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Experience in developing Logistics services in some ASEAN countries and lessons for Vietnam - 2


2. Research objectives

The thesis topic has research objectives:

Learn about experiences in developing logistics services in ASEAN countries.

Make recommendations for the development of Vietnam's logistics services based on lessons learned from developing logistics services in ASEAN countries.

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3. Research object and scope

The research object of the topic is the issue of logistics service development in some ASEAN countries and in Vietnam.

Experience in developing Logistics services in some ASEAN countries and lessons for Vietnam - 2

The scope of the research is limited to macro analysis of the current status of logistics service development in some Southeast Asian countries, mainly Singapore, Malaysia, Thailand and Vietnam in recent years.

4. Research methods

On the basis of applying dialectical materialism and historical materialism of Marxism - Leninism, the research methods used in this Thesis include: method of collecting & synthesizing documents, method of interpretation, induction, method of analysis, synthesis, comparison method, etc.

5. Thesis structure

In addition to the Introduction, Conclusion and References, the content of the Thesis is divided into 3 chapters as follows:

Chapter I: Overview of logistics services

Chapter II: Experience in developing logistics services in some ASEAN countries

Chapter III: Developing logistics services in Vietnam based on the experience of ASEAN countries

Here is the entire content of my Graduation Thesis.


CHAPTER I: OVERVIEW OF LOGISTICS SERVICES


I. General overview of logistics

1. Logistics concept

Along with the development of productive forces and the effective support of the scientific and technological revolution in the world, the volume of goods and physical products produced is increasing. In addition, the gap in traditional competitive areas such as product quality or price is increasingly narrowing, causing manufacturers to compete in inventory management, delivery speed, rationalization of the flow of raw materials and semi-finished products, etc. in the entire physical distribution management system of the enterprise. That fact gives logistics the opportunity to develop strongly in the business sector.

However, logistics was first invented and applied not in commercial activities but in the military field. Logistics was widely applied by countries in the two World Wars to move military forces along with large-scale weapons and ensure logistics for the participating forces. The effectiveness of logistics activities is a factor that has a great impact on success or failure on the battlefield.

Through the course of history, logistics has been studied and applied to the business sector. From a business perspective, the term “logistics” is often understood as supply chain management or physical distribution management of that business. There are many different concepts of logistics in the world and they are built based on the industry and research purpose, however, some main concepts can be mentioned as follows:


According to the American Council of Logistics Management-1988

Logistics is the process of planning, implementing, and controlling the efficient, cost-effective flow and storage of raw materials, inventories, finished goods, and related information from point of origin to point of consumption, in order to meet customer requirements.

According to British professor Martin Christopher

Logistics is the process of strategically managing the procurement, movement, and storage of raw materials, in-process goods, and finished goods (and the corresponding information flows) within a company and through its distribution channels to maximize current and future profits through the fulfillment of orders at the lowest cost.

According to the “5 Rights” Viewpoint

Logistics is the process of delivering the right product to the right location, at the right time, in the right condition and at the right cost to the customer who consumes the product.

According to Ma Shuo, author of “Logistics and supply chain management”

Logistics is the process of optimizing the location, storage and circulation of resources/input factors from the first starting point, which is the supplier, through the manufacturer, wholesaler, retailer, to the final consumer, through a series of economic activities.

Thus, in the content, all authors believe that logistics is the activity of managing the flow of raw materials, semi-finished products, finished products and information flow from the procurement stage through the storage process, product production and distribution to consumers. The purpose is to minimize costs that arise or will arise in the shortest time during the movement of raw materials for production as well as timely distribution of goods (Just-in-Time).


In short, logistics can be understood as follows: " Logistics is the process of optimizing the location and time, transportation and storage of resources from the first point of the supply chain to the hands of the final consumer, through a series of economic activities."


2. The development process of logistics

As mentioned, “logistics” is a military term, used in the army. Logistics is considered a branch of the art of fighting, which is the transportation and supply of food, provisions, and military equipment to the right place, at the right time when needed for the fighting force. Logistics has helped the armies of the participating countries gain victories, especially in World War II.

Stemming from the superior nature of logistics, after the end of World War II, logistics experts in the military applied their logistics skills in post-war economic activities to meet the practical task of rebuilding the country after the war (for European countries) or assisting in reconstruction (for the United States).

Since the 1950s, world industry and commerce have undergone profound changes from an economy based on mass production, requiring a large amount of homogeneous goods, to an economy in which the uniqueness and diversity of goods are emphasized. In trade, the seller is not necessarily the producer, and the buyer is not necessarily the consumer. The process of goods from the hands of the producer to the hands of the consumer can go through many intermediaries who play the role of seller or buyer in turn and are part of the entire process of goods circulation. The rich nature of goods together with their complex movements require strict management.


This has placed a new requirement on manufacturers and businesses. At the same time, to avoid capital stagnation, manufacturers and businesses always try to maintain the smallest amount of inventory. From the above reasons, the requirement for transportation and delivery activities in particular and distribution in general must ensure that raw materials and goods are supplied promptly and on time (Just-in-Time). On the other hand, transportation must be increased with the goal of not leaving goods in stock to minimize costs arising in production and circulation - logistics in businesses was born.

Studying the development stages of logistics, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) divided it into 3 stages as follows:

Phase 1 : Physical Distribution

In the 60s and 70s of the 20th century, people began to pay attention to the systematic management of related activities to ensure the effective distribution of products and goods to customers. These activities include: transportation, distribution, storage of goods, inventory management, packaging, classification, labeling, etc. These activities are called physical product distribution/supply or also known as out-bound logistics.

Phase 2: Logistics Systems

During this period, around the 80s and 90s of the 20th century, companies closely combined the management between the two sides, input (in bound logistics) and output (out bound logistics) to minimize costs as well as increase the efficiency of this process. Thus, the close combination between the supply of raw materials for production and the distribution of products to consumers ensured the stability and continuity of transportation flows, this combination was described as the logistics system.


Phase 3 : Supply Chain Management

This stage has been going on since the 90s of the 20th century until now. Supply chain management is a strategic concept of managing a series of activities from suppliers - to manufacturers - to customers along with services that add value to the product such as providing relevant documents, monitoring, checking... This concept emphasizes the development of relationships with partners, closely combining manufacturers with suppliers, with consumers and parties related to the management system such as transportation companies, warehouses and information technology providers.

Thus, logistics was developed from the application of "logistics" and "supply" skills in the army to solve problems arising from production and business reality and is now perfected into a management system that brings high economic efficiency.


3. The role of logistics

3.1 The role of logistics in business

In every business, there exists at least one of the two main activities: organizing production and building distribution channels. With the role of supporting other activities in the business, logistics always has a close interaction with both of these activities. Without logistics, production as well as distribution can hardly operate smoothly and effectively.

In production activities, logistics helps businesses shorten the operating time of the production line while still achieving high economic efficiency. In fact, many businesses believe that they must exploit the full capacity of machinery to achieve maximum output. As a result, they have to spend very high storage costs because they cannot consume all the products. Therefore, the role of logistics here


is the department that uses market research information to help businesses identify demand in each stage before starting production, avoiding large inventories and reducing continuous machine operating costs.

The second role of logistics is to help businesses ensure that input materials comply with production plans and especially avoid production interruptions. Logistics managers will have more difficulty when the production line of a business uses seasonal materials or the business is a manufacturer, assembling the final product in a chain of continuous production activities. For businesses that use seasonal materials, such as food processing companies, when raw materials cannot be stored for a long time, logistics managers need to find alternative sources of raw materials, and may have to accept importing raw materials. For companies operating in the production chain, such as the automobile industry, logistics performs the function of communicating with co-production units to ensure effective production cooperation without interruption.

In addition to production activities, logistics effectively supports marketing activities, especially mixed marketing. In the process of building marketing policies, managers must know where the business's market is, how to perform customer services effectively, thereby establishing a distribution channel that can maximize the amount of goods sold at a reasonable price. Logistics helps businesses accurately predict market demand, playing an important role in the process of customers accessing, trusting and accepting products.

3.2 The role of logistics in the economy

Logistics is a chain-based comprehensive activity, the efficiency of this process is of decisive importance to the competitiveness of the industry.


industry and trade of each country. Logistics plays an important role in the economy in many aspects.

Firstly , logistics is one of the major costs in business, interacting with many other economic activities. For developed countries such as Japan and the US, logistics contributes about 10% of GDP. For underdeveloped countries, this rate can be more than 30%. High production and business costs force consumers to buy goods and services at high prices while business profits decrease. If logistics costs increase for a long time, it can lead to a backward development of the entire economy, a decline in people's quality of life, and the state budget, which is mainly formed from tax revenue, is also affected. Thus, well-developed logistics will not only reduce time, costs and improve the quality of goods and services, but logistics is also an important driving force for economic development.

Second, logistics plays a supporting role in the flow of many transactions in the economy, and it is also an important activity that facilitates the trading of most types of goods and services.

Third, logistics is an effective tool to enhance the competitiveness of the economy and integrate with the world. In the current trend of economic globalization, the time and space gap between producers and consumers does not stop within the scope of each country or region but is increasingly expanding globally. In a fiercely competitive global environment, manufacturers and businesses must maximize production cost savings, reduce product prices, shorten delivery times, increase supply capacity, etc. To achieve these goals, businesses must apply logistics technology.

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