Case Study: Hock Cheong-Logistics

Topics: Supply chain management, Logistics, Supply chain Pages: 10 (3021 words) Published: November 6, 2011
1.0 Introduction
Hock Cheong Forwarding, Logistics and Transport Group of Companies was established in 1945, started by delivering and distributing newspapers, movie films and trailers only in Malaya and Singapore. They also carried huge engineering products like valves and generator sets to delicate electronic products like computers and printers through cargo. They deal in like door-to-door, project cargo deliveries, land transportation with sea and air freight services, warehousing & distribution, customs documentation, port clearance, freight forwarding , total logistics and daily trucking from Singapore to Malaysia and weekly to Brunei. Their service centres are strategically located in major cities in Peninsular Malaysia which enables them to provide greater and more effective distribution coverage extending to semi urban areas in the various states (

2.0 Objectives
Location of warehouse and distribution is very important for any logistics business. Hock Cheong’s should have more offices and warehouse at all the strategic location all over Malaysia to help the company to run the business smoothly. The company should also manage their routes effectively. Before the start of any delivery, the routes must be checked thoroughly and confirmed as well as weather so they won’t be any delays or problem during the delivery periods. Hock Cheong Group must take the current assets usage into consideration. Using efficiency vehicles will help to save the company’s money and time. The company can also improve its environmental performance is by reducing the packaging such as re-use the boxes or parcel. The new packaging boxes and parcels can be made form recycle materials which is approved by the ISSO. Related technology such as GPS systems, tracking systems, computers and related software’s must be taken into consideration. The company must make sure that they fully utilize the warehouse capacity. By carrying out these solutions, Hock Cheong Group would definitely improve its Malaysian market logistics by at least 10% and its International market logistics by 5% by the year 2013.

3.0 Challenges faced in business
3.1 Poor Physical and Communication
A major problem which faced by Hock Cheong Group are same as in beer distribution game (Beer Game). Firstly is communication between the downstream and upstream. In the Beer Game, the only person who can see the actual demand is the retailer. Thus, the retailer did not communicate with the upstream and lead to wrong forecast in ordering inventory.

Communication regarded as an important instrument to communicate, especially when you doing cross-boundaries delivery and to meet the delivery time. Slow movement of cargo due to bad road conditions, variety of check posts and documentation requirements, congestion at the port because of inadequate infrastructure, bureaucracy, red tapeism and delays in government clearance, coupled with the power supply is unreliable and slower banking transactions, difficult for exporters to meet the deadline for their international customers. This is due to the less communication between the drivers and the top management where they fail to inform about all this problems. To expedite delivery, the both party should play important roles in communicating to resolve this problems and this also makes them less competitive in international markets (Lee HL & Padmanabhan SW, 1997).

3.2 Lead Time

The second challenges of the beer game are lead time. Lead time delay occurs when the time it takes to obtain, make and deliver the finished goods to a customer is longer than the time the customer is prepared to wait for it to reach them (Fawcett, 1992). In previous beer game, there will be a two period delay before these goods can be used to fill up a downstream order (Lee, H.L and Padmanabhan.S.W 1997).

Hock Cheong Group will land in situations where they...
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