S'pore supply chain firm delivers on innovation

Business intelligence tools need reinvention and a slower economy could be the best time to try new things, says YCH Group's CIO James Loo.
Written by Vivian Yeo, Contributor
James Loo
CIO 1-1 His job requires him not only to please his customers, but also win the approval of his customers' clients.

In his eight years at logistics and supply chain management company YCH Group, CIO James Loo has been involved in a number of projects that plants YCH as an industry pioneer for tapping on technologies such as radio frequency identification (RFID).

Fresh off from accepting an award at Singapore's National Infocomm Awards in October on behalf of the company's RFID-enabled supply chain management nerve center, Loo tells ZDNet Asia about the work around YCH's new innovation phase--his third major ICT chapter as the company's tech chief. He also reveals his bone to pick with business intelligence vendors and tools, and why he actually is rejoicing over an economic slowdown.

How has your role changed over the years?
Since I joined YCH in 2001, there's no difference [in terms of] the scope that I've been given. However, the priorities have changed. I spent a little bit more time during my initial years [as CIO] to [chart out] where we were as an organization [in terms of IT] and what we needed to do.

The first three-year plan, in my role as a CIO, was more for identification. The second [round] was really reinvention. After identifying where the technology pieces were, what needed to be updated...the next step was how to take it to the level that we wanted. We identified some key strategic technologies that we wanted to bring into [the company], staff that needed to be trained and realigned to the new things that we wanted to do.

We're into the third three-year plan, and it's all about innovation. After getting to where we are--onto the new infrastructure, platform and applications--[the question is:] Where do we take that as a competitive and strategic weapon to [advance up] the value chain?

What does the new three-year plan--the innovation cycle--involve, and what does that translate for the business?
We're very committed to adding value to the services and products that we bring to market. The innovation that we have in mind is two-prong: one is to make us better in serving our customers, so we still keep our bottom line. The other thing is to be able to serve our customers' needs, so that they can serve their customers.

The innovation is more than just for ourselves, it's also shared with our customers so that they can serve their customers, and our suppliers can serve their suppliers. It becomes a collaborative platform--internally between functions so that we break down the barriers and be able to move a lot faster, [while] externally it could be with customers' customers [to determine] what information or knowledge we can share with them so that they can be better served by our customers.

Take for example, Dell. Dell demands clarity in terms of milestone tracking on delivery, and they want it to be over the Internet. They want it to be consistent. They don't just want it just for their fulfillment office; they want it also for their sales and finance offices.

What are the key areas you'll be focusing on in the new phase?
During the reinvention part, we spent a lot of money consolidating our servers. The other thing is, we virtualized our storage to support our growth. We're growing at a breakneck pace--close to 200 percent for the last three years--so without this infrastructure in place or consolidating it, we'll end up with a lot of servers or storage all over the place.

Steering competitive advantage

Name: James Loo
Job title: Chief information officer, YCH Group
James' role:
Since joining YCH Group in 2001, James has been involved in charting the ICT development of the organization, as well as helping YCH to tap on innovation for a competitive edge and improve customer offerings. James oversees 200 IT staff in YCH's operations across the Asia-Pacific region, about one-third of whom are based in Singapore. Up to 80 percent of the development work for the company's systems and applications are conducted in-house. James wears the concurrent hat of COO at Y3 Technologies, a subsidiary of YCH Group.
About YCH Group:
Founded in 1955, YCH Group is a provider of supply chain management services for the key logistics processes of raw materials management, consumer goods distribution, and service and returns management. The company also offers integrated logistics services such as warehousing and inventory management, transportation and distribution management, and freight management services. Based in Singapore, YCH's operations span across the Asia-Pacific region--it has presence in countries including China, India, Korea, Malaysia and Thailand.

From an application point of view, we're growing open source--Java and Web-enabled technologies are being used. The open source platform also brings about a new dimension of capability for my IT team--the agility, collaborative effect in terms of development, sharing new apps, is there--so it's pretty useful and powerful as a platform. We will continue that kind of collaboration with the development environment out there.

We freed ourselves of the constraint [whereby] we need another server because we need to deploy [a particular] application. Now we're pulling back everything centrally and we're able to deploy it anytime, anywhere for anybody. We're very successful in our deployment plan for India, for example. Over a short period of two to three years we have grown to 27 sites. If you think linearly, to set up data centers to support 27 sites of operations in two years is almost like a nightmare, but if you [centralize the control] then that's possible.

Are you concerned with the growing volume of data?
Yes we are, that's why the information model has to aggregate, consolidate. But if you have rubbish data, you're aggregating a lot of rubbish. One way to throw away all this 'rubbish' is to make sure that your starting point is correct. That's why we invested way upfront because the payback is really all the way down the chain; it not only saves human labor at that spot, it flows through the entire organization. When people look at the information, they can feel comfortable that it is updated, and not suspect that [someone] keyed [in the data wrongly].

What about the role of business intelligence in the organization?
All the while, we've had business intelligence (BI) in some form. I have a very demanding CEO that always wants to be ahead of the industry, so insight and intelligence becomes very important for him.

The shortcoming of most business intelligence [tools] is, they rely on historical data. While it is good to analyze trends and be able to say what we're going to deal with [a problem or issue] and plan what's next, we also need to have real-time insight into what is actually happening to confirm the actions that we want to take. What we're focusing on is this real-time intelligence.

Is that something you feel is not adequately addressed by the industry?
Not at the moment--not by any vendor. That's why we're going to spend some of our own R&D money in this new chapter--our innovation phase--and spend some time looking at it.

Most of the traditional BI tools are still very report-based--very drill or diced kinds of applications. We really need to draw insight not only from one database but from across databases. The challenge now is…I have my financial database, but my financial database will only do my closing once a month. How good is that data--that's my question--because it'll be good only for last month. [On the other hand,] I have my warehouse management system which is run operationally, which is real-time with RFID information.

So you are marrying something that goes in 'start-stop' mode in batch form, with something that goes on 24/7 in split second, in real-time. Data is time-sensitive--what you looked at one month ago is not what is happening right now. So we're trying to marry the two with business intelligence, and this is something that I don't think any vendor actually knows or has put anything to it to manage it. It's the same problem when we tell people that warehouse management is not the same as inventory management--people can't understand it. That was how we developed our WMS (warehouse management system).

YCH is really a bank for cargo. People deposit cargo with us, and they take out cargo. Can you imagine, when you deposit money, they tell you, "I won't know until one hour later that you have made the deposit." Would you feel good working with a bank that's like that?

How the [real] banks used to [denote transactions] in the past was with [banking] passbooks, where you had to queue at the counter to get it printed. But you realize that the banks had to re-engineer themselves when the Internet came along, because the information is moving real-time. A daily report is not good enough, and [being] online is not good enough. You want to do Internet transactions, where you see real-time, the transfer or withdrawal. To that extent, the banking system still suffers a little bit. We have one banking system that's not real-time. We have the other system, which is the Internet, and that's real-time. They haven't figured it out. And we want to get that figured out, from the perspective of YCH. We want to move it up the value chain, and give this real-time capability not just for ourselves to operate but also for our customers.

How will the new ICT plan be executed in the light of the current financial turmoil? How do you expect the economic climate to affect the industry?
Unluckily for us, [the slowdown] will affect our dollars and cents--the budget. But the other way to look at it is, because of the financial meltdown, the availability of resources to us now sort of becomes a bit wider.

In the past--even at the beginning of this year--we found it very difficult to hire staff. The market was so 'hot', and the financial institutions were taking away the brains because they [had] attractive [terms], and we had to compete with them. I find that we always ended up paying more than what we thought was worth. And after having that person on board for three or six months, he would receive a better offer and disappear. This hurt us from a development, and R&D, timeline.

With the meltdown, although we have to work with a smaller budget, we have to work more creatively with our vendors. The good side is, we can pick and choose. People are willing to work longer hours, harder. Therefore, I expect delivery to be even faster, not slower. I'd be able to achieve more with less.

From an industry perspective, I look at it really as an opportunity for us to try new things. It forces us and the customers to work together…they're more willing to try [new things] because they [believe] trying with us would mean a tremendous amount of savings, and these savings will translate into their bottom line when the upturn comes.

I look at it as an opportunity to force [to the fore] some issues, which customers would otherwise defer [making decisions on] during their peak. They would say "My business model is perfect, and I'm growing by 50 percent so don't touch it." Now that they face a bit of a challenge, they say, "Let's explore all options." So from an innovation point of view, I think it's a great time to invest.

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