1.0Introduction

Content

1.0 Introduction -----------------------------------------------------------------------------------------------21.1Operation BY Hock Cheong Transportation-------------------------------------------------------2 1.2 SWOT Analysis of Hock Cheong---------------------------------------------------------------------3 1.3 Challenges Faced By Hock Cheong Transportation in Its Operation------------------------3 1.3.1 Long Lead Time due to Unavoidable Delay----------------------------------------------------4 1.3.2 Fluctuation of Petrol- Crude Oil Price----------------------------------------------------------4 1.3.3 Exchange Rate-------------------------------------------------------------------------------------4-52.0 Becoming A Truly Global Company in Providing Total Supply Chain Solution-----------5 2.1 Total Supply Chain Solution------------------------------------------------------------------------5-63.0Technologies That Assist Hock Cheong in Realising Its Potential-----------------------------7 3.1 E-commerce--------------------------------------------------------------------------------------------7-8 3.2 Global Positioning System (GRS) System--------------------------------------------------------8-9 3.3 Automated Warehousing and Material Handling System--------------------------------------9 3.4 Online Tracking-----------------------------------------------------------------------------------------94.0 Conclusion---------------------------------------------------------------------------------------------9-10

5.0 Reference----------------------------------------------------------------------------------------------11-12

1.0IntroductionHock Cheong Transportation Company started it operation back in 1945. The company started it operation by delivering and distributing newspaper, trailers and movie films in Malaya and Singapore (Hock Cheong, 2014). Since its establishment, Hock Cheong Transportation has grown dramatically and strongly by providing one-stop integrated logistics services to business in Peninsula of Malaysia, Sabah and Sarawak, Singapore and Brunei. The one-stop integrated logistics services provided includes door-to-door and project cargo deliveries; warehousing and distribution; land, sea and air transportation delivery and other logistic related value-added services (Hock Cheong, 2014). Growing of Hock Cheong Transportation has made the management to organize its business into different subsidiaries such as Hock Cheong Logistics Pte Ltd and Hock Cheong Forwarding Pte Ltd (Figure 1). It makes the management of business easier and efficient and effective because different employees and subsidiaries in charge of different business.

Figure 1: Affiliate Companies of Hock Cheong Group

Hock Cheong Forwarding Pte LtdHock Cheong today Pte LtdHock Cheong Logistics Pte LtdHock Cheong Transport Co. (S) Pte LtdHock Cheong Logistics Sdn BhdHock Cheong Trading Sdn BhdHock Cheong Transport Co. (1974) Sdn Bhd

Source: Hock Cheong (2014)

Source: Hock Cheong (2014)

1.1Operation BY Hock Cheong TransportationHock Cheong Transpiration is an effective company whereby its businesses in three different countries: Malaysia, Singapore and Brunei is facilitates its operation by its own network branch in each countries. In the late 1990s, Hock Cheong Transportation provides additional services to its existing and potential clients in ASEAN regions such as warehousing, distribution, and freight forwarding. Moreover, Hock Cheong also partners with other logistics companies in other ASEAN regions as well. Although its 69 years in pioneering logistic services, Hock Cheong Transportation also faces intension competition from local and foreign competitors, namely DHL, Li and Fung Logistics and Tiong Nam Logistics and others. Moreover, there are also challenges faced by Hock Cheong in its operation.

1.2SWOT Analysis of Hock CheongDespite Hock Chong business efficiency and effectiveness in operation for almost 7 decades in business. There are weaknesses in Hock Cheongs business and opportunities and threats. Therefore, the SWOT analysis provides a deep understanding of Hock CheongTransportation. By fully utilizes strengths and opportunities to overcome weaknesses and minimize threats, Hock Cheong is in a big step in becoming a truly global company and practicing total supply chain management to its clients.

Table 1: SWOT Analysis of Hock CheongStrengthsWeaknesses

1. Has been in operation for 69 years.2. Has its own strategic partners in ASEAN regions

1 Family owned business.

2 Main market: Malaysia, Singapore and Brunei

OpportunitiesThreats

1. Incentive by Malaysian Government.2. ASEAN Intra-trade3. Dramatic expansion of external trade in ASEAN regions such as China, Singapore and Vietnam

1 Fluctuation of the petrol price

2 Compete directly with international logistics companies3.Natural disaster

1.3Challenges Faced By Hock Cheong Transportation in Its OperationThere are many challenges faces by logistic providers today (Logistics Quarterly, 2014). However, there are only few prominent challenges faced by Hock Cheong will be discussed in this section. (1) long lead time due to unavoidable delay, (2) fluctuation of petrol- crude price oil, (3) exchange rate

1.3.1Long Lead Time due to Unavoidable DelayUnavoidable delay from controlled and uncontrolled circumstances such as natural disaster and uncertainty in transportation will lead to long lead time and thus incur high operation cost to the company. Lead time is crucial for logistic provider as shorter lead time will affect customers satisfaction. According to Luck (2006), lead time is crucial in determining consumers satisfaction.However, delivery of goods to other companies in other countries out of Malaysia might take longer time. This is because of different procedures at custom check point and documents required for submission are different as well. Sometime, the address given by the customers is incorrect and it will also lead to long lead time.

1.3.2Fluctuation of Petrol- Crude Oil PriceFigure 2: Crude Oil Price

Source: InfoMine.com (2014)Figure 2 shows the fluctuation of crude oil and it is crucial for logistic provider as it will impact the profitability of the Company. Therefore, increase of crude oil price is one of the challenges for Hock Cheong Transportation. Increase of operation expenses means increase cost to do business. Eventually the increase cost will be transfer to the customers. Some of the customers might change its logistic service providers when it can provide same service at cheaper price.

1.3.3Exchange RatePolitical, economic, social and technological factors that happen in the country will affect the rate of currency. Therefore, fluctuation of currency is also one of the challenges for Hock Cheong Operation as the company involves cross-boundary delivery to Singapore and Brunei. According to Investopedia (2014), weaker domestic currency stimulates exports and makes imports more expensive or otherwise.Therefore, logistic providers need to adjust their rates in order to ensure that they remain economically viable. The exchange rate of the country might also impact Hock Cheongs performance and growth.

2.0Becoming A Truly Global Company in Providing Total Supply Chain SolutionAccording to Sum et al. (2001), the potential for growth for logistics companies is very promising in Asia Pacific region. This is due to the expansion of external trade in countries such as China, Singapore and Vietnam. For example, Singapore; strade in February 2014 increased 8% compared to January, and it is boosted by higher exports of pharmaceuticals and petrochemicals (Trading Economics, 2014). Therefore, Hock Cheong can grape the opportunity and compete directly with other local and international competitors such as DHL and Tiong Nam Logistics by adopting total supply chain management. Objective of adopting total supply chain management is expected to help Hock Cheong to explore international market, becoming more effective and efficient in its operation and reducing operation cost.

Moreover, the total supply chain solution has also been provided by local and international players in the logistics industry. Example, Fedex, ODW Logistics, Spincer Boy Transportation, Shin Shin Japan and Transways Logistics Sydney. It shows that total supply chain solution is a best practice to gain more market share and become a truly global company. In addition, Hock Cheong needs to also releasing its business based on other SMART objectives as well. This will help Hock Cheong to growth stronger and becoming a truly global company. The example of SMART objectives apart from adopting total supply chain management is shown in Table 2 below.Table 2: Objectives That Might Be Set by Hock Cheong transportation1. Fully providing total supply chain solution to its clients by end of 2014.2. Achieve ISO 14000 environmental management in 2016.3. Maximizes the use of technology in business and increase revenue by 10% at the end of 2014.4. Expend international market share by 5% in 2015.5. Making Hock Cheong a preferred brand by business and individual clients.

2.1Total Supply Chain SolutionAccording to Levi et al. (2008), supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirement.

The possible total supply chain solution by Hock Cheong is shown in Figure 3. Hock Cheong Transportation can provide total supply chain solution to its clients. Hock Cheong has already an one-stop integrated logistics services providers whereby it is specialize in door to door and project deliveries, land transportation with air freight and sea services, warehousing, distribution, customs documentation and port clearance, freight forwarding and total logistics. Moreover Hock Cheong can other value added services which is useful in realizing its potential to become international player as well. Example of value added services that can be provided by Hock Cheong. 1. Supply of ISPM-15 compliant pallets2. Fumigation services3. Project cargo crating4. Stuffing &unstuffing of containers5. Haulage services6. Port-to-port bonded transshipment7. Heavy lift & special transportation8. Escort traffic services9. Cargo consolidation10. Short term warehousing services11. Shrink wrapping & packing12. Labelling& marking13. Insertion of warranty card & manualsFigure 3: Possible Total Supply Chain Solution by Hock Cheong

Overseas WarehousingDistribution OfficeImport FreightCustomsWarehousing

Receiving product Consolidation (cross docking) Store packing Labeling, scanning & packing Internet availability Purchase order management Purchase order follow up Liaise with suppliers &organize transport Full domestic coverage Internet tracking Management of Ocean & Air transportation Preparation of documents Full Internet tracking system

Landed costs Electronic entry of imports Pre clearance Draw back processing Technical valuation and classification Dynamic cartage and delivery solution Bonded warehousing Storage Pick & Pack Delivery to end user Internet tracking

A lot of the total supply chain solution that can be provided by Hock Cheong requires the help of technology. Therefore, Hock Cheong needs to invest heavily in technology to help the company to realiseits potential.

3.0Technologies That Assist Hock Cheong in Realising Its PotentialAccording to ODW Logistic (2014), Technology is able to manage customers distribution effectively and correctly and it helps to solve supply chain problems.At the same time, Marchet et al. (2009) mentioned that Information and Communication Technology has several tools that helps logistic companies in realising total supply chain solution to its clients.Cheetah (2014) also stated that technology helps logistics companies prosper. Therefore, Hock Cheong can invest heavily in technologies in order to realise its potential to becoming global logistics company.

3.1E-commerceHock Cheong needs to invest in E-commerce in order to penetrate more market share. Giant logistics service provider such as Fedex is also adopting e-commerce in its business. E-commerce is the trend of doing business today. It brings a lot of benefits to both companies and consumers. The benefits of adopting E-commerce will be enjoyed by Hock Cheong are as following. Tseng et al. (2005) stated that a successful E-commerce is determined by the optimal logistic operation as well. A. Expend the market from regional to globalB. Promote companys efficiency and competitivenessC. Number of single trip/ delivery is reducedD. Reduces warehouse and the stock costIn terms of the benefits to customer, customer can access to logistics services at anytime, anywhere without physically appear at the logistics service providers company. Moreover, it helps customer to save time and money as well. The figure 3 below shows the differences between traditional trade and e-commerce.

Source: Tseng et al. (2005)

3.2Global Positioning System (GRS) SystemTsai (2005) stated that GPS system enable tracking physical goods at real-time greatly improves logistics performance, cost efficiency and customer satisfaction. Moreover, Malladi and Agrawal (2002) mentioned -that GPS system is a space-based radio positioning system that provide 24 hour X 365 days, 3 dimensional position, velocity and time information to suitably equipped users anywhere on the surface of the Earth. Other benefits of applying GPS by Hock Cheong (1) increase security of company asset, (2) allows consignments to be tracked faster and easily, (3) improve drives safety and enhance productivity. In order to be a global players in providing total supply chain solution to client, GPS will give extra confidence to its clients and help to minimize operating cost to Hock Cheong. Other giant players such as DHL, FedEx is applying GPS in their vehicles as well.

3.3Automated Warehousing and Material Handling SystemIn order to achieve objective its potential, Hock Cheong needs to also invest the automated warehousing and material handling system in its warehouse. The example of automated warehousing and material handling system are conveyor system and stacker cranes. Those effective material handling equipment is useful in transportation of bulky and heavy materials and reducing picking error (Industrial Storagemhs, 2014) and thus reduce time of handling materials and increase productivity. Heavy investment need to be made by Hock Cheong, however, Hock Cheong it will help Hock Cheong to increase its revenue and customer base in long-run.

3.4Online TrackingReviewing Hock Cheong Transportations website found that Hock Cheong does not has any online tracking system in the website. However, many other local and international logistics providers have already provide online tracking conveniences to their customers. Therefore, Hock Cheong needs to benchmarking other business approaches for better growth and transportation of its business. Online tracking allows customers to easily trace the status of their shipment using the Internet.

4.0 ConclusionAfter reviewing Hock Cheong operation, Hock Cheong needs to adopting benchmarking strategy in order to compete with local and international. Moreover, Hock Cheong Transportation needs to invest heavily in technologies and applying total supply chain solution to its clients and at the same time aligned with other objectives in order to become a truly global company. It is crucial as Hock Cheong needs to enhance its existing performance to create its own competitive advantage and its own customer base. It is a win win situation for both Hock Cheong and customers. With those investment and approaches, Hock Cheong is able to deliver better value and helping its customer to reduce costs. Delivering value and reducing costs will be shown in the Table 4 below. The tangible and intangible benefits which will be enjoyed by Hock Cheong is shown in Table 5 below.Table 4: Delivering Value and Reducing Costs1. Reducing clients acquisition cost2. Reducing clients transactional costs 3. Reducing clients down time through improve deliveries4. Reducing clients inventory costs and capital invested5. Reducing clients transport and logistics costs

Table 5: Possible Tangible and Intangible Benefits TangibleIntangible

1. Reducing operating cost2. Increase profit3. Enhance companys reputation4. Increasemarket shares5. Explore global market1. Save time2. Better customers experience and satisfaction3. Better relationship with clients4. Increase productivity

5.0 References1. Cheetah (2014) Technology helps logistics companies prosper. [online]Available at: http://www.cheetah.com/news/technology-helps-logistics-companies-prosper(Accessed 17 March 2014)

2. InfoMine.com (2014) Historical Crude Oil Prices and Price Chart. [online]Available at: http://www.infomine.com/investment/metal-prices/crude-oil/all/(Accessed 17 March 2014)

3. Investopedia (2014) Interesting Facts About Imports and Exports. [online]Available at: http://www.investopedia.com/articles/investing/100813/interesting-facts-about-imports-and-exports.asp(Accessed 17 March 2014)

4. Hock Cheong (2014) About Us. [online]Available at: http://www.hockcheong.com.sg/about(Accessed 17 March 2014)5. Induatrial Storagehms (2014) Advantages of using material handling equipment for industry storage. [online]Available at: http://industrialstoragemhs.blogspot.com/2011/02/advantages-of-using-material-handling.html(23 March 2014)

6. Levi, D.S., Kaminsky, P. and Levi, E.S. (2008) Designing and Managing the Supply Chain. Concepts, Strategies, and Case Studies. 3rd edn. The United States: McGraw Hill.7. Logistics Quaerterly (2014) The impact of exchange rate on supply chain management. [online]Available at: www.logisticsquarterly.com/issues/10-1/article3.html(Accessed 17 March 2014)

8. Marchet, G., Perego, A. and Perotti, S. (2009) An exploratory study of ICT adoption in the Italian freight transportation industry, International Journal of Physical Distribution and Logistics Management, 39(9), pp. 785-812.

9. ODW Logistics (2014) Technology. [online]Available at: http://www.odwlogistics.com/technology/index.htm(Accessed 17 March 2014)

10. Sum, C.C. and Teo, C.B. (2001) Strategic Logistics Management in Singapore, International Journal of Operations and Production Management, 21(9), pp. 1239-1260.

11. Trading Economics (2014) Singapore Trade Surplus Increases in February. [online]Available at: http://www.tradingeconomics.com/singapore/balance-of-trade(Accessed 17 March 2014)

12. Tsai M-C (2006) Constructing a logistics tracking system for preventing smuggling risk of transit containers, Transportation Research Part A, 20(2006_, pp. 526-536.

13. Tseng, Y.Y, Yue, W.L, and Taylor, M. (2005) the role of transportation in logistics chain, Proceedings of the Eastern Asia Society for Transportation Studies, 5 pp. 1657-1672.

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