Synergy Through Connectivity

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scmapWe are devoting today’s column to edited extracts from the address delivered by SCMAP president Corazon Curay at the National Export Congress 2016, which was held last December 7 at the Philippine Trade Training Center in Pasay City. There she discussed the challenges and opportunities facing the supply chain industry in ensuring our exporters remain competitive in these times. And with that, we at SCMAP would like to wish you a happy Christmas and a prosperous new year ahead.

 

In 2014, the Philippine economy took a big hit after the extended truck ban, implemented by the city government of Manila, led to heavy congestion in the city’s ports. This problem was solved only with the intervention of the national government and other affected stakeholders.

 

This situation leads to a wider awareness of the role the supply chain management profession plays in the Philippine economy. We mean not just the act of moving products from origin to destination, but the end-to-end process of planning to buying, making and moving goods, up to fulfilling customer satisfaction. The exporter’s role is to create great products by meeting the customer’s desire in terms of cost, quality, speed and flexibility.

 

But moving products in the Philippines is a great challenge, being an archipelagic country and prone to natural calamities, and this made even more difficult with inadequate road networks, lack and poor ports infrastructure making shipping cost higher than our neighbors.

 

The supply chain and logistics sector, despite our best efforts, has not been as competitive as we hoped. In the latest Logistics Performance Index, released earlier this year by the World Bank, the Philippines ranked 71st out of 160 countries, and fifth among ASEAN countries. For comparison, we were at number 57 in the 2014 index, 52 in the 2012 index, and 44 in the 2010 index.

 

But there is good news in addressing the infrastructure gap. The current administration intends to ramp up infrastructure spending to about PHP 8 trillion in the next five years. It has also embarked on an aggressive plan to build new infrastructure and improve existing ones. This will improve connectivity not just within the Philippines, but to our neighbors in the ASEAN, like the ASEAN RORO project connecting Davao and General Santos to Bitung in Indonesia, which is expected to open by April next year.

 

They have also implemented policy reforms that are designed to lower both transport costs and delivery time like the Single Window system and amendments to the cabotage principle.

 

The private sector has also done their part. Port operators, for example, have introduced policies designed to improve operations in their facilities and enable more users to avail of their services within a period of time, like the implementation of the Truck Appointment Booking System. They have also invested in new equipment, allowing our ports to operate more efficiently. Others have adjusted transport hours so their processes do not contribute to the worsening traffic.

 

Before, an entrepreneur had to be big to export, but the Internet has changed all that. Now, a small business – even one person – with online access can do business and sell to buyers across the world. Apart from widening access to worldwide markets, it also widens their sourcing options for inputs.

 

While we aim to export our best products around the world, customers now also have easier access to products from other countries – and they will choose those products if they believe it is of better quality and value than local products. All of this is putting a strain on producers to adapt, to ensure that they can keep up with evolving tastes, as well as on existing infrastructure, which cannot handle the increased demand.

 

We at SCMAP believe that the supply chain industry plays a big part in the continued growth of our economy. However, without the support of stakeholders from the public and private sectors, we are limited in what we can do. Therefore, it is best that all stakeholders be able to connect, coordinate, and synergize their plans – all stakeholders working in tandem to enhance supply chain processes, improve connectivity, and further boost the economy.

 

Already there are many efforts towards this goal. Just last week, the DTI and DPWH signed a MOA for a convergence program called ROLL IT: Roads Leveraging Linkages for Industry and Trade. Both agencies agreed to align government infrastructure status projects with the requirements of local industries and identify priority areas.

 

But more efforts need to be done. There must be closer collaboration and planning between all stakeholders. Consultations and discussions may be an extra step in solving an urgent problem, but when one hand moves, and the rest of the body is not aware of things, there may be negative consequences.

 

These collaborations should not just be limited to infrastructure or traffic policy. We must take a holistic approach to how we deliver goods from producer to manufacturer to retailer to customer. All this will lead to more inclusive development for the Philippines. How can we call for our country to be united, if we cannot easily connect to each other?

 

In this day and age, the Philippines can no longer just survive on its own. It is now part of an international community of countries that give and take from each other, in order to bring a better life for its citizens. It is in our best interests to ensure that we are equipped to face an increasingly globalized world head on. Global is different and misses can be costly. We must be faster, flexible, adaptable, innovative and collaborative to be globally competitive. It pays to prepare.