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Transocean has proven its experience in managing project shipments which include the setup of a manufacturing facility, plant expansion, oversized equipment, boilers, steam turbine and hydro electric equipment. Transocean also works together with relevant government agencies to facilitate customs duty exemptions and secure import permits where relevant. Additional services that are catered by Transocean also include customs clearance, transportation & storage of equipment for international sporting events such as the F1 Malaysian Grand Prix in 2000 & 2001.
Bonded Trucking Services
Transocean Holdings also are the market leader in the provision of scheduled bonded trucking services between Penang and Singapore (Pensin) and vice-versa. The services guarantee time sensitive over night deliveries that meet the requirements of Multinational Manufacturing Corporations for timely deliveries of raw materials and components and shipments of finished products. Supporting facilities and services includes:
Figure 1.11: Transocean Fleet of Bonded Trucks
Consolidation Hubs in Penang and Singapore.
Online Singapore GST (Government Sales Tax) application.
Border customs clearance & documentation formalities.
A fleet of over 105 commercial bonded trucks of various specifications and capacities.
Specialized trucks with air-ride suspensions catering for highly sensitive machinery's.
Open top and side loading trucks catering for odd-sized & over-sized cargo.
A high standard of mandatory preventive fleet maintenance.
All trucks are equipped with cellular telecommunication facilities.
Trucks operate along approved routes and halts.
To further enhance our efficiency and customer service, Transocean is considering the installation of a Global Positioning System (GPS) for tracking and monitoring the movement of the fleet, as well as the use of bar coding for more effective reference of cargo.
Local Trucking Services
All inland feeder deliveries to destinations are made through a separate fleet of bonded & non-bonded trucks that move to local destinations within Malaysia. Local Trucking services provide:
Interface deliveries between industrial zones.
Logistics support to warehousing services
Transocean Group also provides efficient container haulage services to local & international corporations. This haulage operation is done through the subsidiary, which Gerak Intensif Private Limited, registration number (277011 X). The services characteristics that are offered by Gerak Intensif Haulage include:
Gerak Intensif Sdn, Bhd (277011 X), provides container haulage services. Set up in 1995, the company presently provides laden and empty container haulage services throughout various destinations within Malaysia up to Johore Bharu
Facilities that are currently available for the utilization of customers include: A well maintained fleet of 25 prime movers and 123 trailers. State- of- the- Art computerized system for intelligent vehicle scheduling and optimizing tracking operations (Innola Haulage System) and also online linkage with Penang Port (Pelkon System).
In terms of customer service, Gerak Intensif Haulage also has a website, which enables clients to access for requests for transportation (ROT) & status of service. This increases the effectiveness and efficiency of the service and makes it easy for clients to place a request.
Figure 1.12: GI Primovers
Transocean (Konteniaga) Public Bonded Warehouse
Konteniaga Public Bonded Warehouse Sdn. Bhd (193356 V), provides professional Third Party Logistics (3PL) services, which include distribution, bonded and non- bonded warehousing and other value adding activities, such as break bulking, re-packaging, labeling and also palleting. These activities will complete part of the spectrum of total the logistics services provided by the Transocean Group. Below are the characteristics of the warehouse which include:
80,000 square feet bonded warehouse space providing about 5,000 Euro pallets racks storage.
12,000 square feet temperature controlled bonded warehouse space with back-up generator set (temperature range at 16 - 22 c; humidity - 60 - 65 %)
30,000 square feet compartmentalized bonded & non-bonded warehouse space for bulk storage, project cargo and other dedicated use.
All weather stuffing / unstuffing of containers & receiving / delivering operations from trucks with a large operation space which consists of 11 units loading bays with dock levelers to facilitate the movement of cargo.
Reach trucks, paper cramp trucks & forklift trucks for handling cargoes.
In- house customs office for prompt customs clearance. Ample open yard space for handling & storage of over- sized heavy lifts & odd- sized cargoes.
Round the clock security services by in-house & professional security personnel
Customer and Terminal clearance services
Constant transportation of shipments from terminals and inland points are facilitated through professionally handled customs & terminal clearances.
Accurate tariff classification in accordance with the local customs and terminal by-laws are conducted.
All inland feeder (trucks) deliveries to destinations are made through Transocean's own fleet of bonded & non- bonded trucks which operate locally.
Customs and terminal documentation clearances are now done on-line. This is done to improve the characteristics of the service and also to facilitate speedy operations in the hub
2.1 EXTERNAL ENVIRONMENT ANALYSIS
Figure 2.1 PEST Analysis
PEST Analysis is a useful tool for Transocean to understand market growth or decline, and as such the position, potential and direction of a business. PEST is an acronym for Political, Economical, Social and Technological factors. It shows the 'big picture" of the environment, in which Transocean is operating in and the opportunities that lies within it. By understanding the environment, Transocean can minimize the logistics competitors and at the same time, Transocean can take the advantages of the opportunities to excel in the business. This analysis is done to improve the companies business and be a dominant power in the logistics market.
The elements in political-legal such as antitrust regulations, environmental protections laws, tax laws, specials incentives, foreign trade regulations, attitudes toward foreign companies, laws on hiring and promotion, stability of government should be focus by Transocean. For example, the foreign trade regulations should be more lenient. Now days, Malaysian government is trying to make Malaysia as a core business center around the world. To achieve this, the legal rules for Transocean to operate globally should be revised and made lenient, allowing local or foreign investor to invest in Transocean, thus giving them the freedom of addresses and rule of law. Besides that, the Malaysia government should also give incentive to the Transocean if their project is for social purpose. Furthermore, Malaysian government focuses more on social and employment legislation for the purpose to create a peaceful country for any business investor.
a) Stability of government
Stability of government means that the government in the country can control their development stability. Therefore, Transocean has always kept a good relationship with the Malaysian Government, as this will ensure their safety and stability development while conducting business locally, and at the same time, attracting more local and foreign investor to invest in their business. Besides that, Transocean with the shared relationship and vision with the local government, it has enable in gaining more profitable tender. As return, Transocean will able to conduct even more social project for the purpose to enhance the economic growth of the country in realizing the vision 2020. A better stable government will ensure the smooth flow operations for Transocean
b) Attitudes towards foreign companies
The attitudes towards foreign companies mean that the company has to be a good business to their customers in foreign companies. The company has to be honest and do not commit fraud with other foreign companies in businesses. Transocean is a Malaysian-based logistics company and only operates in the northern site in Malaysia with over two company-owned businesses; Transocean has warehouses, distribution centers, inland container depots, container freight stations, container haulage operational centers and offices strategically located. Transocean understands the customers' logistics needs whereas for customers in domestic or foreign country, it is with their needs in mind combined with the above precepts that Transocean hopes to build a mutually beneficial partnership with foreign companies. Besides this, due to operating globally, Transocean has a subsidiary in Singapore. Transocean should also work together with the foreign subsidiary to dominate the logistics market of Singapore.
Economic is the study of how search resources are allocated among competing needs and the examination of the allocation of goods and services through the price mechanism and market. Economic environment refer to the stage of business cycle, current and project economic growth, unemployment and labor supply, labor cost, impact of globalization, impact of technology and likely changes in economic environment. Based on the latest News, Malaysian government will provide more capital for the company to do the first business in Malaysia. That is a good way to build Malaysia as a develop country at year 2020. The elements in economics such as Interest rates, money supply, inflation rates, unemployment levels and so on
a) Interest rates
Interest rate is a rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies. The sudden case was where the government increase RM0.80 for the fuel charges every liters and it has lead to some burden for the Malaysian. If global oil prices are pressured up again, there will be another round of fear over rising inflation and interest rates. Besides that, Transocean increases its transport prices and its operation cost also getting higher.
b) Inflations rates
Inflations are an increase in the general level. It reduces the purchasing power of a unit of money and occurs when a given quantity of money purchases a smaller quantity of goods and services. A high inflation rate in Transocean may lead to a tightening a monitory policy which in result in an increase in interest rates. Transocean will get benefit from the increase of interest rates. But, Transocean also will lose their customer who can't buy or used the Transocean services because of increase of the prices of transport or tickets or rent for the logistic in Transocean businesses.
Social refers to the growth rate of population, age distribution of population, pension plans and level of education. Besides that, it also includes press attitude, public opinion, social attitude and social taboos. This factor will impact the development of the company or business organizations.
a) Career expectations
Career expectation is the general progression of your working or professional life. Transocean offers promising career opportunities for bright, motivated professionals throughout their dynamic organization. Besides that, Transocean faces a shortage of skilled and committed employees. Transocean has to recruit and select the most suitable and potential employees to work with them. The purpose of recruitment is to attract the potential employees to fill in the vacancy in the company and avoid the unqualified candidates to apply for a job. Transocean can search for the potential candidates internally or externally. Internal recruitment means promote the internal employees where external recruitment means searching the qualified employees through advertisement, professional agency, head hunter and much more. Transocean also should prepare a detailed job description and job specification to enable the recruitment and selection process become easier. Finally, Transocean should select the most suitable employees' base on their knowledge, skill, ability, experience, attitude, personality and so on.
This factor is very important to contribute for development and improvement for any company or organization. Nowadays, the trends of technology are more improve and develop such as the introduction of E-commerce and E-business. The world without border makes business transaction very easy to be done. Besides that, the exiting of Internet tool may help the company to build up their close relationship with other parties, such as the supplier, consumers, competitors and government. To improve their business levels, Transocean can use two new developments in technological such as Electronic Data Interchange (EDI) and Radio Frequency Identification (RFID) that is new development in technology transfer from lab to market place.
a) Electronic Data Interchange (EDI)
Now days, the development of technological has develop to all sector in Malaysia including the Transocean business. The new developments in technology such as data interchange (EDI), Internet-based EDI, and Internet are widely implemented in companies. EDI can be defined as the computer-to-computer exchange of standard business documentation in machine-process able form. EDI has been around since the late seventies and its use as a replacement for paper-based systems has increased dramatically.
Transocean can use this new development technology in their business because it has many advantages for their business. EDI benefits can be categorized into six areas:-
Lower administrative and transaction costs by reducing paperwork and processing transactions.
Lower inventory levels and inventory costs by enhancing integration between trading partners information systems.
Improved accuracy of Information and error reduction by eliminating the need for re-keying data.
Improved cash flows because funds are not tied up.
Better customer service by reducing order cycles time and providing timely information about transaction status.
Enhanced competitiveness through win-win partnership fostered by EDI linkages.
b) Radio Frequency Identification (RFID)
Radio frequency identification (RFID) is a technology that incorporates the use of electromagnetic or electrostatic coupling in the radio frequency (RF) portion of the electromagnetic spectrum to uniquely identify an object, animal, or person. RFID is coming into increasing use in industry as an alternative to the bar code.Transocean can use this new technology because it has the advantages to enhance Transocean's business. The advantage of RFID is that it does not require direct contact or line-of-sight scanning.
2.2 SWOT ANALYSIS
SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for building a competitive advantage, and weaknesses may hinder it. By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastating threats.
Below are Transocean Holdings respective strengths, weaknesses, opportunities and threats:
Figure 2.2: Environmental Analysis
CORPORATE SWOT ANALYSIS
Table 1.2: SWOT Analysis of Transocean Holdings.
Strong brand name
Excellent management team
Large numbers of Subsidiaries
Integrity and transparency of the Business
Reduced Inventory Costs
Large number of multinational companies as customers
Membership with Logistics bodies
1. Low wages
2. Outdated equipments used
3. Low Job Diversification
4. Low expenditure and high
5. Low marketing strategy
Improved Real-time Information
E-commerce and technologies development
Globalization and regional integration
1. Competition with other company
2. Fluctuations in fuel prices
1) Strong brand name
Transocean Holdings is a well rooted company in the logistics and transportation agency. With more than 30 years experience as behind their back, Transocean Holdings has become on of the major dominant powers in this industry. With services that range from trucking, haulage, and warehousing, it has set itself as on or the major brands when it comes to providing one- stop logistics services to its customers.
2) Excellent management team
MR Tung Sing Hong is the Chairman of Transocean Holdings Limited. He holds a degree in Economics from Science University of Malaysia, a Masters of Logistics Degree (MSc.) in Logistics Management from the Chartered Institute of Transport United Kingdom, and a Technical Diploma in Petroleum Economics from Institute Francaise du Petrole (IFP), France. The Board of Directors of Transocean Holdings are also deeply rooted in the logistics sector, the best example is Mr Krishnan Cheliah, who is the Group General Manager of Transocean Holdings who has various positions in the logistics and transport bodies within Malaysia, this is also backed up with the years of experience he has on the job.
3) Large numbers of subsidiaries
Transocean Holdings also has a large number, which consists of 15 subsidiaries. Each of these subsidiaries is responsible for their own operations and is audited separately in accounting terms to determine the profitability ratio. Each of these subsidiaries is a part of Transocean Holdings and will contribute directly to the performance of the company. This enormous amount of subsidiaries enables Transocean to provide the one stop service to the customers and also enables the company to diversify its business to gain profit.
4) Integrity and transparency of the business
With the years operated and the service quality provided by Transocean Holdings, the company has gained the earned the trust and the commitment from the customers, shareholders, fellow employees, business partners and community by being committed to the highest standards of ethics, honesty, and integrity when operating as a service provider in this highly competitive sector. All the operations which are involved are certified with assurance form the ISO department of quality. This means that there is no room left for illegal money making form the services provided. The employees of Transocean are highly courteous and treat each other with the uttermost respect. Customers are also high acknowledged and treated with respect to gain their trust.
5) Companies Location
Transocean Distribution Hub is located in Sungai Lokan Butterworth, this place is cosidered strategic because it is located in the industrial area of Butterworth. Companies like Honda Motors and Northern Elevators are located closely and also can be seen as potential customers for Transocean. Besides this, the route to the hub is also well connected with a good network of roads which will bring you diretcly into the hub. The main office which is Weld Quay, Penang is also well placed. The company is placed just in front of the jetty and Port Swettanham. This will make it easy for customers and cients to find the place. Another advantage is that both locations are free of traffic congestions. This is seen as an advantage because traffic congestions can lower the efficiency and effectiveness of he service provided.
6) Reduced Inventory Costs
Through better inventory planning & positioning, Transocean has optimized its stock level and lowered the inventory volume, which is demanded. This is seen as strength for the company because it can reduce the working capital. Every "dollar" saved in financing capital is a "dollar" increased in profit which can be used to develop the business.
7) Large number of Multinational companies as customers
Transocean Holdings operates on a large scale. Due to the large and complexity of the operation scale, Transocean has gained the trust of a lot of multinational companies. These companies have a large production scale due to the demand that is generated by the customers. Due to this, they need a service provider that has a "clean sheet" when it comes to providing logistic and transportation services. The on time delivery and also the reasonable service charges also add as an advantage to attract the customers to use the services of Transocean. Examples of these multinational companies are JABIL Circuits, TIM Electronics and also MARIGOLD Dairies.
8) Membership with logistic bodies
As a one-stop service provider, the membership with other logistics bodies is important to ensure that there is sharing of information and also technology with the members of the bodies. This information and technology will then be used to further improve the operation of the company. Transocean is a proudly holds membership in the FIATA (International Federation of Freight Forwarders Association); FMFF (Federation of Malaysian Freight Forwarders); PFFA (Penang Freight Forwarders Association); Penang Chinese Chambers of Commerce and Malaysian International Chambers of Commerce. Memberships in these regulatory bodies are of the uttermost importance when it comes to sharing of information, technology and also to capture the client market.
The employees of Transocean Holdings are paid low wages. The employees that have worked for the company for ore than 20 years are only paid wages between the ranges of RM 1500-1800. Beside this, all the employees also have not got any bonuses, increment or allowances for the past 3 years. This will definitely is seen as a weakness that will not increase the employee's performance.
2) Outdated equipments used
The equipments such as computers, forklifts and block stalkers are all outdated and not updated according to the latest technology development. In terms of the computers and the software's used, mostly all the computers operate on Microsoft Windows 98, device extended memory of 128 Megabytes and hard disks space of 40 gigabytes. This definitely will not be capable to support all the latest software to improve the operation of the company. Besides this, the linkage to the NBCT PELKON System will also delayed and the container information will be entered into the system thus delaying the container clearance. The other equipments such as the forklifts are used more then 10 years. This will definitely lower the operation capability of the machine and thus, increasing the maintenance of the machine
3) Low job diversification
Even though job specification for each workers help to improve their skills and also reduce the tendency for any errors, this is seen as a good advantage for the company. The disadvantage is that if the same job is done over and over again, it will cause 'boredom' among the staffs. Doing the same job everyday will also restrict them to learn and master other jobs that can also increase their experience and also profit the company
4) Low expenditure and high operations costs
Due to large number of assets and also subsidiaries, this directly increases the cost of operations for Transocean Holdings. This basically means that all the revenue generated from the operations of the subsidiaries will be channelled directly to cover the operation costs that are incurred during the operations of the subsidiary. Due to this high costs, this will lower the chance of Transocean Holdings to expend their business and venture into more profitable business. The high operation costs are seen as on of the weakness to hinder the company from growing.
5) Low marketing strategy
The current marketing strategies that are used by the marketing department of Transocean are more towards face to face communication. Marketing from various media's such as televisions, radio and through the internet are not done. This is seen as a weakness because face to face communication can be only applicable for local customers. Customers which are situated far away cannot be reached this way. So, the lack of promotion is seen as a one of the weakness for the companies to expand the business to unreachable customers which are situated is distant locations. A good marketing strategy is essential to promote the companies operations.
1) Government supports.
Transocean Holdings needs to always maintain a good relationship with Malaysian Government, as this will ensure that the government would not interfere with the business development of the company. Political factors can have a direct impact on the way business operates. Decisions made by governmentÂ affectÂ our every day lives and can come in the form of policy or legislation.Â The government's introduction of a statutory minimum wage affects all businesses, as do consumer and health and safety laws and so on. This as can be seen as a good opportunity for the company to improve its business
2) Improved Real-Time information
Information is a valuable asset for Transocean Holdings. This information can come from a variety of sources and must be processed with pinpoint accuracy. Real time information is seen as an opportunity Transocean to upgrade its performance. Real time information means that the information that is received by the company is always accurate and arrives just in the time needed. The sources of the information also must be accurate and precise to ensure that the customers enjoy the visibility of real-time information. Customers are able to follow the progress of their cargo or consignments from departure to destination using the track and trace, inventory management system and customized reporting facilities.
E-commerce and technologies development
E commerce and technology developments are seen as an opportunity for Transocean to apply diversification to the business. Applying proven and enabling technologies, techniques and tools for developing and executing innovative logistics solutions is a way to improve Transocean's market domination. With E-commerce, multi-year strategic plans are seen as a as a strategic tool that endeavors to transform Transocean into the premiere e-commerce logistics service provider with unlimited accessibility in the region.
4) Globalization and regional integration
Globalization and the rise of e-commerce make the logistics process much more critical to the development of the supply chain. Globalization, or better known as a world without borders, also may will the opportunity for Transocean Holdings to expend their business abroad and gaining more market shares in the global market. So, Transocean should quickly adapt and also make adjustments to their operations to support the globalization change. These adjustments can be seen as an opportunity to expand the horizons of Transocean Holdings to a greater height and also manage the supply chain professionally. With this, the range of customers reached will be extended and the services provided will reach all destinations on time.
5) Artificial intelligence
Artificial intelligence can be defined as a computer generated organism which operates like a machine but has the ability to make decisions which include thinking, processing and coming up with a solution for the problem. This will reduce the amount of manpower needed to and also the amount errors done will be minimal. This technology development is now newly introduced to the world and not fully introduced in Malaysia. This technology is seen to improve the operations of Transocean, with time and place utility in mind.
1) Competition with other company
Nowadays, due to the high demand of logistics, a lot of competition has emerged which provides the same services as Transocean. This competitor competes with Transocean in terms of the charges and also the accuracy of the service. The main competitors of Transocean are Kontena Nasional Private Limited, Lee Tee San (LTS) Logistics and also Pax Global Logistics. With this, all the services offered by Transocean must always efficient and effective to grab the customers. The services provided must be faster, cheaper and better than competitors.
2) Fluctuations in fuel prices
Fuel is the main ingredient that is used to move the logistics industry. It covers almost every activity in Transocean, which include haulage services, trucking services, shipping services and also forwarding services. Due to the current economy condition, the price of fuel is regularly fluctuating; the price was raised from RM1.70 to RM2.70 in 2007 and depreciated to RM1.80 in the second quarter of 2008. This is seen as a major threat for Transocean because a fix rate can't be set for the services. If the price which is not monitored, the customers will find cheaper service providers that can satisfy their needs.
As a conclusion, Transocean should use all the strengths that it posses to eliminate its weakness to gain market dominance. With the increase of customer's satisfaction, the company is deemed to grow greatly.
Internal Factor Analysis Summary (IFAS)
Table 1.3: Internal Factor Analysis
Good company structure
S2Reduced inventory costs
Effective inventory management
S3Membership with Logistics bodies
Quality key to success
S5large number of multinational companies as customers.
Maintain good relationship with customers
W1 Low wages
Should be equal or more than current competitors
W2 Low job diversification
Should take good action to expose staff to perform variety of jobs
W3 Low marketing strategy
Should take immediate action
External Factor Analysis Summary (EFAS)
Table 1.4: External Factor Analysis
T1Competition with other company
Should try to expose more in market and provide better services
T2Fluctuation of oil prices
Reduce empty running and safe operating cost
Work together with government to gain profit
O2Globalization and regional integration
Reach out to foreign markets( Thailand) to get customers
O3 Artificial intelligence
Reduce manpower, reduce errors, save costs
In the long run
1. In column Weight, each factor was weighted from 1.0(most important) to 0.0(not important).
2. In column rating, each factor was rated from 5.0(outstanding) to 1.0(poor), and 3.0 known as average.
Outstanding Above Average Below Poor
2.3 TOWS Matrix
The Threats - Opportunities - Weaknesses - Strengths (TOWS) Matrix is an important matching tool that helps manager to develop four types of strategies:-
S-O Strategies: pursue opportunities that are a good fit to the company's strengths
W-O Strategies: overcome weaknesses to pursue opportunities
S-T Strategies: identify ways that the firm can use its strengths to reduce its vulnerability to external threats
W-T Strategies: establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats
A schematic representation of the TOWS Matrix of Transocean Holdings is shown below. The TOWS Matrix composed of nine cells; there are four key factor cells and four strategy cells. The four strategy cells, label SO, WO, ST and WT, are develop after completing the four key factor cells, label S, W, O, T.
As a conclusion, With reference to Tows matrix, it is seen that the SO strategies is the strategy that is needed to be implemented to make the company grow. These are the strategy that is needed to be implemented by the company. The strategy that is rarely implemented by Transocean is the WT strategies. These strategies are not implemented due to costs that are involved in the operation process. This is more towards a stability strategy.