BBA 3007

LOGISTICS

KHOO YU TING

921227015896

200080

MR. LOH YONG CHIANG

JANUARY 2014
 TOPIC PAGES

1 Contents 2

2. Introduction and need of future trends 3-9

2 Future trends in logistics and supply chain management 10-16

Increasing the responsiveness

Expanding the supply chain

The greening of supply chain

Reducing supply chain cost

3 Reference 17

4 Conclusion 18

Coursework
5 28-34

TABLE OF CONTENT

Page 1 of 22
2.0 Introduction and need of future trends

Introduction

A fundamental aspect of insurance ratemaking is the calculation of the indicated rate

level change for a segment of an insurers book of business. The indicated rate level

change is simply the difference between the current rate level and the indicated rate level.

So how do we determine the indicated rate level? Since ratemaking is prospective, the

indicated rate level is the rate level that achieves a balance between the expected

premium income and the expected losses and expenses (including a profit provision that

considers investment income) for a future policy period. While it may be clear that losses

and expenses are subject to continuous change from economic forces such as inflation,

the average premium per exposure can also change significantly over time, even in the

absence of rate changes. In the calculation of the indicated rate level change, we

recognize the continuous change in the frequency and severity of claims when projecting

a future loss level. Similarly, our projection of the future average premium level may be

quite different from the historical or current level. There are several factors that can

influence the average premium level and two main methods of properly accounting for

the effect on the indicated rate level change.

In the Mix

The idea of having a "personal cloud" for storage is so 2011. Now you can combine

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office, mobile, web-based and even homebased storage options to achieve near-automatic

caching of data on everything from your smartphone to your TV set-top box. What's

more, the line has become blurred in terms of personal and business use of such

technologies.

"Many [people] today not only use the cloud to automatically back up their photos from

their smartphone to their computer and share those photos with friends, but they also use

the cloud to share critical files with their co-workers, collaborate on those files and have

access to them from any device they happen to have with them," says Laura Yecies, CEO

of SugarSync, a San Mateo, Calif.-based integrated storage provider. "One could argue

that the personal cloud' is dissipating as the lines between business and personal lives are

shifting, and that now it is just the all-purpose cloud.'"

Hand Print

Hewlett-Packard, Lexmark and Canon have touted their web-enabled printers for years--

but the hardware wasn't all that useful or necessary. That has changed. Now, thanks to the

current crop of mobile devices, you can send documents to printers directly from your

smartphone or tablet. Instead of lugging along a load of collateral materials on your next

business trip or stuffing a lot of just-in-case papers into your briefcase, you can store the

documents on your device and print them as needed.

"Whether it's a real estate agent on the move who needs printed copies of contracts or an

insurance agent who needs to print several forms quickly, printing without a PC has

become more of a must-have than simply a premium," says Tuan Tran, vice president of

Hewlett-Packard's imaging and printing group.

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Touch Me

The trend that started with smartphones and tablets has leapt off the small screens: Now

desktop computers, printers and more can be managed by a touch of the finger. And

innovations in the technology have helped bring the price way down. Formerly

enterprise-only solutions like touch-controlled office kiosks, interactive point-of-sale

terminals and even sophisticated employee inventory systems are now within reach of the

smallest small businesses. One worth a look? The ViewSonic VX2258 touch-controlled

monitor (about $340) can be installed in a store or medical waiting room as a low-cost

interactive kiosk.

The Uncomputer

Tech-savvy companies that need more desktop computers but don't want to spend big for

the firepower should consider a different breed of machine: zero-client PCs. These cheap,

small units are, quite frankly, weaklings on the processing front--until you network them

to a full-power computer nearby. Zero-clients have been big-company tools for some

time, but recent price drops mean that a shop with just a few seats can zero out its PCs.

"Sectors where data security, IT productivity and endpoint reliability are critical are a

very good fit for zero-client computing--specifically, health care, financial services,

hospitality and retail, along with local government and education," says James Buzzard,

vice president for marketing at Pano Logic, a zero-client PC manufacturer in Redwood

City, Calif.

Speed Up

Innovations in wireless communications come and go, but with service providers

investing heavily in blazingly fast Long Term Evolution (LTE) networks, it looks like the

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technology will be around for some time. Though Verizon Wireless was once the sole

LTE provider, now players from AT&T to Google-backed startup Clearwire are stepping

into the arena--which means several choices will soon exist for accessing the web while

on the go as quickly as you can in the office.

"The emergence of LTE speeds has revolutionized the mobile experience for small

businesses," says Walt Rivenbark, area vice president for mobility applications consulting

at AT&T Mobility. "Salespeople will benefit by being able to collaborate remotely with

their peers, easily review and share large files and help prevent service technicians from

making a second trip."

But you may not want to sign up for LTE immediately. The service has its problems:

Coverage is still spotty, and there can be brutally expensive usage caps. But, sooner

rather than later, the technology may be so robust that a single mobile data connection

will work in the office and on the road, allowing businesses to drop their pricey internet

service for a single cheap LTE deal.

Auto Zoom

Thanks to the likes of Ford, GM and Toyota, even small-business owners can stop

thinking company cars and start thinking company fleet. Auto manufacturers have started

offering low-cost business-oriented tracking tools and productivity features that mirror

the logistics packages of big-time fleets.

"Factory-embedded productivity tools help fleet owners present data like where vehicles

are, driver behavior and dispatch options. And they make that information accessible

from any computer," says Ed Pleet, product and business development manager for

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connected services at the Ford Motor Company. Ford's Crew Chief vehicle management

app starts at $425, plus $32 a month.

Just be careful: Though fleet management tools are helpful in figuring out which delivery

guy can handle that last-minute pickup, improper utilization could make your staff feel

like you're spying on them.

Talking Point

No, don't toss your keyboard quite yet. But do think of voice-control technology as an

always-at-the-ready assistant that can help out when you're driving, caring for patients or

knee-deep in hands-on work. "Voice-recognition tools also can be effective in workplaces

with document-intensive work flows," says Vlad Sejnoha, chief technology officer at

Burlington, Mass.-based Nuance Communications, which offers the Dragon Go! voice-

recognition search app. "For example, the federal government has mandated the use of

electronic medical record systems to capture and share patient information. But they tend

to be hard to use, template-oriented and a good option for voice recognition."

But be prepared to put some time into practicing with the technology before you unleash

it on your business. Those misdials that get served up by your car's Bluetooth? You don't

want the same thing happening with sensitive business docs or in client communications.

Author, Author

Plenty of people will feel itchy at the thought (the editors at Entrepreneur among them),

but there are machines out there that can write. Not just type or print, but actually turn

bits of data into full sentences.

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Durham, N.C.'s Automated Insights has put its writing program to work to create more

than 400 websites, 700 Twitter feeds and 400 mobile apps. The 13-person firm creates

every single grammatically correct word of this network by machine, and founder and

CEO Robbie Allen believes automated authoring has a home in almost any business. "We

originally started out focused on data-intensive content like sports," he says. "But now we

realize we can use the technology in anything from financial services to health care."

Gumby Screens

Imagine a PC screen that can bend around a column or along the curves of a car's interior.

Consumer-targeted tools like bendable iPads are still years away, but moderately flexible

screens, such as those from Norcross, Ga.-based NanoLumens, are already available. The

company's NanoFlex products can conform to curved surfaces in retail spaces, lobbies,

transportation hubs or hospitality venues.

"It's all about more screens," says Nick Colaneri, director of Arizona State University's

Flexible Display Center in Tempe. "Everywhere you look: at work, sides of cars--

anywhere."

Join the Club

Shopping clubs aren't just for buying vats of ketchup anymore. These days they're

targeting businesses by pushing essential tech products. Need a multiline phone setup, a

high-speed network printer or even a sophisticated networking system? Now you can

load up your cart during a trip to Sam's Club, Costco or BJ's Wholesale Club--and you

may never have to rely on a pricey business technology reseller again.

"As the consumer market slows, tech vendors look for ways to reconnect with customers,

and the small-business-oriented shopping club is a natural fit," says Stephen Baker, vice

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president of industry analysis for Port Washington, N.Y.-based market research firm the

NPD Group.

There are drawbacks to using a club as your go-to tech vendor: Items come and go, so

you may not find what you need, and most don't offer much on-the-floor customer

service. (Luckily, you can put your smartphone to work midaisle to search out product

reviews.) And, as it was with that backyard shed you bought at the club the week before,

you'll need to know how to install and service your tech purchases--or be ready to hire

someone who does.

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3.0 Future trends in logistics and supply chain management

Future of logistics and supply chain management. Future of national post offices and

postal service monopolies. DHL, FedEx and UPS global competition for just-in-time

courier services. Growth of air freight, alternative delivery services. Deregulation of

delivery services. Distribution and supplies of components, raw materials and finished

products. Package and parcel RFID tracking technologies and RFID controversy. Road,

rail, air and shipping comparative costs. Inflation and outsourcing. Overnight delivery

and same day delivery services -- growing demand. Pharmacies and garages lead way.

Integration of EPOS data. Planning security of supplies and risk management. Online

tracking and tracing of products. Integration into global supply chain,suppliers,

manufacturers, wholesalers, warehouses, retail. How technology reduce costs in

distribution.

Increasing the responsiveness

In today's just-in-time world the ability to respond to customers' requirements in ever-

shorter time-frames has become critical. Not only do customers want shorter lead times,

they are also looking for flexibility and increasingly customised solutions. In other

words, the supplier has to be able to meet the precise needs of customers in less time than

ever before. The key word in this changed environment is agility. Agility implies the

ability to move quickly and to meet customer demand sooner. In a fast-changing

marketplace agility is actually more important than long-term planning in its traditional

form. Because future demand patterns are uncertain, by definition this makes planning

more difficult and, in a sense, hazardous.

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 In the future, organisations must be much more demand-driven than forecast-driven. The

means of making this transition will be through the achievement of agility, not just within

the company but across the supply chain. Responsiveness also implies that the organisation

is close to the customer, hearing the voice of the market and quick to interpret the demand

signals it receives.

Agile manufacturing, JIT, mass customization, efficient consumer response, and quick

response are all terms referring to concepts that are intended to make the firm more

flexible and responsive to customer requirements and changes. Particularly with the

tremendous levels of competition in almost all avenues of business, firms (and their

supply chains) are looking today at ways to become more responsive to their customers.

To achieve greater levels of customer responsiveness, supply chains must identify the end

customers' needs, look at what the competition is doing and position the supply chain's

products and services to successfully compete, and then consider the impact of these

requirements on the supply chain participants and the intermediate products and services

they provide. Once these issues have been adequately addressed among the firms in the

supply chain, additional improvement in responsiveness comes from designing more

effective and faster product and service delivery systems as products are passed through

the supply chain and by continuously monitoring changes occurring the marketplace and

using this information to reposition the supply chain to stay competitive.

Saying these things is easy, but improving customer responsiveness requires firms to

reevaluate their supply chain relationships, to utilize business process reengineering, to

reposition warehouses, design new products and services, reduce new product design

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cycles, standardize processes and products, empower and train workers in multiple skills,

build customer feedback into daily operations, and, finally, link together all of the supply

chain participants' information and communication systems. So, very quickly, you can see

that achieving high levels of customer satisfaction through responsiveness requires

potentially significant changes not only in firm culture but also in the technical aspects of

providing products, services, and information throughout the supply chain. This remains

a significant and ongoing challenge for supply chain effectiveness. Today, Web-based

systems are proving to be ideal for connecting supply chain members efficiently. One

such tool is Formation Systems' Optiva 4.0, a Web-based product life cycle management

platform that provides business intelligence and collaboration from product concept

through introduction to improvement. It can be integrated within a supply chain to help

products get to market faster.

Expanding the supply chain

As markets for the supply chain grow, so too must the supply chain. Today, U.S. firms are

increasing their partnerships with foreign firms and building foreign production facilities

to accommodate their market expansion plans and increase their responsiveness to global

economic conditions and demand. The supply chain dynamic today is changing, and

companies are now working with firms located all over the globe to coordinate

purchasing, manufacturing, shipping, and distribution activities. While this global

expansion of the supply chain is occurring, firms are also trying to expand their control of

the supply chain to include second- and third-tier suppliers and customers. Thus supply

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chain expansion is occurring on two fronts: increasing the breadth of the supply chain to

include foreign manufacturing, office, and retail sites, along with foreign suppliers and

customers; and increasing the depth of the supply chain to include second- and third-tier

suppliers and customers.

With advances and improvements in communication technology, manufacturing, and

transportation, more and more companies around the globe have the capability to produce

and sell high-tech parts and products and move these quickly to world markets as demand

develops. Trade agreements such as the European Union, the World Trade Organization,

and the North American Free Trade Agreement have also facilitated the production and

movement of goods between countries; and this has enabled firms to easily expand their

supply bases and their markets. New software tools and "market makers" such as Perfect

Commerce and FreeMarkets Online, who bring buyers and suppliers together in e-

marketplace reverse auctions, have also helped to expand supply chains considerably and

easily, using the Internet. Over the past few years, a rapid expansion of the global

marketplace has occurred; and this pace should continue as new market enablers,

producers, customers, and transportation infrastructures come into the global picture.

Additionally, as firms become more comfortable and experienced with their supply chain

relationships with immediate suppliers and customers, there is a tendency to expand the

depth or span of the supply chain by creating relationships with second- and third-tier

suppliers and customers. This span expansion phenomenon is just now taking place in

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most industries and should continue to increase as the practice of supply chain

management matures. In a survey of firms already practicing supply chain management,

about one-third of the respondents stated that they practiced supply chain management

with second-tier suppliers, while somewhat fewer practiced supply chain management

with second-tier customers.

The greening of supply chain

Producing, packaging, moving, storing, repackaging, and delivering products to their

final destinations can pose a significant threat to the environment in terms of discarded

packaging materials, carbon monoxide emissions, noise, traffic congestion, and other

forms of industrial pollution. As the practice of supply chain management becomes more

widespread, firms and their supply chain partners will be working harder to reduce these

environmental problems. In fact, relationships between companies in an integrated supply

chain are much more conducive to taking a more proactive approach to reducing the

negative environmental consequences of producing, moving, and storing products as they

move through the supply chain.

Over time, consumer sentiment toward environmentally friendly processes has tended to

increase, making this topic one of concern for companies managing their supply chains.

As mentioned in one study, 75 percent of U.S. consumers say their purchasing decisions

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are impacted by a firm's environmental reputation. Additionally, companies are finding

that pollution control activities and waste reduction can reduce cost.

Added to this increasing concern and awareness among the general public for

environmentally friendly business processes is the growing cost of natural resources such

as wood products, oil, and natural gas. Strategies to successfully compete under these

conditions include using recyclable materials in products; using returnable and reusable

containers and pallets; using recyclable and reusable packaging materials; managing

returns along the supply chain efficiently; designing effective transportation,

warehousing, and break-bulk/repackaging strategies; and using environmental

management systems from initial producer to final consumer in the supply chain. The

benefits of these activities will include lower systemwide costs, fewer duplicate activities,

marketing advantages, less waste, and, ultimately, better customer satisfaction.

Reducing supply chain cost

Considering again the objectives of supply chain management, cost reduction is clearly

high on this list of priorities. Cost reduction can be achieved throughout the supply chain

by reducing waste as already described, by reducing purchasing costs, and by reducing

excess inventories and non-value-adding activities among the supply chain participants.

As supply chains become more mature, they tend to improve their performance in terms

of these cost reduction activities through use of continuous improvement efforts, better

supply chain communication, and a further integration of processes.

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As time passes, supply chain costs continue to decrease due to trial and error, increased

knowledge of the supply chain processes, use of technology to improve information flow

and communication, benchmarking other successful supply chains to copy what they are

doing well, and continued performance measurement and improvement efforts. The

purchasing function among supply chain participants will continue to be viewed as a

major strategic contributor to cost reduction through better supplier evaluation

techniques, value engineering and analysis in product design and production,

standardization and reduction of parts and materials, and through make-or-buy decisions.

Finally, the transportation and logistics function will also play a major role in cost

reduction along the supply chain through better design of the distribution networks and

more efficient use of third-party logistics service providers.

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4.0 Conclusion

Supply chain management (SCM) is the management of the flow of goods. It includes the

movement and storage of raw materials, work-in-process inventory, and finished goods

from point of origin to point of consumption. Interconnected or interlinked networks,

channels and node businesses are involved in the provision of products and services

required by end customers in a supply chain. Supply chain management has been defined

as the "design, planning, execution, control, and monitoring of supply chain activities

with the objective of creating net value, building a competitive infrastructure, leveraging

worldwide logistics, synchronizing supply with demand and measuring performance

globally."

Future trends in logistics and supply chain management

Increasing the responsiveness

Expanding the supply chain

The greening of supply chain

Reducing supply chain cost

Page 16 of 22
5.0Reference

1. www.casact.org/library

2. http://books.google.com.my/

3. en.wikipedia.org

4. text book

Page 17 of 22
6.0 Coursework

1. Four options for crafting strategy

If we make these two considerations the axes of a matrix, suggests four options for

crafting strategy.

What are the implications for the way in which supply chain strategy is approached in

different organisations? Here is a brief description of the four options:

Evolve. 'Strategy1 is not something that is formally undertaken at all. "Our

strategy is not to have a strategy' is a typical viewpoint. Operating decisions are taken in

relation to the needs of the moment, with financial goals as the main guiding principle.

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 Classical. While financial goals are again the main guiding principle, these are

achieved through a formal planning process. This is called 'classical1 because it is the

oldest and most influential option.

Accommodate. Here, decisions are back to the day-to-day mode, but financial

objectives are no longer the primary concern. Strategy is accommodated instead to the

realities of the focal firm and the markets in which it operates.

Systemic. This option for strategy setting sees no conflict between the ends and

means of realising business goals. While goal setting takes place across all major aspects

of the business (including human resources, marketing and manufacturing policies), these

are linked to the means by which they will be achieved in practice.

Logistics strategy usually demands systemic strategy setting between network partners,

who may have to coordinate order winners and qualifiers across different market

segments.

Page 19 of 22
2. The cost advantage

These two supporting drivers are the key determinants for increasing ROI and hence

shareholder value. An understanding of the financial ratios that affect these two drivers is

essential when formulating an organisation's supply chain strategy. While financial ratios

are based on historical information, and therefore have limitations, they have a number of

advantages for an organisation. They can be:

a benchmark for comparing one organisation with another;

used as a comparator for a particular industrial sector;

used to track past performance;

a motivator for setting performance targets;

Page 20 of 22
 an early warning indicator if the organisation's performance starts to decline.

This chapter tackles the issues concerning the visibility of costing information. This form

of analysis can be applied to benchmark an existing operation with a competitor, or it can

be used to assess the implications on ROI against potential trade-offs , such as comparing

an in-house operation with a third party outsourcing alternative.

The use of financial ratios in relation to time are key to monitoring working capital and

the 'cash to cash* cycle. Key time-related ratios include:

average inventory turnover: the number of times inventory is turned over in

relation to the cost of good sold;

average settlement period for debtors: the time taken for customers to pay their

invoices;

average settlement period for creditors: the time taken for an organisation to pay

its creditors.

Reductions in working capital will have a beneficial effect on an organisation's ROI. For

example, inventory reductions increase both profitability (reduced costs) and capital

(increased asset utilisation). Supply chain decisions have an impact on costs and assets,

so they affect both the drivers of ROL Understanding the trade-offs involved is key to

increasing value.

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