The History Of Global Logistics

Published Date: 02 Nov 2017

1.0 Introduction

OAS Global Logistics (M) Sdn Bhd was formed as a result of partnership. Initially known as Syarikat Oriental Air Services in 1976, a private limited company was incorporated to take over the existing business, resulting in the partnership in 1980. The principle activities of the company are air & sea cargo forwarding and transport services.

The company's main operations are based at three international airport sites in Malaysia, which are the Sepang Airport (Kuala Lumpur), Bayan Lepas Airport (Penang) and Johor Bharu (Johor). For the past 30 years, OAS has successfully built efficient and effective operation plans to meet the strict requirements of various multi-national and public listed companies

The objectives of the company are diversified; including to perform as an Agency Forwarders, Carriers Forwarding Agent, Worldwide Forwarding Agent, Custom Broker, and Transportation Consultation as well as to perform all daily operations for logistics requested by clients, be those locally or internationally.

Philosophy

OAS Global Logistics (M) Sdn Bhd's motto, "A Commitment to Serve", is held high by the company since it was founded in 1976. Customers are always the main priority, hence the company has always been concerned to offer fast, reliable and efficient transportation. OAS works hard to provide the best services within least amount of time.

Company Vision:

To join-up with bigger corporate organization and enhance the image in market.

To have stronger financial back-up for business expansion.

Company Mission:

To provide quality, efficient and timely services to our customers.

To work towards achieving excellence in quality through ISO 9002.

To be public listed company within this decade.

To be the leading regional operator of aircraft and shipping chartering services.

To develop a total logistics franchising program in the region.

To collaborate and assist local higher institutions in developing logistic studies and research program.

Strategy to Compete

OAS Global Logistics has a unique competitive advantage over its competitors by having operation offices and bonded warehouse located adjacent to the cargo terminal inside the airport. Hence, they are strategically located to handle the needs of their valued customers. Besides, they are also well equipped with the correct hardware to handle all kinds of cargos. Furthermore, they have infrastructures capable of handling all cargos irrespective of their nature and bulk, with high efficiency. In terms of information technology, OAS communication and information dissemination network is powered by the IPAC Freight Net System which is developed on a successful platform and is well supported by advanced technical service providers.

OAS also deals with most major carriers and this gives them great credibility and a sharp competitive edge as they have the reputation of serving carriers and have competitive choices of carriers specially tailored in order to meet the customers’ needs.

Since human resource is vital in the pursuit of excellence, OAS employees are all highly trained and motivated individual who are not only knowledgeable about the jobs but also dedicated to uphold the highest standards of quality services, with the total employee base reaching almost 100 trained personnel. The company’s employees are comprised of experts from different fields of transportation industry, such as air freight, ocean freight and air-sea freight. The main priority of the company is to understand the needs of the customers, which is important in order to provide high quality services and to create competitive advantages to their business.

2.0 Company’s Production/Operation Processes & Facility Layout

(a) Production/Operation Processes

(i) Diagram of production processes flow (steps) and its descriptions

Sorting the Goods

Unloading of Arrival Goods

Collecting of Arrival Goods

Arranging the Goods

Order Processing

Loading and Stuffing

In Step 1, OAS Global Logistics employees collect arrival goods from Royal Malaysian Customs Department. After that, they will move the goods into the container yard and load them onto box vans. Mr. Andy Ooi, the OAS’s Chief Executive Officer said, "In order to save transportation cost, we will send the goods to our customers in the same area as we are, when we’re on the way back to company.

In Step 2, once the goods reached the company, OAS’s employees will unload the goods from the vehicles and stack them onto pallet as it is easier for them to transfer the goods from one area to another area. Then, they will check the goods for completeness and correctness on the basis of the accompanying documentation. For example, what is the contents and the quantity of the goods.

In Step 3, OAS’s employees will perform sorting of goods based on types (for example: solid or liquid), weight and size. At the same time, they will inform their customers about the importance of insurance coverage before proceeding to the next step which is storing and arranging of goods. It depends on the customers on whether they want to cover their goods with insurance or not. For documentation purposes, they will identify and mark the goods in accordance with the legal requirements. After they have done marking, they will move the goods using forklifts..

In Step 4, they will arrange and organize the goods properly and professionally according to the weight and type of goods. They will put the heaviest goods on the floor while the lighter ones on top of the heavy goods. Besides, they will place the liquid goods in a separate area whereas solid in another area. OAS has three different types of storages for allocating their customers’ goods, which are drum storage for liquid goods, palletized cartons and selective racking for solid and dry goods.

In Step 5, order processing includes few logistical activities that require cohesion and integration. Order processing will take place once the customers placed orders. During this step, OAS’s employees get to know the choice of transport mode, carrier and loading sequence to deliver the goods to customers. The picking and packing, updating of inventory files, printing replenishment and reorder lists, preparation of shipping documents, payment of the accounts and the entering of all the data into the company’s books are taken place in this step.

In Step 6, the employees will load the packaged goods into shipping containers. They will load the containers onto van, truck or lorry according to volume of the goods and position the goods in a proper manner.

(ii) Analyze and address the strengths and the weaknesses

OAS Global Logistics as a Third Party Logistics service provider has implemented process focus as their basic strategy. The facilities are arranged accordingly for the progression of specific activities and processes, in order to facilitate low-volume, high variety production (Jay Heizer & Barry Render, 2011). In OAS, each employee is being assigned on specialized jobs; he or she will keep performing the same job scopes within OAS’s operation processes and moves goods to the next employee to continue the process until the task is completed. We have found out the weakness of OAS which is communication among employees will be minimized through process focus. This is because OAS’s employees will only communicate with the employees that carry out the next step of the process after them. Rose Johnson (2013) claimed that effective communication can increase the productivity, minimize the errors and improve the efficiency of operations.

In process focus, service customization is being applied. Mr. Andy said, "Based on my experience in this logistics industry, we know that even after much precautions taken to protect the goods, there are still risks of unforeseeable natural happenings such as accident, fire and sabotage that can cause damages to the goods. Therefore, we will ask our customers whether they would like to purchase insurance before storing and arranging their goods in our warehouses." He also mentioned that, "We will provide minimum amount of compensation to our customers if there are any accidents happen which lead to damages to their goods. So, in order for our customers to get a much higher compensation, we recommend them to buy insurance." Therefore, service customization can be strength to OAS as they can fulfill most of the customers’ needs and increase their satisfaction (Arnold Anderson, 2013).

Make-to-order is involved in process focus. Once OAS’s employees notice that their customers need to restock their goods through quick notice system, they will deliver the required goods to their customers via quick mode. OAS will provide their final service to their customer which is shipping service only when the customers need the goods. In order to know when the customers need the goods, OAS practices Just-In-Time (JIT), an automated ordering system that can provides accurate forecasting and speedy order management for OAS. JIT can be strength for OAS in helping make-to-order process to flow smoothly and to provide a better and efficient service to their customers. JIT is an integrated, problem-solving management approach that focuses in improving quality and facilitating timeliness in supply and production as well as distribution (Kee-Hung Lai and T.C.E. Cheng, 2009).

Temidara Adeosun (2011) indicated that broadly skilled operators who can manage their job as a challenge because of uniqueness is involved in process focus. OAS uses automated material handling machines for loading, unloading and storing of goods in their warehouses. Mr. Andy said that, "Automated material handling machines can reduce the intensity of labor and at the same time, it will help my company to save labor costs." He also claimed that automation will be more useful when handling hazardous material. In order to handle and control the machines professionally, OAS’s management has hired highly skilled operators who recognize the benefits of technology and have interests in the logistics industry. This will be the strength of OAS as Shishir Rege had analyzed that currently, plant managers acknowledged that robotics have hidden values over hard automation and he noted that the demand of material handling robotics will increase constantly (Bennett Brumson, 2012). In logistics industry, usage of technology is important as to achieve the company’s desired goals (Susana Garrido Azevedo, Joao Ferreira, Joao Leitao, 2007).

Scheduling is a complicated work in the process strategies of process focus (Jay Heizer & Barry Render, 2011). A greater efficiency in the movements of logistics can be attained if the management chooses the modes, terminals, routes and scheduling appropriately (Dr. Jean-Paul Rodrigue & Dr. Markus Hesse, 2013). OAS has showed their strength in scheduling. They have employed shipping and receiving coordinators that are in charge in handling the manual tasks such as assembling, addressing and stamping as well as organizing the shipment of customers’ goods. In this modern era, time-sensitive segment of population has been increasing continuously (Peter Foldesi, Janos Botzheim & Edit Sule, 2011). Thus, OAS’s shipping coordinators have created proper and effective schedule in arranging the shipping processes to avoid delay deliveries.OAS also provides different types of transports to move goods quickly to a point of demand and arrange the suitable transportation to deliver their customers’ goods on time. For instance, OAS will suggest their overseas’ customers to use air freight shipping instead of ocean freight shipping, if customers need their goods urgently.

In process focus, costing is predicted before job and is only known after the job is done (Jay Heizer & Barry Render, 2011). During the shipping process where the goods are still on the way to the customer, OAS will only get to know the actual payment their customers need to pay. This is because the management needs to calculate the total number of days of the storage of goods and the spaces that are being utilized by the goods in the warehouse in order to compute the total costs of their services they need to charge to their customers. In our opinion, collecting payments after providing services is very risky for the company as some people may have the intention of not paying but to enjoy the "free services" which may lead to the company to incur losses. However, Mr. Andy told us that, "We will be collecting for handling costs before we start our process while total payment is collected during the shipping process." It has been weakness for OAS as getting payment after completing the overall process is very risky.

(b) Facility Layout

(i) Diagram of facility layout and its descriptions

Symbols:

Packing Department

Shipping Department

Entrance

Exit

Palette Racks

Palette Racks

Drum Storage

Top-Track Storage

Top-Track Storage

Loading Area, Receiving of Goods

Symbols

Descriptions

Before shipping the goods to the customers, packing activities are done in this location.

This is a pallet rack, a material handling storage aid system that is designed to store palletized goods. Besides, it enabled mass storage of goods on pallets, so that OAS can simplify the process of receiving goods to utilizing them inside their factory.

Drum storage racks, a rack to store larger quantities of flammable solvents. These drum racks are able to hold 30 or 55 gallon drums in a horizontal position.

This is a top-track-storage system that utilizes far less aisle space as well as to maximize the usable storage area. It can increase the storage capacity of a given area up to 30% to 40%.

The entry and exit area of goods. This is the area for OAS’s employees to transfer the goods in and out for packing or shipping.

Place for receiving arriving goods. This is also a loading area, a building for loading and unloading goods from trucks or lorries. The loading area is an activity as goods arrive for storage and being staged for distribution.

(ii) Analyze and address the strengths and the weaknesses

OAS has arranged the drum storage racks at the corner of their warehouse and far away from the others goods to minimize damage and spoilage. This is because drums, cylindrical containers hold flammable solvents that can cause unexpected situation to occur if employees do not handle them with appropriate methods. For example, improper way of handling and storage drums can cause fire in the warehouse which might lead to huge losses for OAS. In addition, the place for allocating drums is situated near to the entrance. So, it is easier for OAS’s employees to handle and move the drums in and out across short distances by using forklifts. It is clearly shown that OAS has the strength in arranging their drum storage as it gives number of advantages to them.

Mr. Andy had mentioned that, "We must utilize the space our warehouse fully to obtain highest profit and to minimize cost." M.B.M. de Koster (2008) said that, "Storage and order picking play vital roles in most of the warehouse operations. Hence, the efficiency of warehouse has a strong connection with the methods used for storing goods and picking the orders." Furthermore, Mr. Andy had acknowledged us that he designs his warehouse higher than normal low roof warehouse which is around 12 feet to 16 feet so that they can store more goods by stacking them without taking large amount of space (Edward Brown, 2010). This is OAS’s strength; however there is a possibility for the pallets to collapse due to instability which may cause injury to their employees.

Besides, process-oriented layout design for OAS can help to optimize the efficiency of their operation processes. Having a well-structured facility layout for warehouse is important in order to achieve top performance. Process-oriented layout is designed for flexibility where some employees are able to link to geography and improve a firm’s flexibility (dukesinbusiness.com, n.d.). Thus, the flexibility of the layout in labor assignments and equipment has become the strength for OAS. OAS has allocated different processes in different departments. This shows that OAS has the capability to deal with an assortment of processing requirements.

The number of pick-up and deposit (P&D) stations can affect the efficiency of the warehouse (Otto Dario Galvez & Ching-Jung Ting, 2012). The more P&D stations in the warehouse, the more efficient the daily operation processes are. The P&D station is used to transfer the goods to the right level of storage where the pallets are placed there. OAS has only one P&D point so it has become the weakness of OAS. If OAS has several numbers of P&D stations, it can increase the OAS’s efficiency as the travel of goods begins and ends in different P&D points (Otto Dario Galvez & Ching-Jung Ting, 2012). Another weakness of OAS is they have few numbers of shipping docks. Having multiple shipping docks in warehouses can increase the speed of operations and indirectly help the company to gain more profits.

The weakness of the process-oriented layout is it has a higher cost per unit and less conformity from department to department. Lower efficiency causes higher cost per unit. As the departments of OAS, for example, receiving department and packing department are situated in different locations, the costs of moving the materials are eventually high. This is due to the time taken to transfer the goods and the cost of moving goods from one department to another department. When the time taken to transfer the goods is long, it will affect the overall progress of the operation processes and delay the time for the goods to move from one step to the next step of processes. Last but not least, it will affects the overall operation processes of OAS as well as causing OAS to generate lower profit.

 

3.0 Study Area’s Literature Review & Contributions

New Service Development Definition

New service development can be defined as the offering of new services that haven’t been offered before or the modification of the existing services to transform it into new one.

New Service Development Process Elements

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New service development consists of four main stages which are design, analysis, development, and full launch. In the design stage, it consists of the formulation of new services objectives / strategy, idea generation and screening, concept development and testing. While in analysis stage, it includes business analysis and project authorization. Next is development stage that involves service design and testing, process and system design and testing, personnel training, service testing and pilot run, and test marketing. Lastly, full launch has two elements which are full-scale launch and post-launch review.

The Importance of New Service Development

New service development (NSD) is getting more and more important for companies that wish to gain a competitive advantage on service-driven markets (Lin and Hsieh, 2011).Therefore, most companies are applying new service development into their company policies in order to get the most updated information to satisfy the customers’ needs. Furthermore, they are more focused on the innovation and creativity in terms of new service development, to create more opportunity for the company.

How to provide better service 

First of all, service characteristics need to be considered in order to provide better service. Service characteristics can be classified into four, which are intangibility, inseparability, variability and perishability. (Shekar, 2007). Asking the customer to purchase insurance allows the insurance to become one of the service characteristics. It is an intangible service and can’t serve its’ purposes if there aren’t any accidents, so it is also an inseparable service characteristics. OAS sorts their goods step by step to ensure that they are kept safe. They will ask their customers to purchase insurance to avoid possible risks such as lost, broken or any other accidents. It’s also variable and perishable service due to customer can choose what type of insurance they want and the insurance only covers each delivery service will be lost forever after it is used.

Besides, to build a competitive logistic company, it is vital to fulfill customers’ needs and let them satisfied. Timely restocking of customers’ goods can be achieved through quick notice system and by delivering them to customers via quick mode, as what OAS is currently practicing. Furthermore, internal analysis is also crucial to discover the needs and problems within the company. Understanding what the customers want is one of the ways to achieve more efficiency and effectiveness.

On top of that, another way to better service is by having own customer database which records customers’ preference regarding transportation mode, carrier and loading sequence when delivering the goods to customers. The recording includes the picking and packing, updating of inventory files, printing replenishment and reorder lists, preparation of shipping documents and so on. OAS emphasis on each of their steps, they are focused on each of the steps to deliver the best value to their customers. For example, how the customers want to receive the delivery, what the customer customize on their goods, and so on. They even hire skillful leaders to lead the departments to make sure that their organization is operating well.

Offering service customization for customer can also be a way to promote better service. Customers can choose to buy or not to buy the insurance that they offered to avoid accidents. (Matear, Gray, & Garrett, 2004). OAS provided different types of insurances, but they do force their customers to purchase them, but just as an offering to help customers to warrant their goods. Cost effectiveness, relational and new service positional advantages are factors that should be considered too. To seek for an efficient product and process focus is important so that not only they can cut off costs, but customers need pay less too, which will lead to higher customer satisfaction. Stronger market base can then be built with win-win situations. Currently, OAS is trying to operate in an efficient and effective manner as they would like to offer their customers better values. These will be let the customers feel satisfied and in turn they will be loyal to OAS. (Matear, Gray, & Garrett, 2004)

Effects of communication are also another aspect for new product or service development. Communication means sharing or transferring of information between two or more parties. The misunderstanding or uncertain communication will evokes a lot of mistrust and conflict. If cross-functionality had been solves, this will create the opportunity for timely integration of critical information into the new product or service development (Park, Lee, Zhou, Kim, 2011 ). For example, access to new knowledge, heightened, high quality learning experiences. In order to succeed in developing new services, OAS will need to improve the communication between them and their customers.

The collaboration with other party for new product or service development is also crucial. Collaboration is the exchange of resources and mutual understanding between two or more parties to achieve the goals of both participants (Park, Lee, Zhou, Kim, 2011 ). Through collaboration, OAS attempts to understand the practices, preferences and culture of their multi-nation customers. Collaboration is a useful way of conceptualizing cross-functional linkages in developing new service, where high levels of collaboration among participants in the new product or service development process can result in significantly improved performance of the service.

Innovation is the most important aspect in the new service development. There are few innovations needed in the new service development. The innovation between service and product are totally different. This is because services are intangible and heterogeneous. From the research, we found that innovation is not only about the development of new things. Innovation in service can be related to the client interface by delivery system and technological options. Innovation in service is to increase the market and client through specific ways. For the delivery system, it is refer to the internal organizational arrangement. OAS needs to manage the employees so that they perform their job properly in the development of offering of innovative services. Next, technological components refer to technologies that are used in the new service development process. The examples of these can be seen in tracking and tracing systems. The transport service providers use these systems to monitor the progress of their fleets and manage the service closely including OAS. Besides, OAS is also using another technological system which is Made-to-Order. This system will notify OAS if there’s restocking needed by the customers through quick notice system

New Service Development Competence is a system of development practices, processes, and routines that interrelate to influence a firm’s ability to development new services effectively. There are 4 dimensions of new service development competences which are process focus (PF), market acuity (MA), new service development strategy (ST), and IT experience (IT) (Menor and Roth, 2008).

PF is concept referring to the availability and the use of systematic new service development practices and routines. Cooper (1994) recognizes the importance of breaking down the new services development process into stages. OAS facilities are arranged accordingly to make their process or activities smoother. This is a strategic advantage in development efficiency and effectiveness to service firms with specific formalized processes. MA is the ability of the service organization to see the competitive environment clearly. MA is valuable because it requires the service firm to continuously seek information regarding customers’ needs and wants, and also the competitors’ offerings at the same time. IT captures the use of the information of technology for facilitating or improving inter-organizational and intra-organizational coordination of activities and information processing during the development of new service.

Through the redesigning of information system flow and the infrastructure of a company, a company will be able to build and achieve a better environment for better and faster decision making process through the interactions between various components within and outside a company. This will contribute greatly to the growth and efficiency of a company.

The interaction between employees and technologies plays an important part in contributing to the new service development. The infrastructure of a company serves as an important element in the facilitation of the new service development. This is in such way that the layout or geographic location of a work facility will affect how a company will perform.

All these can be seen in OAS throughout the steps involved in providing the logistic serviced to their customers. With a process focus arrangement in their plant, OAS is able to efficiently cater to different customers, focusing on several services categorizing the goods they need to transport according to the products’ features. The use of Made-to-Order and JIT system in OAS enables them to fulfill their customer's needs and serve them better. All these can be done with the help of technologies by tracking the needs of their customers.

Service is viewed as a process rather than an object requiring new service developer to consider more than just the design of the service per se (Jones, 1989; Gronroos, 1990; Martin and Horne, 1995; Van Looy et al., 1998). This causes the excess complications organizations have to endure in the effort of improving their services.

The core of service includes the interactivity of services in which its nature is developed and consumed by multiple parties. This causes the exacerbation of the complexity of how a service can be manipulated. Because of this, a network approach can be valuable and important in identifying and nurturing appropriate relationship between the affected parties.

Innovation through external network can allow the cost of service providers to go down through the utilization and involvement of external expertise to complement their internal development capability. OAS has implemented all these through the collaboration with external parties by offering the insurance services for the protection of their customer's goods. OAS's usage of various transportation options which they have acquired with the help of their external network has enabled them to fulfill their delivery task efficiently.

Many researchers has come to an agreement that the three categories that are important to increase job satisfaction include the content and the character of the work, the organization of the work, the employees possibility for self control within the working atmosphere and the social relation among employees in the work place. However, there is a tendency for them to take for granted that the organization should offer a safe, healthy and comfortable work environment (Baron, 1995).

It is important that the employees in OAS is kept happy and satisfied with their work because in the service industry, it is not uncommon that the employee will have direct contact with the customers and their practice of adding a more personal touch for the customers on behalf of the organization. Thus, the quality of the work environment will affect employee job satisfaction, which will indirectly positively affect and support the new service development and increase customer satisfaction and retention.

Skilled employees are hired to operate the machines at work. These employees are interested in the logistic industry which allows them to learn and observe as they go on with their daily working routine. OAS provides comfortable and conducive work environments for their employees from various fields of work.

Service has four different characteristics, namely intangibility, inseparability, variability and perishability (Shekar, 2007). OAS’s service cannot be examined before the goods is delivered to the customer. So, OAS takes good care of their customer's goods and advices them to purchase insurances before receiving their services.

Nowadays the rate of new service creation is rapid while customer adoption rate for new services are much lower. There is more focus on service improvements rather than service innovations (Shekar, 2007). Through the use of JIT system, OAS is able to restock customers’ goods through quick notice system, thus they are able to provide improved services to their clients.

OAS should understand their customers’ needs, and how to fulfill it with optimum efficiency and effectiveness. They have the strength in scheduling, which they emphasize on the shipping through their receiving coordinators who are in charge of handling the manual tasks. They are also able to predict the cost before a task is being carried out and try to minimize it to help their customers to save more.

Path model illustrates the close inter-relationship among the core concepts of IT, team structures, and process formalization that tie with new service development (Froehle, Roth, Chase, & Voss, 2000). Although sometimes there are lacks of communication between departments, OAS still able to operate smoothly.

Besides, they have their own customer database which enables the recording of the customers’ choices of transportation mode, carrier and loading sequence for the delivery of the goods. The teams of OAS comprised of highly skilled employees who are able to recognize the benefits of technology and have interests in the logistics industry, which can nurture competitive leaders.

OAS is always trying to be speedy and to be more effective in order to serve their customers better. For example, they have different departments with specialized employees who are able to work effectively and efficiently.. (Froehle, Roth, Chase, & Voss, 2000)

New services development and brand investment are found to be able to contribute to the attainment of positional advantages and thence to performance. OAS has implanted their process focus where they offer service customization to their customers. Through their innovative services, customers can choose whether to purchase the insurance that OAS offered or not. Due to its ability to enhance firm’s performance, innovation has received considerable attentions (Matear, Gray, & Garrett, 2004).

New service development contributes positively to cost effectiveness, relational and new service positional advantages. OAS seeks for an efficient product and process focus so that not only they can cut cost but to benefit their customers also. Hence, they are constantly trying to find win-win situations to build stronger market base. New service development is important as it can lead to both cost-effectiveness and new service development success positional advantages. (Matear, Gray, & Garrett, 2004)

Discussion and conclusion

It is very important to follow the steps and system during the production process in order to make sure everything is under control and systematic. Hence, company may achieve the production effectiveness and efficiency. During the operation process of OAS Global Logistics, some of the points have to be highlighted such as the checking of goods for the completeness and correctness during unloading, sorting of goods based on types, weight and size. Without these steps, the goods placement could be a mess and prone to damages. Imagine without the sorting by weight, light goods will probably be placed at the bottom where they will most likely break due to the heavy pressure on top.

Besides, the separation of liquid goods and solid goods is a smart precaution to prevent accidents and to facilitate storage. Moreover, offering customers with insurance coverage is also an initiative step in order to minimize the loss the company needs to bear in case the customers’ goods got damaged in the unforeseen future.

Facility layout is important for an operation based company. The facilities have to be arranged in a proper ways to facilitate the operational activities. OAS Global Logistics facility layout shows that, the packing department is located near entrance door while the shipping department at exit door. Their departments’ placement is considering the step of productions. Besides that, middle section is the strategic location for them to place the pallet racks. This makes it easier for the employees to transfer the goods from one area to another. The doors used for loading goods are placed just beside the pallet racks in order to speed up the loading of the goods onto pallets

Furthermore, the drum storage racks are placed at the corners and a wall was built beside there to separate the top-track storage and pallet racks. The drum storage racks usually store larger quantities of flammable solvents. Therefore, a wall is needed to separate the racks. Top-track storage is placed behind of the layout because they are able to use the aisle space to maximize the storage capacity. With improper facility layout, operation process will be inefficient and ineffective.

OAS Global Logistics employees are skillful in performing their works and specifics activities. Thus, they are able to provide high level of production. Due to the process focus, employees are lack of communication because they will only communicate when needed. We suggest that OAS Global Logistics should organize a company trip or party for employees to improve their relationship and bonds between each other.

In order to improve OAS Global Logistics’ performance, we would like to recommend them to install GPS on their vehicles such as lorry, van or truck. GPS is handy when the drivers are confused about the routes to destination. It can also show the records for the company to track the routes the drivers have been through when they to trace the real time position of the transported goods.

For the facility layout, OAS Global Logistics only have one pick-up and deposit station (P&D). Thus, they are less efficient in transfer goods. Thus, we suggest the company to extend their storage and rearrange the layout in a more optimized way. With the larger space, company can increase the P&D point and the number of shipping docks. After this, the transferring process will be able to run smoother. Thus, the transfer process will be more efficient by making improvements on these. Furthermore, the receiving department and packing department should be placed nearer in order to decrease the time and costs spent during transferring of the goods. There is even less conformity from department to department. After rearranging the layout, production will be more efficient, time saving and cost saving.

Furthermore, we would also like to introduce Radio-Frequency Identification (RFID) technology to OAS Global Logistics. This system features small chips that are able to store a maximum of 2000 bytes data. It has similar function as bar code where the bar code needed to be scanned manually for the information while RFID chips can be detected the scanning machines for a distance of few meters when the goods are being passed through them.

Besides that, it can be used to as a tracking system by attaching the chips onto each of their goods. This will prove to be helpful in the situation where misplacement of goods happen after the employees have packed them. In that case, the employees may scan on the goods to confirm the types of goods. If the goods are missing in transit, the goods still can be tracked as RFID are track able. The system’s tags operate in the 2.4 GHz network band and are used to track either people or assets. The readers are on a mesh network and can triangulate the location of any tag for display on a map. The system is even capable of showing the travel history of each tag. (Mike, 2010)