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DHL Express Japan expaanding its warehouse

Source: telegraph.uk

DHL Express unveiled a new $74 million, 215,278 square foot warehouse at Shin-Kiba in Tokyo, more than double its space in the city, to fill in the gap in the modern warehousing in Japan following the fast-growth of ecommerce industry in the country.

This is also to anticipate the increasing demand for international shipping, particularly from China and Southeast Asia.

There was also a pressing need to support [Japan] domestic companies focusing on international markets.

“Business expansion in overseas markets, especially in emerging countries, has now become the critical part of growth strategies for many Japanese companies,” Taketo Yamakawa, president and representative director of DHL Japan added.

This rising demand has led to strong sustained volume growth in DHL Express Japan over the last few years — the previous Tokyo Distribution Center facility had already reached full capacity. With the relocation, the DHL Express Tokyo distribution center will be converted into the DHL Express Tokyo central service center. This service center will subsequently become DHL’s largest in Japan.

Japan’s Footprint in Southeast Asia Ecommerce

Both Southeast Asia and Japan are experiencing fast-growth in their respective commerce industries, both favoring the marketplace model, but the similarities end there. The track record of Japanese companies in Southeast Asia is not a sterling one.

While Japanese electronic commerce and Internet company based ecommerce marketplace Rakuten successfully dominated its home market, the same could not be said to its presence in Southeast Asia as the company shut down its operation in three countries earlier this year. Sumitomo Corp, a Japanese trading company, also started the year by selling its ecommerce site soukai.my to Malaysian company Hermo.

A version of this appeared in Journal of Commerce on June 29. Read the full article here.

brexit impact on thailand not concerned gov, sleeping asian man

The Thai government is positive about Brexit, as officials insist that Britain’s exit from the European Union is unlikely to negatively affect any trade talks Thailand has with the EU. In fact, the Brexit will release a lot of restrictions for its trade policies with Southeast Asian countries. If Britain wanted to initiate a free bilateral trade pact with Thailand, the talks could happen instantly without waiting for a green light from EU commissioners, said Sirinart Chaimun, Director General of the Trade Negotiations Department.

Negotiations for a Thai-EU FTA were formally launched on March 6, 2013. Currently, EU commissioners were reluctant to hold any talks with Thailand until the country’s new constitution is in place. These talks were suspended following Thailand’s 2014 military coup. In June 2015, the EU said it would delay signing an agreement on closer economic and political ties, due to Thailand’s political unrest.

The Brexit will release a lot of restrictions for its trade policies with Southeast Asian countries.

In 2015, Thailand’s exports to the 28 EU countries were just under $22 billion, down 6% from 2014. Shipments to Britain were worth $4 billion. Shipments to the EU contributed to 9% of Thailand’s total export value. The numbers seem to suggest that if anything, Thailand’s own political instability has more of an impact on the country’s international trade, more than Brexit itself.

A version of this appeared in Bangkok Post on June 27. Read the full article here.

SingPost Warehouse Source: Bangkok Post, Thailand Post Logistics Unit Expected To Turn Profit

SingPost Warehouse, Source: Bangkok Post

The company’s logistics revenue is expected to reach THB 480 million, a 60% increase from THB 300 million in 2015.

“We also expect to break even this year, after facing a loss of 100 million baht last year, thanks to our cost-effectiveness strategy”, said Warakan Srinualnad, chief executive of Thailand Post Distribution, the logistics arm of Thailand Post.

Thailand’s logistics market has experienced an average annual growth rate of 15% per year, highlighting a growing need for high-class logistics service.

Thailand Post began its logistics operations in 2015, mainly serving the pharmaceutical industry, ecommerce and warehouse management. The company has nine of its own storage and distribution facilities in major provinces.

The company projects revenue from its medical and pharmaceutical services to account for 80% (THB 384 million) of the total this year. Ecommerce is set to account for 12% and its warehouse management service is set to generate 8%.

“Thailand Post Distribution expects revenue from its ecommerce service to surge to THB 58 million this year, as that market is booming,” comments Srinualnad.

A version of this appeared in Bangkok Post on June 24. Read the full article here.

Supply Chain Is Integral To Lenovo's Strategy

Lenovo CEO Yuangqing Yang, Source: blog.lenovo.com

Chinese technology giant Lenovo Group is planning to boost its slumping smartphone business with a revamped manufacturing supply chain and major global marketing strategy this year. According to Gartner Research firm,

Worldwide smartphone sales is expected to grow 7 percent this year, reaching 1.5 billion units cooling from 14.4 percent growth last year

Lenovo initially owned 6.4 percent of global market share before March 2015, and is now experiencing intense competition from mainland China and other large markets.

Lenovo started the restructuring of its mobile phone business since Q3 in 2015, including a $300 million write-off of its smartphone inventory. Lenovo is expected to have a big advantage over its competitors once the manufacturing supply chain of its smartphone business is fully implemented.

“We’re working to leverage our personal-computer supply chain know-how for the smartphone business,” said Gianfranco Lanci, Lenovo Chief Operating Officer.

This means that the assembly of products are in the same factory to save component costs and decrease production cycle times.

“What we’re trying to do is simplify our brand architecture, which means putting more marketing resources on the products which offer the most differentiation for Lenovo,” comments David Roman, Chief Marketing Officer at Lenovo.

The recovery in Lenovo’s smartphone business would also depend on the demand for its recently launched Phab2Pro, which is the world’s first smartphone with augmented reality technology.

A version of this appeared in South China Morning Post on June 21. Read the full article here.

supply chain challenges in Southeast Asia reached a turning point

Source: Reuters, Ralph D. Freso

The supply chain challenges in Southeast Asia have reached a turning point owing to the scarcity of supply chain professionals, increased consumer diversity and fragmented supply chains. Transforming supply chains to reach market potential is a mammoth task but it can become a source of competitive advantage and drive global growth for businesses.

The many layers of suppliers, localized delivery and route to consumer practices, and lack of transparency and consistency in information flows make it incredibly difficult for businesses to achieve the next wave of global growth but also positions global businesses to capitalize on growing demand in these markets. For most companies the potential is clear; the challenge is how to address it.

As companies move their factories from China to Southeast Asia due to rising labor costs and the move away from an export-based economy, they should grasp the opportunity to carry out a full supply chain review to identify how they should configure their supply chains better.

Accelerate the supply chain transformation with best practice

Bringing best practice into the strategy from elsewhere can accelerate the transformation. Labor remain a big challenge for this relatively young region for the manufacturing industry meaning there is limited supply chain knowledge and a lack of experienced professionals and high staff turnover as employees are quick to leave for even marginally higher wages.

To capture the full potential in Southeast Asia, it is best to establish a physical presence and subsequently localize knowledge and skills.

This can be done by setting up R&D centers or developing region specific leadership and training programs. Coupled with a long-term focus on developing local supply chain knowledge and people capabilities, it can ensure a successful transformation.

A version of this appeared in Supply Chain Digital on June 20. Read the full article here.

Indonesia’s logistics costs are 24% of GDP, currently the highest in the region. The country’s logistics performance index (LPI) also lags behind its neighboring countries like Malaysia, Thailand, and even Vietnam, according to World Bank but Hong Kong-based digital logistics startup OpenPort is attempting to lower Indonesia’s logistics cost via technology.

The platform enables clients to track the entire distribution process – claiming to cut companies’ logistics costs by up to 30% by cutting out the middleman. Connecting shippers and carriers via OpenPort’s digital platform will also replace the inefficient paper-based process, decreasing the time it takes carriers to receive payment from three months to one month. Their cloud-based digital logistics platform will allow the supply chain to be managed entirely in house, solving headaches for many logistics companies in the archipelago.

“With more than 17,000 islands scattered across the country, Indonesia needs to make its logistics and supply chain management system more transparent and more efficient, and it is impossible to do so without deploying technology and systems that can seamlessly monitor processes and cut out inefficiency wherever possible.” said its chief executive officer, Max Ward.

The Indonesian Logistics and Forwarder Association (ILFA) has highlighted that the republic can unlock a potential US$250-billion worth of value in the logistics market if it could make the sector more transparent and cut out hidden costs.

The startup plans to expand its operations in Indonesia to Surabaya where the major Perak Port is located.

A version of this appeared in Digital News Asia on June 14. To read the full article, click here.