CEO EXECUTIVE SERIES!
27 SEPTEMBER 2012
EXPLORING TALENT SHORTAGES NEWS & EVENTS
IN THE DEVELOPING LOGISTICS SECTORS OF CHINA, INDIA AND VIETNAM Poor in!astructure, rapid growth and unexpected cost blow"outs are just some of the cha#enges in these emerging markets, but its the slow developing talent pool that is of the greatest concern for the Supply Chain sector writes Mark Mi#ar, Logis" tics Executive Group.
Upcoming Event Logistics Executive is an official partner of the Asia Manufacturing Strategies Summit 2012. This exclusive event will take place in the Ritz-Carlton Hotel, Millenia, Singapore on 15th – 16th October 2012 and will provide the opportunity to discover the latest news and the best practices for optimizing your manufacturing and supply chain operations. The event is packed full of real life case studies, allowing you to benchmark your business against ‘best in class’ and ensure that you have the tools you need to form a coherent and logical strategy. To register please visit www.asiamanufacturingsummit.com/ register.
Logistics Executive Global News Logistics Executive 6th Annual Employment Market Survey Report gets underway.
In emerging and developing markets, logistics activities involve a range of opportunities and challenges: • Opportunities " revolve around the fact that the emerging markets are experiencing rapid economic growth and the resulting increase in trade and commerce drives increasing demand for logistics services. • Challenges " are many and varied, with the top three consistently being infrastructure limitations, bureaucratic regulatory procedures and shortage of skilled experienced logistics professionals. Let’s explore Infrastructure Developments and Skills Shortages in three specific markets # China, India and Vietnam: © 2012 LRS Group Pty. Ltd. All rights reserved!
Logistics Executive Now in it’s sixth year, the 2012-2013 Employment Market Survey Report will be release mid-October and will be available for download from our website - www.logisticsexecutive.com. The 2012-2013 Employment Market Report surveys go out of over 40,000 supply chain and logistics professional globally and looks at employment trends in the sector including talent retention, growth and salary trends. The report is covered in a number of high profile publications including Supply Chain Review. To register for a free copy go to www.logisticsexecutive.com.
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CEO EXECUTIVE SERIES!
Infrastructure Developments China has made massive progress in transportation infrastr ucture development, accelerated a massive boost from the four trillion RMB stimulus package initiated in late 2009. The highway system now has over 75,000 km of expressways, new airports are being constructed at the average rate of one new airport every five weeks, inland water ways are being developed and expanded, and container port infrastructure developments continue unabated, with Shanghai port handling over 31 million twenty foot containers $TEU% in 2011 Fu r t h e r m o r e , the huge development of the high"speed passenger rail network is expected to free up some of the
27 SEPTEMBER 2012
existing rail infrastructure to be converted for cargo use in the future, including containerized rail freight. In India, the transportation infrastructure is nowhere near as developed as in China. The level of investment and support has not been enough to keep up with modern logistics requirements, resulting in limited road infrastructure and congested container ports, leading to huge delays and inevitable ine&ciencies " costing time and money. A Washington Post article quoted experts as saying that “If urgent steps are not taken, by 2020 the cost of waste and delays will increase from '45(billion a n n u a l l y to ' 1 4 0 ( b i l l i o n . ” Several years ago, India took the initiative to allow private
© 2012 LRS Group Pty. Ltd. All rights reserved!
companies to operate on the state railway systems. One major player, Arshiya, is investing heavily in the rail sector in a bid t o i m p r o v e In d i a ’s o v e r a l l logistics efficiency, including investments of over 1.5 billion rupees in order to double their rail capacity. Vietnam " with the support of foreign investment and through several public"private"partnership $PPP% projects, Vietnam has been able to make good progress in recent years on infrastructure developments, particularly in southern Vietnam. One example is Cai Mep port ) the large, impressive, modern container terminal development south of Ho Chi Minh City. Together with the huge industrial zones and logistics parks built in Binh Duong province, north of the city, there are now much better options available for logistics activities. However there are still opportunities to further improve the overall planning and coordination of the logistics infrastructure projects " despite the Cai Mep port container terminals being open, there is limited highway connectivity to and from the port. There is also a need to develop multi modal ground transportation networks and corridors # specifically road and rail infrastructure # to connect the new industrial zones and logistics parks in Binh Duong province to the container ports " both the city terminals and
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CEO EXECUTIVE SERIES! the new Cai Mep facilities. Talent Shortages The skills shortage is one logistics challenge common to China, India and Vietnam # indeed throughout all emerging markets. As their economies are rapidly expanding, then logistics activity increases, which in turn drives demand for trained, skilled and experienced professionals. One of the key findings of the most recent Global Chief Supply Chain Officer Report was that “talent acquisition and leadership development” represents a significant challenge in supply chain management, with 35* of respondents listing it as one of their top challenges and a further 56* agreeing that it is an important challenge. In China the difficulty of recruiting skilled professionals is exacerbated because of its scale and also due to China’s expanding role in global suppl y chains, leading to increasing demand for skilled logisticians. At the same time, the sheer size of the population gives it a larger pool of experienced workers than in other countries. India’s leadership role in global commerce has developed in areas such as telecommunications and business process outsourcing. The impact for supply chain management is a smaller pool of
27 SEPTEMBER 2012 experienced talent to fill the expanding demand in the logistics s e c t o r. A s In d i a p l a n s t o m o d e r n i z e m a n y s e c to r s , i n particular the retail trade, there will be further increasing demand for experienced logisticians. In Vietnam, the majority of the population are young, well educated, with English widely spoken. Thus there is a large pool of potential workers for the logistics sector. However, as in many other countries, there are not enough young people choosing the logistics sector as their career path. Therefore in Vietnam, we are also seeing skills shortages. Conclusion The logistics sectors in China, India and Vietnam have improved significantly during the last five years, and as they continue to do so, we can expect to see a gradual reduction in the logistics costs as percentage of GDP. As industry leaders, we have collective responsibility to encourage the younger generation to choose a career in logistics, and within our businesses we must actively engage on talent attraction and retention programs. In line with maturing logistics sectors in developing and emerging markets, we will also see an increase in the level of outsourcing, which is good news for the 3PL logistics ser vice providers.
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For a copy of the 2012 Logistics Executive Global Employment Report email: darrylj@logisticsexecutive.com or kimw@logisticsexecutive.com
AUTHOR PROFILE: MARK MILLAR 克 Mark Millar leverages 25 years global business experience to develop and deliver enlightening and informative Keynote Presentations and to provide Consulting, Education and Advisory services " creating value for clients by empowering superior performance in their supply chain ecosystems. Acknowledged as an industry thought leader, Mark has been engaged by clients as Keynote Speaker, Moderator or Conference Chairman at more than 230 events in 20 countries. Recognised by the Global Institute of Logistics as “One of the most Progressive People in World Logistics”, Mark serves as a Director of Logistics Executive: markm@logisticsexecutive.com
© 2012 LRS Group Pty. Ltd. All rights reserved!
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