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Mark Goh Parooj Pinaikul, (1998),"Logistics management practices and development in Thailand", Logistics Information
Management, Vol. 11 Iss 6 pp. 359 - 369
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http://dx.doi.org/10.1108/09576059810242471
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Eric Sandelands, (1997),"Strategic logistics management", International Journal of Physical Distribution & Logistics
Management, Vol. 27 Iss 2 pp. 73-142 http://dx.doi.org/10.1108/09600039710757736
Willem W. Cilliers, Pieter J.A. Nagel, (1994),"Logistics Trends in South Africa", International Journal of Physical Distribution
& Logistics Management, Vol. 24 Iss 7 pp. 4-14 http://dx.doi.org/10.1108/09600039410070948
John E. Spillan, Michael A. McGinnis, Ali Kara, George Liu Yi, (2013),"A comparison of the effect of logistic strategy and
logistics integration on firm competitiveness in the USA and China", The International Journal of Logistics Management, Vol.
24 Iss 2 pp. 153-179 http://dx.doi.org/10.1108/IJLM-06-2012-0045
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Introduction
Research paper:
logistics management
practices and
development in
Thailand
The authors
Mark Goh is Senior Lecturer and Logistics Management
Coordinator in the Department of Decision Sciences,
National University of Singapore, Singapore.
Parooj Pinaikul is a MSc (Transportation Systems)
graduate from the National University of Singapore,
Singapore.
Abstract
Many firms are starting to focus on the effective and
efficient supply chain management in Asia. This empirical
paper reports on the state of existing logistics management practices in Thailand. The main results reveal that
firms prefer agile suppliers. Also, most of the logistics costs
incurred are on transportation and warehousing. Firms
that have instituted logistics departments are making an
effort in upgrading their logistical systems and are more
pervasive in using technology to manage logistics as
compared to firms without formalised logistics departments. The factors hindering logistics development include
inefficient logistics information systems, acute transportation bottlenecks, and the lack of logistics management
expertise. Finally, future logistics managers need to be
competent in modern technology and possess logistics
specific skills.
359
Freight (tonnes)
Year
Loaded
Unloaded
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
102,522
127,702
153,098
184,649
214,151
245,925
244,265
267,192
305,090
356,464
54,829
61,370
73,982
93,668
107,596
127,580
125,886
135,756
160,898
197,890
Total
Percentage
change
157,351
189,072
227,080
278,317
321,747
373,505
370,151
402,948
465,988
554,354
20.16
20.10
22.56
15.6
16.09
0.90
8.86
15.64
18.96
Container (TEU)
Year
Inbound
Outbound
Total
1992
615,326
687,981
1,303,307
1993
597,856
675,940
1,273,796
1994
659,955
734,812
1,394,768
1995
673,963
758,879
1,432,842
1996
264,238
275,538
539,777
(until May)
Source: Department of Commercial Economics, 1996
Percentage
change
Methodology
2.26
9.50
2.73
360
361
Criteria
Very important
or more
(%)
Quality of services/products
Reliability of service delivery
Flexibility/responsiveness
Customer orientation
Price of services/products
Technical expertise
Committed to continuous development
Good marketing/publicity
Unimportant/
unaffected
(%)
Mean
Standard
deviation
4
4
5
5
6
10
13
23
4.500
4.225
4.100
4.088
4.038
3.738
3.438
3.250
0.118
0.121
0.123
0.125
0.129
0.129
0.126
0.135
Mean
Standard
deviation
4.263
4.138
3.813
3.825
3.750
3.300
3.350
0.128
0.128
0.136
0.128
0.140
0.142
0.141
91
85
81
79
75
71
45
41
Criteria
84
78
68
66
64
54
46
6
5
9
8
11
24
19
With logistics
department
Without logistics
department
Total
Product development
73
60
66
53
45
49
53
40
46
Business forecasting
50
35
43
Market research
Linking information system
30
30
40
15
35
23
Areas
362
accuracy, turnaround time and reduce delivery costs. On a more assuring note, it is heartening to see that firms are taking customer
service seriously and setting up a logistics
department is a direct response to that concern (Gilmour et al., 1995). Interestingly,
about half of the respondents feel that business productivity can be improved after the
logistics department has been set up.
Area
Warehousing
Purchasing
Local distribution
Materials planning
International distribution
Percentage
65.0
62.5
55.0
35.0
15.0
Level of expenditure
The average annual logistics costs expended
by a firm is about 10.5 per cent of the gross
annual turnover. This is less than the average
logistics costs of firms in the USA. The higher
and longer investment in high-technology
(e.g. IT, material handling equipment
automation) in US-based firms is one reason
to explain this trend. Three out of five firms
with logistics departments incur less than 10
per cent of their gross revenue on logistics
related activities. Only 7.9 per cent report that
their logistics costs form more than a quarter
of their gross revenue. Also, more than 60 per
cent of firms with logistics departments incur
less than 20 per cent of their logistics costs on
procurement and information systems, again
suggesting an inertia in investing in logistics
hardware and technologies. Most of the costs
are spent on either transportation or
warehousing, with half of the firms incurring
more than 30 per cent of their logistics costs
on transportation. The fact that Thai firms
spend more on physical distribution is a result
of the worsening traffic condition on trunk
routes especially in the capital, and a pressing
need for better distribution infrastructure.
A further reason is that many of them (78 per
cent) have started consolidating their warehouses (by reducing the number of regional
warehouses) in a bid to centralise their stocks
and control inventory holding costs, and
lower fixed costs. The trade-off has necessitated a higher distribution cost and sometimes
even a longer lead time. Thus, the transportation cost increases owing to the longer
haulage needed. The costs for operating
warehouses are also high due to the higher
cost of facility maintenance. These results are
shown in Figure 1.
Warehousing
Most firms prefer to rely on private warehouses rather than public warehouses. Nearly two
thirds of them (65 per cent) own one or two
warehouses. Only 9 per cent use solely public
warehouses while a third rely on both private
363
Objectives
Very important
or more
(%)
Unimportant/
unaffected
(%)
Mean
Standard
deviation
90
78
75
78
73
75
63
55
3
0
5
3
3
8
13
13
4.350
4.225
4.150
4.075
4.000
3.950
3.725
3.600
0.139
0.127
0.146
0.126
0.129
0.152
0.186
0.182
Type
Conveyors
Carts
AGVs
Forklifts
Cranes
With
logistics
department
(%)
Without
logistics
department
(%)
Total
13
30
13
93
28
15
45
5
85
15
14
38
9
89
22
Key
<20%
20
21-30
15
31-40
41-50
10
>50%
5
0
Purchasing
Warehousing
Transportation
364
Information
system
Distribution
While Table IX shows that nearly three quarters of the firms (72.5 per cent) own their fleet
of vehicles to handle physical distribution,
some still use a combination namely own,
leasing and third party providers to distribute
their goods as is evidenced by the 60 per cent
of replies for leased and third party providers.
Firms with logistics departments tend to lease
or use third party providers to assist in physical distribution. On fleet assignment, 23.8 per
cent of the respondents assign their fleets by
customer while 74.4 per cent do so by zone.
Another eight firms assign by considering the
urgency of shipments or rotating priority of
their services to customers. Only four firms
assign their fleets by both customer and zone.
Further investigation reveals that the average
number of transportation providers used by
firms is five, with some 24 per cent using more
than ten transportation providers. Thus,
outsourcing is more frequently utilised in the
area of transportation and less in warehousing, similar to Korean companies (Kim,
1996). However, firms also tend not to rely
solely on a dedicated third party transportation provider, suggesting on the need for such
providers to improve their service offerings
and provide better contract management.
Trucks are by far the most popular form of
vehicle used in physical distribution. Two out
of every three trucks engaged in distribution
are either leased or provided for by a third
party transportation provider.
Fleet
With
logistics
department
(%)
Own
Do not own
Leased or third party
providers
Do not lease
Without
logistics
department
(%)
Total
65
35
80
20
72.5
27.5
70
30
50
50
60
40
365
Reasons
Very important
or more
(%)
Unimportant/
unaffected
(%)
Mean
Standard
deviation
92.7
78.1
70.7
63.4
56.1
48.8
41.5
26.8
0.0
7.3
2.4
12.2
12.2
12.2
22.0
26.8
4.463
4.146
4.098
3.682
3.659
3.537
3.342
3.049
0.099
0.170
0.139
0.154
0.162
0.157
0.187
0.167
Concerns
Standard
Mean deviation
82.5
75.0
50.0
7.5
18.8
16.3
4.300
3.575
3.488
0.104
0.127
0.105
43.8
41.3
30.0
23.8
20.0
17.5
13.8
18.8
18.8
30.0
35.0
45.0
52.5
66.3
3.388
3.275
2.975
2.825
2.675
2.488
2.275
0.115
0.092
0.107
0.111
0.124
0.125
0.118
Skills
Satisfied or more
(%)
Can improve
(%)
Mean
(%)
Standard deviation
(%)
61.3
61.3
45.0
22.5
17.5
2.5
3.8
7.5
31.3
35.0
3.863
3.600
3.438
3.038
2.788
0.728
0.446
0.604
1.075
0.904
Skills
Good communication skills
Logistics operations specific skills
Ability to plan and forecast
Grounded in new technology
Formal qualification in logistics
Very important
or more
(%)
91.3
90.3
87.5
86.3
35.0
Unimportant/
unaffected Mean
(%)
(%)
1.3
1.3
2.5
0.0
20.0
367
4.550
4.488
4.375
4.325
3.275
Standard
deviation
(%)
0.475
0.481
0.592
0.500
1.164
References
Andel, T. (1995), Get fit for the future, Warehousing
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Christopher, M. (1993), Logistics and Supply Chain
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Cilliers, W.W. and Nagel, P.J.A. (1994), Logistics trends
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Davis, F. and Gibson, B. (1993), Responsiveness:
redefining logistics management for the 1990s and
beyond, Proceedings of the 22nd Annual Trans-
368
Huan, N.C. (1995), The integrated logistics management system: a framework and case study,
International Journal of Physical Distribution and
Logistics Management, Vol. 25 No. 6, pp. 4-22.
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