All Posts By

Aindrea Sewell

Agile Performance Management

By | CEO Newsletters | No Comments

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!

Download PDF

 

wwqfwfqwf

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

By | CEO Newsletters | No Comments

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.

Download PDF

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

By | CEO Newsletters | No Comments

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

Download PDF

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

By | CEO Newsletters | No Comments

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

Download PDF

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

By | CEO Newsletters | No Comments

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!

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.

How Strategic Supply Chain Drives Competitive Advantage

By | CEO Newsletters | No Comments

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.

Download PDF


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

By | CEO Newsletters | No Comments

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.

Download PDF


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

By | CEO Newsletters | No Comments

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.

Download PDF


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

By | CEO Newsletters | No Comments

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).

Download PDF


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

By | CEO Newsletters | No Comments

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.

Download PDF

 
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.