Firm's far-reaching ambitions

PUBLISHED : Friday, 15 August, 2008, 12:00am
UPDATED : Friday, 15 August, 2008, 12:00am

Most companies are prone to exaggeration in detailing their accomplishments and scope of activities, but it is hard to quibble with Schneider Electric's claims to have a truly global presence. Involved in everything from power systems and infrastructure to data centres and industrial supplies, the French-headquartered enterprise is either sourcing or manufacturing in close to 100 countries and, by the latest count, has customers in substantially more.

What that means is a perpetual movement of parts, products and raw materials between suppliers, factories, distribution centres and end users. Efficient global logistics arrangements are crucial to the organisation's success, and responsibility for that lies with an eight-person strategic transport team, three of whom are based in Hong Kong overseeing a region from India to New Zealand.

'All the connections create a network like a spider's web,' said Sum Wai-yew, international transportation project manager for Schneider Electric Asia-Pacific. 'My job is to look at operations in different locations with regional and country managers and to co-ordinate the movements globally. We must look at the totality of factors and [always remember] that transport is one of the major costs in the supply chain.'

He said the basic global network was set up in collaboration with three counterparts in charge respectively of Europe, North America and 'the rest of the world'. Together, they chose six logistics providers able to offer worldwide sea and air services and finalised contract terms and conditions for each key sector.

'We have very stringent KPIs [key performance indicators] and want visibility by being able to track and trace the cargo at all times,' Mr Sum said. 'Reliability is very important, so we have to think about the full supply chain and make sure the network is optimised.'

This requires close monitoring of the performance of carriers, sub-contractors and distribution centres. To this end, there are quarterly reviews, operational reports and regular updates from the company's own country managers and local transport teams. In addition, a system of 'control towers' has been set up. These are effectively liaison points or platforms with the main service providers, enabling quick decisions on whether to expedite, divert or delay individual shipments.

The key to doing the job well, Mr Sum feels, is not to get too caught up in the normal day-to-day operations and to be fully aware of the options at one's disposal. That makes it possible to act as an adviser on a strategic basis and to spot opportunities for simplifying the network, trimming costs and consolidating flows.

For this, it is vital to understand the ins and outs of seasonal capacity, off-peak schedules, international routeings, space guarantees with carriers and customs regulations. Such information allows one to anticipate problems, drive a harder bargain in negotiations and set higher customer service standards.

'We need our feet on the ground, but an eye on the changes in the industry,' Mr Sum said. 'We have to be very proactive in giving advice to [people in] the supply chain on how to prepare for different situations.'

He noted that one of the more challenging aspects of the job was finding an acceptable balance between competing priorities. Suppliers, factories, carriers and clients all tended to have their own views on how things should work. Therefore, ensuring on-time deliveries and seamless movements around the globe also required a clear understanding of the mechanics of international trade and a realistic sense of when to compromise.

'Decisions are never isolated,' Mr Sum said. 'It is always consensus driven and every single function in the company plays a role. Our team provides information on the strengths of service providers and will validate them before any nomination is agreed.'

Seeing the way global sourcing patterns were evolving, he predicted that more multinationals would see the value in having their own strategic transport teams. Consequently, they would be on the lookout for senior candidates with at least 10 years' experience in the logistics sector. Ideally, this should combine time with a carrier or service provider and a client side to give a thorough knowledge of the jargon, routeing, pricing parameters and general tricks of the trade.

'There will be more companies creating this function and centralising it at their strategic locations and international transportation hubs,' Mr Sum said.




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