issue 12

Your Pooling Solutions Partner

Bringing Yihaodian and Walch TogetherIncreasing Indomaret '’s Operational EfficiencyEnhancing Wall '’s Supply Chain in ChinaLoscam Wins FMCG Solution Award

Pallet Pooling Solutions

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This issue of Across Asia highlights the commitment we have towards our customers, devising highly customised solutions to enhance supply chains and add value to operations.

In Thailand, we have all been impacted by the prolonged political crisis, which has dampened consumer confidence, and lowered growth and spending. Our retail and other clients have been hit hard, with a knock on impact to our own business volumes. We have been working with our customers wherever possible on solutions to help cut costs and improve efficiencies to partly mitigate the effects of the situation.

Elsewhere in the region, we continue to expand as we promote the benefits of adopting pallet pooling. In Vietnam, we sponsored the country’s first pallet pooling workshop in collaboration with Vietnam Supply Chain. The level of interest in equipment pooling was very high, and we are now working with our clients towards the implementation of such solutions.

For Indonesia, we provide a feature on how Loscam adds value through pallet pooling to Indomaret’s operations. This development mutually enhances our businesses as Loscam provides a superior product, system and strong relationship with our customers, who are also Indomaret’s trade partners.

In China, Loscam continues to play an active role in promoting pallet pooling. On 9 May, we sponsored the China Chain Store & Franchise Association (CCFA) pallet pooling conference. Additionally, we have been working with large scale customers, such as Wall’s (Unilever), Walch and Yihaodian, to boost supply chain efficiencies by lowering lead times, reducing cost and minimizing product damage.

From new adoptees of pallet pooling to long-time customers, Loscam aims to be a trusted business partner. We customise solutions that best suit each client’s unique needs against the backdrop of their country’s logistics landscape.

Sirin Limpaitoon

Thailand Tel (66) 35 276 888 Fax (66) 35 276 899

China Tel (86) 755 2680 8820 Fax (86) 755 2680 8791

Hong Kong Tel (852) 2419 2692 Fax (852) 2521 5205

Indonesia Tel (62) 21 883 72050 Fax (62) 21 883 72051

Malaysia Tel (60) 3 5511 7066 Fax (60) 3 5511 7062

Philippines Tel (63) 2842 7878 Fax (63) 2850 0905

Singapore Tel (65) 6863 0316 Fax (65) 6863 0312

Vietnam Tel (84) 650 3 769 199 Fax (84) 650 3 769 203

For general enquiries, contact Jamie Lo,tel +852 6292 1613, jamie.lo@loscam.com.

If you wish to receive the Loscam Across Asia magazine by email please contact editor@loscam.com

22 Your Pooling Solutions Partner

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kContentsCustomer UpdatePallet Pooling Incentive BringYihaodian and Walch Together

Indonesian Minimart Leader Adopts Pooling Solutions

Sweet Success: Enhancing Wall’s Supply Chain in China

Special FeatureNEXT PRACTICE born from Best Practice

Loscam NewsLeadership Training in Thailand

Loscam Holds First Pallet Pooling Workshop in Vietnam

Loscam Pallet Pooling System Awards “Best FMCG SCM Solution” in China

Loscam Participation in China ECR

Typhoon Yolanda Relief Efforts

Loscam Addresses China Pallet Pooling Promotion Conference

Loscam Across Asia is printed on The ForestStewardship Council (FSC) certified paper

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From the MD 's desk

Mr. Sirin Limpaitoon, Managing Director - Asia

Utilizing Loscam’s comprehensive pallet pooling solutions and systems, Whealthfields Lohmann（Guangzhou）Co., Ltd. (Walch), China’s well known cleaning compounds and supplies company, has successfully launched a Palletised delivery system with Yihaodian, China's leading e-commerce firm that provides customers with a one-stop shopping platform for essential daily goods.

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Pallet Pooling Incentive Brings Yihaodian and Walch Together

Your Pooling Solutions Partner

Mr. Hart Guo, Warehouse Operation Director of YHD (third from left), Mr. Jiang, Warehouse Manager of Walch (first from left)

Leveraging a Palletised delivery incentive scheme launched by Loscam last year, the Walch-Yihaodian pallet transfer model makes the free physical flow of pallets along the supply chain possible. As early adopters of this practice, Walch and Yihaodian have created a milestone in the pallet pooling capacity of the country’s massive retail industry.

In this system, trucks do not need to be manually unloaded during the pallet transfer stage from the suppliers account to the receivers account. It enables the transfer of the pallets’ contractual rights along the supply chain. Also, as the transfer model is compatible with overseas retail distribution systems, it helps to save even more time and drive lower costs for all participants in the supply chain.

“Yihaodian and Walch have joined their respective strengths to implement a ground-breaking initiative in pallet pooling in China that proves to be more efficient than non-palletized or exchange systems,” said Mr. Patrick Chan, Loscam Greater China Sales Director. “We can quickly see how it greatly enhances the efficiency of receiving goods, as well as removing transportation costs for empty pallet return -- with clear lines for pallet responsibility.”

Mr. Chan added, “To encourage more participation from industry players for the pallet transfer system, I’d like to urge more retail industry players to join us in this Palletised delivery initiative and reap the benefits that the Walch-Yihaodian project currently enjoys.”

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Last year was crucial year for Loscam and a lot of our customers. The anaemic and uneven recovery after the financial crisis drove us to make sure our processes and operations were as close to best practice across all aspects of our business. As a result we feel we are in much better shape to take on the challenges of 2014.

Next Practice is a concept we are maturating with one of our major customers in 2014. Whilst we are always focused on innovating and ensuring our customers have access to the very best and latest packaging solutions, the notion of Next Practice conceptualizes the next significant evolution of supply chains, and how we can respond with products and services that enable our customers, and their customers, to transform their businesses.

• Concepts such as de-coupled packaging are being driven by the trend toward more SKU’s in smaller pack sizes. How can our manufacturing customers produce and consolidate finished goods as one process and then delay the more complex and costly packaging function into a separate workflow? This presents a whole range of opportunities in intermediate containers, secondary packaging reductions and so on.

• Tesco pioneered shelf ready packaging as best practice in driving OSA as well as lowering replenishment costs. They are also driving the use of shelf pusher systems that bring forward packs to customers as one is removed. We are now seeing them explore digital based systems that monitor through imaging stock on shelf to maximize shelf availability. How will this impact the type of packaging used through the supply chain and is shelf ready a thing of the past?

• The rise of sustainability issues and the need to drive waste (packaging) out of supply chains is becoming a real factor in global companies. Whilst they have achieved significant reductions in packaging and reduced their land fill impacts (best practice) their desire to rid their supply chains of corrugated packaging and the effect that may have on the use of returnable packaging is driving Next Practice thinking.

• As retailers seek stronger engagement with their shoppers in fresh food and produce (a key source of competitive edge and higher

margins), how can the benefits of a standardized returnable packaging be merged with retailers desires to present their produce in a more natural, traditional manner. The recent release of our Wood-Look plastic crate is seeking to replicate the look and feel of a farmers market whilst enabling safe and efficient travel of produce through the supply chain.

• Watching Amazon struggle to get packages to their customers over the 2013 Christmas season also highlighted the shortcomings of current best practice in freight consolidation and shipping. There is also a high incidence of abandoned purchases online due to inadequate delivery options. With most members of a family working and not at home during the day and unable to get to traditional post offices during working hours, new ways of making ePurchases available to customers through remote pickup locations, keyless lockers etc is a real challenge for Next Practice thinking.

We are excited about the challenges that Next Practice will bring. It is through these types of collaborative initiatives with our customers that we will ensure Best Practice leads to Next Practice!

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packaging used through tready a thing of the past?

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NEXT PRACTICE born from Best Practice NEXT PRACTICE

born from Best Practice

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Established 25 years ago, Indomaret pioneered Indonesia’s minimart retail market. Today the company remains an industry leader with chain stores across the country, underpinned by a vision to continue expanding and evolving to remain highly competitive while serving the needs of Indonesia’s massive populace.

Indonesian Minimart Leader Adopts Pooling Solutions

Indonesian Minimart Leader Adopts Pooling Solutions

Your Pooling Solutions Partner

An archipelago nation, Indonesia’s logistics infrastructure, technology, human resource competencies and policies are continuously developing. Having entered the market in 1996, Loscam has leveraged its early mover advantage. Today, the company is a market leader that enjoys close relationships with key regional customers and major retailers; the latter is served is on exclusive basis.

With an expanding base of over 100 customers, Loscam features a semi-mechanised expanded facility in Cibitung (Jakarta), and a strategically located service depot in Rungkut Industrial Estate, Surabaya.

It is no surprise that Indomaret learned about Loscam from many of its suppliers, including Unilever, Coca Cola, Aqua‐Danone and other FMCG producers, and sought Loscam’s help to realise better efficacy in its extensive supply chain.

“We wanted to reap the time and cost efficiencies at our warehouses or DCs by using Loscam’s pallet pooling system,” said Mr. Jesse Octaviano, Merchandise Manger of Indomaret. “Since we first met with the Loscam team at our office, we believed Loscam had the solutions concerning pallet rental backed by a superior product, system, and strong relationship with other suppliers, who are also Indomaret’s trade partners.”

Jesse also expressed that Loscam offers good stock availability, product standardisation, and competitive pricing for its rentals, compared to the capital the firm would have to commit to investing in its own pallet system. “Also, with Loscam’s strong infrastructure, resources capital, industry experience, huge product capacity, and large number of major customers, we look forward to the benefits and advantages their system will add to our operations – especially as Indomaret plans its expansion of new branches and warehouses to more cities outside Java‐Bali and Sumatra Island.”

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For Wall’s, Unilever’s leading ice cream enterprise, Loscam played an important role in the enhancement of its supply chain operations.

Your Pooling Solutions Partner

Sundarrajan Bhyravan, Logistics Director and Alan Chen, Senior Cold Chain Logistics Manager of Unilever China

Having entered China in 1994, Wall’s built a typical FMCG supply chain network, with four factories throughout the country. Four national DCs and 12 regional DCs handle product distribution to over 20,000 direct delivery points, including supermarkets, shopping malls and retail stores.

Wall’s is unique in that its products are palletized when they come off the production lines and during storage in plant-attached cold storage facilities. The ice cream remains on pallets when they are transported to national and regional DCs. Palletized delivery makes the most sense as products are transported in large volumes and require quick response so as to maintain their quality.

When Wall’s began operations in China, the company purchased their own pallets. However, ice cream is a product with high seasonal fluctuation. In the winter season, the utilization rate for pallets was very low and much space was needed to store idle pallets. Also, it was costly to ship empty pallets back to the factories for future use, and long-haul palletized delivery caused significant wear and tear to the pallets.

“As a FMCG manufacturer, Walls is committed to improving its logistics efficiency through continuous SCM self-optimization, rather than purely through introduction of new equipments and technologies”, explained Mr. Sundarrajan Bhyravan, Logistics Director of Unilever China. “That is why we engaged China Merchants Loscam in 2012 to implement a new solution.”

First, Loscam bought back all of Walls’ non-standard pallets and replaced them with Loscam’s ECR standard pallets. Today, with the support of its nationwide service network, Loscam coordinates pallet pooling among all of Walls’ regional DCs, eliminating the need to return empty pallets to their original departure point.

Also, Wall’s now uses pallets according to its actual need, thus decreasing capital expenditures. Wall’s can also hire and de-hire pallets through Loscam’s regional depots, saving 50% of the transportation costs (and lowering its carbon emissions) for empty pallet returns. Finally, Wall’s no longer bears the costs of pallet maintenance, as that falls under Loscam’s responsibility.

“While efficiency and cost savings have been realised, Wall’s continues to refine its palletized delivery system,” added Mr. Alan Chen, Senior Cold Chain Logistics Manager of Unilever China. “From improving product packaging to addressing warehouse racking and truck specifications, Wall’s is committed to continu-ous optimisation of its supply chain operations and we count on Loscam as a trusted partner to support these efforts.”

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Enhancing Wallll 's Supply Chain in ChinaSweet Success:

E h i W lll 'Enhancing Wall 's Supply Chain in ChinaSweet Success:

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Loscam recently held Vietnam’s first comprehensive pallet pooling workshop in the Logistics Forum 2014. Organised by Vietnam Supply Chain in Ho Chi Minh City, the workshop shared experiences of successful pallet pooling implementations, providing examples of how pooling can increase efficiencies and economic benefits through cross-company collaboration. It also explored case studies concerning pallet pooling in other countries, as well as the chal-lenges in Vietnam.

“Judging by the level of interest in what was presented and showcased, I believe manufactures and retailers are on the cusp of increasing supply chain efficiency through equipment pooling and retail ready packaging,” said LanAnh Do Thi, General Manager of Loscam Vietnam.

Over 100 delegates from 40 retailers, FMCG and logistics companies joined the workshop. The participants also viewed newly launched returnable packaging exhibits, including foldable crates, rising floor bins, small format pallets and beverage trays, to better understand the value of reducing the use of secondary cardboard packaging.

Your Pooling Solutions Partner

With the broad goals of becoming a trusted business partner and introducing a sense of Loscam’s five guiding principles -- Loyalty, Trust, Teamwork, Communications and Solutions – into the organisation, Loscam held a one-day leadership training programme in Thailand. Taking place in two sessions, on 15 May and 10 June, the programme was geared towards managers, supervisors and senior staff, combining group learning with fun, light-hearted activities.

The sessions focused on leadership essentials, with participants sharing their perceptions of both good and bad leaders, as well as the important leadership qualities. The latter includes having a long term vision and short term goals; anticipating and avoiding potential problems; motivating and inspiring the team; making crucial decisions; aligning the right person with the right job; and reducing manual processes, among many others.

The level of participation in the programme was very good, after some initial encouragement. It helped to establish expectations of good, effective leaders, while opening up new ideas for the participants to consider. For example, the groups agreed on the importance of clear communications, teamwork and good leadership traits. They also discussed specific techniques on how to deliver feedback, motivate others and understand why people communicate differently.

On the whole, participants reported that they learned a lot, while having fun and meeting new colleagues. It was a good start to ongoing efforts to improve internal commu-nications, which will help boost efficiency among the units. Ultimately, better understanding and communica-tions among managers, supervisors and teams will enhance Loscam’s customer service capacity.

Leadership Training in Thailand

Loscam Holds First Pallet Pooling Workshop in Vietnam

88 Your Pooling Solutions Partner

Typhoon Yolanda was one of the strongest tropical cyclones ever recorded, which devastated portions of Southeast Asia, particularly the Philippines, on November 8, 2013. LOSCAM Philippines donated PHP 256,913 to the victims through Christ for Commission Fellowship, a local church.

Meanwhile, LOSCAM Thailand, a sponsor of the Thai Red Cross Society, donated THB 200,000 to aid relief efforts for the typhoon’s victims in Thailand.

Loscam along with Yihaodian (YHD), China’s leading e-commerce company, jointly received the “Best FMCG SCM Solution” award at the 4th China FMCG SCM Summit in Tianjin on 17 April 2014. The award highlights the successful implementation of palletized delivery between YHD and its suppliers using Loscam’s pooled pallets.

At the summit, Scott Chi, Senior Solutions Manager of Loscam, explained how palletised delivery helped both traditional and e-commerce retailers to improve their supply chain efficiency and reduce logistics costs. The benefits of palletized delivery were then demonstrated by Mr. Hart Guo, Logistics Director of YHD, who elaborated on the success of palletised delivery on optimizing YHD’s supply chain management.

This summit was organized by the Logistics & Material Handling Magazine, one of the most prominent publications in China’s logistics equipment and technology sector.

Typhoon Yolanda Relief Efforts

Loscam Pallet Pooling System Awards "Best FMCG SCM Solution in China"

The 12th ECR China Conference was held in Guangzhou from 10 to 12 June, with a focus on sharing best practices and advances in the FMCG industry in China.

As a leading equipment pooling service provider, Loscam’s pooling solutions help improve supply chain efficiency and reduce costs for FMCG industry players. Scoot Chi, Senior Solutions Manager of Loscam Greater China, shared the key benefits of palletised delivery among manufacturers and retailers.

Loscam Participation in China ECR

Loscam Addresses China Pallet Pooling Promotion ConferenceOn 9 May, Loscam was invited to address the Pallet Pooling Promotion Conference, jointly held by China’s Ministry of Commerce and the China Chain Store & Franchise Association (CCFA) in Beijing. This marked the first nationwide pallet pooling promotion event ever held in China, aiming to promote pallet pooling and standardisation in the country’s retail industry. At the conference, officials from the Ministry of Commerce stressed that a national pallet pooling system is bound to increase supply chain efficiency and lower national logistics costs.

Mr. Zhengnan Dai, General Manager of Loscam Greater China, expressed during his speech, “Driven by the current macro economy and national policies, China retail industry has begun to realise the importance of pallet pooling. In recent years, leading retailers have cooperated with Loscam in numerous pooling projects.” Additionally, Mr. Sirin Limpaitoon, Regional Director of Loscam Southeast Asia, shared Loscam's successful experiences of pallet pooling in his region. He pointed out that Southeast Asia had experienced similar problems and challenges as China in the context of pallet pooling development, but eventually, the standardised pooling model achieved success. Mr. Sirin was confident that China's pooling system is sure to grow and prosper through the contributions and efforts of all stakeholders in the industry.

Upcoming Event

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Hart Guo, Warehouse Operation Director, YHD and Patrick Chan, Sales Director, Loscam Greater China