A small Singapore-based company shows how Web-based technologies can help small- and medium-sized enterprises (SMEs) prosper in the traditionally brick-and-mortar logistics and transportation industry.
May 15, 2002 -- A small, unpretentious office in a Changi warehouse with only 37 employees seems an unlikely nerve centre for a business operation spanning 13 countries.
But Singapore-based freight services provider, S-Net Freight Holdings, prides itself on being a new economy company, using technology, rather than scores of employees, to optimise its operations. Set up in April last year, the company is partly owned by Singapore Post. S-Net offers global air and sea freight and logistics management services for business-to-business (B2B) shipments, all through a sophisticated Web-based system.
The company's chief executive officer, Mr Cyril Rodrigo, elaborated on its track record. "Within a year, we have seen a month-on-month revenue growth of more than 300 per cent," he said. "We have expanded to 13 countries and have more than 1,000 customers."
The company attributes its success to its management and use of Web technology. "Our senior management consists of logistics industry veterans, and their domain knowledge has, of course, played a significant part in our achievements," said Mr Rodrigo. "But a large part of the credit must also go to information technology."
S-Net's IT director, Mr Liang Say Meng, agreed: "We conduct all our business through the Internet in an industry that still depends largely on paper invoices, faxes and international telephone calls. And that's what gives us a competitive edge."
Swift technology
S-Net conducts its operations with the help of an online integrated enterprise application system known as Swift (S-Net Web-based information technology).
Swift links multiple suppliers and buyers with the freight forwarder (or S-Net) through the Internet.
A flexible, plug-and-play system, Swift is designed to meet S-Net's transportation, warehousing and distribution requirements, both with regard to air and sea freight. Indian software firm, FourSoft, designed the system. Customer satisfaction and administrative efficiency are among the main benefits of this system.
Online tracking of customer orders and dispatches saves extra data entry and manpower costs. "We do not need scores of employees to monitor calls and faxes," said S-Net's vice-president of operations and services, Mr Peter Lim. "With the help of a mere 10 employees, Swift allows us to monitor thousands of customers in 13 countries."
Fragmented industry
There are other benefits as well.
"In an online system, both buyers and shippers can track the status of their consignments in real time," said Mr Rodrigo.
The logistics and transportation industry is highly fragmented, with no single computerised system to link sea, air and road freight.
"Besides, logistics companies usually also have separate warehouse management, accounting and ERP systems," said FourSoft general manager, Mr R. Ganesan. "As a result, they often have to duplicate data entry."
FourSoft's e-supply software integrates all these functions into a common Web-based system. There are two components to the software. The first, e-log, deals with logistics, inventory and warehouse management. A purchase order (PO) generated by a buyer is sent by the system to the inventory management system of a particular seller, where the PO is turned into a sales order. The other module, e-trans, deals with freight management and the task of moving shipments through different geographic locations.
Cost efficiency
Cost is another major consideration.
"An SME (small- and medium-sized enterprise) like us could never have ventured into the logistics and transportation industry, if not for the relative affordability of Internet technology," said Mr Rodrigo.
Before the Internet era, large multinational freight forwarding companies maintained their data on mainframes.
"It cost around $75 million simply to upgrade some of those mammoth systems," said Mr Rodrigo. "With Web-based technology, we can buy our entire software package for a fraction of that amount."
Scalability
FourSoft's e-supply software is built on Sun Microsystems' Java 2 Enterprise Edition (J2EE) architecture.
"Our main reason for choosing J2EE is that it has no platform dependency on any particular operating system or application server," said Mr Ganesan.
"Besides, it is extremely scalable, so that we can easily upgrade a customer's system to meet the growing demands of his business." |
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