The Supply Chain Management Association of the Philippines (SCMAP) is creating collaboration groups to address seven identified supply chain “pain points” that hinder the Philippines from reaching its economic potential.
SCMAP president Nestor Felicio, in a speech during the association’s Supply Chain Outlook 2018 forum on January 26, noted that the country’s continuing economic growth and the start of the administration’s infrastructure program both present opportunities for the supply chain industry.
“But our country will not be able to realize its potential soon enough without the supply chains and logistics that can deliver goods and materials to support its resurgent manufacturing base and still recovering agricultural base, and provide the needed goods and services to its growing population,” Felicio pointed out.
He said that the supply chain industry is “fraught with many challenges” and that “before we can think about leapfrogging into the future, there are many pain points that we have to address in the here and now.”
Examples of these pain points include “missing deliveries and making customers (and sales people) angry simply because we cannot find trucks or can’t get our goods on a ship during peak days, when we need them the most,” Felicio said.
“This situation leads everyone to increase inventory throughout the entire supply chain, increasing working capital cost that gets passed on to the consumer,” he added.
Felicio also noted how poor reliability and timeliness continues to bug the supply chain’s performance, in which “the cost to serve is continuously increasing.”
The industry is also facing a shortage of truck drivers and qualified warehousing personnel.
“And while the growth of e-commerce has become a new opportunity, our last-mile logistics is not only fragmented and lacking scale, it also lags in the application of technology such as basic track and trace capabilities,” he added.
“These are just some examples of pain points we face. And it affects every one of us because supply chains are interconnected. Parang ’yung kasabihang ‘ang sakit ng daliri ay ramdam ng buong katawan’ [It’s like the saying ‘the pain in the finger is felt by the entire body’],” Felicio explained.
To address these pain points, Felicio said that this year, SCMAP will continue its battle cry of “Connect. Engage. Move,” but giving it new meanings.
“We will direct our efforts towards these pain points. Getting connected and educated about the issues, so that we can engage ourselves and all stakeholders, towards moving and solving them,” Felicio said.
For a start, he said, SCMAP will engage the companies it represents by forming collaboration groups that will focus initiatives on the seven pain points that have been identified by the Board.
In a separate statement, SCMAP said these collaboration groups will allow its members to discuss, brainstorm, and propose solutions to issues and pain points affecting the supply chain in the country.
The first initiative is surge planning, or identifying the best plan during surges in demand, and addressing the difficulty of finding transport and logistics services during peak periods.
Second is tackling the cost to serve, or how to contain cost while achieving effectiveness and how to be globally competitive when the cost to serve customers is consistently increasing.
Third is addressing the low reliability and timeliness of deliveries that results in higher cost and poor service.
Manpower management, meanwhile, is addressing the shortage of qualified truck drivers, as well as warehouse personnel, especially during peak periods.
The fifth initiative is finding out how the industry can “put its act together” and respond to the challenge of last-mile logistics with the growth of e-commerce. Felicio said the challenge and opportunity has shifted to last-mile logistics, which is very underdeveloped (including payment) and constrains growth.
The group will also look at preparing the industry for the impact of “a slew of regulations” being implemented, including truck modernization and restrictions on ownership.
Lastly, with downstream supply chain remaining uncoordinated, (e.g. narrow delivery windows to retailers that prevent multiple drops, stiff penalties, countering delays), SCMAP will look at how to improve collaboration to make the whole supply chain efficient.
“Maybe making our supply chain world class to enable our country to realize its potential to be a rising economic power will not be easy, but nothing worthwhile has been achieved that came easily,” Felicio noted.
He noted that one SCMAP dream project has now become a reality.
This is the upcoming launch by the organization of the first module of graduate-level courses on supply chain management, which are certificate courses to be granted by SCMAP together with the Ateneo Graduate School of Business.
“A world-class education specializing on supply chain management is a key component of our goal to have a globally competitive supply chain industry,” Felicio said. — Roumina Pablo
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