How does Thailand logistics manage its supply chain with precision?
Release time:
2023-07-20 15:27
1. the overall situation of enterprise supply chain management in Thailand
(I) companies are beginning to recognize the importance
In the Thai academic field, supply chain management generally refers to the optimization of the process of product planning, supplier selection, procurement, production, transportation and distribution until repurchase, in response to customer needs. Logistics is a part of supply chain management. Supply chain management involves most of the value chain of goods, it goes beyond industry and requires all participants to work closely together. The advantages of implementing supply chain management are to reduce procurement costs, shorten delivery time, reduce product inventory, and improve supplier loyalty and service levels.
The logistics management of Thai enterprises has gone through the following stages:
In the 1970 s (traditional logistics, the goal is to optimize the functions of each link): procurement-transportation, transshipment, warehousing-production-transportation, transshipment, warehousing-sales;
1980 s (horizontal cross logistics, the goal is to optimize orders): procurement-traditional logistics-production-traditional logistics-marketing-customers;
1990 s (value chain integration logistics, with the goal of optimizing the value chain): customer orders-research and development (subcontracting to suppliers)-procurement (subcontracting to suppliers)-production (subcontracting to suppliers)-distribution (subcontracting to suppliers)-recycling (subcontracting to suppliers)-customers;
21st century (global value chains integrate logistics with the goal of building and optimizing global networks).
According to the survey, 81% of Thai enterprises believe that the implementation of supply chain management will improve the competitiveness of enterprises. However, only more than 20% of enterprises have established effective supply chain management, because 95% of enterprises in Thailand are small and medium-sized enterprises. Large enterprises and large-scale medium-sized enterprises pay more attention to supply chain management, while small enterprises are limited by their own scale and strength. Limited basically did not establish supply chain management. According to statistics, 37-39% of large enterprises in Thailand do not yet have a strategic supply chain.
The total cost of supply chain management in Thailand generally accounts for 7% of the turnover of enterprises. The profit margin of enterprises that implement supply chain management is twice that of enterprises that do not implement supply chain management. Manufacturers of standard products with supply chain management have an average profit margin of 11%, while manufacturers of personalized products have an average profit margin of 9%.
Generally speaking, compared with the United States and other countries with strong service industries, Thai enterprises, mainly small and medium-sized enterprises, still have a process of accepting the new thing of supply chain management in practice.
The main practices of (II) supply chain management enterprises.
1. SCOR mode
Most of the enterprises that implement supply chain management in Thailand are large enterprises, which have their own complete supply chain and manage and integrate themselves. The supply chain generally uses the SCOR model. The SCOR model can be used to optimize a company's current supply chain. It goes beyond the boundaries of enterprises and departments, pays attention to the upstream and downstream partnership of the supply chain, and pays attention to the strategic connection and efficient operation of related enterprises.
2. Contract logistics mode
Thailand's contract logistics (Kontraktlogistik), or what the UK and the US call third-party logistics (3pl), is similar to Hong Kong's "Li & Fung model" from the perspective of the contract executor ". Simply put, contract logistics is a model in which manufacturers or retailers sign longer-term contracts with logistics companies to outsource the entire logistics process.
The contract logistics model is more popular in Thailand, especially in the supply chain management of export-oriented enterprises. According to incomplete statistics, there are more than 700 contract logistics enterprises in Thailand, including not only large Thai companies, but also small and medium-sized enterprises. These enterprises generally sign contracts with customers for 3-5 years, enter into the customer's product value chain more deeply from the beginning of the product planning stage, and create greater value for customers through their own professional services. Thailand's contract logistics companies are mainly active in the automotive, textile, food and frozen products and pharmaceutical industries. In 2008, the market size of enterprise supply chain management in Thailand was 81 billion billion euros, of which nearly 30% used the contract logistics model.
It is worth noting that the trend of outsourcing supply chain management of Thai enterprises has slowed down significantly. At its peak in 2005, many companies outsourced the entire supply chain. However, according to the report, there was no growth in the overall outsourcing of supply chain management in 2010, and some large enterprises took the supply chain management part back into the enterprise.
(III) countries have no support measures
Thailand is a typical market economy country, except for special circumstances (such as economic crisis), the government intervention in economic life is less. Specific to the supply chain management enterprise industry, Thailand has no direct specific support measures.
2. Suggestions on Developing Foreign Trade Enterprises of Supply Chain Management
As a global manufacturing country, we cannot always rely on the demographic dividend to lower labor costs. Moreover, the foreign trade environment facing our country is becoming increasingly unoptimistic, and the number of "double reverse" cases against China is increasing, and it is spreading from developed countries to developing countries. Our manufacturing enterprises should upgrade their industrial structure and strive to occupy the two high ends of the global value chain, namely R & D and sales. We should strive to develop and promote enterprise supply chain management and supply chain management enterprises. Competition in the 21st century may no longer be a mere competition between enterprises, but a competition between supply chains. The current trend is that with the deepening of globalization, enterprises are accelerating the pace of strategic alliances. We can consider:
(I) large enterprises should strive to optimize their own supply chain
Chinese companies are going out. We must see that with the rapid development of China's economy, our large enterprises have the strength to carry out global procurement. Our enterprises should cultivate a global vision, not just be satisfied with the order-production-export model. In the past, the processing mode of "two ends outside" was the appropriate mode under the conditions at that time, but it could only bring the lower part of the value chain, which could not meet the needs of industrial upgrading of foreign trade enterprises. Large enterprises should strengthen the research on supply chain links such as procurement, supplier selection, transportation and distribution, and even foreign seller selection on a global scale, and strive to integrate resources and build multinational enterprises. Postal, railway, aviation and other large-scale transportation enterprises with natural advantages should strive to rely on their own advantages, build their own supply chain management service departments or subsidiaries, and become excellent third-party logistics suppliers.
(II) small and medium-sized enterprises should strive to integrate into the global supply chain.
For small and medium-sized enterprises, limited by their own strength, the realistic approach should be to find the right market positioning and become a part of the supply chain of large local enterprises or foreign enterprises. Strive for long-term stable contracts, so as to ensure that the enterprise has the basis to plan for future development.
(III) should focus on sustainable development
Sustainable development has become a worldwide topic. Multinational enterprises in order to maintain their own image are very concerned about environmental protection, energy conservation and emission reduction. Whether to obtain a green certificate has become a necessary audit condition for multinational enterprises to choose suppliers. Our enterprises must pay attention to it and strive to become environment-friendly enterprises.
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