Transaction elements

• According to (Stock & Lambert, 2001), transaction elements means elements directly related to the physical distribution function.• They include the following: 1. Stockout level 2. Order information 3. Elements of the order cycle 4. Expedited shipments 5. Transshipment 6. System accuracy 7. Order convenience 8. Product substitution

1. Stockout level

• Definition: Is a level to measure of product availability.• Stockouts occur, 1) arranging for suitable product substitution or 2) expediting the shipment

1. Stockout level

• Elimination of Tariffs. -Eliminate import duties on all intra-ASEAN goods, except sensitive and highly sensitive products. -This means that zero tariff -> goods can be produce in everywhere without hide -> increase the stockout level.• Elimination of Non-Tariff Barriers. ASEAN has achieved tariff liberalisation -> no restrictions of tariff and quota -> products easy to move -> increase the stockout level.

2. Order information

• Definition: Ability to provide accurate and fast information such as 1) order status, 2) inventory status, 3) expected shipping and delivery dates, and 4) back-order status to the customer.• Back-order capability enable the firm to determine and facilitate

orders that need immediate attention.• Number of back-orders is to measure performance of system.

2. Order information

• Trade facilitation. Simple, harmonised and standardised trade and customs, procedures,

processes and related information flows (for example: order information) to reduce transaction costs in ASEAN.• ASEAN Single Window. National Single Window allows a single submission of data and information, a single synchronous processing of data and information which can reduce transaction time and costs.

3. Elements of the order cycle

• Definition: Total time that pass from initial order of customer until delivery to the customer.• The components of the order cycle include 1) order communication 2) order entry 3) order processing 4) order picking and packing and 5) delivery

3. Elements of the order cycle

• Free Flow of Services -Eliminate substantially all restrictions on trade in services for 4 priority services sectors, e-ASEAN, healthcare, air transport and tourism, by 2010 and the fifth priority services sector, logistics services, by 2013. -Let foreign (ASEAN) equity participation for the 4 priority services sectors, logistics services and other services sectors of not less than 49% by 2008 until 2015.

4. Expedited shipments

• Definition: Those that accept special handling in order to reduce the normal order cycle time.• Even though expediting costs quite more than standard handling, but

it cost less than losing a customer.

ASEAN single market

• A single market for goods and services will 1) promote the development of production networks in the region 2) improve ASEAN’s capacity to serve as a global production centre or global supply chain

Effect of ASEAN Single Market to foreign workers• Malaysia’s migrant workers become one of the highest in ASEAN next

to Singapore.• 22% of the Malaysian labour force consists of foreign workers.• This is dominated by unskilled and low skilled workers (Orbeta, 2013). • Foreign workers tend take on jobs that local workers no longer prefer

to do especially low-paying jobs in sectors such as domestic services, construction, agriculture, fisheries, and manufacturing (Rynhart & Chang, 2014). • Foreign workers compete with local workers.

Effect of ASEAN Single Market to local workers• Shortage of local workers in labour-intensive sectors such as the

garment industry and followed by rises in labour costs (Orbeta, 2013). • More local workers Immigrant to other country to search of better

opportunities in a globalized labor market (Kanapathy, 2007).• The common destination are the US, UK, Australia, Canada, New

Zeland and Singapore (Rynhart & Chang, 2014).

5. Transshipment

• Transport of goods from one place to another places to avoid stockouts. It places at intermediate destination, then to yet another destination.• Are often made in anticipation of customer service.• Transshipment usually take place in transport hub, much

international transshipment also take place in designated customs areas.

5. Transshipment

• Since ASEAN Economic Community adopted the ASEAN single market, it was facilitate the transport of goods between ASEAN members, thus it is huge benefit among them.• Free flow of goods mentioned in core element of ASEAN single

market;zero tariff and removal non tariff barrier..Trade facilitation, Customs Integration- smoothen custom clearance.

• Political aspectStrengthening Cooperation under the Cooperation in Southeast AsiaPromote ASEAN Maritime Cooperation

i. Establish the ASEAN Maritime Forum;ii. Apply a comprehensive approach that focuses on safety of navigation and security

concern in theiii. region that are of common concerns to the ASEAN Community;iv. Stock take maritime issues and identify maritime cooperation among ASEAN member

countries;v. Promote cooperation in maritime safety and search and rescue (SAR) through

activities such asvi. information sharing, technological cooperation and exchange of visits of authorities

concerned.

6. System accuracy

• The accuracy of quantity ordered, product ordered, and billing.• Is important to both the manufacturer and the customer.• Errors should be recorded and reported as a percentage of the

number of orders handled by the system.

6. System accuracy

• ASEAN Single Window.Enables a single submission of data and information, a single and

synchronous processing of data and informationSingle decision-making for customs clearance of cargo, which

expedites the customs clearance, Reduce transaction time and costs, and thus enhance trade efficiency

and competitiveness.

• Consumer ProtectionConsumer protection measures are already being developed in tandem with

the proposed economic measures to address the already emerging consumer protection.

i. Strengthen consumer protection in ASEAN through the establishment of the ASEAN Coordinating Committee on Consumer Protection (ACCCP);

ii. Establish a network of consumer protection agencies to facilitate information sharing and exchange;

iii. Organize regional training courses for consumer protection officials and consumer leaders in preparation for an integrated ASEAN market.

7. Order convenience

• Refer to the degree of difficulty that a customer experiences when placing an order. • Problem that result from confusing order forms or nonstandard

terminology can lead to poor customer relations• An appropriate performance measurement is the number of

convenience-related problem as a percentage of the number orders.• These problem can be identified and reduced or eliminated by

conducting field interviews with customers

8. Product substitution

• Substitution occurs when the product a customer ordered is replaced by the same item in a different size or by another product that will perform as well or better.• In order to develop an appropriate product substitution policy;the manufacturer should work closely with customers to inform them

or gain their consent. Keep product substitution records to monitor performance.Requires good communication between the manufacturer and

customers.

8. Product substitution

• ASEAN single windowSince it was developed, it has simplified the communication between

two parties (manufacturer & customer) and product substitution program will be successful by the application of ICT in all areas related to trade facilitation. For example ASEAN-6, ASEAN-4

The implementation of measures of simplifying, harmonising and standardising

Effect ASEAN single market to foreign workers• The AEC (ASEAN Economic Community) will have major benefits for

the Philippines. • Increasing migrant workers in the countries.

Effect ASEAN single market to local workers• Some communities and even whole countries may lose out because

of the risk of human rights being sacrificed to the imperatives of big business.• Local workers are needed to upgrade skills to meet shifting demand,

since AEC will increase the demand for skilled labor across the region.• women will gain less from new jobs than men said Sukti Dasgupta,

Senior Economist at the International Labour Organisation.• creating wage inequality between skilled and unskilled workers

References

• Gattorna, J. L. (1990). Handbook of Logistics & Distribution Management. (G. Trost, Ed.) (4th ed., pp. 66–76). Burlington: Gower Publishing Company.

References

• Kanapathy, V. (2007) “Highly-skilled versus low-skilled labout migration: Managing a complex agenda in Malaysia,” Paper prepared for EADN Migration Project.

• Orbeta, A. C. (2013). Enhancing Labor Mobility in ASEAN : Focus on Lower-skilled Workers, 1–21. Retrieved from http://dirp4.pids.gov.ph/ris/dps/pidsdps1317.pdf

• Rynhart, G., & Chang, J. (2014). No Title (pp. 1–58). Retrieved from http://www.ilo.org/public/english/dialogue/actemp/downloads/publications/working_paper_n7_en.pdf

References

• Stock, J. R., & Lambert, D. M. (2001). Strategic Logistics Management. (R. Adams & C. Parker, Eds.) (Fourth., pp. 95–143). New York: McGraw-Hill Irwin.