expertise.

Reference
*SEEK Employment Trends, September 2015

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Stefanie Moran | General Manager – Australia, Logistics Executive Group
As General Manager Australia for Logistics Executive, Stefanie has driven Logistics Executive Australia’s growth and client partnerships for more than 10 years. Stefanie with her reputation for business integrity and transparency leads Logistics Executive’s Search business and recruitment projects across Australasia. Taking a partnership approach to clients and the talent market, for more than a decade Stefanie has built extensive and priceless networks across a wide range of industries such as 3PL, Transport, Supply Chain, Mining and Resources, Retail, FMCG, Pharmaceutical, Industrial, Express and General Freight.

Merger & Acquisitions: Stacking the Deck to Ensure Success

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Merger & Acquisitions: Stacking the Deck to Ensure Success

October 2015
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

It all starts on day one: Emphasising the importance of planning and execution in executing an M&A integration.

Collaboration has become the driving force behind supply chain management excellence. In this article, we will look at how to define, sell, and manage change in supply chain.

The Logistics landscape is changing. Not a day goes by without a news headline flashing in front of us pronouncing a new mega deal. Industry consolidation is upon us and recent deals have exceeded many leading analysts expectations: DSV to buy UTi for USD$1.35bn, XPO Logistics purchase of Con-Way (USD$3bn), along with earlier buying Norbert Dentressangle for €3.24bn, UPS acquiring Coyote Logistics USD$1.8bn and Fedex buying TNT for €4.4bn. Not to forget the moves in Asia from Japan Post who earlier brought Toll in a deal worth AU$6.49bn and Kintetsu Worldwide Express massive deal for APL Logistics valued at USD$1.2bn.

With near record deal sizes, getting the integration elements right from day is going to be a critical component of realising strategic and operational value. When most people think of mergers and acquisitions (M&A), they think of companies selling and buying each other in order to facilitate an enterprise growing rapidly in its sector. From a legal point of view, a merger is a legal consolidation of two companies into one entity, whereas an acquisition occurs when one company takes over another and completely establishes itself as the new owner.

It may be more accurate, on a deeper level, to describe M&A as a human resources exercise through company restructuring in order to create a better growth or value effect. Companies in the same industry often find that combining creates synergies and increases market share. Examples of ways in which companies use M&A to achieve their Human Resources targets include the economies of scale achieved by saving money by removing duplicate departments. Some companies even use acquisitions as an alternative to the normal hiring process. Despite the goal of performance improvement, results from mergers and acquisitions (M&A) are often disappointing compared with results predicted or expected. The reason for this is often that the Human factor has not taken a large enough emphasis.

This is reinforced by a recent Mckinsey report that found that executive management strategies fail when:

• They don’t plan and execute a thought for end and integration process
• They don’t put the right leadership in place They don’t hone the skills needed to realise fully even the most obvious value from the merger
• Success requires deeper stronger integration skills and intense management commitment. This balanced with an integration approach that is flexible enough to allow leadership to pursue sources of transformational and combinational value
• Rigorous analysis and integration management

Based on this analysis it is fair to say that investment in the People integration side of an M&A exercise is critical.
Success depends on aligning the people, organizational and cultural assets of the new entity. Once a deal is sealed, nothing is more important to a successful outcome than effectively managing these “soft” issues. Finessing issues such as workforce management and cultural integration will avoid uncertainty, loss of productivity, talent loss and other factors that could jeopardise success.

The first thing to do to achieve this is to develop a comprehensive research framework that bridges different perspectives and promotes an understanding of factors underlying M&A performance in business research and scholarship . Management must make a conscious effort to bring new joiners along and the culture they create is as important as the financial elements in making the deal successful. There is a greater need therefore to position Human Resources as a strategic due diligence partner
The involvement of HR (Human Resources) as a strategic and due diligence partner can be of enormous advantage in facilitating this process but only if they possess specific understanding and tools that are unique to the M&A environment.

Members of the HR team should possess the following behaviours and capabilities– collaborative team player; proactive; analytical and detail oriented; ability to work in an ambiguous environment; ability to work under pressure of time constraints; conflicting priorities and agendas; broad knowledge of HR; strong communication skills.

They need to have prior experience that will prepare them for an M&A activity. Examples of how this can be evidenced in their employment experience at the selection stage is as follows:

  • Leadership of a functional area that is impacted by M&A activity
  • Project management for an enterprise-wide strategic initiatives
  • Ownership of profit and loss or budget
  • Membership of an international and cross functional project team
  • Alternatively, being an employee of an acquired or spun-off organisation.

A strategic HR approach can take the lead in activities that will ensure a smooth integration. By channelling the skills of enthusiastic employees, merging the intellectual capital of both organisations and streamlining the way the new business operates so it can rapidly overcome hurdles and maximise synergies.

Examples of a top down of approach that a HR leadership can activate in times of a merger include:

  1. Mobilising Integration planning around value and events.
  2. Identifying and prioritising Day One business critical events that relate to value.
  3. Review the transaction strategy and identify operational priorities.
  4. Conduct “truth testing” vertical workshops that focus on maximising value events.
  5. Analyse people, processes and technology critical to each value event.

Another aspect that can create problems in a merger involves branding. The factors influencing brand decisions in a merger or acquisition transaction can range from ego, political to tactical. Employee Branding for the new entity will need to be carefully considered as an integral part of the talent retention and acquisition process.
In conclusion, success or failure all starts at the beginning, on day one. To survive the challenges of post-merger integration it is imperative that due thought and considerations are given to the critical junctions of the new business that are at the heart of its activity: its people.

A strong human resources strategy with consideration to the key pinnacles of leadership, organisational design, talent retention strategies, communication and cultural alignment need to be formulate. This process needs to start right from the beginning of the M&A process and well formulated by its legal conclusion, so that it is ready for rolled out cohesively from day one. As straightforward and logical as these considerations may sound, in the frenzy of activity that usually follows a merger announcement, even simple things can be difficult to remember and execute. Clearly however, history has shown us that the companies that focus on these issues are the ones that have the most success. A timing reminder in this period of industry consolidation!

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Darryl Judd | Chief Operating Officer, Logistics Executive Group
In 2015, Darryl was named as one the “Top 50 influential individuals in Asia’ Supply Chain, Manufacturing & Logistics industry” in the prestigious SCM Thought Leader publication by SCM World, recognising him as expert in the linkage of business strategy and supply chain best practices to human capital management. Darryl brings 28 years of executive leadership and consulting experience and is regular contributor on thought leadership across numerous industry publications and is a frequent speaker at international conferences and events on business leadership, strategy & people alignment and talent management. He was instrumental in the creation of Logistics Academy and presently holds an advisory board appointment with industry group LSCMS. In 2014, he was appointed as one of five global experts to IATA’s Global Innovation Award selection board and has held senior executive positions within the airline, air cargo and aircraft leasing industry.

How Strategic Supply Chain Drives Competitive Advantage

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How Strategic Supply Chain drives Competitive Advantage

September 2015
Author: Mark Millar, Director, Hong Kong, Logistics Executive Group

Supply Chains are the arteries of today’s globalised economy – they enable the international trade flows that empower global commerce. Supply Chains have evolved to reflect the increased complexity of world trade – highly competitive, super connected and changing fast, amidst a volatile global environment.

No wonder that Supply Chain has become an essential topic across all spheres of management and a strategic agenda item in every boardroom. Twenty-first-century supply chains have transformed into world-wide inter-connected supply-and-demand networks – with profound interdependencies and exposed to the vulnerabilities of our uncertain world. This has led to greater deployment of collaborative partnerships, frequently involving outsourcing and off-shoring, creating elongated networks encompassing multiple stakeholders. Consequently, supply chains have morphed into today’s multi-layered, inter-woven distribution networks that enable companies and countries to trade more effectively.

Confirming how these networks enable commerce in an increasingly connected world, the Financial Times’ (FT) lexicon describes how “businesses operate in a broader network of related businesses offering particular products or services – this is known as a business ecosystem”. They further define this as “a network of interlinked companies, such as suppliers and distributors, who interact with each other, primarily complementing or supplying key components of the value propositions within their products or services”. From the supply chain perspective, Cranfield’s Dr Martin Christopher adopts an end-to-end view, articulating the supply chain as “the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer”.

This notion of networks is particularly important, with Dr Christopher reinforcing the key message that modern supply chains are no longer simply linear chains or processes, “they are complex networks – the products and information flows travel within and between nodes in a variety of networks that link organisations, industries and economies”. The linear concept of a chain is therefore no longer adequate to describe today’s complex international networks of suppliers, partners, regulators and customers – all collaborating to ensure the efficient and effective movement of products, services, information and funds around the world. These extended multi-stakeholder networks continue to develop as supply chains have become progressively more global, complex and strategic – we are firmly in the era of Global Supply Chain Ecosystems!

Supply Chain becomes Strategic

Leading edge companies now consider supply chain to be strategic – as a business enabler, as a revenue driver and as a differentiator. Many businesses now compete on the basis of their supply chains, as much as on their actual products. Indeed, because it embraces every single activity that enables getting products to customers, supply chain touches the vast majority of functions within and across a company. World class organisations no longer perceive the supply chain as merely tactical support for business as usual, but take a holistic position that their supply chain is what drives the business. The latest strategic thinking is that supply chain is the business.

This is leading to CFO’s recognising that supply chain is typically responsible for 60-90 per cent of their company’s total spend – varying by type of business, according to research by the Supply Chain Council – and that finance executives must therefore engage more actively with supply chain. In fact, a growing trend in recent years is the presence of the Chief Supply Chain Officer (CSCO) role on the board of directors – with the executive agenda now including supply chain strategy, supply chain execution and supply chain risk.

Connected Supply Chains drive Competitive Advantage

In today’s complex connected world, supply chain is more and more recognised as a key source of competitive advantage and differentiation. Companies strive to build powerful supply chains that will enable them to get their products to market faster, more efficiently and more economically than their competition. For many businesses – particularly those in high tech, consumer electronics, pharmaceutical and fresh produce – time to market and effective distribution channels are critical success factors, and therefore supply chain management competencies and capabilities are what drive competitive advantage. In that context, there are exciting and evolving synergies between the supply chain and marketing functions, as together they become the principal business drivers for companies in the modern era. Each of them is both a functional discipline and a profession. Taking the broadest perspective of the two disciplines, these functions together embrace all of the mission-critical business activities of a company, with IT, HR and Finance playing important supporting roles.

With marketing comprising the four P’s of Product, Price, Promotion and Place and supply chain encompassing the five operational activities of Plan, Source, Make, Deliver and Return, then Logistics becomes the point of intersection and convergence – the essential linkage between the Deliver function of supply chain and the Place (distribution) function of marketing. Together therefore, supply chain and marketing are becoming the primary engines that drive the business – hugely influential in driving business growth, increasing market share and generating revenue and profits. The Chief Marketing Officer (CMO) and the Chief Supply Chain Officer (CSCO) will become the most critical leadership roles to sit alongside the CEO and CFO in the enlightened C-suite of the future. Supporting this concept that supply chain drives competitive advantage for your business, the FT lexicon explains how “Ecosystems also create strong barriers to entry for new competition, as potential entrants not only have to duplicate or better the core product, but they also have to compete against the entire system of independent complementors and suppliers that form the network”.

Conclusion

Any chain is only as strong as its weakest link – and it’s the same with a supply chain, except that within a supply chain ecosystem the linkages are not consecutive and not linear; there are numerous multi-dimensional connections with profound inter-dependencies. Nevertheless, the strategy of achieving continuous improvement through consistently and persistently working on strengthening the weakest link(s) still applies, and companies adopting such an approach will leverage their global supply chain ecosystem for competitive advantage in our complex, connected world.

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Mark Millar | Director,Hong Kong,  Logistics Executive Group
Mark Millar is the author of Global Supply Chain Ecosystems – commissioned and published by Kogan Page of London – in which he presents detailed and practical insights that help companies capitalise on market opportunities, overcome supply chain challenges and make better informed business decisions. Acknowledged as an engaging presenter who delivers a memorable impact, Mark has completed over 350 speaking engagements at corporate events, client functions and industry conferences across 23 countries. A Visiting Lecturer at Hong Kong Polytechnic University, Mark is recognised in the ‘China Supply Chain Top 20’, as one of ‘Asia’s Top 50 Influencers in Supply Chain and Logistics’ and in the 2014 USA listing of ‘Top Pros-to-Know in Supply Chain’.

The Importance of People – How to Define, Sell and Manage Change in Your Organisation’s Supply Chain

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The Importance of People – How to Define, Sell and Manage Change in Your Organisation’s Supply Chain

August 2015
Author: Darryl Judd, Chief Operating Officer, Logistics Executive Group

Defining, selling and managing supply chain and business transformation projects internally has always been the key stumbling block for all businesses. This month Darryl Judd, Chief Operating Officer of Logistics Executive Group explores this topic and why people are so important in the success or failure of projects.

Collaboration has become the driving force behind supply chain management excellence. In this article, we will look at how to define, sell, and manage change in supply chain.

Back in 1964, Bob Dylan’s song “The Times They Are A-Changin’ ” captured the feeling that the world was entering a period of rapid transformation. The industries of Logistics, Supply Chain and Manufacturing have all felt this in a major way. Through massive advances in technology, expansion growth in the global development of economies and the reach of multinationals to new markets, the advancement of third world countries. All these factors and more have created an enormous pressure and appetite for change to the point were it is now accepted that a company’s ability to change goes hand in hand with their success.

Capabilities-LOM-Past-PerformanceFifty years on from Dylan’s famous song; things are changing faster and more profoundly than ever before. Our thirst for innovation, knowledge and things bold and new seem to have no bounds. And nowhere has that occurred more dramatically than in the world of business, much of it propelled by the marvels of modern technology, the ‘cloud’ and devices we never dreamed about in 1964. And this change has certainly had a significant impact on the role of supply chain management.

Since the 1960s, it has evolved from physical distribution to logistics to supply chain management. Supply Chain Management has progressed from a remote corporate necessity to a critical strategic component of commerce that has achieved global prominence in boardrooms and on Wall Street. Supply chain management has shed its dowdy image as a “cost center” in favor of the more glamorous one of “revenue generator.”

The key reason Supply Chain has become such an asset is because it can supply a very fast response to an organisations ability to react in the market place. Almost universally, without regard to channel position, managers acknowledged that people are the key to successful supply chain integration. As one prominent Director of Supply Chain told me recently “People are the bridge or the barrier.” Unfortunately, actual practice in the areas of hiring, training, motivating, empowering, measuring, and rewarding people does not support the rhetoric. From managers we talk to daily leveraging the human resource is often not a priority at companies pursuing supply chain strategies.

Veracity-Logistics-warehouse-worker_mainA recent research paper from University of Illinois found the amount of time and money spent by organizations to develop its people for supply chain collaboration pails in comparison to other budget expenditures—namely technology and alliance formation. There are certain issues that must be dealt adversarial contract relationships, the fragmentation of the supply chain and resulting dispersal of information are all barriers to achieving an integrated supply chain.

Improving Supply Chain Transparency

The innovative use of IT can help overcome these barriers and improve supply chain transparency ERP systems give us real time messages about business activity. This has been an immense advantage to implementing change as it offers instantaneous information on a range of business activity by offering improved:

  • Data quality and reporting: a better CRM and therefore customer relations, better business analytics, which allow businesses to arrive at better business decisions.
  • Improved reporting: eliminating inefficiencies as reporting follows an automated template system, allowing various departments to access information seamlessly.
  • Data quality: As compared with manual recordkeeping or other traditional approaches, an ERP system improves data quality by improving the underlying processes. As a result, better business decisions can be reached.
  • Improved data access: with the use of advanced user management and access control.
  • Regulatory compliance: Having the system in control means organizations can better comply with regulations.

All the above points lead to a better supply chain with improved procurement, inventory, demand forecasting, etc., essentially improving the entire supply chain and making it more responsive.

Why buy-in is critical

However we can have the best ERP system in the world but as mentioned above, it is only as good as the staff that will use it. If the leaders of an organization foster a company culture in which change is embraced and accepted, then it is a lot easier to mobiles a workforce to respond and adapt. This is very easy in theory but in practice, leading people through a change process unscathed is one of the greatest of challenges and the hallmark of only the very best people managers.

The key to achieving this is by understanding company culture. Needless to say every organization is different. Some of the characterizing and influencing factors that define the unique culture of a company include nationality, type of industry, the task the organization performs, the people working in the organization, and information technology. It is through first by having a thorough understanding of what the strengths and weaknesses of each one of these rivets are that a leader can formulate and tweak a strategy design for a culture that will accept change as a healthy part of corporate life. The bedrock tools are embodied in training people through change whilst keeping communication channels open at all times.

The role of training

VKqTnjTxgQ9N-yyhg_LfTraditionally training congers up expensive university courses and formal accreditation processes that are far removed from the workplace. The new wave of training however has evolved. The world, technology and business are changing at too fast a pace for formalised classroom teaching to adapt. Instead training is now skill-based and on the job. As mentioned above, proactive leadership is about understanding what is required. Training can be about communicating, informing and by doing so eliminating fear of the unknown and empowering people. Education can create the roadmap and vision for Supply Chain and engage a workplace at all levels in a common course. The way this training is manifest in a company will largely depend on the requirements of individuals and their unique company culture. It can include university tutorial or the classroom of the factory floor. Going back to the example of the ERP implementation, if there is targeted communication to staff explaining the need for the new system, addressing concerns, offering training tailored to meet specific requirements, then it is a lot more likely that the new system will be successfully adapted.

Changing the focus from the inside to the outside world

magazzino-scatoloni-300x200It is worth mentioning that it is not just corporations that are adapting this approach to training, shifting the importance from institutions to the workplace. Countries like Singapore have recently (June 2015) initiated a framework called SkillsFuture, a national initiative to encourage Singaporeans to develop industry-relevant skills by recognizing career progression based on skills and training, and promoting lifelong learning at the workplace. Australia has held a longstanding, skills based initiative called TAFE, which is focused on offering Australians the opportunity for ongoing vocational education in trades and skills based learning. The constant stimulation proved by learning and improving reframes the narrative. Employees are no longer battling to maintain their status quo against the face of the unknown. Instead they are embracing a system that will improve their skills and situation with the support and information they need to make necessary decisions.

What then happens when a company tries to partner with another business, for example a logistics provider?

Often when this happens the two enterprises need to somehow marry different systems and processes in order to share information and achieved shared objectives. This can be disastrous from the outset if there is a misalignment between the two company cultures. However, success can be achieved if both institutions are committed to providing a continuous information flow between all stakeholders and if both companies agree to commit to providing timely and reliable data, in order to manage the supply chain. Of course technology plays a key role in this as they provide support in sharing information and implementing new processes and integrity, as previously mentioned.

In summary, a company can succeed in implementing drastic change in their supply chain function if there is a commitment to provide proactive leadership and the resources in training, underpinned by the integrity of good systems. However collaboration is the driving force behind supply chain management excellence. In these fast-changing times, the only way to tear down the walls that block collaboration is by recognizing the role that of people by energizing and winning over a workforce to embrace and prosper through the various hurdles and rewards that a change environment offers.

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Mark Millar | Director, Hong Kong, Logistics Executive Group
Mark Millar is the author of Global Supply Chain Ecosystems – commissioned and published by Kogan Page of London – in which he presents detailed and practical insights that help companies capitalise on market opportunities, overcome supply chain challenges and make better informed business decisions. Acknowledged as an engaging presenter who delivers a memorable impact, Mark has completed over 350 speaking engagements at corporate events, client functions and industry conferences across 23 countries. A Visiting Lecturer at Hong Kong Polytechnic University, Mark is recognised in the ‘China Supply Chain Top 20’, as one of ‘Asia’s Top 50 Influencers in Supply Chain and Logistics’ and in the 2014 USA listing of ‘Top Pros-to-Know in Supply Chain’.

The Rise of Human Capital in Supply Chain Performance

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The Rise of Human Capital in Supply Chain Performance

July 2015
Author: Kimble Winter, Chief Executive Officer, Logistics Executive Group

This month, Logistics Executive Group, Group Chief Executive Officer Mr Kimble Winter reflects on celebrating 16 years of company operations. This has included changes in HR business practices, along with the increasing importance of supply chain people in driving business performance.

This month, Logistics Executive Group celebrates our 16th year in business serving the supply chain and logistics sectors; it is a great opportunity to reflect on how the industry, our customers, and our own operations have evolved.

In 1999 we were a small team of supply chain executives who decided to apply a white collar, professional approach to what up until that time was perceived by many to be a blue-collar industry sector.

27a79dcAs a start-up based in Sydney, we focused on mid to senior level supply chain and logistics executives, who had previously been serviced by the larger ‘generalist’ recruitment companies, mainly headquartered offshore. It took 5 years to build trust and credibility as a local specialist human capital partner and after successfully opening business units in Sydney, Melbourne, and Brisbane, we began serving customers in Europe (Amsterdam) and Asia (Singapore).

As we expanded organically across the main logistics hubs of Asia (Hong Kong and Shanghai), the Middle East (Dubai) and India (Mumbai, Delhi and Chennai) it was clear that the complexity of the markets and customers we were developing was matched only by the diversity of economic environments, cultures, business practices, and the talent we found ourselves working with.

Our mantra was “the only thing we now about tomorrow is that it will be different from today”, to say life became exciting, as the Global Financial crisis hit in 2008, is an understatement. Throughout this period of massive economic challenge and change, our customers’ requirements were continually evolving as the pressures of transformation influenced all businesses in one way or another. The need to adapt, realign, reshape, and restructure organisations was manifest across all markets and verticals.

Identifying-human-capitalIn our case, this included increasing our investment in our Asia operations as a defined growth market and exiting the Australian contract labor market to focus our resources and expand our Executive Search and Recruitment business on the Australian East Coast. In 2014, we opened our UK business unit with the West Australian office opening Sept 2015.

Where many had sought specialist talent from us previously in a high demand low supply market, new requirements for advice including organisational re design, rightsizing, talent development, retraining, reskilling, coaching and other retention strategies became prevalent. Many leaders realized that irrespective of economic conditions, securing and empowering new or existing human capital was essential to business unit competitive survival and growth and they invested accordingly.

As well-known global Hong Kong based supply chain thought leader Mark Millar writes in his recently released bestselling book Global Supply Chain Ecosystems (Published by Kogan Page, June 2015) “Few if any other industry sectors are still so utterly dependent upon people to design, operate and manage its systems and equipment as the Supply Chain”. Millar reflects on his 20 years in Supply Chain leadership, using examples and case studies to identify and highlight the relevance of human capital within the multi-dimensional touch points across the complexity of supply chain ecosystems.

Many who did not grasp the cross-functional significance of their most valuable asset during the GFC struggled, with many businesses failing altogether. During this turbulent time, some customers appreciated the connections we had developed across the markets we had evolved in and reached out for support to make acquisitions or to sell parts of their business. This led to the emergence or our Mergers & Acquisitions business unit.

Many customers who came through the Global Financial Crisis, having made tough decisions to collaborate, reshape, and improve their business operations, were ready to take advantage of the renewed market stability. This included the APAC, Middle East, and Africa regions in particular. By 2011/12 many agile organisations sought to explore emerging markets for new opportunities. We were able partner with them by leveraging our private sector and Government relationships across our global footprint. Our Trade Facilitation activities have developed from strong associations with Australian, New Zealand, South East Asian and the Middle East Government and industry trade organisations, assisting our clients to expand across borders into mainly emerging markets.

The constant demand for knowledge, training and human capital development led to our creation of a new training platform. This resulted in the launch in 2015 of our Logistics Academy platform, providing daily industry newsfeeds, an extensive range of publications, industry events, and a comprehensive suite of Educational and Training Programs that cater for all levels of professionals looking to further enhance their supply chain and logistics skills and careers. With a range of online quick courses, specialized short courses, certificate based and diploma e-learning products through to MBA’s with a focus on Supply Chain Management, Logistics Academy and our partners bring together cutting-edge Supply Chain and Logistics training and development.

Human Resources thought leader Mr Wayne Beel in his LogiSYM magazine article (July Issue) highlights the significance of the HR learning pathway for employee evolutions and the value of linkages between industry bodies, specialist learning partners and enlightened Human Resource professionals in ensuring successful human capital and business outcomes. Mr Beel is a strong advocate of organizations that understand the benefit of positioning senior Human Resources Executives above the transactional partner model (prescribed by internal and external policy and regulation) to strategic business partners. As strategic collaborators, they would not only fulfill traditional aspects of HR but also actively anticipate organizational leadership needs, lead the alignment of business life cycles and interweave stakeholder requirements and relationships.

The increasing demand for assessment and evaluation tools as part of talent selection and career pathway planning process has led our development of a range of Talent Management Services which we have integrated into our online technology platform. These include Executive Search and Talent Acquisition, Career Transition / Outplacement services, the latest Job Search functions, Online Behavioral Skills Assessments, Psychometric Evaluation and Candidate portal tools. The ability of our clients and candidates to draw on these services and access tools remotely provides a wider flexibility in which to engage these services to meet their requirements. In other words, it empowers them with the latest HR business tools.

Since 2008 Logistics Executive Group has been providing corporate advisory services, our Corporate Advisory platform offers Human Capital, Business Performance and Supply Chain consulting, M&A, Knowledge Centre, Research & Whitepapers, and Organisational and Executive Coaching services. We have designed these tools to offer industry specific experience, based on a commitment to partnering with customers, boosting their transformational journeys in order to drive measurable, sustainable business performance and results.

Increasingly we have seen supply chain ecosystems becoming more complex, and the supply chain function being recognised as the centerpiece of the organisation. According to Mark Millar, “Supply Chain management has become an essential topic across all spheres of management and a strategic agenda item in every boardroom. Today’s supply chains are evolving to reflect the increased complexity of world trade and a volatile, super connected, global environment which is progressively more difficult to predict” (Global Supply Chains. pp.1) Millar continues “Human Capital could be considered the most important topic (of the entire book), as every other aspect of operating a productive supply chain organization equipment, systems, IT, finance, risk management, market and sales, operations, administration and legal, are all dependent on how well staff carry out their tasks” (pp.169)
An organizations’ ability to align its upstream and downstream supply chain in harmony with its customers and markets whilst developing and empowering its leadership team and workforce is what will ultimately drive future organisational success and profitability.

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Kimble Winter | Group Chief Executive Officer, Logistics Executive Group
The founder of the company, Kimble Winter is Global CEO of Logistics Executive Group, a qualified IECF (Institute of Executive Coaching & Leadership) coach, a Sydney Headquartered internationally recognised organisation with offices throughout APAC that operates under the ICF (International Coaching Federation) operating principles, regulations and ICF Code of Ethics. Kimble leads our global executive coaching practice which operates from our offices in Dubai, London, Mumbai, Chennai, Delhi, Singapore, Hong Kong, Shanghai, Sydney and Melbourne.

The Networked Supply Chain Professional

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The Networked Supply Chain Professional

May 2015
Author: Brian Cartwright, Managing Director – Middle East & Africa, Logistics Executive Group

Networks, so what! Is being networked really that important to ensure success?
Brian Cartwright, Logistics Executive Group’s Middle East Managing Director outlines just why investing time into conferences, events and knowledge sharing platforms not only leads to success, but is critical for tomorrows supply chain executive.

Ensuring you remain well networked within the People Supply Chain is key to success for many Supply Chain professionals.

Networking experience and ability should be a no brainer for people in commercial management roles, but what if your whole career to date has been focused on operational management functions in the Supply Chain and you haven’t been making a conscious effort to build your business networks.

The truth is that if you are a Supply Chain professional with a pure operational focus you are probably already be an excellent relationship builder and networker as your working week will involve dealing with many stakeholders both internal and external, including people from Government entities to MNC’s, local organisations and SME’s.

You will have been regularly building working relationships as well as influencing, supporting, and also challenging people in order to keep your part of the Supply Chain running smoothly.

pasted-imageI am willing to bet that when a Supply Chain professional has made significant improvements to an organisations Supply Chain it has been largely due to their ability to foster relationships and positively influence people from all walks of life.

Facts, figures, and overall analysis provide the visibility to know what needs to be changed or what can be improved but the only way to successfully implement these things is by winning over the people.

If you take the Supply Chain on a local, regional or even a global level I don’t think we see enough operational Supply Chain professionals actively networking with their counter parts in other organisations including those from their competitors in order to understand if they are sharing the same challenges or can support one another to run more efficient Supply Chains.

Don’t me wrong, there are plenty of Supply Chain focused events and conferences going on constantly around the world where SC professionals get together and briefly network during the breaks between presentations and panel discussions, there are also plenty of steering committees and industry bodies which promise to champion the cause of Supply Chain (Only a few manage to do this effectively).

That’s all good, but my big question is this…

How many people in operational Supply Chain management functions make a point of getting together with their counterparts in other organisations on a fairly regular basis just to catch up for a coffee or a bite to eat and chat about the Supply Chain in general?

For the cost of a drink and some of your time I am sure there will be good advice to share and you might also highlight some challenges which could be overcome through sharing experiences or taking action together.

The more networked Supply Chain professionals we have in the sector the better, and with enough people having these kinds of meetings a bigger picture outcome could well be improvement of global supply chain efficiencies and standards in the future!

So if you aren’t already an avid networker then please don’t just wait for the formal industry conferences and events, I would suggest being proactive and reaching out to some of your counterparts with the aim of getting together for a chat once in a while, if nothing else I am sure you will be able to share some useful information about the market!

pasted-image-2The Supply Chain only works because of the people involved!

The majority of people are not natural networkers and many simply lack the confidence to put themselves in a networking environment, so where do you start and how can you get the most out of business networking or even just building more confidence?

There are many online resources and their is lots of advice available with hints and tips on how to network, you should definitely take the time to read up as much information as possible but remember ultimately at some point you will just need to throw yourself in at the deep end as the best experience will come from getting out there and doing it for real!

pasted-image-3I have been attending, supporting and leading networking events for years now but I don’t believe I was a natural when I started. I just got better at it by ensuring that I was regularly attending as many events as possible and as a result I believe I have done enough networking and have been successful enough to be able to share some of my advice and experience with others.

If my advice helps just one or two people to improve their networking skills or encourages them to get out there and network more then it’s been a success in my view!

Here’s the Brian Cartwright guide to business networking.

  1. The cardinal rule – always be genuine, effective business networks work on trust so be yourself.
  1. Pay it forward – Don’t just think what can others do for me? Think instead what support you can offer to others, your efforts will be rewarded at some point as it will come full circle one day!
  1. Be clear on what you want to achieve – Why do you want the new contacts? Is it about learning or sharing challenges and issues? Do you just want to staying on top of what’s happening in your market? Is it more about keeping up to speed on regulatory changes etc? It could be all of these or simply that you want to spend time with like minded understanding people who go through the same day to day ups and downs and face the same business challenges as you.
  1. Network in the right places – Once you know what you want to achieve you can think about which types of networking events you would likely get the most benefit from, do your research.
  1. Understand that every group of people and event is different – Bear in mind that the dynamics of networking events and groups can be drastically different even in the same industries as the types of people attending are often very different, so try out various events and groups until you find the right group of people for you.
  1. Stay connected after the events – Use your calendar to ensure you keep in touch with the people who you meet where there is mutual value to be gained from the relationship.
  1. Don’t just wait for the next formal event – Aim to catch up in person with people between events for one on one discussions (coffee, breakfast or lunch always works well).
  1. Never sell to, or pressure people – There is nothing worse than going to a networking event to be bombarded by someone looking for commitment right there and then for some kind of product or service.
  1. Be professional – Represent yourself and your business appropriately at all times, its business networking after all and even if the environment at some events may appear quite casual bear in mind that everyone is ultimately there for business purposes.

Be honest and consistent – If your networking efforts are honorable, and regular you will ultimately create an ever expanding circle of trusted professional contacts who become your business referral network as well as your support network (See number 1. The cardinal rule).

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Author Profile: Managing Director, Middle East & Africa Logistics Executive Group
Brian Cartwright is an experienced executive headhunter and business leader based from our Dubai office where he is responsible for managing the Logistics Executive business across the Middle East and Africa.  He has over 12 years business management experience and has worked in the recruitment sector for the past 9 years. Brian has built a solid reputation within the Logistics & Supply Chain community as one of the leading recruiters for the sector since moving to the Middle East in 2008 and serves as a key member of the senior management team. Brian can be contacted on email: Brianc@LogisticsExecutive.com

Latin America – A Region of Opportunities and Challenges

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Latin America – A Region of Opportunities and Challenges

May 2015
Author: Mr John Manners-Bell, Chief Executive Officer, Transport Intelligence

John Manners-Bell, Chief Executive Officer of Logistics Executive Group’s research partner Transport Intelligence takes a closer look the Latin American logistics and supply chain landscape and its challenges following the release this month of the Ti 2015 Latin America Logistics Market report.

1There has been much talk of the opportunities offered by the Latin American region. However, such talk is inevitably followed by a ‘but’. Indeed, this is a region of fantastic opportunity. It is a leading exporter of agricultural and mining commodities, has a strong automotive sector and is a top location for pharmaceutical manufacturers. Global retailers are establishing in metropolitan areas of Brazil, Argentina and Chile, and the close proximity to the US, its large trading partner, is a huge benefit.

However, at the same time as this there are frequent truck strikes, rail networks that lead to nowhere, drug cartels, violence, bribery, corruption, debt and government regulations, all of which have choked trade and business investment.

In order to cope with this set of challenges, manufacturers and retailers have developed a unique range of supply chains. For many businesses, the opportunities offered by Latin America outweigh the negative. To be successful, one adapts to the conditions. For example, shipping a 20-foot ocean container from Mexico or Colombia to Brazil costs about the same as shipping a container to Brazil from China or Hong Kong although the transit time, at 20 to 23 days, is some 10 days shorter. As a result, logistics providers such as DB Schenker are introducing multi-modal solutions to lower such costs as well as delivery times.

2In the apparel industry, “fast fashion” retailer Zara makes design adjustments especially for Brazil, something that it does not do for most other countries. It has created a flexible local supply base, which allows it to quickly change its production plans in response to demand.

As a result of the varying complexities, most large companies operating in Latin America tend to segment their supply chain organizations into regional “clusters.” These clusters are designed to balance market size, cultural similarity, and the cost and ease of moving goods across internal borders, within the cluster. A typical approach uses four segments: North and Central America (including the Caribbean countries and Mexico), Brazil, the Northern Andean Region, and the Southern Cone.

Trade within Latin America is on the rise, but the geographic makeup of the region, infrastructure problems and individual country border requirements and taxes make it problematic at best. This is also a major cause of the very high transportation costs.

Road conditions vary greatly. In some areas, especially near large cities, the highway is carefully graded and well paved. In some remote areas it is nothing more than a rough gravel road and a few sections are impassable for part of the year. Port and airport infrastructure problems are widespread and the congestion this has caused has been well documented.

3Top trade partners are still Europe and the US, but China and other emerging markets, such as the Middle East and Africa, are increasing their market share. Mexico’s good fortune continues to be its reliance on the US market. Thanks to NAFTA, international companies have relocated to this country to take advantage of tax benefits and the close proximity to the US. In particular, the Mexican automotive and electronics industries have greatly benefitted as labour and transportation costs in Mexico have now become lower than in China. However, this reliance on the US can be a hindrance as Mexico found out during past economic downturns. Consequently it has forged numerous free trade agreements with other countries, as a means to lessen this dependence.

Cold Chain and e-commerce logistics – key sectors for the future

Cold chain logistics plays an important role in Latin America and Caribbean, mostly within the agriculture and pharmaceutical industries. Like much of the infrastructure across the region however, cold chain capabilities are uneven.

For example, the majority of cold chain products are transported by air, but the capacity and infrastructure for this is lacking at airports. For many countries such as Brazil, the waiting period for clearance necessitates proper storage requirements.

Transporting agricultural products to airports or ports is also difficult due to road conditions and shortage of reefer trucks. Many small to medium-sized agricultural producers do not use refrigerated trucks and, as a result, spoilage is high by the time it reaches an airport or port. In addition, unreliable power sources outside urban centres and the diverse climate zones play a role in the poor transportation and storage of perishable items.

The growing need for cold chain logistics within the region is clearly apparent. Logistics providers such as DHL and UPS have established warehouse facilities to support this growing need. Also, in 2014, DHL Global Forwarding expanded its Thermonet network of certified life sciences stations.

Meanwhile the spread and adoption of internet access has resulted in unprecedented demand for transportation and fulfilment services in the e-Commerce logistics sector despite the weak infrastructure. Part of the growth has been driven by the rise in affordable mobile devices.

Now this growth is coming further under threat due to the increase in government restrictions. These are aimed at developing domestic markets, but are instead hindering the market’s development. As a result, cross-border trade may slow significantly in some countries.

Alibaba and Brazil’s post office announced a partnership to encourage trade between Brazil and China. eBay has developed a similar offering between Brazil and the US. Both of these offerings should bode well for e-commerce growth in Brazil, the region’s largest economy.

Conclusion

Amidst the criticism levelled at the development of the country’s ports, airports, railways and roads, it would be easy to forget how far the region has developed over the past decade.
In Brazil for example, intermodal connections between the key southern Brazilian cities of Sao Paulo, Rio de Janeiro and Belo Horizonte have improved significantly, as have connections outside that triangle. The port of Manaus continues to be a focus of South American shipping and a free trade zone and industrial park has opened in the area. Assembly plants for many multinational companies, including electronic giants Philips, LG Electronics, Samsung, Motorola and Ericsson, have expanded in the Manaus area.

However Brazil also exemplifies the weakness of the region. Of the transport infrastructure projects planned to facilitate the World Cup and Olympics, it is estimated that half of the projects have been abandoned. These projects are essential to reducing the proportion of GDP which is spent on logistics, presently between 15-18% – far higher than in developed countries.

At the same time, only 1.5% of GDP is invested in transport infrastructure compared to a global average of 3.8%. A key reason for the lack of investment is the level of bureaucracy associated with planning.

If the region is to fully progress it must learn the lessons provided by China, one of the region’s largest trading partners. The Chinese government understood that improving its connectedness with the rest of the world was critical to its long term economic development. The Latin American economy badly needs a shot in the arm to cope with the forecast downturn and investing in transport would be a key way in which it could boost its prospects.

The private sector needs to be involved in these investments, but for more partnerships to develop governments in the region have to create an attractive environment free from corruption and political intervention.

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Author Profile: Mr John Manners-Bell, Chief Executive Officer, Transport Intelligence
John Manners-Bell, Honorary Visiting Professor at London Metropolitan University, started his working life as an operations manager in a freight forwarding and road haulage company based in the UK. Prior to establishing Transport Intelligence, he worked as an analyst in consultancies specialising in international trade, transport and logistics. He also spent a number of years as European marketing manager for UPS Supply Chain Solutions working at locations across Europe including France, Netherlands and Germany. He holds an MSc in Transport Planning and Management from University of Westminster and is an Associate of King’s College London. He is a Fellow of the UK Chartered Institute of Logistics and Transport and Chair of the Supply Chain and Logistics Global Advisory Council of the World Economic Forum. John has travelled widely, undertaking research and speaking at conferences in countries including China, Hong Kong, India, Japan as well as in the Middle East, USA and extensively throughout Europe.