Executive Briefings

In Malaysia, It's Not Easy Being Green

When venturing into a new territory, one should seek out supply-chain partners with deep experience in that area. Or so goes conventional wisdom.

When Mayne Nickless Logistics set out to establish a Malaysian operation, it turned to a warehouse management system (WMS) vendor that was just as green as it was. In fact, Mayne Nickless was the very first customer of EXE Technologies Inc. in Malaysia.

Both Mayne Nickless and EXE were seasoned providers, yet both had to learn quickly about a market that differed sharply from anything they had served before. Their common customer was Unilever, one of the world's largest producers of consumer packaged goods, itself determined to overhaul its Malaysian distribution network.

Mayne Nickless Logistics is a leading Australian-based provider of third-party logistics, with a strong presence in warehousing and time-critical delivery. While it has a history of doing business in Asia, it didn't open a regional office in Malaysia until January 1995, according to Managing Director Clive Steele, who is based there. Unilever was its first customer.

The key lies in crafting relationships with vendors that extend well beyond the purchase stage. "It isn't the case that you buy something and say goodbye."
- Clive Steele of Mayne Nickless

Mayne Nickless has since amassed a roster of blue-chip clients in Malaysia, including S.C. Johnson, Kellogg and Malaysian Newsprint Industries, for which it manages a supply chain that generates 550,000 tons of product per year.

But it was the Unilever account that launched Mayne Nickless into the Malaysian market, which is highly complex and tough to serve. Unlike in the developed world, where grocery distribution tends to be dominated by a handful of major chains, Malaysia is home to countless small outlets. The Malaysian distribution center of Mayne Nickless ships to more than 1,000 customers a week, Steele said. Orders can be as small as single units.

In Australia, Mayne Nickless had developed a number of software packages internally. This time, it decided to purchase an off-the-shelf WMS that could be partially customized, from a vendor that would constantly upgrade its capabilities. "In most cases these days," Steele said, "competitive advantage doesn't come from writing your own software."

Enter EXE. The Dallas-based software provider also had some Asian experience; it had been installing its products there since 1994 under the name Neptune Systems. (Neptune merged with Dallas Systems in 1997, creating EXE.) Ben Hood, EXE's Asia/Pacific director of sales consulting, said the vendor was attractive to Mayne Nickless because it already had sales support personnel in Singapore, an hour's plane ride from Kuala Lumpur. Major U.S.- based competitors didn't even have people on the continent. Said Steele: "We had to have someone with on-the-ground support and with a package that was easily written in a number of languages."

Mayne Nickless implemented EXE's supply-chain executive software, dubbed EXceed, at the end of 1997. Not surprisingly, there were numerous glitches that had to be addressed. The job took so long that Mayne Nickless, EXE's first customer in Malaysia, became its third installation, said Hood.

Gradually, however, the partners got the system up and running properly, with tangible results. Not counting stockouts, which are beyond its control, Mayne Nickless saw its on-time performance on behalf of Unilever rise from 75 percent to its current level of 99.8 percent.

Equally important to Mayne Nickless was the sudden availability of crucial shipment data. No longer did the provider have to rely on "myth and legend" to explain why a shipment was late, or an order wasn't fulfilled, Steele said. "Now we're down to talking about facts."

The same goes for Unilever, which is using the information it gleans from the system to better manage its operations and cut down on stockouts, both at the warehouse and on store shelves throughout Malaysia. Steele said the new WMS has improved reliability to the point where customer orders have become more realistic, and are not necessarily geared toward stockpiling product in the event of late shipments or improperly fulfilled orders.
"That's still done, but it's on the way out," said Steele, "now that the customer is confident that he's going to get what he ordered."

The fact that neither Mayne Nickless nor EXE was an old Malaysian hand may actually have strengthened their partnership. "We're both new in Asia, and both trying to become the leader," said Steele. "That's where our goals are compatible."

Today, EXE's Malaysian office, with a staff of 20, is in the same business park as that of Mayne Nickless. EXE also has established an Asia/Pacific training center in an area just outside Kuala Lumpur, designated by the Malaysian government as a developing "multimedia super-corridor."

"Companies in Malaysia can see that we've committed to the market," Hood said.

Mayne Nickless and EXE have since teamed up on another Unilever contract, this time in Thailand. Steele said Mayne Nickless hopes to expand its services throughout Southeast Asia, using its central distribution center in Malaysia as a springboard.

The key to a successful partnership, Steele says, lies in crafting relationships with vendors that extend well beyond the initial purchase stage. "It isn't the case that you buy something and say goodbye," he said. "There are constant requirements for change."

When venturing into a new territory, one should seek out supply-chain partners with deep experience in that area. Or so goes conventional wisdom.

When Mayne Nickless Logistics set out to establish a Malaysian operation, it turned to a warehouse management system (WMS) vendor that was just as green as it was. In fact, Mayne Nickless was the very first customer of EXE Technologies Inc. in Malaysia.

Both Mayne Nickless and EXE were seasoned providers, yet both had to learn quickly about a market that differed sharply from anything they had served before. Their common customer was Unilever, one of the world's largest producers of consumer packaged goods, itself determined to overhaul its Malaysian distribution network.

Mayne Nickless Logistics is a leading Australian-based provider of third-party logistics, with a strong presence in warehousing and time-critical delivery. While it has a history of doing business in Asia, it didn't open a regional office in Malaysia until January 1995, according to Managing Director Clive Steele, who is based there. Unilever was its first customer.

The key lies in crafting relationships with vendors that extend well beyond the purchase stage. "It isn't the case that you buy something and say goodbye."
- Clive Steele of Mayne Nickless

Mayne Nickless has since amassed a roster of blue-chip clients in Malaysia, including S.C. Johnson, Kellogg and Malaysian Newsprint Industries, for which it manages a supply chain that generates 550,000 tons of product per year.

But it was the Unilever account that launched Mayne Nickless into the Malaysian market, which is highly complex and tough to serve. Unlike in the developed world, where grocery distribution tends to be dominated by a handful of major chains, Malaysia is home to countless small outlets. The Malaysian distribution center of Mayne Nickless ships to more than 1,000 customers a week, Steele said. Orders can be as small as single units.

In Australia, Mayne Nickless had developed a number of software packages internally. This time, it decided to purchase an off-the-shelf WMS that could be partially customized, from a vendor that would constantly upgrade its capabilities. "In most cases these days," Steele said, "competitive advantage doesn't come from writing your own software."

Enter EXE. The Dallas-based software provider also had some Asian experience; it had been installing its products there since 1994 under the name Neptune Systems. (Neptune merged with Dallas Systems in 1997, creating EXE.) Ben Hood, EXE's Asia/Pacific director of sales consulting, said the vendor was attractive to Mayne Nickless because it already had sales support personnel in Singapore, an hour's plane ride from Kuala Lumpur. Major U.S.- based competitors didn't even have people on the continent. Said Steele: "We had to have someone with on-the-ground support and with a package that was easily written in a number of languages."

Mayne Nickless implemented EXE's supply-chain executive software, dubbed EXceed, at the end of 1997. Not surprisingly, there were numerous glitches that had to be addressed. The job took so long that Mayne Nickless, EXE's first customer in Malaysia, became its third installation, said Hood.

Gradually, however, the partners got the system up and running properly, with tangible results. Not counting stockouts, which are beyond its control, Mayne Nickless saw its on-time performance on behalf of Unilever rise from 75 percent to its current level of 99.8 percent.

Equally important to Mayne Nickless was the sudden availability of crucial shipment data. No longer did the provider have to rely on "myth and legend" to explain why a shipment was late, or an order wasn't fulfilled, Steele said. "Now we're down to talking about facts."

The same goes for Unilever, which is using the information it gleans from the system to better manage its operations and cut down on stockouts, both at the warehouse and on store shelves throughout Malaysia. Steele said the new WMS has improved reliability to the point where customer orders have become more realistic, and are not necessarily geared toward stockpiling product in the event of late shipments or improperly fulfilled orders.
"That's still done, but it's on the way out," said Steele, "now that the customer is confident that he's going to get what he ordered."

The fact that neither Mayne Nickless nor EXE was an old Malaysian hand may actually have strengthened their partnership. "We're both new in Asia, and both trying to become the leader," said Steele. "That's where our goals are compatible."

Today, EXE's Malaysian office, with a staff of 20, is in the same business park as that of Mayne Nickless. EXE also has established an Asia/Pacific training center in an area just outside Kuala Lumpur, designated by the Malaysian government as a developing "multimedia super-corridor."

"Companies in Malaysia can see that we've committed to the market," Hood said.

Mayne Nickless and EXE have since teamed up on another Unilever contract, this time in Thailand. Steele said Mayne Nickless hopes to expand its services throughout Southeast Asia, using its central distribution center in Malaysia as a springboard.

The key to a successful partnership, Steele says, lies in crafting relationships with vendors that extend well beyond the initial purchase stage. "It isn't the case that you buy something and say goodbye," he said. "There are constant requirements for change."