Loscam customer Linfox were asked to help “take the temperature” of the retail sector in Asia and share their thoughts on future developments and opportunities driven by changing retail supply chains.
The growing sophistication of supply chains in Asia led by the penetration of modern style retail formats is generally followed by three key development drivers; centralized distribution, standardization and third party logistics. High levels of retail penetration such as Thailand and Malaysia drive higher levels of centralised distribution, pallet transfer systems and outsourcing to 3PL’s. Lower in Vietnam, Philippines and Indonesia translates to lower levels of supply chain sophistication and in turn greater opportunities for organizations involved in driving logistics change.
One such organization is Linfox, with operations across Asia and Australia, primarily leveraging the development of the retail sector and the responses by manufacturers to better enable their supply chains. Mark Parlane, Linfox’s VP for Retail, has seen increasing levels of outsourcing by manufacturers and retailers as more modern store formats demand lower inventory levels with increased velocity, improved product stewardship and greater efficiencies.
“We are uniquely placed as an operator of both ends of the retail supply chain in outsourced transport and warehousing to assist our clients to drive efficiencies. The distribution centres we operate for our clients are some of the largest in the Southern Hemisphere and this scale enables us to invest in best in class IT and operational systems to better connect our customers and their trading partners” he said.
“The connectivity of supply chains and the use of standard equipment such as pallets enables us to achieve step changes in supply chains. Today we see the supply chains we manage in Asia as being as sophisticated as anywhere in the world and we at Linfox strive to continuously improve these to deliver value for our customers. Its also important to note that a significant benefit of using a international 3PL is the ability to implement international standard safety and duty of care systems, better protecting employees and better managing risk to deliver a safer outcome for all” says Mark.
Linfox has also been able to penetrate the outsourced transportation sector normally dominated by local transport companies and owner drivers. Operating Linfox’s largest retail fleet in Thailand is James Allmand, Thailand Country Manager.
“As we see our retail customers increase in size and sophistication they tend to outgrow the transportation systems they have traditionally relied upon. When you operate multiple central distribution centres, multiple temperature products and have to service hundreds of stores sometimes two and three times per day then traditional systems just cant cope. We aim to bring improved planning and routing systems, drop and go trailers, modern low emission fleets, eco-driver safety and training systems and generally more sustainable solutions – these all add up to deliver highly efficient transportation systems for our clients” James said.
Mark Parlane adds, “We are now seeing increased demand for these types of customer solutions across Asia and have implemented similar systems now in China, where increasing labour costs and concerns about product integrity are driving demand. We think the future is bright for 3pl’s as evolving retail supply chains continue to drive best practice, creating a wave of opportunity not only amongst international retailers but also Asian based ones as they seek to capitalize on the benefits in efficiency and safety that outsourced operations bring”.