Sunday, October 10, 2010

Only handful opt for third-party logistics

KUALA LUMPUR: Malaysia’s manufacturing sector is still in transition to fully realise the advantages of outsourcing their logistics activities.

This outsourcing effort, known as third-party logistics (3PL) services, usually involves integrated warehousing and transport services being customised to meet customer’s needs based on their markets, demands and delivery requirements.

According to Dynamic Learning Resources trainer consultant G. Vizayer Raj, only a handful of Malaysian companies have fully outsourced their logistics activities.

“For manufacturers, the long-term benefits of using 3PL services include reduction in warehousing and distribution cost as well as enhanced focus on core activities such as quality control, production and marketing.

“In the long run, the cost of transportation, distribution and inventory management could be reduced by more than half if the company opts for 3PL services,” he told StarBiz.

“At the end of the day, manufacturers could produce good quality and competitively priced products that could reach their target markets on time.”

Vizayer recently presented a paper on Creating Global Value Through Efficient Trade Logistics at the 2nd National Logistics Conference organised by The Exporter Club.

He said the lack of awareness on 3PL services in Malaysia could be due to the perception towards logistics services here.

“Around 20 years ago, we were largely dependent on Singapore in terms of logistics. Our logistics services then did not bring the desired result, but the sector has since evolved.

“Many international logistics companies have set up their hubs in Malaysia and they include DHL, Schenker and Ceva Logistics,” Vizayer said.

He noted that Malaysia had developed its own logistics companies that offered services of international standards. They include Century Logistics Holdings Bhd, Freight Management Holdings Bhd, Tiong Nam Logistics Holdings Bhd and Freight Mark (M) Sdn Bhd.

Vizayer said to achieve a strong logistics sector, a country must put in place the processes of logistics.

“Certain factors must be addressed to stimulate growth and they include infrastructure and policies.

“Physical assets such as skilled workforce; infrastructure like roads, bridges, airports, seaports, railways; and adequate communications network must be of international standards,” he said.

“We also need Government support in the areas of policies, procedures and regulations to ease and promote trade.”

Vizayer said corporations should also play their part to stimulate trade growth.

“They must educate employees on the benefits of global trade, create a sustainable enterprise, utilise the resources of 3PLs and make supply chain management a strategic priority.”

Source: StarBiz

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