Supply chain success in Asia will hinge on industry collaboration and local quality sourcing

Maxine Krajniak, vp marine & hospitality, UTi posed the question at a workshop on cruise ship supply chain management in Asia on day two of Seatrade Cruise Asia 2016 being held at Busan, Korea.

Asia is an emerging market for the cruise industry and could learn from other industries which have faced similar challenges with regard to supply chain management, she noted.

Transporting  to emerging markets involves similar challenges such as regulatory hurdles, pilferage, theft etc. She said future supply chain success in Asia will hinge on industry collaboration, how well the stakeholders come together and figure out how to manage the supply chain.

Drawing examples from other industries Krajniak talked about achieving cross border goals through collaboration and innovation. Illustrating the ‘power of people coming together’, she agreed with professionals who think ‘we should be synergizing and not competing on supply chains’.

Other keys to success is strong global partners and relationships with local authorities, understanding of local regulations and real time access to complete global trade information.

‘Achieving “lean” supply chain delivers significant benefits. This also includes establishing “predictable performance” so that customers can rely on a company,’ she said. A lean supply chain is agile and able to respond to market conditions quickly when needed.

Tom Wieland, director supply chain f&b Asia, worldwide hotel procurement, Royal Caribbean Cruises Ltd said with additional ships in Asia, which invariably have new specialty restaurants onboard, there come attendant challenges to secure f&b products for the vessels. This is more so with highly specialized products for specialty cuisine, which is difficult to source.

It’s current goal is to source up to 50% of perishables needed on board locally, compared to 23% before. Price is an issue and carrying perishables from source costs more, he explained. Decisions  on sourcing  factor considerations such as what is safely, locally available and cost-effective.

He listed some of the challenges Royal faces in Asia to include product availability such as sufficient inventory being available, product quality meeting culinary requirements, food safety concerns and VAT, which can be prohibitive in China for instance.

Wieland said in catering to vessels in Asia, RCCL is changing more to local cuisine, which makes it easier to source locally. Unlike the US, Asia does not have consolidating warehouses but uses local distributors instead.

However, it is difficult to get the same brand and same quality each time.To this end it has a global supplier management program which includes food safety audits, testing, inspections, certification and meeting regulatory requirements.

The company is also starting to do sustainable seafood sourcing in Asia and have in place sustainable sourcing guidelines for RCCL suppliers.

Wieland announced that it has started an Asia distribution centre strategically located at Ho Chih Minh in Vietnam to help with delivery and distribution of f&b in Asia.

He considers this a big move in creating ‘hardware’ for the supply chain. He said various aspects of supply change management for the cruise industry is at the infancy stage in Asia and a learning curve is involved. He is optimistic: ‘We'll get there, it's just going to take some time.’