As
the Year Ends
AS in past years, DMAP’s Christmas fellowship had an
overflow crowd, exceeding 170 attendees. Held at the Makati
Sports Club and re-scheduled from Dec. 1 to Dec. 5, the festivities
provided attendees respite from their hectic year end schedules
and problems on rising logistics costs.
Chief festivities organizer President Cora Curay had been
worried about low attendance. Less than a week before, there
had been much fewer than 100 registered. With the original
date threatened by Typhoon Reming, a quick decision was made
to move to Dec. 5.
Guests present included friends from FPI (Meneleo Carlos),
UA&P (Henry Basilio, Jenny Llarena), CSPM (Tet Gambito),
lawyers (Janette Chua, Rod Domingo, Te Leonardo), DBP (Mar
Enecio), CTAP (Bert Suansing), Sulpicio Lines (James Go),
and Solid Shipping (Bert Santos).
Other guests came from conference sponsors, including Ed
Keller, Geologistics, Loscam, past officers and presidents.
DMAP members with big groups included PLDT, Smart, J&J,
TNT, IDS, Jaka and XVC.
The program included introduction of the directors, officers
and committee chairpersons for year 2007, achievement awards
for 2006, games and raffles. DMAP favorite band Arriba provided
entertainment and dance music. DMAP friend Jude Hong again
handled the MC duties. Apart from raffle prizes, each attendee
went home with a bag of giveaways with ham.
By the way, I committed some errors in five of the names
of committee chairpersons in the previous issue (November
27). An erratum was published afterwards. Again I apologize
for the mistake.
With the Christmas fellowship out of the way, companies will
be pre-occupied with meeting year 2006 target volumes. Busiest
among these companies are food companies, the likes of CDO,
Pure Foods and Swift Foods.
Those interested in joining DMAP as individual members will
have to wait for the final rules and application form. The
Board will tackle this in this week’s December Board
meeting.
Also to be finalized is the calendar for 2007. The usual
seminars are expected.
• Basic Shipping Course (1 day classroom seminar)
• Shipping Immersion Course (3 day seminar on board
vessel)
• Warehousing Seminar I (2 day classroom seminar with
warehouse visit)
• Warehousing Seminar II (1 day classroom seminar)
• Logistics Outsourcing Seminar (1 day classroom seminar)
• Intro to SCM (2 day classroom)
• Finance in Logistics (1 day classroom seminar)
Address inquiries and comments to Ed Sanchez at tel. 671-8670,
fax 671-4793, cell 0918-914-1689, or email dmap@i-manila.com.ph.
Those interested in DMAP training and other activities are
requested to send their e-mail addresses.
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Outlook
for 2007 and Beyond
At the last general membership meeting of
the year, on Nov. 16, the membership elected the directors
for 2007, who there-after elected the officers for next year.
The new set of directors and officers will
lead the association in facing what looks like mixed conditions.
The early part of next year looks tame. As examples, we mentioned
last time the rising peso, the reduction in NLEX toll rates,
and reports about the success of RORO. Another factor that
makes the first half look healthy is election spending.
The second half, on the other hand, may take
a turn for the worse. This could be influenced by a reversal
in the exchange rate movement this year, and a resumption
of upward movement of oil prices. But the worst thing, in
my opinion, is a continuing concentration of wealth in a few.
No wonder we are hearing, from surveys, that the poor do not
feel the so-called economic progress.
This observation that the economic progress
does not filter down to the poor supports my past claim, months
or years ago, that there are more forces and characteristics
of the system that push towards concentration of wealth, making
the poor poorer and the rich richer.
A concrete example of this is the continued
construction of malls, now spreading to the provinces. While
the new massive buildings appear to symbolize economic progress,
the economic progress is confined to the mall owners. Sari-sari
stores in surrounding areas are forced to close down. Not
even the owners of stores in the malls, with some exceptions,
reap much from their efforts, as can be seen from the closure
of stores in malls and their replacement by new stores, which
are ‘doomed’ to close down sooner or later
The concentration of wealth prevents the
growth of a middle class that will serve as a strong economic
base. This threatens all businesses in the long term.
Going back to DMAP, the new lineup of directors
and officers looks almost the same as this year’s.
Director and President Cora Curay XVC Logistics
Director and Vice President John Guillermo CDO
Director and Secretary Ana Rose Ochoa J&J
Director and Treasurer Gerry Ong Cheng Ban Yek
Director and Auditor Danny Cabrera Zuellig Pharma
Director and PRO Ninoy Rollan TNT Express
Director Dennis Ilovido Nestle
Director Pio Bernardo Megavia
Director Warren Ermac Smart
Director Jun Gabrino Splash
In addition to the above, the following were elected Committee
Chairpersons:
Dina Pilapil IDS Logistics
Chinky Foz Coats Manila Bay
Tino Calimon Kraft Foods
Marichelle Chan Unilab
Abbe Daza Omni Logistics
Francis Llanes Pilipinas Shell
Noli Cruz Havi Foods
With the exception of newcomers Dennis Ilovido
(Nestle) and Warren Ermac (Smart), the Board is intact. Ilovido
and Ermac replaced Oliver Caday (Nestle) and Alain Ison (Colgate),
both of whom are no longer available next year as they have
transferred to different jobs in their companies.
Among the officers, Danny Cabrera replaced
Pio Bernardo as Auditor. The rest of the lineup is intact.
For 2007 we can expect logistics managers
to continue cost containment and cost reduction efforts. Expect
them also to turn to technology to help meet the increasing
demands of the customers and intensifying competition.
For DMAP itself, even if the leadership is
virtually the same, expect a more conciliatory and collaborative
stance vis-a-vis service providers.
DMAP will also spend more time investigating technologies
that could benefit members, hold a wider variety of seminars,
and encourage more presentors of technology in the general
membership meetings.
Finally, with individuals now allowed to
become members, there should be an initial interest to join
from individuals who feel inadequate in SCM skills and capability,
and who are unable to convince their employer companies to
apply for DMAP corporate membership.
Address inquiries and comments to Ed Sanchez
at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email
dmap@i-manila.com.ph. Those interested in DMAP training and
other activities are requested to send their e-mail addresses.
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Year-end
Fears; Last Seminar
WE mentioned two issues ago that the 4th
quarter is the time when various logistics cost increases
and approval of unfavorable regulations have been expe-rienced
in the past years — shipping rates, cargo handling rates,
trucking rates. Thus DMAP members have learned to fear the
last quarter.
We recall several years when rate increases
were announced or communicated to DMAP on the day of the DMAP
Christmas fellowship. We recall increases in cargo handling
rates, both arrastre and stevedoring, and both domestic and
international. We recall shipping rate increases, North Harbor
trucking rate increases. Likewise the promulgation of MC153
which transferred the burden of proof of the need for a shipping
rate increase from the shipping lines, to proof of no need
for a rate increase, to the shippers. Even RA 9295, with its
disadvantageous provisions, was itself debated and pushed
in the fourth quarter.
Is it different this year? The rising peso has no doubt helped
prevent rate increases. Oil prices have been coming down.
Even MARINA chief Vic Suazo has predicted that shipping rates
will remain at current levels. Even at the NLEX, toll rates
are scheduled to be reduced in January. Lately the schedule
has even been advanced to December 20. BusinessWorld mentioned
that President Gloria said it was a concrete example of how
economic gains impact on ordinary Filipinos.
On the rosy side, we also hear from different
sources that RORO has truly lowered shipping costs by huge
amounts. The government Task Force on Infrastructure Monitoring
mentions 47% savings in shipping 50 motorcycles, P50,000 by
RORO vs. P95,000 by traditional means. We have heard similar
claims from different persons, from both government and the
private sector, including those who did not believe us when
we were pushing for true RORO.
We have, so far, not made a long-term assessment
of the true impact of RORO, now three years after EO 170.
I clearly remember that DMAP was advocating true RORO then,
but I was told by two top honchos in the domestic shipping
industry, in a forum held in Cebu, that RORO was not the way
to go.
Now, one of these two advertises heavily that RORO is the
way to go, claiming the benefits of farther, fresher, faster.
We are not about to say, ÒWhat did
I tell you?Ó. We will wait and study the matter more
thoroughly.
Things do look rosier this year.
However I would like readers to consider
the following:
á The PPA has approved a 14% increase in stevedoring
charges effective November
á The unexpected reduction in NLEX toll fees should
have been expected, since to begin with, the rates were too
high and unaffordable. This is a concrete example of how economic
gains impact on ordinary Filipinos?
á The PPA appears to favor a 25-year extension of the
contract of ATI; ÒreasonableÓ according to PPA
GM Sevilla. Why is this, when the current contract will expire
in 2013?
á PPA’s contract with ICTSI was extended for
25 years. Question — why is it that it was President
Gloria that signed the extension? We can get a clue from one
of my past columns, prior to the presidential election, where
I mentioned the TV ads paid for by ICTSI.
Logistics Outsourcing Seminar
DMAP’s last seminar for the year will be the Logistics
Outsourcing seminar, scheduled for November 24, to be conducted
by UniMaC, Inc. Speakers include DMAP stalwarts Ike Castillo,
Cora Curay, Norman Adriano, Ninoy Rollan and Malou Santos.
Target participants include
á Logistics and SCM staff and managers from logistics
companies
á Logistics and SCM staff and managers from user companies
Seminar topics are:
á What is outsourcing? Evolution of logistics outsourcing
á Global trends. Outsourcing in the Philippines á
The outsourcing debate. Reasons to outsource. Excuses not
to.
á Users outsourcing decision. Provider evaluation and
selection
á Opportunities in outsourcing for providers á
Contracts and negotiation
á Implementation, transition
á Performance management
á The partnership / relationship, problems, termination
á The future of outsourcing
Fees are P5,500 VAT included per DMAP participant
/ P6,875 VAT included for non-DMAP.
Address inquiries and comments to Ed Sanchez
at tel. 671-8670, fax 671-4793, cell 0918-914-1689, or email
dmap@i-manila.com.ph.
Those interested in DMAP training and other activities are
requested to send their e-mail addresses.
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Individual
Membership
THE column title of our last column (print
edition) was “garbled”. It got mixed up with the
column Across Borders of Atty. Agaton Teodoro O. Uvero. The
subject title was correct – Individual Membership and
the contents were intact.
I have retained the title for this column,
since this is a continuation of the last column.
Last time we announced that DMAP would vote
on a new issue, that of allowing individuals to become the
members of DMAP, at the October general membership meeting.
On October 19 the members present at the
GMM overwhelmingly, almost unanimously, voted to accept individual
members into the DMAP fold.
Rules also approved include:
• Individual members have no voting rights and are not
eligible to be elected Directors or officers.
• The number of individual members cannot exceed 30%
of the total membership.
These precautionary restrictions are typical
of DMAP, being very cautious when adopting new rules. At the
same time it is quite flexible, and will drop restrictions
that are later proved to be unnecessary.
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Individual
Membership
AS we enter the 4th quarter, DMAP members
prepare for familiar year end activities. In their own companies,
DMAP mem-bers, especially food companies, grapple with the
extremely skewed sales volume, causing heavy pressure on logistics
resources. The 4th quarter is also the time when various logistics
cost increases have been experienced in the past years - shipping
rates, cargo handling rates, trucking rates. Thus the prospect
of better sales is dampened by feared cost increases.
In DMAP itself, the 4th quarter is the time for the election
of the Board for the next year, and also the time for the
Christmas fellowship.
This year, however, DMAP will tackle something new. This is
the issue of membership for individuals. Members will vote
on the issue in the October general membership meeting later
this week.
DMAP has not been a stagnant organization. It makes changes
to its by-laws when it sees fit to do so. To be sure, DMAP
has made amendments to its by-laws twice. Apart from these,
changes and clarifications have been made in guidelines and
rules on membership related matters.
Changes over the years have been reflected in the changing
membership profile. Initially since the founding of DMAP in
1989, DMAP was made of manufacturers, even though there was
no rule that specified members to be manufacturers. Later
some distributors came into the membership.
For the first 11 years, members were cargo owners (manufacturers
and distributors). There was an error at one time, when a
service provider in an adversarial situation vs. DMAP was
allowed to become a member. But DMAP corrected this by terminating
the member. This is one example act of DMAP that serves as
evidence of its direction of cautious, consistent and continuous
improvement.
In year 2000, DMAP took a vote on whether or not to allow
service providers to join. The body voted yes. Exercising
caution, DMAP instituted safeguards, via a limitation of 20%
on the number of service providers. In addition, providers
of logistics equipment and logistics software were also allowed
at the same time.
On hindsight, the 20% figure appears to be a good number.
While the number of logistics service providers has approached
20%, it has never reached it.
If the coming vote approves individual membership in DMAP,
this will change the complexion of the activities of the association.
Since the beginning and up to now, DMAP has had two faces,
(1) Training and (2) 'Causes'. These two faces have so far
been given equal importance.
In the area of training, DMAP has been undertaking the following
activities
¥ Seminars in warehousing, shipping, performance measurement,
SCM, etc.
¥ Annual logistics / SCM conference
¥ program in logistics / SCM at DLSU
¥ Presentations / talks at general membership meetings
I have always bragged about DMAP being a cause-oriented professional
organization, therefore different from other professional
associations. It has used various venues - formal hearings,
newspaper publication, newspaper column (this one), letters
to govt. officials in the legislative and executive branches,
meetings and collaboration with other groups, a lawsuit, even
a march/rally at Mendiola. Two DMAP officers have even been
sued.
Examples of the causes focused on by DMAP are:
¥ High shipping rates, various rate increases
¥ Various cargo handling rate increases
¥ Impositions such as valuation surcharge, bunker adjustment
¥ Proposed pass-on of funding of port workers benefits
to cargo owners
¥ Shift of burden of proof for shipping rate increase
to cargo owner
¥ Shipping cartel
¥ Monopoly at North Harbor and other ports
¥ Unreasonable proposed trucking impositions (total truck
ban in expressways, 15-hour truck ban, odd-even traffic scheme)
¥ Trucking rate increases
¥ Toll fee increases
I expect a heavier emphasis on training once and if individual
members are allowed.
Incidentally, the Council of Supply Chain Management Professionals,
has only individuals as members. As far as I know, its goal
is to spread knowledge about SCM. CSCMP. It has only one face.
Address inquiries and comments to Ed Sanchez at tel. 671-8670,
fax 671-4793, cell 0918-914-1689, or email dmap@i-manila.com.ph.
Those interested in DMAP training and other activities are
requested to send their e-mail addresses.
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Conference
Highlights
AS I write this, DMAP's 2006 SCM conference
and exhibit is in full swing on its second day at the EDSA
Shangri-La Hotel, with its theme "Supply Chain Challenge:
Simplify the Complexities".
Highlights of the event: include:
Sponsors. Exhibit booths numbered 35 in all.
¥ Cocktails Sponsor : Loscam
¥ Luncheon Sponsors : PLDT, SSI Schaefer
¥ Principal Sponsors : Smart Warehousing Solutions, IDS,
Ed Keller, TNT, Geologistics, 2GO
¥ Regular Sponsors: Fast Logistics, Zuellig Pharma, Filogistics,
Handling Innovation, K-Lift, NMCCLI, Sulpicio, Inland Corp.,
Ximex, A1Force, Materials Solutions, Smart, Prime Sales, Solid
Shipping, Star Value
¥ Cooperating Organizations: <i>PortCalls</i>,
GS1, ECR, PISM, Agrilink, CCAP, Epson
Speakers. The conference had an excellent
collection of speakers and talks, all or most touching on
supply chain complexities.
¥ Meneleo Carlos (Federation of Phil.
Industries), keynote speaker, "Bridging the Island Thru
Efficient Transport and Logistics"
¥ Sec. Arthur Yap (Pres. Adviser on Job Creation), keynote
speaker, "Strategic Infrastructure Projects"
¥ Dr. Cid Terosa (UA&P), "Emerging Regional Markets
in the Philippines"
¥ Ike Castillo (Avon), "Practical Perspective to
Differentiating Your Value, Unsolicited Advice to Third Party
Logistics"
¥ Josef Gueta (Business Profiles), "Managing Complex
Risks in the Supply Chain: The Mitigating Cycle and Approach"
¥ Jose Luis Romero-Salas (TNT), "Global Best Practice
in Simplifying Freight Business"
¥ Antonio Rivera (Mead Johnson), "The Best View Forward
– Core Lessons for Supply Chain Leaders"
¥ Roberto Claudio (PRA), "Retailing Update: GS1 Standardization
in the Supply Chain
¥ Brian Miles (Schaefer), "Selecting the Optimum
Storage Solutions"
¥ Noel Bautista (IDS), "Outsourcing the Logistics
Process for Increased Efficiency & Service"
¥ Steve Muller (SSA), "Best Practices and Technology
Drivers for Supply Chain Excellence"
¥ In addition to the above, there were talks given by
PLDT and Schaefer over lunch
The first three talks mentioned above appeared
to be closely inter-related, with Yap and Terosa both discussing
GMA's super regions, and Yap and Carlos both mentioning RORO
and the coming competitiveness summit at end-September. The
other speakers discussed other aspects of SCM (TPL, retail
trade, technology, security, global practice, etc.), and simplification
of these aspects.
Carlos's speech was very much in line with
DMAP advocacies which we have been pushing at various times
in this column and in other venues. Carlos also stressed these
while tying them to simplification of complexities.
Carlos mentioned the results of archaic laws
and rules still governing us, many of them from the Marcos
administration. He gave two examples:
¥ PD 857, which created the PPA, making the government
responsible for promoting and operating our ports. Yet the
government says now that the private sector should be the
driving force of the economy.
¥ The work of a task force formed to simplify export procedures
at customs, near he end of the Marcos administration, which
resulted in a more complex procedure.
Two of four principles listed by Carlos as
the direction for private sector players are right in line
with DMAP principles. This is why I quote Carlos below.
¥ Monopolies should be avoided and natural
monopolies must be regulated for the sake of upholding the
public good. A government monopoly is bad, but a private sector
monopoly is worse
¥ The private sector prefers to compete than to be regulated;
therefore competition must be promoted through the applicable
rules and regulations. In this regard, the tradition and tendency
towards regulatory capture of regulatory agencies of those
regulated must be prevented through appropriate safeguards
in our laws, rules and regulations.
In relation to the so-called Competitiveness
Summit on Sept. 29, the archaic laws still governing us are
part of the complexity that must be simplified. In plain and
blunt language, regulatory agencies such as the PPA are a
stumbling block to the achievement of competitiveness and
must be removed.
Not only is the role of the PPA counter to
the stated role of the private sector now, but the basic nature
of the PPA is anomalous. It has a very basic conflict of interest
- it has a share in the rates that it sets. In addition, its
orientation is profit generation, as it has been declaring
over the years with pride how it does not rely on the national
government for funding. Furthermore the PPA is pro-monopoly,
and does not even try to hide it. Instead it even flaunts
it.
Another archaic agency created by Marcos
is the MARINA, which has been exhibiting pro-cartel behavior
over the years, for example, by not censuring the shipping
lines, for using the same lawyer, asking for the same rate
increase, using the same arguments and wording in papers used
in rates cases, even if the financial performances of these
companies widely differ.
Speaking of the PPA, a rumor has reached
us that a change at the top level is coming. Guess where he
is from. Try to connect this with Carlos's statement on regulatory
capture?
Address inquiries and comments to Ed
Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689,
or email dmap@i-manila.com.ph.
Those interested in DMAP training and other activities are
requested to send their e-mail addresses
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Mini
Survey on Warehousing
OVER the past years we have been doing mini
surveys on warehousing practices among participants in our
past basic warehousing seminars. In more recent years, however,
practices have been changing, particularly on technology.
Thus I have decided to start again with our new warehousing
seminar part 1 as the start of new readings.
In the first warehousing seminar part 1 held
last July, 13 of the participants responded to our survey.
Some of the responses include the following. Total using /
total answers exceed the number of respondents due to multiple
answers.
¥ Storage equipment (11 respondents)
Selective pallet racks 6
Block stacking 3
Drive in racks,
mobile aisle racks 2
Bulk liquids in tanks 2
Storage drawers 1
¥ Pallets (11 respondents)
Wood 9
Plastic 6
¥ Lift trucks type (6 respondents)
Reach 4
Counterbalanced 2
Side loading 1
Turret 1
¥ Other equipment (12 respondents)
Pallet jack 11
Conveyors 1
¥ Inventory taking count procedure (9
respondents)
Periodic count 5
Cycle count 7
¥ Inventory taking accuracy (12 respondents)
Accuracy < 90% 3
Accuracy 90-95% 4
Accuracy 95-99% 1
Accuracy 99-100% 4
¥ Technology adoption (12 respon-dents)
Inventory records
computerized 7
Using WMS 5
Using RF technology 2
Using bar codes
for logistics 1
Doing cross docking 1
Using pick to light system 0
Using sortation system 0
Other technologies 3
Indications gleaned from the above, as compared
to our past surveys, are:
¥ Selective pallet racks and pallet jacks continue to
be popular
¥ Plastic pallets and WMS are becoming more popular
¥ More companies are into cycle counting
¥ Inventory accuracies have improved considerably
Warehousing Seminar II
We held this seminar last August 25. Perhaps due to the closeness
to the annual conference, we got only 22 attendees. This one-day
seminar is a compact assembly of a lot of info on specific
warehousing topics, including actual experiences in key installations.
As we mentioned during the seminar itself, this is like a
mini-conference, based on the topics included.
¥ Warehousing Breakthroughs
¥ Technology Update : Managing an RF / Barcode Warehouse
¥ WERC Benchmarking Study 2006
¥ Opportunities for Cross Docking
¥ Advanced Warehousing Ex-perience: Insights from a WMS,
RF and MHE Implementation
¥ WMS Experience: Effective Inventory Control with 2 Systems
¥ Intro to Leading Edge Logistics
We are considering a rerun of this seminar
soon, if we receive enough requests or queries about it.
2006 DMAP Conference
It is all systems go for this year's supply chain conference
and exhibit, with its theme "Supply Chain Challenge:
Simplify the Complexities". This will be on Sept. 14-15
at the EDSA Shangri-La Hotel. A few more slots are available
for conference sponsors and advertisers.
Keynote speakers will be Secretary Arthur
Yap, Presidential Adviser for Job Creation and Meneleo Carlos,
Chairman of Federation of Philippine Industries. Other speakers
include: Dr. Cid Terosa (University of Asia & the Pacific),
Ike Castillo (Avon Cosmetics), Noel Bautista (IDS Logistics),
Bobby Claudio (Philippine Retailers Association), Brian Miles
(Schaefer Asia), Antonio Rivera (Bristol Myers) and Josef
Gueta (Business Profiles), Steve Miller (SSA), and Jose Luis
Romero-Salas (TNT).
Conference fees are: P9,385 for DMAP member
companies and P11,730 for non-DMAP.
Address inquiries and comments to Ed
Sanchez at tel. 671-8670, fax 671-4793, cell 0918-914-1689,
or email dmap@i-manila.com.ph.
Those interested in DMAP training and other activities are
requested to send their e-mail addresses.
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