Steven Thacker, Director, Logistics Bureau Co., Ltd., emphasized that Supply Chain Benchmarking can identify various operating and production costs - starting from transportation, storage, inventory holding through to processing time and lead time, internal communication and management.  Logistics costs currently account for 19% of Thailand's GDP, more than double the ratio in other countries. 
     
The free trade era underlines the urgent need to upgrade local supply chain systems by applying technological innovations such as Supply Chain Benchmarking.  Although new in Thailand, Supply Chain Benchmarking has been widely practiced by major countries.  Logistics Bureau (Australia) has implemented Supply Chain Benchmarking for over 12 years.  Logistics Bureau's data base gathered from over 800 companies worldwide enables comparison of supply chain efficiency and identifying a company's status as compared to other companies that implement similar supply chain systems.
      Benchmarking Success (BMS) has helped their clients in the areas of setting benchmarking, handling key performance indicator (KPI) systems and searching for efficient best practice methodologies.  Its leading clients include several international cooperates, such as BMW, IBM, Ericsson, Honda, DuPont, Pepsi, Shell and Volvo, etc.

Logistics & Supply Chain Efficiency in ASIA & ASEAN
 The pace of industrial production expansion in North America will continue to slow in proportion to import growth from Asia.  On-going expansion of industrial production in Asia will only exacerbate the complexity of supply chain management as buyers demand shorter delivery time.  Responding to customer needs, suppliers need to apply new modes to deliver goods quickly and accurately.  These challenging circumstances underline the importance of efficient supply chain management in expediting transportation plans between Asia and America.
 
Technology plays a pivotal role in supply chain management.  As the majority of young people do not want to become truck drivers or train engine operators, we need to install modern technology to improve transportation services.  For example, accurate scanning of packages will minimize product replacements while GPRs devices help to track container trucks around the clock.
     
The Benchmarking Success (BMS) service was locally launched during the Thailand Logistics Fair last September.
We already have 25 companies in Thailand, using our benchmarking service.  Mostly, they're international firms originally using our services in Australia and their headquarters also want us to do the benchmarking for the Thai market.  Now we are eyeing local companies to be our new clients.
     
We need to establish and grow our Thai database.  From the 25 companies in hand now, we expect, within a year after launching, about 150 companies to be enlisted.  So far, three new local companies have subscribed to our service, including ones from the agricultural chemical industry, automobile and consumer product business.  All are in the export circle.
     
Many companies certainly need the help.  The cost of logistics and supply chain operation in Thailand is equal to 19% of national GDP, while that of developed countries is about 8%.

Logistics & Supply Chain Cost Comparison
In terms of benefits gained from supply chain benchmarking, the difference of costs spent on supply chain management between the average and the best-in-class performers is nearly 100%.  For example, in comparison to the total gross sales, the average performers from manufacturing business spent about 10% for the supply chain costs, but the best practice ones spent just 6%.  So those who know the strategies the best practice performers used can save a huge amount.  And, BMS is one channel to get to know such strategies.
     
Successful companies know how to spend money correctly and effectively, and with less extra costs.  One key factor for achieving successful supply chain management is to reach a "perfect order", or an "error free" order.
     
If you're a purchaser, you normally need to get the right product on time without damage at the agreed price.  And, there are six subsequent stages to get such "perfect order", starting from handling the order entry accurately, to proper inventory, warehouse and carrier management, to undamaged customer delivery and correct payment received.  The earlier stage of them you can manage correctly, the less cost you spend.

The Key to Supply Chain Management Success
The key to successful supply chain management is "Perfect Order" which implies a strict observance of six rules: Order Entry accuracy, Inventory Availability, Warehouse Handling, On Time, No damage and Invoice Accuracy.
 Cargo transportation requires cooperation from various parties: the company, supply chain department and customer.  Internal supply chain members need to coordinate their efforts in preparing product/customer data to ensure accurate and on time transportation.  Collaboration from the entire business organization is also necessary.  Last but not least, supply chain members need to strengthen customer relationships to keep pace with growing demand for exports.
 
Examples of Logistics & Supply Chain Best Practice
Companies now rely more on collaboration across the whole network of the supply chain.  The first stage of collaboration would originally be confined across only the company's internal sectors involved with supply chain affairs, such as shipping and warehousing.  But now the collaboration must be across all bodies within the business company, including those of other sectors like marketing and customer service staff and even CEOs.  The collaboration must be across the entire circle of supply chain, including customers and suppliers.  Through sharing of information, resources, structure and planning among all sectors, efficient forecasting will be achieved.  
     
Another important issue now is one of confidentiality.  Possible clients are concerned with how well we will keep their data and not let it get to their rivals.  The answer to this lies in the wide list of our clients internationally, who have trusted us for years. 

Supply Chain Benchmarking Method
The Supply Chain Benchmarking process comprises four stages. Firstly, the Customer Order Fulfillment Survey (COFs), which list down 129 questions is answered and completed by a customer. Based on this survey, Logistics Bureau can evaluate and review facts and figures relating to purchasing, inventory management, transportation and customer service.  Survey results are reviewed by experts before comparing the collated data with Logistics Bureau's data base.  After this, an assessment report is prepared and presented to customer's senior executives.  The last stage involves preparation of the final report on the strategic plan to re-organize work procedures.  An annual follow-up of the customer's progress is undertaken.
 
Logistics Bureau has discovered that "best in class" companies also have the lowest production costs compared to their peers in the same industrial sector. 
If a company does everything correctly right from the start when a customer's order comes in, there will be no additional expenses such as refunds for goods that have been incorrectly delivered or the cost of product replacement.  Improved customer services can solve supply chain management problems.  At the same time, customers will pay more for the best services.
 
Various strategies are available for increasing the competency of business companies.  One of them is accurate auditing and benchmarking supply chain performance.  For a country with high logistics costs like Thailand, such auditing practice was often done internally and so was imprecise and biased.

Logistics Bureau (Asia) Limited, Thailand
Tel: +66 2 277 3071
Fax: +66 2 277 2869
www.logisticsbureau.com