transformational logistics in emerging markets
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Transforming Economies Through Transports & Logistics CILT International Conference, Colombo, Sri Lanka – November 2012. TRANSFORMATIONAL LOGISTICS IN EMERGING MARKETS. Presentation by: - PowerPoint PPT PresentationTRANSCRIPT
TRANSFORMATIONAL LOGISTICS IN EMERGING
MARKETS
Transforming Economies Through Transports & Logistics
CILT International Conference, Colombo, Sri Lanka – November 2012
1
Presentation by:
Mangala P. B. YapaM.Sc. (Hons.) Eng. (Astrakhan, USSR), MBA (Sri J)C. Eng. FIE (SL), FCPM, MIMarEST
Managing Director/Chief Executive OfficerColombo Dockyard PLC
CILT International Conference, Colombo, Sri Lanka – November 2012
Overview
Emerging Markets Introduction Sri Lanka as an Emerging Market Some Terminology Characteristics Supply Chain in Emerging Markets
Case Review – Colombo Dockyard PLC
Transformational LogisticsQuestions 2
CILT International Conference, Colombo, Sri Lanka – November 2012
Emerging Markets In 1970s LEDCs - Less Economically Developed Countries
Term was introduced by World Bank Economists, Antonine van Agtmael in the 1980s
Found in countries considered to be in a “transitional phase between developing and developed status”
“..regions of the world that are experiencing rapid informationalization under conditions of limited or partial
industrialization” – Center for Knowledge Societies
Examples: Indonesia, Iran, some countries in Latin America, some countries in Southeast Asia, South Korea, Russia, most countries in Eastern Europe and some countries in the Middle East and parts of Africa
Emerging Markets are nations with social or business activity in the process of rapid growth and industrialization
Markets that provide greater opportunities, but with associated risks.
Sri Lanka, an Emerging Market 3
CILT International Conference, Colombo, Sri Lanka – November 2012
An Envious Geographical Positioning…
4
CILT International Conference, Colombo, Sri Lanka – November 2012
BRIC and related acronyms BRIC : Brazil, Russia, India & China BRICS : BRIC + South Africa BRICET : BRIC + Eastern Europe & Turkey BRICM : BRIC + Mexico BRICK : BRIC + South Korea
BEM :Big Emerging Markets:Brazil, China, Egypt, India, Indonesia, Mexico, Philippines, Poland, Russia, South Africa, South Korea and Turkey
5
CILT International Conference, Colombo, Sri Lanka – November 2012
Characteristics of Emerging Markets
Globalization and ICT development has made the
world flat. Thomas Friedman, July 2007
6
There really is no such thing as a free market. We have laws which regulate commerce. And the most successful economies in the world have become that way by protectionist policies. This includes the US, Japan, England, and South Korea
Ha-Joon Chang
CILT International Conference, Colombo, Sri Lanka – November 2012
Characteristics of Emerging Markets
Widely different markets: EMERGING: the BRIC & the Second Eleven DEVELOPING: those with high degree of social and economic hardship; lacking
the robustness to compete alone such as host of African, South American and Asian countries.
DEVASTATED: those wrecked by geological or metrological phenomena and requiring humanitarian aid and international support , such as Haiti, Niger, Pakistan, Chile
DISLOCATED: experiencing or recovering from warfare such as Iraq, or Afghanistan
TRANSITIONAL: those moving from centrally planned to open markets like Russia, Eastern Europe and the Baltics in the 1990s
One Size does not fit all! 7
Contd.
CILT International Conference, Colombo, Sri Lanka – November 2012
Characteristics of Emerging Markets
High level of informal economic activity.
Hybrid and asymmetrical supply chains.
Significant regional, urban and rural differences.
Variable levels of hard and soft infrastructure connectivity.
Inconsistent and insufficient levels of sanitation, energy and market access.
Extremes of affluence and poverty; literacy and numeracy and, cultural norms on gender and social mobility.
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Contd.
CILT International Conference, Colombo, Sri Lanka – November 2012
Supply Chains in Emerging Markets
Diversity & Complexity results in asymmetrical Supply Chains linking traditional, low tech and highly fragmented supply bases.
Globalization pushes the enterprises to integrate into the global markets
Logistics & Supply Chain thinking is the key challenge in emerging markets.
9
CILT International Conference, Colombo, Sri Lanka – November 2012
Supply Chains in Emerging Markets
Mainstream logistics and supply chain thinking will not work, as is.
Adapting to the unique conditions in Emerging Markets is inevitable.
Hybrid Techniques that uses available resources and able to be responsive to local context & needs.
The approach – Transformational Logistics
A case review from Sri Lanka10
Contd.
Ship Repair & Ship Building Industry in Sri Lanka
11CILT International Conference, Colombo, Sri Lanka – November 2012
Seatrade Sri Lanka Ports, Trade & Logistics
S-1
Noboru Ueda Chairman & President, ClassNK
The Importance of Emerging Maritime Hubs in the Indian OceanAdvancing the Continued Growth and Development of the Maritime Industry
S-2
10
20
3040
50
6070
80
90
100
110
1930 1940 1950 1960 1970 1980 1990 2000 2010
Mil. gt
JapanEurope
KoreaChinaOther
Shipbuilding’s move from West to East
Source: Shipbuilders Association of Japan
Construction Volumes (GT) by Country/Region 1926-2011
S-3
Shipbuilding’s move from West to East
EuropeanShipbuilding Asian
Shipbuilding
S-3
S-4
Shipping’s move from West to East
Country No. of Ships Mil. Gross TonsJapan 8,730 150.9 Greece 4,664 148.0Germany 4,562 97.8China P.R. 6,584 96.8United States 5,065 47.8South Korea 2,785 47.1Norway 2,724 46.8Italy 1,970 34.2Singapore 3,560 32.1Denmark 1,704 31.6
Owned Fleet by Nationality
Source: Clarksons, May 2012
S-5
Shipping’s move from West to East
Europe:Shipowning
Asia:Shipowning & Shipbuilding
S-5
S-6
The Rise of Singapore
S-7
The Rise of Dubai and the Middle East
S-8
EuropeAsia
The Rise of Sri Lanka
Middle East
SE Asia
Sri Lanka & India
The New Map of the Maritime World
S-8
S-10
The Rise of Sri Lanka
S-9Source: Royal Society: Interface
World Shipping Routes by Traffic Density
The Rise of Sri Lanka
S-10
Thank You For Your Attention!
S-8
EuropeAsia
Middle East
SE Asia
Sri Lanka & India
S-11
CILT International Conference, Colombo, Sri Lanka – November 2012
Thoughts on Sri Lanka…
“With growing populations, a rapidly surging economy, a hunger for natural resources and growing demand for new ports and other infrastructure, there is little doubt that it is the Indian subcontinent that will drive the world economy in future.
And, at the heart of this new maritime region, and at the heart of world trade, is Sri Lanka. I believe that Sri Lanka could easily emerge as the new great maritime nation - joining the ranks of with Singapore and the U.A.E. as a leader in the maritime world”.
Noburu Ueda – Chairman and President of Class NK, Seatrade Sri Lanka 2012 Conference, Colombo, June 2012
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CILT International Conference, Colombo, Sri Lanka – November 2012
Diversity & Complexity …examples from CDPLC
SHIPREPAIRS SHIPBUILDING
HEAVY ENGINEERINGOFFSHORE ENGINEERING
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CILT International Conference, Colombo, Sri Lanka – November 2012
Growth
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CILT International Conference, Colombo, Sri Lanka – November 2012
Shiprepairs
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CILT International Conference, Colombo, Sri Lanka – November 2012
Index of global shipping, Baltic Dry falls to a 25-year-low!
Collapse in dry bulk shipping rates unprecedented in its severityThe recent (2012) months' collapse in dry bulk shipping rates has been unprecedented in its severity, the head of the body that organizes the key shipping market said yesterday, as a key market index hit its lowest level since 2008.
The Baltic Dry Index has fallen nearly 65% since the beginning of 2012. This is one of the few leading economic indicators that is not subject to government or corporate manipulation giving a true economic barometer of what is to come. The index is a measure of global shipping rates mainly composed of raw materials used for other products.
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CILT International Conference, Colombo, Sri Lanka – November 2012
Diversity & Complexity …examples from CDPLC
2007 2008 2009 2010 2011 2012-E -
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
Major SR Revenue Vessel Type wise - US$ Mn
Tankers Dredegers OSVs Passengers Reserch LPGTugs Bulk Car Genral Cargo Container car Barge Naval
28
CILT International Conference, Colombo, Sri Lanka – November 2012
Shipbuilding
SingaporeAHTSV x(2),MPSV x (2)
IndiaAHTS V x(2)MPSV x (2)
Lakshadveep Islands Passenger V x(2)
Maldives 35m, 42 m, 24 m Vessels &
Other Crafts x (13)
Dammam, Saudi Arabia Crew Boats x(2)
Nigeria, Port Harcourt Crew Boats x(2)
Jeddah, Saudi Arabia Tug Boats x(3)
JakarthaMPSV
BrazilMPSV x(1)
19752005 2006 2007 2008 2009 2010
2011
CILT International Conference, Colombo, Sri Lanka – November 2012
Materials & Stocks
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CILT International Conference, Colombo, Sri Lanka – November 2012
Materials & Stocks … STOCKS TURNOVER DAYS02 03 04 05 06
07
08
09 10 11 12
0
25
50
75
100
125
150
175
10079
29 36
63.6976831091181
95.601724137931
107.448192771084
136
8074.2630878438332
31.2987003230411
Location C (MAIN) Stores Stock
Sto
ck T
urno
ver D
ays
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CILT International Conference, Colombo, Sri Lanka – November 2012
Supply Chains in Emerging Markets
Diversity & Complexity results in asymmetrical Supply Chains linking traditional, low tech and highly fragmented supply bases.
Globalization pushes the enterprises to integrate into the global markets
Logistics & Supply Chain thinking is the key challenge in emerging markets.
32
CILT International Conference, Colombo, Sri Lanka – November 2012
Supply Chains in Emerging Markets
Mainstream logistics and supply chain thinking will not work, as is.
Adapting to the unique conditions in Emerging Markets is inevitable.
Hybrid Techniques that uses available resources and able to be responsive to local context & needs.
The approach – Transformational Logistics
33
Contd.
CILT International Conference, Colombo, Sri Lanka – November 2012
Transformational Logistics is;
A framework for research into logistics and supply chain thinking and practices that are relevant to Emerging Markets.
A forum to build better understanding and common purpose between the formal and the informal elements of the economy as a whole.
A means to embed a viable, inclusive and sustainable market as an economy responds to a natural disaster, the devastation of warfare or, political and economic dislocation.
and Transformational Logistics can be:
An enabler to grow logistics skills standards, capacity and delivery.
A facilitator to promote and share adaptable, affordable and accessible practice in all end-to-end flows (physical; information, cash and skills) relevant to effective and efficient operations in these markets.
A catalyst for mature markets and established companies to access new markets and learn from them.
Transformational Logistics
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Thank You.
3535CILT International Conference, Colombo, Sri Lanka – November 2012