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SESSIONIV:AGILITYINPRACTICE
VORATATTANTIMONGKOLSUKBOARDOFTRADEOFTHAILAND
TOPICS• Logistics and supply chain update
• How can logistics and supply chain be disrupted?
• Logistics and supply chain trends
• Enhanced IT into logistics and supply chain
• Agile in practice : Business Case Study
Logistics and Supply Chain Update as of July 2020Airfreight Cambodia Laos Myanmar Vietnam Thailand
USA
EUROPE
ASIA
CHINA
Land Air (Transit)
Cambodia Laos Myanmar
USA
EUROPE
ASIA
CHINA
Seafreight Cambodia Laos via TH/VN
Myanmar Vietnam Thailand
USA
EUROPE
ASIA
CHINA
Very much limited Very Limited Limited Constraints Available
Ex CLMVT• Airfreight is
limited but can support each other while rates are based on demand.
• Seafreight capacity is available but rates increased.
• Peak season and imbalanced trade will put the pressure on rate increased.
Logistics and Supply Chain Update as of July 2020Airfreight Cambodia Laos Myanmar Vietnam Thailand
Cambodia
Laos
Myanmar
Vietnam
Thailand
Roadfreight Cambodia Laos Myanmar Vietnam Thailand
Cambodia
Laos
Myanmar
Vietnam
Thailand
Verymuchlimited VeryLimited Limited Constraints Available
Within CLMVT• Airfreight is very
much limited• Roadfreight is able
to replace airfreight
• Seafreight capacity is available. No significant freight rates increased.
• Air and Roadfreightwill be more capacity due to government unlock policy
Seafreight Cambodia Laos via TH/VN Myanmar Vietnam Thailand
Cambodia
Laos
Myanmar
Vietnam
Thailand
Logistics and Supply Chain Update as of July 2020
Global Airfreight (IATA, Q2/2020) • Global CTKs (Cargo Ton Kilometer) fell by 15.3% YOY (Jan – Apr 2020) back to the same level in 2013• Global cargo yield and load factor reaching all-time high level in Apr 2020 • Expected cargo volume and yield will be fallen in the next 12 months.
Expected % rates increased are going to decline and capacity will be gradually increased but it is subject to air border locked down policy.
Global Seafreight • 2020 containerized trade estimated to reduce by -14% and will be recovered back to the 2019 volume in 2022
(Seabury Consulting, 2020)• Carrier fleet capacity reductions first half of 2020 (Alphaliner, DHL, July 2020), ~4-5% of total capacity• Expected rates increased due to lower supply and high season
Roadfreight in CLMVT• Land border has been unlocked gradually. Now 50% of border in Thailand is unlocked• Roadfreight will play more important role as airfreight substitution mode but need to solve the bottleneck
at VN/CN and LA/CN border issues as well as truck permission from TH into LA.
How can logistics and supply chain be disrupted?
ON LINEE-commerce:
Inbound : Still in FTLOutbound : Last mile
Logistics platformi.e. Lalamove, Grab, Uber Truck, etc.
Avoid middlemanAvoid red-tapeMore transparencyCost efficiency Demand & Supply Equiliquim
OFF LINEUncertainty -> Business Continuity Plan • ASIA Economic Crisis (1997) à Reformed Fin• 911 (2001) à Re-config security measures• SAR (2002-2004) • Airport Blocked (2008)• Hamburger Crisis (2008-2009)• Thailand Flooding (2011)• Sendai, JP Earthquake (2011) -> J-SOX• European Debt Crisis : PIGS (2013-2014)• Covid -19 (2020) à ???Technology -> Adaption• Self driving truck i.e Tesla• Electric Truck i.e. Tesla, Volvoà TransparencyNew developing mode of transport • High Speed Rail• Dual track rail
Logistics and Supply Chain Trends• Consumer or Industrial Users Behaviors Changes
• Lean to Localization* -> Visibility -> Digital Transformation
• Whether or not those changes are sustainable
• Develop more choices i.e. mixed used mode of transport
• Super apps*
• Buyer Standardization*
• Manufacturing relocation • Multiple facilities -> WFH• Multiple suppliers• Local sourcing• Stock building in the market
• Fulfillment Center
Freight market : Price fluctuation• Contract/Spot rates • Bid/Offer• Fixed price : grab,
lalamove, etc.
Business Continuity PlanISOxxxx : Hygienic proof
Enhanced IT into Logistics & Supply Chain
• Back end system*à Automated (2010s)
• E-platform
• Big Data à Data Sharing
• Model Simulation à Predictable behaviors à Accurate Demand Forecasting
• Logistics Transformation* (2020s) : Synchronization (Voratat, 2020)
Fragmentation (1960s) à Consolidation (1980s) à Integration (1990s) à Value Capture (2000s)à Automated (2010s) à Digital Transformation à Collaboration : Synchronization (2020s)
Buyer/Seller/Logistics Service ProvidersPay per useVisibility
MOVE: Multimedia Online Virtual Exhibition
25-26 May 2020- 300 Business Matching- 20,000 visitors
Not only agile action but also- Positive mind set- Opportunities grasp
Food Delivery Platform
• Industry Overview (SCB, 07/20) • 2019: Food Industry = THB412 Bn• On Line = 8% (THB33Bn)• 300% increased : Gov stay home policy• Revenue earns
• Foods Merchant = 78% (THB25.7 Bn)• Rider = 12% (THB3.9 Bn)• Platform = 10% (THB3.3 Bn)
• Platform: Grab, food panda, GET, LINE MAN ,etc.
• Gross Profit (GP) : 30-35% (During Covid 19, (Marketeer, 07/2020)
• LINE MAN : NO GP but offering Marketing package fee
ROBINHOOD (SCB)• From Bank to FD Platform• NO GP• Strengths extension : Between
branch and Food Merchant relationship• Selection• Assistant
• Goal : Financial Supports
Challenges:• Customer switching cost• Learning curve• Sustainability of Customer
behaviors
Air Conditioners
Industry Overview• Buy/Deliver/Install• Via Dealer• Warranty• Financial support : Installment• After sale service • Air purified• Modern design• Low energy consumption
Haier Smart Sharing • THB4 (USD0.13)/Hour -> Pay per use• 5,200 Hrs in 3 years
• Average 6 hrs @ 30 days = 180 Hrs (B720)/Mo• Digital Transformation
• IOT value• Prepaid via SCB
• WFH and Outlet closed• Stock to Cash• Keep production economy of scale• Market share taken
Challenges:• Limit model offered• Internet downed• Law enforcement• Brand switching cost
Manufacturing Outsourcing
Industry Overview: Manufacturing• Low demand• Unable to reach economy of
scale• Interval production• Non skill labor shortage• High logistics cost and longer
transit time• Cost & Quality competitiveness• Customer behaviors changes• Short Medium & Long terms
strategies
Outsouring manufacturing process• Warehousing to manufacturing services
• Light assembly• Kitting
• Relocation production line
Challenges:• Service Provider Capability• Unstable volume and period
Medical services
Medical service delivery• Tele consultation (since before Covid
19)• HOME Services
• Blood Collection• Vaccine Injection
• Medicine Delivery• Thai Post : 398 hospitals, 27,992
deliveries (One month , 8 Apr – 10 May 2020)
• Drive through Vaccine Injection• Hospitals i.e
• BDMS groups : Paulo, Smitivej, BNH, etc.
• Theptarin
Challenges:• Patients’ behavior after post covid• Laws amendment• Shift to local patients
Industry Overview:• Medical hub• Good medical hospitality• Oversea patients have been disappeared
Key Factors to Covid 19 Response
• Monitor impacts of government policy closely
• Identify changes especially customer behaviors
• Determine and implement your actions quickly
Challenges:
• Those changes are sustainable and large enough to justify your actions or investment
• Are your organization agile enough?
CLMVT Joint Efforts
What if CLMVT is heading to ONE Single Direction,
1) Strengthened trading within CLMVT during soft world demands and high logistics costs.
2) CLMVT Travel Bubble in order to stimulate our economy, trade and investment• Stimulate into real sector and micro level. • Insurance policy instead of cash or credit card deposit• Focus on land transport (Bus/Van) in order to avoid infection suspect on board
3) CLMVT as safe place for tourism, trade and investment
4) CLMVT common health standard and measures • Adopt CBTA concept, Common Control Area (CCA) for Traveller• Adopt cargo concept, QC/Covid test at origin country by destination country.
• Single Inspection• KH Poipet officer conduct test at Arant.
