Singapore is an Asian hub for port activities for logistics and warehousing companies. These companies are serious in adding value for their customers to expand market share and build stature using IT. Seng Li Peng speaks with Changi International Logistics Centre (CILC), one such company that recognises the role IT plays in its operations.
April 2000 - In March 1991, Changi International Airport Services (CIAS), Asia Pacific Logistics Services (APLS), McGregor Sea and Air Services (MSAS) and Sime Singapore came together to form a new business venture, CILC. The group aims to develop CILC into one of the most advanced and specialised warehousing and distribution companies in Asia Pacific.
With a financial outlay of more than S$62 million (about US$34 million), CILC erected a warehouse site sprawling across 337,000 square feet with a capacity to house up to 14,000 pallets, 2,000 shelves and 2,000 bins. And business is good, with 80% of the warehouse capacity taken up on average. Especially popular with Singapore-based companies, where the bulk of CILC's business comes from, the company also boasts a client base from all over ASEAN, Sri Lanka, Hong Kong and Taiwan.
CILC is the first third-party logistics company to incorporate the concept of 'technopark' facilities, where customers can treat it as a one-stop shop: R&D infrastructure, repair and configuration, as well as test bench work, and warehouse operation can all be found within the building.
Alongside its physical facilities is state-of-the-art technology consisting of Murata Machinery ASRS (Automated Storage and Retrieval System), a VNA (Very-Narrow Aisles) racking system from Tech-link, and a WMS (Warehouse Management System) supplied by Pulse Logistics Systems.
Says Goh Pei Eng, CILC's Assistant IT Manager: "We want to offer prompt, reliable and competitive services, as well as a total logistics solution to our customers. More importantly, we intend to stay competitive by constantly upgrading our IT and equipment, as well as applying sophisticated systems to the warehousing operation so as to provide the capacity to deliver a potent range of commercial benefits."
Evolving over time
Between 1995 and 1999, CILC pumped in another S$800,000 (about US$470,000) to revamp and integrate its entire network system to further increase its efficiency. "Our previous system was not user friendly and not integrated. The integration between the host server and the ASRS cranes is, to a large extent, done manually.
"In order to process certain data, we would first have to save it on a diskette and then port over the information to the ASRS. Sometimes, to bypass this process, operators would key in the data all over again into the ASRS. However, mistakes may occur during this process, which would result in loss in productivity and accuracy in the overall operation," Ms. Goh says.
CILC implemented the Pulse WMS in 1995, which quickly provided the organisation with tangible benefits, improving warehouse operations and increasing efficiencies without adding headcount. The WMS was able to include directed putaway by applying 'best' location methodology.
With the implementation of the WMS running on a Unix platform, advantages achieved include lot tracking, use-by-date control, first-in-first-out enforcement for efficient stock rotation and last-in-first-out methodology, ability to track movement of stocks for the purpose of audit trail, and RF (Radio Frequency) capability for data capture.
Apart from upgrading its internal technical environment, attention was also channeled into its external sphere, such as connecting with its customers via the Internet.
Says Ms. Goh: "Three years ago, we were not Internet enabled. But we have decided that we should be heading in that direction and making our services more convenient to our customers. We have decided on EDI (Electronic Data Interchange) on EDIFACT because many of our customers were interested in it."
The receiving and check-in process begins with a customer sending to CILC an ASN (Advice of Shipment Notice) either through Internet or fax. The ASN will be received at CILC's HP 9000 Unix server, running a Progress database. Once the cargo arrives at CILC, the warehouse will verify the actual receipt against the ASN and confirm the receipt with the server, which will further send the information to CILC's HP NetServer Internet server. From the Internet server, the confirmed receipt and discrepancy reports, if any, are sent to the customer via EDI or e-mail.
The HP 9000 server also sends a message to the RF handheld terminals of CILC's operators in the warehouse, instructing them to pick up the pallets and put them in particular pick-and-drop (P&D) stations.
"Some of the advantages of implementing RF in our warehouse include increased inventory accuracy, and high throughput so that more material can flow through the warehouse in less time. It also helps in increasing productivity and eliminating paperwork because all the inventory data now resides in the host computer databases. In addition, the interactive information exchange between operators at the warehouse and at the terminals to provide picking validation and error correction ensures a more accurate response to customers," Ms. Goh adds.
"We are looking into the possibility of integrating the WMS with our ACCPAC accounting software. By linking up, the cost information captured at the WMS database can be directly sent to the ACCPAC software during billing. This would help us improve accuracy and productivity when generating invoices for our customers," she adds.
Another area of interest to CILC is the transportation module of the WMS that includes route and load planning. "The transportation module is part of the feature of WMS. In this module, the WMS application is able to compute the number of trucks required for delivery based on the size and weight of the pallets. The WMS is also able to group deliveries based on delivery date/time. With this module, we are able to plan manpower more efficiently, and better update our customers with the delivery status," Ms. Goh says.
The company currently has a fleet of three three-tonne trucks. To support its internal trucking operation, contractors are also engaged whenever the need arises. While it has not experienced major hiccups in its route planning, CILC does not intend to adopt a reactive approach. "As long as we see that our investment in a certain area is justified by improved efficiency, we will go ahead with it," Ms. Goh adds.