The company plans to build a hub in the Southeast Asia region for shipping products to other specific countries. Among nine countries in this region, there must be one selected country to locate the hub. Before making this plan real, the company needs to consider several factors including the customs, quality of transport, and all the necessary logistics functions.
The World Bank has released the Logistics Performance Index (LPI) 2016 and indicated Germany as the best country for logistics. Following Germany, one of the Southeast Asia countries ranked 5 among all countries in the world. The country is Singapore. Since the company is looking for the transshipment hub in Southeast Asia region, Singapore deserves as the best choice. The LPI is measured by several indicators including customs, infrastructure, international shipment, logistics competence, tracking and tracing, and timeliness. Each of which Singapore is included in the top 10 country. Singapore achieved first rank for the custom indicator with the score of 4.18 where Germany is only 4.12. This indicates customs in Singapore will not become a burden for company to locate the hub and do transshipment. The transshipment activities are regulated by Singaporean Government under the Customs Act, the Strategic Goods (Control) Act, the Regulation of Imports and Exports Act, and other related legislations. A specific system for this matter is called TradeFirst. This system will provide company a greater convenience and facilitation through six assessment frameworks; company profile, procedures and processes, security, inventory management, other scheme-specific requirements, and compliance (Singapore Government, n.d.).
Furthermore, Singapore commits to create efficiency in the supply chain and logistics hub. They transform the procedure and regulation related to security and the operation to be simpler allowing company better adapt with Singaporean and any international customs. This creates an ease for company to get clearance, documentation, as well as a permit towards their products. An application has been built in Singapore called TradeNet. This gathers around 35 controlling agencies to assess and give permit to company for trading activities. Despite the business-friendly customs, Singapore is located strategically in the heart of Southeast Asia making it an important hub for the meeting point of major shipping lanes. The quality of the transport is measured by the facilities provided in this country. Singapore hub is facilitated by the world class infrastructure such as Airport Logistics Park of Singapore, Changi International LogisPark, and Banyan LogisPark. All of these infrastructures are specialized to serve domestic and international distribution. Thus, among 25 global logistic firms, 20 of them are operated in Singapore (EDB, n.d.).
The aviation hub in Singapore has AS9120 certification with various capabilities.
1. Aircraft-on-ground (AOG) for fast delivery of missing part to the waiting-aircraft.
2. Service Parts Logistics (SPL) for aftermarket facilities.
3. Integration of the airline inventories.
4. Master of the engines and other related functions of the transportation.
In addition, it is also providing packaging facilities and chemical processing in the Jurong hub by implementing the system of Katoen Natie. The Vopak has also built its facilities there, providing the chemical storage, distribution system for domestic market, and other services for better chemical substances quality. The electronics product is also be supported by the DB Schenker by building the Competence Center focusing on the Production Vendor Managed Inventory (PVMI). This will help Singapore managing the electronics and other manufacturing sector. In terms of healthcare and cold chain logistics, Singapore is facilitated by the Coolport offering storage with the temperature ranging from -28°C to 19°C. This Coolport has also a Halal certification (EDB, n.d.).
The potential of transshipment in Singapore will be maintained by its domestic resources, especially the human resources mastering in supply chain management and logistics. The education in science and engineering offer variety programs for creating potential talents in this industry. The EDB mentioned that the graduates with specialization in Supply Chain Management in Singapore have reached 8,500 people. It also offers double masters program nurturing over 150 professional who work in SCM field. Despite the educational system, Singapore conducts TLI-AP THINK Forum gathering experts and professionals in SCM to discuss and outline potential SCM and logistics to be developed and maintained in Singapore (EDB, n.d.).
Singapore is ranked first for logistics in Southeast Asia. It has a business-friendly customs and world class infrastructures supporting the transshipment. These infrastructures ranging from aerospace to healthcare and cold chain logistics will ensure the quality of the transport. The government has also collaborated with educational and other institutions to maintain the quality of the logistics and supply chain processes. Its human resource will be prepared to be the expert and professional in the SCM field.
Singapore Government. (2017). TradeFirst. Retrieved from https://www.customs.gov.sg/businesses/customs-schemes-licences-framework/tradefirst
Singapore Government. (n.d.). Transhipment procedures. Retrieved from https://www.customs.gov.sg/businesses/transhipping-goods/transhipment-procedures
EDB. (n.d.). Logistics and supply chain management. Retrieved from https://www.edb.gov.sg/content/edb/en/industries/industries/logistics-and-supply-chain-management.html
The World Bank. (n.d.). International scorecard. Retrieved from http://lpi.worldbank.org/international/scorecard/column/254/C/MYS/2016/C/SGP/2016/C/BRN/2016/C/KHM/2016/C/IDN/2016/C/MMR/2016/C/PHL/2016/C/VNM/2016/C/THA/2016/C/BRN/2016?sort=desc&order=Customs#datatable