1.

Background of Hock Cheong Transport Company

The Hock Cheong Transport Company was found in 1945. At present, it has grown
into the Hock Cheong group and is an integrated logistics and transport provider. The
Hock Cheong group started from delivering and distributing the Straits Times
newspapers, movie films and trailers. Now expanded scope of goods supply for the
group, such as engineering products, electronic goods, thus have a better development
of integrated logistics services. There are one-stop integrated logistics services,
related value-added services and warehouses are provided by the Hock Cheong group
in Malaysia, Singapore and Brunei. The logistics services have been developed in
various unique industry, publishing houses, the computer industry and heavy industry.
At the same time, provide experienced and trained transportation team and transport
vehicles are more than 100 vehicles, include 40, 36 & 30 trailers, box trucks, lorries,
vans and low loaders, are capable of delivering all types of cargo efficiently.

Vision
To be the 1st Choice Logistics Partner in Asia.

Mission
Provide fast and reliable door-to-door services for customers through competitive
rates in Malaysia, Brunei and Singapore.

1.1 Companies of the Hock Cheong Group

1.2 The range of services the company provided

The Hock Cheong Group specializing in door-to-door deliveries, multimode freight
services, warehousing, distribution, customs documentation and port clearance,
freight forwarding, and other related services to Malaysia, Singapore and Brunei. The
Group has been involved in value-added services for manufacturers and importers that
include national freight consolidation, small parcels delivery, re-labelling, insertion of
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warranty cards and instruction manuals, shrink-wrap and promotional packaging,
customer returns management, and document management services. The group
maintains its own network of branches all over the Malaysia, Singapore and Brunei,
provide daily trucking to Malaysia and weekly shipping to Brunei, at the same time,
accept both loose cargo load(LCL) and full container load(TCL). The group will
expand its business to provide warehousing, distribution and freight forwarding
services in the ASEAN region through strategic partners. The services also include
Pearson Education Malaysia, McGraw Hill, Jardine One Solution, and Amoy Canning.
The Group also offers many warehouses for the Hock Cheong in Malaysia, Singapore
and Brunei. Moreover, there are five warehouses in Malaysia, such as Petaling Jaya,
Johor Bahru, Malacca, Ipoh and Penang. The group is seeking to expand its services
beyond Southeast Asia, and becoming a truly global company.

Figure 1: The services provided by The Hock Cheong Group

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Table 1: Warehouses provided by the company
Collection Centre for Malaysia
Singapore office
Collection Centre for Brunei

Brunei office Wyneer Forwarding

Petaling Jaya( main office)

Branch offices
Malaysia office Johor Bahru
Malacca
Ipoh
Penang

2. Competitors of the Hock Cheong Group

Positive business created a good business environment for the Hock Cheong Group in
Malaysia, Singapore and Brunei, but also created the incentive competition. Many
local and international companies that also provide logistics services to invest heavily
on logistics and supply chain services, such as FedEx, DHL, City-Link. They had
enough advantage to compete with the Hock Cheong, so as to occupy more market
share. Therefore, the company must expand their businesses, and provide a
comprehensive supply chain solution to improve logistics services for international
clients. For instance, win-win solution that is using by the Hock Cheong Group help
increase their competitive to obtain better customer satisfaction through undertake all
or part of your supply chain management activities.

2.1 Keep speed of supply chain

Although The Hock Cheong Transport Company tries to increase the speed of the
supply chain by reducing shelf life of product and damaged, but in the supply chain
process, extension of the transit time and delays and restrictions from customs or
border, these characteristics of the global logistics restrain speed of supply chain.
When extending the transit time or articles exposure in transit, increasing the risk of
damage to the product, as well as reduce speeds of supply chain and maximum
flexibility.

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2.2 Manage vulnerabilities of supply chain
Manage well the vulnerabilities of the supply chain, so as to ensure the safety of
products and services. When there are all types of supply chain vulnerability is existed,
especially operates a global supply chain. If the product or transport equipment is
damaged, this will have a big impact to the Hock Cheong. For instance, Transport and
supply of goods and biochemistry in the Hock Cheong Transport for their customers,
these products are likely to be damaged or infected due to transport equipment,
transport infrastructure, storage facilities and processing systems of information are
damaged or destroyed.

2.3 Variability and flexibility of the supply chain improvement

Production and transportation of domestic and global supply chains are changing.
Large buffer inventory are caused by global business and extension that is from
transport time. In addition, there are different speeds of the logistics development in
different countries. The Hock Cheong shipping products to other countries or regions,
or in order to faster response their customers, establish supply chains and warehouses
in other countries or regions, the company must solve all the problems that face in
those countries through different strategies, business, law and culture. Therefore,
increased variability of supply chain affect the development of The Hock Cheong
Transport, it is a challenge, which the company faces.

2.3 Lack of resources

It is a daunting challenge for lack of advanced transportation facilities to the majority
of Malaysia's logistics vendors. Poor transport facilities extend transit time in
Malaysia, thereby extending the delivery time of The Hock Cheong Transport. It does
not contribute to customer satisfaction, at the same time, created a heavy financial
burden to The Hock Cheong Transport. Logistics progress of Malaysia also cannot
keep pace with the growth of its trade.

On the other hand, The Hock Cheong Group lacks of trained logistics talents to
manage the supply chain in Malaysia. Both the Northern and Southern Freight
Forwarder Associations pointed out that Malaysia existing transport companies cannot
acquire experience and skills, when introducing new services and innovation.
Therefore, the freight operator usually do not have basic training in logistics, and only
from their experiences, thus they are not actively providing solutions for customers.

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2.4 High cost transportation
Most of the freight supplier still rely on ever-expensive continually fuel. However,
price of oil is still rising. Prices of oil distinctly rise, but not a predictable pattern. In
essence, continuing fluctuations of oil prices and production limitation would mean
higher transportation costs. High fuel prices increase transportation costs to The Hock
Cheong Group, thus increasing the financial burdens, reducing profits. Therefore, The
Hock Cheong Group should optimize the mode of transportation and supply chain
management. In addition, poor transportation facilities and over long shipping
distances would also increase transportation costs.

2.5 The low acceptance of integrated third party logistics (3PL)

Globalization has led to many uncertain factors, for instance. The Hock Cheong
Group want better service to Asia, as well as becoming a global logistics provider,
needs develop 3PL and establishes partnerships with other suppliers of 3PL.
nevertheless integrated third party logistics is also a challenge for the Hock Cheong
Group. The Hock Cheong cannot provide a complete solution due to the lack of
trained personnel and technology, cannot accept knowledge and skills well when the
introduction of integrated third party logistics, thus may increase the cost and
inventory.

3. Hock Cheong Group develop total supply chain solutions

The Hock Cheong Group wants to develop better for its logistics services in the South
East Asian region. In addition to expanding and sustaining the business of the Group,
it also needs to create their own advantage in Malaysia, Singapore and Brunei.
Therefore, the Hock Cheong Group have to provide a total supply chain solutions to
restructure its business, help the company to become a member of the international
logistics industry. Total supply chain solutions are good for logistics enterprise's
business development and simplify. It will help the group to improve the operation
and management of the supply chain, and improve service levels, reduce the bad
choices, reduce inventory, shorten lead times, and obtain economic cost. Total supply
chain solutions of the Hock Cheong Group as follow:

3.1 Establish oversea distribution

The Hock Cheong is required to establish appropriate oversea distribution networks.
Using advanced technology to optimize the whole logistics process, lead to
distribution is done faster, and make The Hock Cheong won their speed of
development within a reasonable time and reasonable places.
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3.2 Build warehouses and improve warehouses management
Warehouse is very important for the Hock Cheong, because it is responsible for
sending and storing of goods. More local and overseas warehouses should be
established in The Hock Cheong to improve efficiency of shipping goods to the
customer, to ensure delivery within the shortest delivery times.

Improve warehouse management system by advanced science and technology. Set up

automated warehouse management system, to reduce the cost of time and errors.
Enhance domestic warehouse close liaison with the overseas warehouse through the
use of social media and information sharing.

3.3 Establish partnerships with 3PL

When it involves effectively manage the complexity of the supply chain, the Hock
Cheong needs to build partnerships through the 3PL and participating in the parties
report of 3PL supply chain. Leveraging 3PL can help the Hock Cheong to respond
quickly to customer demands, and reduce the risk of long distance transport. Increase
power that is in sea, air, rail and truck for the Hock Cheong in both the national and
the international. The 3PL companies that are industry-leading include DHL, Hanjin
Logistics, CEVA Logistics, Trans place, Agility and Summit Global Logistics. Design
of new business processes with truly global 3PL organization will improve
operational performance in the Hock Cheong, lead to its earnings growth in global
business.
Figure 3: 3PL of the Hock Cheong Group

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3.4 Reverse logistics
Reverse logistics refers to the surplus of output or unwanted materials, products and
equipment back to the company through the supply chain for reusing, recycling,
replacement, dispose return goods, repair or renovation. It includes disposing
hazardous substances, obsolete equipment and returned products because of destroy,
seasonal inventory, recall and excess inventory. Dispose returned products, remove
old or unsalable inventory, redesigned packaging thereby use less material or reduce
energy and pollution from transport is very important for the future development of
the Hock Cheong Group. The Group implements and control high efficiency of raw
materials, low-cost movement of work, in process inventory, finished goods for
meeting customer demand through reverse logistics programs. In a certain sense,
reverse logistics is also a green movement planning.

Figure 4: Schematic illustration of reverse logistics

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4. Lean production

Lean production is a supply chain strategy that timely production, eliminates all waste,
reduces costs, achieves zero defects, zero inventory and aims maximize profit through
minimizing of cost. Lean production help the Hock Cheong Group can eliminate
unnecessary movement of raw material and work in the process. Enable improve
inventory management for the Group, and eliminate wastes, such as overproductions,
transportation, unnecessary inventory and defects.

4.2 Agile supply chain

Agile supply chain is under already existed the processes or training, let it can
respond quickly to customer needs and changes of the market, while controlling costs
and quality. In the agile strategy, the Hock Cheong enhances flexibility and
international competitiveness. Lead time for order delivery is reduced and services
quality is improved, and quickly adapt to the changing of market environment. Agile
strategy also helps the Hock Cheong enable fast response to orders.

4.3 Integration
Supply chain integration is an effective method that looking for business across
multiple suppliers, different platforms, as well as improves performance of enterprise
measures. Characteristics of collaboration are cooperation, collaboration, information
sharing, and trust, partnership, sharing technology and change management process.
Supply chain integration is divided into internal and external integration. Internal
integration refers to a cross-functional interaction, cooperation, communication and
cooperation to bring function to create a cohesive organization. External integration
includes customer integration and supplier integration. Organize its suppliers and
customers during the process of interaction and collaboration, supplement resources
and share demand information. Supply chain integration help the Hock Cheong Group
connect to multiple providers, different platforms, applications and data formats.
Supplement resources, and information sharing from its suppliers and customers to
help the Hock Cheong better understand customers demand and forecast, and ensure
an efficient flow of products and services, thereby providing better quality products,
as well as enable flexibly change and add functions for needs of business
development and soon respond to market changes.

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Figure 5: Performance of supply chain integration

5. Collaboration

Collaboration can be used to improve business performance, establish strategic

partnerships with suppliers and trading partners, shared business and information for
mutual benefit goal. Successful collaboration depends on trust and willingness
between organization and its partner, includes all suppliers, outsourcing partners,
customers and service providers. All the proceeds Information is shared between each
other, such as incentive alignment, Decision synchronization, information exchange,
resources sharing, knowledge sharing, revenue sharing and so on. In order to become
a global logistics company, the Hock Cheong Group should be to establish a strategic
partnership with all of its suppliers, outsourcing partners, customers and service
providers to achieve internal and external collaboration. The Hock Cheong Group can
achieve information sharing, decision synchronization and incentive alignment.
Collaboration performance system is as show in the figure 6. Collaboration help the
Group overcome issues and challenges that they are facing, improve its supply chain
management, conduce to better development of the Hock Cheong.

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Figure 6: Collaboration performance system

Conclusion
The Hock Cheong Group is expanding its services beyond South East Asia and
become a global company. It will be helpful that analyze its service, competitors and
challenges, and provide total supply chain solution and strategies to the Hock Cheong.
The Hock Cheong will gain a better development, realize more flexible, higher
efficiency and economic cost in the operation, as well as offers more and better
logistic services in global.

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