Universiti Tunku Abdul Rahman

Faculty of Business and Finance

(Academic Year 2015/2016)
January 2016 Tri-Mester
UBTD2033 LOGISTICS MANAGEMENT
BACHELOR OF MARKETING (HONS)
BACHELOR OF BUSINESS ADMINISTRATION (HONS) ENTREPRENEURSHIP
BACHELOR OF ENGINEERING (HONS) INDUSTRIAL ENGINEERING
YEAR 2, 3 and 4
GROUP ASSIGNMENT COVER SHEET
Course Details
Course

: Bachelor of Marketing

Year and Semester

: 2016 trimester 1

Tutorial Group

:T7

Tutors Name

: Encik Mohamad Fared bin Mohamad Makmor

Lecturers Name

: Encik Mohamad Fared bin Mohamad Makmor

Assignment Detail
Topic

: Tiong Nam Logistics Company

Due Date

: Friday, 18th. March, 2016, Week 9 (before 12.00p.m.)

Important Note

: Submission of assignment is the responsibility of the students.

Student Details
Name

Student ID

1. Khoo Shi Yrun

14ABB00478

2. Lim Nian Cze

13ABB02595

3. Sarah Chen Yi Tian

14ABB07195

Tan Lih Chyn

15ABB00853

Teoh Rou Pei

13ABB05852
1

4. Yap Ee Wan

10ABB01299

Assignment overall marks:

Universiti Tunku Abdul Rahman

Faculty of Business and Finance
(Academic Year 2015/2016)
January 2016 Tri-Mester
UBTD2033 LOGISTICS MANAGEMENT
BACHELOR OF MARKETING (HONS)
BACHELOR OF BUSINESS ADMINISTRATION (HONS)
ENTREPRENEURSHIP
BACHELOR OF ENGINEERING (HONS) INDUSTRIAL ENGINEERING
YEAR 2, 3 and 4
MARKING SCHEME FOR GROUP ASSIGNMENT
No
.

Guideline Criteria

Rating

1.

Company Background

5 marks

2.

Analysis

16 marks

3.

Strategy Analysis

4 marks

4.

Recommendations

8 marks

5.

Conclusion

4 marks

Project Organization

3 marks

Total Marks

Actual
Score

40 marks

Comment
:______________________________________________________________
__

_______________________________________________________________
_
3

_______________________________________________________________
_

Name of Marker

: ____________________________________________

Signature of marker: ____________________________________________

Date

: ____________________________________________

Assessment

1. Introduction

2. Analysis

Pages

2-13

2.1 Industry
2.2 Competitors
2.3 Firms Current Supply Chain & Logistics
Situations

2-4
5-8
8-13

3. Strategy Analysis

14-15

4. Recommendation

16-18

5. Conclusion

19

References

20

Content

1.0 Introduction
Toing Nam Logistic Holdings Berhad was founded in 1975 and it began as a
small scale cargo business handling consolidated cargo and micro distribution within
Penisular Malaysia. The company's expansion began in 1978 when Tiong Nam
became an incorporated enterprise and in the early 1992, where they extended their
reach across the borders of Singapore and Thailand.Since then, Cambodia, Vietnam
and China, the new economic centre of the world, have been added to Tiong Nams
trucking and warehousing network.
Besides, to enhance their development, Tiong Nam also embraced the power
of 'integration'. This simple yet effective idea has seen their grow from a mere
transportation business to warehousing, customs forwarding, cold room facilities,
express delivery and even crane and forklift rental services. At the same time, the
company has also invested heavily in IT infrastructure as well as sophisticated
handling facilities and equipment for our Distribution Centre in Shah Alam to ensure
they are constant progress into the 21st century.
Nowadays, Tiong Nam has evolved into one of the largest total logistics
service provider in the region with a reputation for efficiency, innovation and service
par excellence.East Malaysia has also been included into Tiong Nams trucking and
warehousing network. At present, they have a fleet of over 2000 trucks and a
workforce of over 3000 employees to meet the needs of their customers across the
region.
Tiong Namhavs been listed on the Kuala Lumpur Stock Exchange (KLSE)
since 1992.Other than that, Tiong Nam consistently rides high on the Bursa Malaysia,
proving that Tiong Nam had instilled confidence not only in our clients but investors
too in the years to come.

2.0 Analysis
2.1 Industry
2.1.1 Land freight industry
Land transport is define as the transport of goods, passengers, materials,
commodities, and animals by using the roads with using various types of vehicles and
motorized mechanisms, including tractors carrying goods, passengers and animals,
from time to time, from three-wheeled vehicles to all types of automobiles nowadays,
including different types of trucks (Samane, 1997). Freight transport is considering as
one of the backbones the physical process of transporting commodities and
merchandise goods, commodities and raw materials to markets. Carriage charges will
be paid for transportation of goods by land, sea or air. The major revenue generating
products are electric and electronic, and then come to bulk products.

The land freight industry sector, there are 4 chief modes of land transport; they
are pathways transport, roadways transport, tramways transport and railway transport.
Pathways is playing an important role of land transport, this is the oldest traditional
type of transport that can be find in the forest areas, which in the hilly areas and the
type of remote places, this is used by the animal and human transports. The roadways
transport, this is the very fundamental and important type, transport by using roads,
the Road Transport Department Malaysia (RTD), the tramways transport, the cars
which call ask tram cars, run on the rails which is very good and suitable mode of the
transport when goods carry in the pack, peak and busy hours. The Railways transport,
which used to say the pioneer of the modern transport, it carries estimated goods and
people in a large quantity (Swati, 2015).

The service sector also included warehousing service, there are few functions
of warehousing there are storage, price stabilization, risk bearing and grading and
packing. The primary focus function of warehousingis a construction of building that
are using to store goods and materials. In this industry uses different types of
7

equipment and facilities, these arranged according to the transportation modes that the
goods need. The transportation types of modes areusing the road, sea, ocean, railway,
etc. Warehousing is very critical process for the main flow control in the supply chain
network and activities, it not only acted as the major influencer and the speed and the
efficiency of the service level that provided to the customers. The performances and
the company profitability of the company are having a great impact from the
warehouses as well. And the warehouses have to load and unload the goods from
trucks, somehow, some of the warehouses unloading the goods from railways,
airports, or seaports also, when they unload, they often need forklifts and cranes for
moving the heavy goods.
There are a number of types of goods could be stored, there is raw materials,
materials which like spare parts, finished goods, it may be manufacturing products,
agricultures, construction materials, etc. There are few types of warehouses found,
and it could be grouped into government warehouse, bonded warehouse, private
warehouse, public warehouse, and co-operative warehouse. Government warehouse is
owned and regulated by the government agencies, bonded warehouse can be classified
into the management control by the government too, as this agencies get the license
and the permission to operate from government, private warehouse which means the
ownership by the manufacturers themselves for storing stocks and goods and cooperative warehouse is use for the co-operate medias (Advameg, 2016).

2.1.2 Tools used to describe the land freight industry

The tools used by land freight industry are containers, haulage, trucks and
warehouses. The containers help the land freight to transport the containers from one
place to another place by using the roads from one location to the destination
customer requested. The haulage and trucks, the truck has 3 different types, light,
medium and heavy trucks which used to carry different types of goods, from light to
heavy goods. And the warehouse, it uses to store the goods, storage of raw materials,
commodities, etc. It also uses as the unload and loading up services. Logistic in
Malaysia, it is a trade dependent economy country which could transported the large
volume of goods to and from global world markets and also in the local region, the

major highways used to connect the East West and North South of Malaysia, 4 ports
are involved, Ipoh, Segamat, NilaidanTebedu (Ministry of Transport Malaysia, 2015)

2.1.3 Key competitors

There a number of key competitors that encountered by Tiong Nam logistic
holding bhd and one of the major competitors is Harbour-Link Group Berhad, it is
one of the top ten of the multimodal transport operators, which provided total logistics
services, for instances, door to door service from land, sea, road and rail freights,
which included the haulage, container, trucks, warehouse, custom clearances, cargo,
etc.

2.2 Current Competitors

The current competitors are century logistics, complete logistic, freight
management, Harbour-link, integrated logistics, consortium logistic, MISC,
Nationwide, SeeHup, Tasco, Transcocean and Yinson. And one of the main
competitors that we choose is Harbour-Link, which we think it has the potential to
grow bigger in the future as it has very globalize businesses, and now it acts as the
main competitors of Tiong Nam.
2.2.1 Competitors profile
Harbour-Link Group Berhad incorporated in 2002, they strengthened all
related business activities and they listed in the Bursa Malaysia securities Berhad on 6
January 2004, it main firm focuses objective is planted in the shipping and total
logistics services, engineering and construction sectors in the past 40 years, this
Harbour-Link Group has developed very steadily and provided services to satisfy the
customers needs, it has reputable brand name within the industries sectors they
operates so far.
The background of the companys founder started their business in Sarawak,
he realized that this industrys potential is high, he set up the business by providing
transportation and forwarding services to Sarawak Shell company which is oil and gas
company, employees and facilities are limited. In 1980&90s, the major petrochemical
projects for example like Malaysia Liquefied Natural Gas, ASEAN Bintulu and Shell
Middle Distillate synthesis, Habour-Link Group provides logistics services to these
projects. A transformation transformed and expanded the services to offer
warehousing, transportation, air, sea and land freight to heavy haulage, ship chartering
and other logistic services in nationwide. They focus and very emphasize on Total
Customer Satisfaction in all services. Harbour-Link Company is always looking
forward to value creating opportunities, therefore, they now has headed into the
shipping line industry acquisition of container and cargo vessels(Harbour-Link Group
Bhd., 2015).

10

2.2.2 Competitive Offering

Habour-Link Group Bhd has offering various types of logistics services,
warehousing, custom brokerage, freight forward (air or ocean), logistic project
management, distribution management, supply chain management and container
haulage.
The transportation and handling service focuses on door to door concept, make
it necessary component of their service focus point, with the large fleet of
transportation equipment, with the expertise that have more than 25 years
experiences, the great systems, always provided the good and fast solution to their
customers all the time, the project cargo handling and delivery, the container haulage,
the general cargo transportation and small parcel delivery is included too.
Next will be the freight forwarding is also door to door links which
intergraded to the worldwide services, close relationship with carriers, for instances,
government agencies and statutory bodies which enable and convenience for them to
deliver with reliable condition, these processes are customs clearance, co-ordination,
consultancy services in tax and marine, application of permits, cost evaluation, project
management assistances, insurance cover and the accountability project cargo report.
The warehousing is very secure and managed professionally which available
at various location in the country, for their distribution channel, they has open yard
storage, container stuffing and unsnuffing work, inventories control and record. A
very expertise stevedoring process, high skilled team to handle loading and
discharged to improve the productivity, the forklifts and skillful operators supply, the
lashing works, etc.
Harbour-Link Group Bhd., they provide the equipment leasing and rental
services on trucks, trailers, prime movers, forklifts, skymaster, crane, tractor and
roller. They give backed up in 24 hours maintenance service from their teams of
expertise, to give guarantee of trouble free helps and services. It also provided the
general cargo transportation, oil tanker services and lowbed trailer services (HarbourLink Group Bhd., 2015).

11

Figures
show

the

tools

that

used

by

Harbour-Link Group to transport the goods.

2.2.3 Competitors goals

Harbour-Link Group Bhd., they have the goal on they believe they could
success in customers satisfaction, to establish their position as the leading total
logistics provider in logistic region, providing more innovative services, creative,
efficiency, and exercising the flexibility and used to adapt changes, create trust and
teamwork with all related employees, customers, contractors and publics. To provide
cares for all people and also environment, doing excellence core in the business
activities. And the people in the Harbour-Link Group Bhd. could do their best by
contributing the expertise in each service they provide. The ability to ensure the
customers needs and satisfaction, to build stronger future, set the global standards
and also enhancing the values of Harbour-Link Group Bhd. (Harbour-Link Group
Bhd., 2015)
2.2.4 Competitors Strategy
The long term strategy forHarbour-Link Group Bhd.is doing good in corporate
social responsibility as this reflects the corporate sustainability commitments, to
maximizing the long-term economic value and remain the Groups core value and
maintain a sustainable business growth. Through this strategy, the commitments of
corporate responsibility enables them to perform high standard of good ethics, provide
12

high standard of services and meet customers business partners expectation, this
could long term attract and retain the quality customers and employees, it is very
important in the business practices(Harbour-Link Group Bhd., 2015).
As Harbour-Link group contact with the many community daily basis, they
has the philosophy of When you learn, you teach; When you earn, You Give. In this
long term strategy, the marketplace of Harbour-Link Group the group will continue
strive for highest standard of best practices and maintain good framework, mainly to
maintain maximizing long-term economic value and sustainable business growth. The
Harbour Club set up for the employees to make them more interactive and work as a
family, more cohesiveness, as a Workplace Social Club, the more fun and more
collaboration of a working team, the more harmony environment, the employees
enjoy and willing to give the best working performances and communicate with the
customers in a wonderful condition (Harbour-Link Group Bhd., 2015)
Lastly, to improve and assure the business operation to have positive impact
on employees, customers, environment and communities, a good environment can
nurture them, and trust, mutual respect, good relationship between shareholders,
stakeholders, this could long term to maintain group sustainability and profitability
growth(Harbour-Link Group Bhd., 2015)

13

2.3 Firms Current Supply Chain and Logistics Situation

2.3.1 Internal analysis of firms strengths
(a) Variety in logistics facilities
Tiong Nam Logistics Holdings Berhad has the inner skills and capabilities that
give their organization special competencies and competitive advantages in executing
strategies in pursuit their mission. Variety in logistics facilities is a powerful strength
for Tiong Nam Logistics. As one of the largest total logistics service providers in the
Asia, Tiong Nam has forged a proud reputation for efficiency and service par
excellence by providing the various diversifications into various complementary
supporting services for their transportation business. Therefore, Tiong Nam can
develop and execute a customized delivery plan for the customers from container
haulage to cross-docking services, customs brokerage to cold room facilities, express
delivery as well as crane and heavy transport services. By providing the diversify
facilities, Tiong Nam able to meet the larger customers range needs and
requirements. At there, they successfully scoped a larger market opportunity, market
share and higher profitability than other logistic company that only provided one
services.
(b) Strong brand name.
Besides, the next strength will be Tiong Nam has the strong brand name.
Tiong Nam establishes since the year 1975s until now 2016, Tiong Nam has 41years
of experience in market. The strong brand and longer existing in the market can lead
to higher brand recognition. When customers are shopping for considering a company
to perform a service, they recognize your company in the running. Consumers are
more likely to choose a company that they recognize over something unfamiliar, even
if they dont know a great deal about your company at the time. This business theory
also makes Tiong Nam to easy introduction of other services. When a company
already has a strong brand and loyal customers, customers will often be interested in
the new products or services.
(c) Natural Gas Vehicles (NGV)

14

Furthermore, Tiong Nam Logistics is also the first that used Natural Gas
Vehicles (NGV) than other logistics company. NGV is the greenest and lowest-cost
transportation fuel available today. Tiong Nam gained the environmental and health
benefits by using the NGV since NGV are helping to improve air quality by
displacing petroleum-powered cars, trucks and Lorries that contribute about 75
percent of the carbon dioxide pollution found in urban areas. Instead of earning
money,Tiong Nam Company also takes care of the environment. Thus, the major
benefit of using NGV is reduced cost. This is because it is cheaper and cleaner than
the gasoline petrol. This will help Tiong Nam to reduce the transportation operation
cost every year and lead more to profits earning.

15

2.3.2 Internal analysis of firms weaknesses

(a) Weak supply chain
Tiong Nam also has their drawbacks that hinder them in executing strategies
in pursuit of its mission. There are several weaknesses from Tiong Nam. First of all is
the weak supply chain. Supply chain starts with the materials to make your product or
people you rely on to create your service. It also includes the equipment for making
your product procurement, your storage capabilities and delivery function. Tiong
Nam company shows up with a poor supply chain management is because they are
still using the system called Transmit System, a system will choose the least cost
carrier which all inventories meets the transit time requirements only will start to
deliver to destination. Supply chain breaks down always stall Tiong Nam ability to
deliver product and make money. For example, the unnecessary delay lead to increase
cost and indirectly reduce the profits earns. In a serious case it may increasesrisk of
reputational damage.
(b) Lack of advanced technology
Lack of advanced technology is also one of the company weaknesses.
Nowadays, Tiong Nam is still more depends on paper document signing rather than
cellular technology. Unlike other companies (GD Express/ Worldgate Express) they
are using the Telematics and smart sensors devices. Those technology devices can
reinvent distribution solutions, and improving communications, logistics and
inventory e-tracking. In short, without the help of latest technology devices caused the
operation and processes to slow down and created an ineffective working
environment.
(c) Dependency
Last but not least, dependency is also the weakness of Tiong Nam. By
handling the works to the third party service(3PL) is about a large commitment and
high reliability structure to function. But too much dependency will be worst. This
dependency puts the Tiong Nams customer in an uncomfortable situations if pricing
schemes or service reliability from the third party service(for example Cekap
16

Container Haulage) is not working out as expected due to lack of power on direct
control the third party services quality.
2.3.3 Current Logistics or Supply Chain Problems Tiong Nam is Facing.
Tiong Nam Logistic Holding Berhad is the largest tracking company in Malaysia
today. They face the problem by their driver attitude, maintenances fee and also their
transit system.
(a) High Maintenance Cost
Tiong Nam has 2000 trucks. The trucks cost a fortune to maintain to ensure those are
in a good condition not even on the logistic progress. Based on the interview, truck
breakdown happen 25 percent per month, 500 trucks have to pay for the maintenance
cost in every month. Between the comparisons with previous year, their maintenance
cost increased by RM 5353000, from RM 985000 to RM6338000. These costs include
unscheduled repairs, preventive maintenance (PM) and tire. Company sends the
trucks to maintenance on schedule. The trucks, deliver in local place, preventive
maintenance in every 3 months. For those trucks deliver to outstation have to maintain
in every 2 month. With the inflation of spare part, the maintenance fee would only
increase in following year.
(b) Driver Attitude
Truck driver attitude is one of the most misunderstood, and overlooked problems
facing the trucking industry. Tiong Nam has at least 2000 of driver. Bad attitude
driver in workplace not only is the problem for whole company and also as a road
killer. A case occurred in Singapore, a woman killed by Tiong Nam truck. The driver
does not pay attention to the road condition. When traffic light turns green, he speed
up the truck but he did not saw the woman walk in front of his truck. As the result, the
Singaporean woman was pronounced dead by paramedics on the spot. Driver attitudes
not only influence the on road condition and also in the whole logistic supply chain.
Drivers do not be having responsibilities. Product damage is happened in Tiong Nam
when delivery. According to the information, every 1000 of product would have 5 of
it is damaged. The staff in the office, failed to understand driver direction and cannot
control well of driver attitude. Some of driver absent without notice office staff or
operational department manager. Even though there has truck in company but lack of
17

driver to control it. Therefore, company has to done arrangement rapidly to the
problem. The kind of driver attitude slow down speed of service even makes the
product pending in the warehouse. It causes customer dissatisfaction to the service.
(c) Transit System
Tiong Nam is using product transit system. By transit system, they waste more time
on process. The other branches transfer product everyday to Shah Alam for transit.
However, they store the product in warehouse, Shah Alam for waiting the
arrangement of truck and regular check for the product quantity. They do not deliver
the product immediately. Based on the information, product deliver to place as went
often like Melaka and Johor Bahru, it stored among 3 days only started to transferring.
For the deliver place which went occasionally, the product store in warehouse among
5 to 7 days. Since the product has to transit to Shah Alam so the warehouse key
performance index is important. If the key performance index is high, represent there
are still have many product do not delivery to their customer. For example, products
deliver from Penang to Terengganu by using transit system will store in warehouse at
Shah Alam. They would not transfer immediately because they only go to Terengganu
for 2 times per week. If miss out on time, customer may wait for 3 to 5 day to get the
product. But, warehouse is limited and key performance index for good deliver
increase. The most important is their customers have to wait for a long time. Transit is
reducing cost but it cannot satisfy customer want and also cannot attract those
competitors customer and potential customer. Other than that, the product had
transfer to many parties; it would raise the percentage of product damage. Transit
system is extent the production.

18

3.0 Strategy Analysis

Due to the problem from multiple perspectives, the company should apply the most
appropriate strategies and find the best way to fulfill the demand. It would be a very
essential in tackling the problems. Once, customer willing to dealing with supplier or
company which means they have to take risk in anticipation delivery. This is a
particularly important in supply chain arrangements when a customer has operating
agreement with a supplier. However, failure by any case or individual to shows
competence affects customer perceptions of the entire organization. There are some of
the strategies taken by Tiong Nam Logistic Company.
(a) Communication
. Communication means keeping customer contact and inform. As a transit agency
customer services staff have the responsibility trying to persuade customer and
overcome their situation, in order to solve transportation issues, such as addressing
customer questions, let customer know their goods situation, letting customer know
what they doing and how long it might take. Communication is very important for a
particularly if problems with any delivery occurred. They mostly communicate
customer through phone call, text or e-mail them. In the business area, the company
will be involved in delivering communication and ensuring customers that feel
credibility from supplier are believable and honest.
(b) Maintenance cost
In the overall holistic approach, the basic elements of customer service in supply
chain logistic operational performance emphasized speed in delivery process, in order
to improve competitive advantage between competitors. Otherwise, the most
challenge in supply chain logistic management sector is malfunction recovery. It is a
firms ability to quickly implement contingency plans when a failure occurs in the
supply chain. Regardless of how fine-tuned a firms logistical operations,
malfunctions will occur. However, company has done the adjustment that can be
implemented to prevent losses from profit and customer, Tiong Nam has
accommodated idea to prevent malfunction. Consequently, lots of customer
complained this situation before, time delivery, the truck break down will cause the
19

time delay. Tiong Nam Company which allocate at Penang was trade in the old truck
and replace the new truck to avoid and minimized down the maintenance cost. Overall
malfunction problem is 25 percent, they already solved a part of the problem, now
only 10 percent of malfunction problem.
(c) Drivers attitude
To solve the bad attitude of driver, or what the company may do to minimize down
the driver attitude problem is to set up the Driver Admin Department (DAD) in all
Tiong Nam outlet. DAD department will handle the entire driver problem. For an
example, if the drivers want to take leave, they must inform 3 days early from the
DAD department.. Another strategies has been using by them is they have set a rules
and regulation that regarding, if the driver had stolen or damage customers good
during the handling and transportation process, the driver will be fine him heavily as a
punishment taken by company, in order to improve responsibility of drivers and
safety.

20

4.0 Recommendation
(a) Daily checking
Tiong Nam Company can minimize down the maintenance cost in future by
doing the daily checking through a preventive maintenance program, and educate the
Company driver. Preventive maintenance program is worth to invest by a logistics
Company. Company can assign driver to do daily checking for the trucks component,
such as the fuel pipe, tires, cooling system, and electronic system. It can prevent the
truck break down suddenly that led to incur additional cost like repairment cost,
especially for tires. A logistics Company may need to change the tire more often, to
avoid it, driver should check the alignment regularly, so that the fuel can be use
efficiency and prevent the tire wear out quietly.
Secondly, Company may have a training class to educate their driver, such as
how to use the fuel efficiency to cut down the cost, reward as encourage those drivers
to provide the cost-saving idea, and giving a talk about concerning the safety of truck.
Company may develop a driver safety program to reduce the percentage of accident.
For example, the driver should slow down their speed when they are driving the
empty truck, they must take longer rest than drivers who driving the heavier truck,
because the tire for empty truck is less friction with the road surface. In additional, the
driver must take double stopping distance when the road is wet or when it is raining.
This program is useful for Company to reduce the additional cost, because
driver have more knowledge about driving on the road and how to do the daily
checking to prevent the truck break down suddenly. The estimation of reduction in
maintenance cost for Tiong Nam Company will continually to decrease below to 10%.
It is because the Company can extend the duration of using the old truck and save the
maintenance cost by using the new truck.
(c) Attitude of driver
According to the Tiong Nam operational manager, the major factor of the
driver attitude problem is they are not satisfied with the benefit of the company. To
reduce the driver attitude problem, Company can provide move benefit to their
21

drivers. For example, Company can give a basic salary to their drivers who already
work for the Company more than 3 years with good performance. This could be a
guarantee for the drivers; it is because there are not basic salaries for drivers in the
contract between the Company and drivers. The salaries of those drivers are based on
how kilometer or how far they deliver the goods. Company give the driver with basic
salary can motivate them to take the responsibility as a driver and encourage them to
perform well.
Furthermore, company also can provide insurance to their drivers with good
attitude; it is because Tiong Nam does not provide the insurance for their drivers. It is
unfair for Tiong Nam drivers compared with other logistics Company. Other than that,
the Company can increase the bonus of drivers who already work for the company
more than 2 year as reward for their good performance. The criteria of good
performance are punctuality, do not incur any accident before, do not get warning
letter, deliver good on time, and responsibility for their work.
This will encourage and motivate them to work hard and keep responsible for
their work. It can satisfy their driver need, so that the driver will not have any
complaint about the Company and willing to work for the Company.
(c) Provide direct delivery
Tiong Nam Company can provide direct delivery to their customers; so that it
can shorten the process by transit the goods from one location to another location. It
can help the customer and company to save the warehouse cost and time, due to it can
shorten down the process of transfer the goods to another outlet and ask for the outlet
to send those goods to some location where the company did not go often. Sometime,
the goods may place in the Warehouse for few days; this will result where the
customers will be late to receive those goods. For an example, if Ipoh wants to deliver
those goods to Terengganu where they do not go often, by transit, it may take around
5-7 days due to those goods will be store in the warehouse. If Ipoh delivers by direct
to their customer, the customer can receive those goods earlier around 5-6 days.
Lower Key Performance Index (KPI) means that those goods store in the
Companys warehouse can deliver or settle faster. By direct, the Company can lower
down the KPI, it helps the Company to save the warehouse space and rent it to other
22

customers or received more order form customers. Company can gain more profit by
using direct delivery system. Even though, this system may increase the maintenance
cost of truck, however, by direct delivery Company can charge higher from the
customer, especially when the goods are urgent for them, they are willing to pay for
the higher price to accomplished they work. Therefore, it is enable to cover the
maintenance cost of the truck. Besides, it can also help the Company to 1reduce down
the percentage of goods that may delivery in bad condition to the customers.

23

5.0 CONCLUSION
Tiong Nam Logistic Holdings Berhad may meet several challenges in supply
chain and logistics management in future. First, Tiong Nam might face difficulties due
to the expand delivery service to e- commerce companies may be future challenges to
Tiong Nam. Nowadays, consumers are become more and more likely to consume
through internet that caused e-commerce became more familiar. Therefore, the online
retailer may send their goods through their own shipping company in future. For
example, the electric and furniture company, Seng Heng will send products through
Seng Heng Shipping Sdn. Bhd. within 48 hours to their customers. Besides, even in
China, the Alibaba Group is snapping up the stakes in logistic companies to
complement overall business.
Second, as the technology nowadays keep updating in a rapid speed, so Tiong
Nam may face difficulties in improving their technology infrastructure and
equipment. This is because of to improve their technology infrastructure and
equipment, Tiong Nam has to spend a lot of money and by the same time the
technology may depreciate very soon and be replaced. In order to spend for latest
technology, Tiong Nam can try to reduce the cost of updating the technology to stay
competence with their competitors such as improving their transport by buying more
trucks and purchase or improve their warehouse management.

24

Reference
Website
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