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WHAT IS A SUPPLY CHAIN?
A supply chain is a system that moves a product or service from supplier to customer. It involves people, information, technology and resources to transform raw materials to finished goods and to ship the goods to the customer. A supply chain involves different external parties who will try to maximize their revenue within their own areas in the supply chain. For example, a raw material supplier to a factory will try to obtain the best price for their goods, while a freight forwarder will also aim to charge the highest fees possible for their transportation services.
A supply chain comprises three key areas:
1. Supply – the raw materials that are supplied to be manufactured.
2. Manufacturing – the process of converting the raw materials into finished goods.
3. Distribution – how the products reaches the consumer, through a network of warehouses, distributors and retailers.
Supply Chain Management (SCM)
As its name suggests, supply chain management (SCM) involves the systematic coordination of the flow of materials within a business and ultimately to the customer. SCM helps to ensure that the business is operating as efficient as possible to achieve the highest level of customer satisfaction, while keeping costs as low as possible. Some of the elements in the supply chain that needs to be addressed in the SCM are planning, purchasing, inventory, production and transportation. There are various tools available to support the supply chain management process. Among them are Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) software. Although they can improve the efficiency of the supply chain, these software can be very costly, especially for smaller businesses.
TRANSPORTATION & LOGISTICS
The last area in your supply chain is the distribution. How will you distribute your products to your customers in the safest, fastest and most efficient way, while keeping your costs low? This is where logistics come into the picture. An efficient transportation infrastructure is crucial in speeding up the distribution process.
Malaysia’s Transport Infrastructure
Malaysia’s conducive business environment has attracted multinational corporations from more than 60 countries to invest in over 3,000 companies in its manufacturing sector, making the country one of the world’s top locations for manufacturing and service based operations. The greatest advantage to manufacturers in Malaysia has been the nation’s persistent drive to develop and upgrade its infrastructure. Today, these investments have paid off handsomely and Malaysia can boast of having one of the best infrastructures among the developing countries of Asia. In fact, Malaysia is often lauded at international conferences for the country’s excellent transportation infrastructure, taking its place as one of the best in the Asian region with well-planned and constructed port facilities, roads, rails and airports, supported by state-of-the art communications networks.
Getting Your Goods On The Road
You can choose from the various modes of transportation available in Malaysia for your goods, whichever suits your business the best.
Road – Currently, road and rail transport are crucial elements in the local logistics network as up to 90% of inland passenger and cargo movements are by road, thus explaining the Malaysian government’s emphasis on extensive and efficient road systems to link all parts of the country. The total road length as at 2005 was 77,673km, while as at 2006 there were approximately 1,500km of tolled highways in service, operated by the various toll concessionaires.
The 823km long North-South Expressway forms the backbone of Malaysia’s roads infrastructure, it starts up north at Bukit Kayu Hitam and ends down south in Johor Bahru, linking all major cities on the West Coast of Peninsular Malaysia between Thailand and Singapore.
Rail – Rail transportation of freight accounts for only a small share of 3% of the total freight carried by all modes in the country. The growth in this sub-sector is spearheaded mainly by the national railway company, Keretapi Tanah Melayu Berhad (KTMB) through its freight division. As the largest transport organization in the country, KTMB, through its freight trains has the capacity to transport several classifications of goods ranging from grains to machinery. Its network runs the length and breadth of Peninsular Malaysia from the northern terminal in Butterworth and Thailand southward to Pasir Gudang, Johor and through to Singapore. The same northerly line serves wharves and port facilities in Penang.
Ports - The Ministry of Transport has under its jurisdiction 7 major federal international ports whereby 6 ports are located in Peninsular Malaysia and 1 in Sarawak. The country’s 7 key seaports are:
1) Port Klang, about an hour’s drive from Kuala Lumpur
2) Penang Port, located in the industrialized island of Penang in the northern region of Peninsular Malaysia
3) Pasir Gudang, Johor
4) Port of Tanjung Pelepas (PTP), Johor
5) Kuantan Port, Pahang
6) Kemaman Port, Pahang, a supply base that caters to the needs of petroleum companies
7) Bintulu Port, Sarawak, catering mainly to the liquefied natural gas (LNG) industry
Airports - Malaysia’s central position at the crossroads of South-East Asia makes her particularly attractive as a trans-shipment centre. The air cargo sub-sector is the fastest-growing segment of the logistics industry. And rightly so, air cargo facilities are well developed, especially in the five international airports in Malaysia, namely the Kuala Lumpur International Airport (KLIA) in Sepang, Penang International Airport, Langkawi International Airport, Johor International Airport, Kota Kinabalu International Airport in Sabah and Kuching International Airport in Sarawak. All the airports are serviced by an increasing number of major airlines and have state-of-the-art cargo transportation facilities.
CARGO TRANSPORTATION SERVICES
In Malaysia, there are various companies providing comprehensive containerized cargo transportation services. These services include container haulage, freight forwarding, warehousing, bunkering, distribution related services, port and customs clearance, and container repair, leasing and maintenance. Consignees and clients in Malaysia enjoy speedy, efficient and reliable cargo transportation through a network of local branches and offices. Most companies also offer a good international network of agents.
1. Container Haulage
The Malaysian government regulates inland container haulage through the Commercial Vehicle Licensing Board (CVLB) under the Ministry of Entrepreneur and Cooperative Development. Haulers cater to varied cargo needs through a diversified fleet of trailers and prime movers sporting 20 to 40-foot trailers, which also include modified vehicles. These haulage companies are fitted with air suspension stems to shield cargo, coupled with generator sets to maintain constant temperature. Some come equipped with modern tracking systems to enable contact with haulage vehicles on the road. Numerous other medium and small-sized operators are available to truck conventional cargoes to destinations in the country. Most haulage agencies can deliver goods within 24 hours in the Klang Valley while some can do it in half the time. Meanwhile, a block rail feeder service operates to specific destinations and a freight liner service takes care of container deliveries to outstation clients. This multi-modal (road and rail) transportation system assures efficient and prompt delivery of cargo to clients.
2. Freight Forwarding
Hundreds of freight forwarding agents stationed throughout Malaysia offer nationwide freight forwarding services, while cargo bound for international destinations can be forwarded through various international freight forwarders with agents at ports of discharge worldwide. Freight forwarders also handle the complete range of documentation pertaining to import and export. For example, they can assist SMEs in the processing of applications for required permits, licenses and duty/tax exemption for the clearance of goods from the Customs, port or railway authorities.
3. Warehousing Services
Today, major ports in Malaysia offer both bounded and unbounded warehousing, where there are state-of-the-art facilities, customized to handle cold-storage, temperature-controlled storage, open yard and dangerous cargo storage. The services offered include container stuffing and unstuffing, freight consolidation, cargo storage, product repackaging, labeling and crating. These facilities are ideal for various storage condition with good ventilation and heat insulation; especially for food products and other heat-sensitive items; raised platform and dock levelers to facilitate ease of loading and unloading; 24-hour security and fully computerized warehouse management, inventory control and other processing systems.
4. Shipping
At present, Malaysia’s shipping lines covers a vast worldwide network. The shipping industry’s fleets comprise fully cellularized container ships, multi-purpose bulk carriers, panamaxes, crude oil tankers, parcel tankers, chemical tankers, product tankers and liquefied natural gas carriers. They are also capable of handling a wide range of cargo, ranging from high-tech goods, grains and chemicals to minerals and petroleum products. Well-trained and experienced crew coupled with modern equipment and systems provide the required back-up.
CONCLUSION
Your company’s supply chain and logistics management is an area well-worth looking into, as it traverses many departments and has a huge impact on your operations. If you are currently looking at ways to improve your business, a good supply chain management tool may be the answer.
