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BLC302 Logistics Management For The Yamato Holdings

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BLC302 Logistics Management For The Yamato Holdings

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Course Code: BLC302
University: Wawasan Open University

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Country: Malaysia


1. Can e-commerce contribute to growth opportunities in local logistics companies? Justify your answer.
2. What are the issues related to logistics and courier-listed companies in Malaysia? How do the leading companies overcome these issues?

The primary aim of this report is to discuss about the significance and role of logistics in Malaysia. Further, it explains that how e-commerce is contributing in logistics and courier listed companies such as Xin Hwa holdings Bhd and Yiwugou ecommerce Sdn Bhd(YESB) in the country. Issues related to e-commerce and logistic have been drawn in the report. At the end, some proposals have been given to improve e-commerce logistics in the country. 
Significance of e-commerce in logistics companies 
E-commerce may be defined as an activity of selling or buying of products on online services or over the internet. In other words, e-commerce is an online transaction between a client and supplier. Yes it is true that e-commerce contribute to grow opportunities in local logistics corporations. E-commerce permits customers to electronically share or exchange products and services with no issues, concerns and distance. It has been reported from the various studies that E-commerce organizations that initiated as a tend such as e-bay, Alibaba, and Amazon continue to make promotes and courageous expenditures into logistics. It is further noted that online retailers such as goods, ICT, fashion, and electronics have enhanced and improved effectively and significantly as against to food retailers in the global market (Khurana 2013). For example GDEX is a growing package delivery services corporation which is attracting big companies like Japan’s Yamato holdings Co. Ltd and Singapore Post Ltd to take up chunks of share in the firm. It is seen that the firm is taking benefits of e-commerce success and growth. Since March 17, logistics stock has increased RM342.6 mil in their combined market capitalizations. Along with this, executive director Edwin says that logistics counters have already been trending upwards in line with the e-commerce evolution. Currently, the courier industry renders around 500,000 boxes per day in Malaysia thus, the growth and success of e-commerce can be ignored in the country. E-commerce mechanisms are generating more demand and developing a pool of purchasers by rendering promotions to entice purchasers to shop online. In this way, e-commerce contributes in local logistics companies in Malaysia to fight with competitors. YESB is principally included in e-business and e-commercial transactions. 
Since e-commerce activities and business have been constantly increasing, growing and predicted to grow even more, it is also becoming an effective and primary element on changing the shape and tends of global logistics companies in the international market. Decisions like physical location of warehousing and inventory are taken through e-commerce. With effective and dynamic e-commerce, a unique and strong supply chain would permit a high level and effective services to be rendered around the channels (Comer 2018). It has been analyzed from the various studies that managing and handling the delivery process are also a growing and significantly complex task as delivery place or location from warehousing to physical stores.  In today’s modern world, e-commerce has taken the entire business and marketing sector due to its constant growth and virtual connectivity (Pandiyan Kaliani Sundram, Razak Ibrahim, and Chandran Govindaraju 2011, 834-855). Through e-commerce, the companies are able to eliminate and reduce the geographical limitations, gaining new and innovative customers with search engine visibility, higher capacity of products and services and reducing the maintenance costs. It has been found that e-commerce may be a single most significant facet of today’s modern world (Eid 2011, 78). E-commerce also permits company’s business to scale up easier and effective than physical retailers because they are not limited by physical limitations and rules like inventory storage space. This facility further helps in gaining morale and loyalty of the customers across the globe. Thus, the logistics companies use e-commerce to increase and improve the accuracy and productivity in the competitive market (Ali, Harlina and Sabariah 2008, 12-13). Kenanga research ensures that there would be effective and adequate time for integrated logistics leaders that are venturing into e-commerce delivery to mature, as the predicted launch of the distribution hub under the name of DFTZ initiative for 2019. 
Issues of logistics and courier listed companies in Malaysia 
It is stated that logistics management in Malaysia helps in distributing the products and services effectively and efficiently. The key logistic activities include cargo storage and warehousing, tracking, transshipment, manpower supply, customs brokerage and packaging. It has been found that the country is using e-commerce and IT facilities in logistic management to stand out over the rivals in the international market. Outsourcing of logistics services and products are done by the companies in Malaysia (Aman and Kasimin 2011, 330-344). The logistics and courier companies expand and explore the business activities and operation in the foreign market with the help of e-commerce. In today’s era, various challenges and issues are being faced by logistics and courier listed companies that have been drawn below.

It is stated that thereare several players in the logistics sector thus, it may affect the growth and progress of the firm. Lack of integration and communication among the transport networks which leads ample of losses in the global market. For example, Tiong Ham logistics Holdings Bhd is facing earnings pressure in the short time period. Lack of trend manpower is one of the leading and growing issues that may impact on the performance and efficiency of the workers. Due to lack of training, the employees fail to keep an eye on the productivity and efficiency within the organization. All these issues are being faced by Tiong Ham logistics Holdings Bhd.
The other example is Pos Malaysia which is a biggest postal delivery service company in Malaysia also facing various issues while functioning.  There is no clear and effective definition of various leaders and scope of services in the market. It also affects the long term profitability and results of the firm.
Labor intensive is another issue that put direct impact on the outcomes and returns of the logistics and courier listed companies (Shepherd and Shintaro 2015, 444-466).
It is further analyzed that decreasing operation cost towards attaining competitive edge in price leadership major issue in logistics and courier listed companies.
The companies further are unable to create multimodal transport system to conduct business activities and functions effectively. It reduces profitability and productivity of the logistics companies (Farahani and Shabnam 2011). All these logistics issues are being entertained by the logistics and courier listed companies in the country.

To overcome all these issues, the companies need to focus on the logistics and supply chain management (Willis 2017). Effective strategies are made by the company in Malaysia to overcome all these issues significantly and effectively. Some of the ways that help to overcome these issues are discussed below.

It is analyzed that logistics companies like Pos Malaysia uses innovative strategies to deal various logistics issues in the country. The firm provides logistics solutions to attain long term objectives and targets (Inn, 2017). The company uses air cargo logistics with two boeing 737-400 freighters under its feet in order to flourish the business and to handle the logistics issues.
Xin Hwa holdings Bhd and Yiwugou ecommerce Sdn Bhd(YESB) highly involved in e-business and e-commercial transactions. Xin Hwa has made an agreement with Zhejiang Yiwugou e-commerce Co.Ltd to eradicate and reduce the logistics issues. Xin Hwa Holding Bhd uses integrated logistics services to save time and cost effectively. It will help to overcome the issues related to logistics and courier listed companies (Inn, 2017).
Air transportation mode is used by Xin Hwa holdings Bhd to overcome the logistics and courier listed companies globally. Apart from this, the firm implements an insurance policy for each and every order before dispatching from the warehouse. After the various studies, it has been noted that the companies in Malaysia use proper and adequate mode of transportation as per the needs and requirements of the customers (Zailani, Azlan and Herina 2011, 104-113).
Yiwugou ecommerce Sdn Bhd(YESB) uses proper and effective documentation for every order which helps in avoiding any difficulty and challenge. It has been portrayed that the organizations should maintain proper inventory record and data to fulfill the needs, demands and needs of the customers (Sham, Rasi,  Abdamia, Mohamed, and Bibi 2017, 021040).

Some of the recommendations have been given to overcome various issues that are elucidated below.

Proper and open communication and cooperation shall be maintained by the leaders and managers to run the business functions smoothly.
Proper tracking and recording related to products and services shall be done by the company to maintain sufficient level of goods and inventory.
In Malaysia, the organizations should focus on the strategies, policies and approaches of the competitors to cope with them and to be leaders in the international market.
The firm shall also focus on the preservation and packaging to avoid and eliminate the various issues related to courier listed and logistics companies (Zailani, Jeyaraman, Vengadasan, Premkumar2012, 330-340).

Evaluate the logistic sector in Malaysia 
It has been analyzed that logistics plays a significant role in gaining competitive edge in the international market. The country is considered as a crucial facilitator of trade. The companies in Malaysia further emphasize on the logistics sector that helps to maximize profitability and market share in the competitive market. In 2005, transport, storage, cooperation and communication services contributed RM23.2 bil. or 8.8 % to GDP (Mordorintelligence 2018). The logistics service providers and transporters have grown and increased in the country that helps to boost and uplift returns and revenue in the global market. As a transporter, it is analyzed that logistics sector is growing in Malaysia rapidly. E-commerce network plays a vital and empirical role in Malaysia to fulfill the long term objectives and goals of the companies in the marketplace. Malaysia’s online retail and logistic sector are investing huge amount on the e-commerce to be a player in the marketplace. It is portrayed that Malaysia’s e-commerce laws and rules are based on a combination of the electronic commerce act 2006 and the electronic government activities act 2007. E-commerce is a biggest and dynamic block in logistics in Malaysia that help in expanding and exploring the business operations in the global market. Logistics is a activity and process that includes storage, obtainment and shipment of products and services. It also includes inventory management, billing, warehousing, labeling, packaging and shipping and so on. In Malaysia, some e-commerce organizations have their own logistics companies whereas the other look for reliable third party logistics providers and transporters to render accurate and speed product delivery thereby satisfying and fulfilling the needs and desires of the customers (Mordorintelligence 2018). E-commerce leaders have started to initiate same day delivery products and services and they also render free or low shipping choices for attracting and retaining the majority of the customers across the globe. To manage and handle the customer request on exchange and return of products, they have used a proper reverse logistics in the global market. Growing and increasing e-commerce has opened the Malaysian market for global leaders and these organizations are welcoming this gesture as a market development and expansion opportunity. It is noted that the digital free trade zone is a key development and effective action to track and record within the Malaysian e-commerce fulfillment market, as it is predicted to make Malaysia an e-commerce logistics hub for the region and internationally. In this way, e-commerce is a fundamental part of logistics companies in Malaysia (Spore 2018).  
Proposals to improve e-commerce logistics in Malaysia 
There are various ways to improve and enhance the e-commerce logistics in Malaysia that have been discussed below.

The logistics companies need to increase and enhance the internet access and network to improve e-commerce logistics globally. It will help in determining speedy delivery across the world hence, the logistics companies can take ample of benefits.
Domestic suppliers need to be used and the companies further need to increase order frequency to improve and reduce lead time. An expert team and audit committee shall be appointed to supervise and monitor the activities and functions of e-commerce logistics.
Beef up online security shall be done by the companies in Malaysia to overcome the issues and improve the e-commerce logistic. Online payment must be used to secure payment (Mohapatra 2013). Various payment methods like cash, mobile payment, credit card and debit card should be used to enhance the e-commerce.
Malaysian companies must look towards emerging development and economies of their e-commerce logistics arrangements, cost, freight management, and usage of technology.
Huge investment is done by the companies in improving and growing e-commerce logistics in Malaysia.
The companies should focus on the online shipping, free shipping and overnight shipping to develop e-commerce logistics internationally.
The needs, requirements, choices and preferences of the customers shall be considered while improving the e-commerce logistics in Malaysia. In this way, the companies in Malaysia can improve and enhance the e-commerce logistics in the country (Kurnia, Choudrie, Mahbubur, and Alzougool2015, 1906-1918).

It is concluded from the above discussion that logistics management plays a vital role in Malaysia to serve the better services to the customers around the globe. In today’s era, e-commerce is being used by the companies like Xin Hwa holdings Bhd and Yiwugou ecommerce Sdn Bhd(YESB)  in Malaysia to struggle with competitors and to increase the sale in the global market. It is analyzed from the above study that organizations face various challenges while using e-commerce therefore innovative strategies are made by the companies to tackle and overcome on these issues and challenges.  
Ali, Rosena Md, Harlina Suzana Jaafar, and Sabariah Mohamad. 2008.  “Logistics and supply chain in Malaysia: Issues and challenges.” In EASTS International Symposium on Sustainable Transportation incorporating Malaysian Universities Transport Research Forum Conference, Johor, pp. 12-13.
Aman, Aini, and Hasmiah Kasimin.2011.  “E-procurement implementation: a case of Malaysia government.” Transforming Government: People, Process and Policy 5, no. 4, pp. 330-344.
Comer, Douglas E. 2018.  The Internet book: everything you need to know about computer networking and how the Internet works. Chapman and Hall/CRC.
Eid, Mustafa I. 2011. “Determinants of e-commerce customer satisfaction, trust, and loyalty in Saudi Arabia.” Journal of electronic commerce research 12, no. 1, pp. 78.
Farahani, Reza Zanjirani, and Shabnam Rezapour. 2011.  Logistics operations and management: concepts and models. Elsevier.
Inn.T.K.2017. Logistics firms running ahead of fundamentals [Online]. Available from https://www.thestar.com.my/business/business-news/2017/03/25/logistics-firms-running-ahead-of-fundamentals/ [Accessed as on 21st November 2018].
Khurana Ajeet. Advanatges and disadvantages of e-commerce, 2013, retrieved from https://www.thebalancesmb.com/ecommerce-pros-and-cons-1141609 
Kurnia, Sherah, Jyoti Choudrie, Rahim Md Mahbubur, and Basil Alzougool.2015.  “E-commerce technology adoption: A Malaysian grocery SME retail sector study.” Journal of Business Research 68, no. 9, pp. 1906-1918.
Mohapatra, Sanjay. 2013.  “E-commerce Strategy.” In E-Commerce Strategy, Springer, Boston, MA. pp. 155-171.
Mordorintelligence. 2018. Malaysia freight & logistics market, retrieved from https://www.mordorintelligence.com/industry-reports/malaysia-freight-logistics-market-study 
Pandiyan Kaliani Sundram, Veera, Abdul Razak Ibrahim, and V. G. R. Chandran Govindaraju.2011.  “Supply chain management practices in the electronics industry in Malaysia: Consequences for supply chain performance.” Benchmarking: An International Journal 18, no. 6, pp. 834-855.
Sham, Rohana, Raja Zuraidah Rasi, Noranita Abdamia, Suhana Mohamed, and TKM Thahira Bibi.2017.  “Halal Logistics Implementation in Malaysia: A Practical View.” In IOP Conference Series: Materials Science and Engineering, vol. 226, no. 1, pp. 012040. IOP Publishing.
Shepherd, Ben, and Shintaro Hamanaka. 2015. “Overcoming trade logistics challenges: Asia-Pacific experiences.” Asia Pacific Journal of Marketing and Logistics 27, no. 3, pp.  444-466.
Spore. 2018. Transport: Overcoming logistical challenges, retrieved from https://spore.cta.int/en/article/overcoming-logistical-challenges.html 
Willis Neal. 2017. Benefits of integrating e-commerce with logistics, Retrieved from https://www.re-transfreight.com/blog/benefits-of-integrating-e-commerce-with-logistics
Zailani, Suhaiza, Azlan Amran, and Herina Jumadi.2011.  “Green innovation adoption among logistics service providers in Malaysia: an exploratory study on the managers’ perceptions.” International Business Management 5, no. 3, pp. 104-113.
Zailani, Suhaiza, K. Jeyaraman, G. Vengadasan, and R. Premkumar. 2012. “Sustainable supply chain management (SSCM) in Malaysia: A survey.” International Journal of Production Economics 140, no. 1, pp. 330-340.

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