Introduction This report is comprises of the characteristics and recommendations of the supply chain and logistics industry.

It provides an overview, and how the industry study jobs, evaluate jobs and achieve external competitiveness. It also provides recommendations that companies in the industry can adopt so as to improve their current compensation and benefits system. Overview Logistics is the management of the flow of goods and services between the point of origin and the point of consumption in order to meet the requirements of customers. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and often security. A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. The Logistics industry helps in industries like retail, automotive, chemical, food and other manufacturing sectors. For profile of staff, some key skills required for this industry would be team building, strategic planning, communication, technical skills, financial skills, and relationship management. The educational qualifications vary according to the jobs in the industry. For instance, for Warehouse/Store Assistant/ Operations Assistant, Shipping Assistant and Warehouse Supervisor, in general its O/N level certificates, for Distribution Manager, its Degree. Based on Kelly Services Salary Guide 2009/2010, for instance for Warehouse Assistant, the salary range is from $1100 to $1700. As for the Distribution Manager, their salary range is from $4500 to $6500. One of the leading players for logistics industry is PTC( Poh Tiong Choon) Logistics leading for more than 50 years specializing on chemical and petrochemical handlings. Here are some examples of competent staff in PTC Logistics. 1) Mr Poh Sin Choon, hes the founder/advisor of the company, he provides advice to the Group on significant business and operational matters. He started the business as a lorry owner-cum-operator back in the 1950s. Through his foresight and entrepreneurial spirit, the business grew significantly. Logistics industry probably is a labor-intensive industry as companies in the industry that manufactures pharmacy products have very low levels of automation, as they require careful handling. For example, conveyor systems may cause items to roll or fall, thus it would not get the job done, causing a large number of service workers to be required. Supply Chain industry might also be labor-intensive too as it involves order picking whereby goods are extracted from the warehousing system to satisfy a number of independent customers order, this process is not only labor intensive but also costly. However, on further inspection of the figures for DHL as of

December 2009, he capital costs it amounted to 6220million whereas for labor costs it only amounted to 4574 million. These figures lead us to conclude that although the industry might seem labor-intensive, it is actually capital intensive. Another unique characteristic of this industry is that unlike most industries, there are lesser women working in logistics. A survey conducted by Europhia Consulting showed that in most companies in industry, has less than 30% of the staff are females. The general lack of interest in the job, societys lack of faith in women and lastly, a lack of work life programs can be the cause of this situation. As the supply chain and logistics industry is generally a male dominated industry so their compensation and benefits policies are mostly catered to the male employees. There are a few emerging trends relating to the industry. Firstly, the increase in freight rate volatility. European Commission caused the increase of the freight rate volatility on the Far East to Europe, when they repealed the conference block exemption on 18 Oct 2008. Secondly, the increase in demand for western luxury goods is driving air cargo imports closer to exports, therefore companies that transports western luxury goods would benefit as a result. Thirdly, the Free Trade Pact between China, Japan and Korea, would be completed by early 2012, one year earlier than initially planned. In addition, theres a increase in demand for professionals in the logistics industry who specialize in various sectors such as contract logistics, operations and general management. How does The Industry: Study jobs Like in any other industry, the studying of the job is crucial, as it helps to establish an internally fair and aligned job structure. To effectively study the jobs in any industry, we should aim to collect relevant and valuable information, and this can be achieved through Job Analysis. The information collected would then be required to develop the job description and job specifications. There are different methods of job analysis and also different sources of information. A particular job might require a specific method and source/s of information, so that the job analysis can be as accurate as possible. In the supply chain and logistics industry, there are many different jobs, and so there would be different ways of analyzing each job. Methods like observation, interviews and questionnaire are the commonly used ones. To analyze the job of a Planner/Scheduler in the supply chain industry, we believe that Flextronics would have made use of Interview to do the job analysis since it is more of an office job. On the other hand, to analyze the job of an order fulfillment in the customer service department, we believe that Flextronics would have used the observation method instead, since the job involves a lot of interaction with customers, which is hard to

understand through interviews. The more commonly used sources of information would be the job incumbents themselves, supervisors, trained job analysts and customers. In reference to the order fulfillment example we stated earlier, we believe that Flextronics had used the supervisors and customers as the main sources of information. The reason behind this statement is that supervisors work directly with them and would provide relevant information about the job. Customers would also be able to provide information about the job, as they are the ones that define what is required of the service. However, more senior positions like supply chain executives would require other source of information. We believe that Recruit Express made use of the job incumbents as their source of information. Since a supply chain executive is more of a management position, they would know best about what is required of their jobs. Ensure Internal Equity In supply chain and logistics, our group could not find any information pertaining to the job evaluation method adopted by the supply chain and logistics company. There is also no sample of evidence of job evaluation published at the websites, as this information is confidential in most companies, rarely disclosed to the public. Although we could not find the evidence of job evaluation, our group feels that FedEx being one of the supply chain and logistics company, had adopted the classification method from what we had done using the job description. By using the job description, our group had come out the job evaluation method, which is the classification method. It is hard to come out with point method, as the compensable factors must fit with the job positions in the entire organization. As this is SC&L, the compensable factors might be hard as some factors like physical strength might not be needed for upper management positions. A simulation of how companies might have done the job evaluation is included in the appendix B (table 1). For instance, a grade 1 job would be FedEx package handler where they should possess the necessary strength to load and unload goods and follow directions of supervisor. On the other hand, for a grade 5 job, it would be FedEx customer service job where decision are made by themselves for instance, handling though unpleasant customer. Also, he had to work with internal and external customers for any delivery delays or discrepancies. However, we managed to find relevant information regarding the internal alignment of the industry. Internal alignment refers to the pay relationships among different jobs/ skills/ competencies within a single organization. We will be looking at FedEx in this case. Figure 2 (refer to appendix A) shows a pay structure of pay rates for different position within single organization, FedEx. The pay differentials are due to the content and value of the work itself. For both operations supervisor and manager, both need to lead employees to ensure customer satisfaction by moving all shipments on time and damage free while the manager

needs to observe company and regulatory policies and procedures. Based on the content of the job, the operations manager are paid an average of $59K per annum while operations supervisor attained lesser- $50K per annum. As FedEx philosophy is putting people first had awarded them the top 100 Best Companies to Work For list in the 10 of the past 11 years, their company combines both of a person which is the employee and a job based structure which relies on the content. They also have developed recognition programs to celebrate the achievement of their people. FedEx can be classified as multiple levels as FedEx itself is a large company where they have FedEx Express, FedEx ground, FedEx Office, FedEx Freight, etc. which is led by FedEx corporation. The criteria used to determine the levels and pay differentials is based on both its value and content. This can be seen by the pay rates for different work or skills within the organization-FedEx, Figure 2(refer to Appendix A). As FedExs culture fosters and promotes an environment where a persons performance is what counts. Thus, it can be seen that the average salary of FedEx can vary greatly due to or depending on your experience-as they emphasize on experience in SC&L, location, education, skills and abilities. Hence, the higher the pay, the more weightage of responsibility the person needs to carry. Achieve External Competitiveness For external competiveness, our group researched on FedEx Singapore as our case study and Kelly Services Singapore as our salary guide to compare. From our research, Kelly Services Singapore showed that the average pay for all the logistics company for the position of an operations manager is $96000 per annum. However, it was shown that FedEx Singapores average salary for the position of an operations manager is $70000 per annum whereas DHL Singapores average salary for the same position is $59000 per annum. Thus, it can be seen that FedEx Singapore and DHL Singapore pay their employees much lower as compared to the average of all the logistics company in Singapore. FedEx Singapore pays their employees 27% lower as compared to the average pay for all the logistics company in Singapore and DHL Singapore pays their employees 39% lower. Hence, we can conclude that FedEx Singapore and DHL Singapore use the lag policy.In addition, Kelly Services Singapore showed that the average pay for all the logistics company for the position of logistics analyst is $45000 per annum. However, it was shown that FedEx Singapore pay their employees is $50500 per annum whereas DHL Singapore pays their employees $85500 per annum.Thus, it can be seen that both companies pay higher as compared to the average of all the logistics companies in Singapore. FedEx Singapore pays their employees 12.2% higher as compared to the average

pay whereas DHL Singapore pays 90% higher. Thus, this shows that both companies use the lead policy.In conclusion, both companies uses different pay levels for different job families. Benefits Types of Employee Benefits & Services DHL Pay-fortime-notworked Insurance Healthcare insurance Vision Insurance Life insurance for employee and eligible dependents Long-term care insurance Cancer Insurance Retirement Employees CPF Retirement plan Employee Services Reduced Shipping Rates Employees CPF Retirement plan Reduced Shipping Rates Employees CPF Super annulations Reduced Shipping Rates Discounted travel Intangible Education programs & Courses Tuition Reimbursement Tuition assistance Special Awards .(Bravo Zulu, Purple Promise Award, Humanitarian Award & Five Star Award) Paid vacation & holidays UPS Paid vacation & holidays FedEx Paid leave for maternity, paternity, marriage Healthcare insurance Vision Insurance

Pay-for-time-not-worked benefits include paid leave for vacation or holidays, it also includes leave like maternity, paternity and marriage. It is where the company still compensates the employee even when the employee has taken leave for the purpose in which the company deems to be able to compensate. Insurance benefits include healthcare, vision, life insurance and for UPS, cancer insurance. These insurances insures against the aforementioned issues.

Retirement benefits include the compulsory CPF contribution and retirement plan. It is in which the company would draft out a retirement plan for the employees in which the employee would contribute and draw out from the said plan. Employee services benefits include reduced shipping rates and discounted travel for FedEx. Employees get a lower shipping rate when shipping in their personal goods or items, the discounted travel for FedEx provides discounts on air travel tickets for their employees. Intangible benefits include education programs & courses, tuition reimbursement, tuition assistance and special awards for FedEx. The company would regularly send the employees out for courses to upgrade their knowledge and skills. Employees who take part in education programs and courses to upgrade their knowledge and skills in order to be more productive, efficient and effective can claim reimbursement or assistance from their employers. FedEx also gives out special awards like the Bravo Zulu award which is awarded to an employee with outstanding performance beyond normal job expectations to recognize their efforts and contributions to the company. Another example would be the Five Star Award by FedEx, which is the highest award for enhancing service, profitability and the spirit of teamwork. Recommendations Indirect Financial Compensation For indirect financial compensation, our group has come up with two recommendations that would aid the employees of the supply chain and logistics industry. One of them would be the improvement in health care benefits. We are aware that employees in the industry are provided with insurance due to the nature of their work, which involves the provision of dangerous equipment such as forklifts. As mentioned above, males dominate the industry; this would mean that a high number of employees in the industry are sole breadwinners of their families. Therefore, we believe that employees in the industry should be provided with paid leaves in situations whereby they are hospitalized during work hours. This would allow employees to feel safer and less worried while at work, as they are aware that in the event of hospitalization their family income would not be affected. This allows the company to show that they value the well-being of their employees and at the same time provides an ease of mind for the employees. Next would be the autonomy of work. As mentioned in the earlier part of this report, the supply chain and logistics industry currently does not provide any work-life balance programs for their employees, causing the low number of female employees. Females provide a different perspective to the organizations and increases the diversity if ideas. Therefore, we believe that it is crucial for the industry to adopt some form of work-life balance program, so as to attract more women into the industry. Furthermore, a research done by Europhia Consulting suggests

that organizations in Asia do not provide enough flexibility in terms of work timing for their staffs. Therefore, our group has came up with a scheme that allows employees of the supply chain and logistics industry to have more flexibility in their work timings. This scheme allows the employee to choose the time they wish to start/end work, so long as they clock up the required work hour for that week. This allows to employees to achieve work-life balance with accordance to their own schedule/plan. This gives a lot of flexibility to the staff, but yet ensures that they fulfill their contractual hours. It would also appeal the women in the workforce, as they would be able to take care of their family matters but yet still able to complete their contractual hours. Non Financial Compensation Job rotation Under this compensation method, our team feels that job rotation can be implemented for the Supply Chain and Logistics industry. This is so because we feel that employees may get tired of their routine jobs and may not be motivated to do well in it. Thus, with this system, employees will get a chance to experience the nature of other different positions in the same industry. Moreover, employees will face new challenges from their new job positions and will be motivated to do well in it. In addition, leadership development can be cultivated during job rotation. Hence, when companies implement this scheme to junior and middle level executives, these employees can be given an opportunity to show off their strengths and attributes. Thus, our group feels that employees will be able to find their jobs more enriching and gain satisfaction from it. Challenge yourself Scheme The Challenge yourself Scheme is aimed at encouraging the employees to take on a new role with higher responsibilities and duties so as to challenge ones abilities. This aims at giving employees satisfaction with their job as the employee would be challenged with this new and more demanding post. This scheme is also developed to help nurture the employee to become an employee with more knowledge and abilities. This scheme empowers the employee to make decisions to help improve the current state of the company. During the course of this scheme, employees would be required to take on a radical change to their daily job routine, they would be performing more challenging and exhilarating tasks. Monthly, an employee can apply to take on this Challenge yourself scheme. The aforementioned successful applicant would then be given the task and roles of the high-leveled job, which comes with higher responsibilities and duties. The employee would then take on this new role for a week in which he would be presented with challenging tasks and assignments in which he or she would have to complete it to the best of his or her ability. This scheme also enables the company to keep a lookout for potential employees who show the ability to lead and overcome challenges, enabling the

company to conduct a succession planning. This scheme not only benefits the company but it benefits the employees as well. It allows employees the chance to take on a higher position and to test their abilities; this encourages the employees to work hard for a promotion should they like the satisfaction that comes with a higher responsibility job. Direct Financial Compensation From the research on part (a), we already knew that the company adopted fixed pay or base wage. After consolidating, we recommend the supply chain and logistics industry to adopt a combination of low base wage and bonuses where it ties directly to performance level of the employee. Variable pay seems unsuitable, as it is more for sales industry. We adopt low wage base pay, as this is to give the employee motivation to actually earn more and will be rewarded through bonuses given for them. By having bonus, this thus increases their base wage and bonus is extra cash for them where the bonus is based on their performance. Our bonuses follows on the level of position the employees are in. This can be seen from the diagram in appendix B. (Figure 3) For deliver personnel, the bonus is given in such a way that it meets the requirements of delivery, customer oriented value and productivity. If the delivery is early, the bonus will be higher than the deliveries deliver on time. Same goes to the customer oriented value where it consists of another 2 branch whereby it is the feedback given by the customers. If he/she is friendly, he/she will receive a high bonus. Besides, under productivity, if the number of trips made per day exceeds, a greater bonus will be given and if vice versa, a lower bonus will be given. For managerial positions, stock and managing skills are factors determine the level of bonus the employee will receive. For stock, if there is missing items, no bonus will be given but a high bonus if stock receives on time. For managing skills, in order to get a great bonus, stock must be systematic, well organized to ensure efficiency in work. Lastly, for other job positions such as administrative, datelines must be met or even early in order to receive a high bonus. The quality of work done should be high to attain a high bonus. Last but not least, the personality of the employee where an appropriate bonus given if they are hardworking, punctual and are productive based on the records of their performance and vice versa. Conclusion In conclusion, our group believes that to attract/retain/motivate employees, they would require a competent compensation and benefits system. We are confident that the recommendations we made, would allow companies to further improve on their system.

Appendix A Overview: http://app.careercompass.gov.sg/Front/Home.aspx http://www.maersk.com/Pages/default.aspx http://www.dhl.com.sg/en.html http://www.dbschenker.com.sg/log-sg-en/start/company_information/ http://www.nipponexpress.com/hq/index.html http://www.supplychainasia.com/news-articles/latest-news/industry-news.html www.asiajobindex.com/downloads/.../logistics-market-update-Q2-2010.pdf http://www.kellyservices.com.sg/res/content/sg/services/en/docs/salaryguide_2009_2010.pdf http://logistics.about.com/od/operationalsupplychain/a/order_pick.htm http://about.fedex.designcdt.com/ www.nipponexpress.com/hq/csr/pdf/2008env-report.pdf http://en.wikipedia.org/wiki/Women_in_logistics http://www.hoovers.com/company/Nippon_Express_USA_Inc/rrryfyi-1.html www.supplychainredesign.com/training/whitepaper_training.pdf http://europhia.com/docs/women-in-logistics-en.pdf http://en.wikipedia.org/wiki/Expeditors_International Part B: Job analysis: https://flextronics.hua.hrsmart.com/ats/js_job_details.php?reqid=43246 https://flextronics.hua.hrsmart.com/ats/js_job_details.php?reqid=30925 http://sg.jobsdb.com/SG/EN/Search/JobAdSingleDetail?jobsIdList=400003000469662&sr=1 Internal Alignment : http://www.nmmu.ac.za/documents/theses/VanRooyenA.pdf http://www.bestjobdescriptions.com/company-profiles/fedex-corporation http://www.jobfox.com/Web/Seeker/Landing/AppJobDetails.aspx?AppJobId=cfa4af0f-fd2a4143-8f25-9f14e0198ea8&source=careerbliss1 http://www.careerbliss.com/salary/operations-supervisor-salary-insingapore/?q=operations+supervisor&l=singapore http://www.careerbliss.com/salary/operations-manager-salary-insingapore/?q=operations+manager&l=singapore External Competitiveness: http://www.careerbliss.com/salary/operations-manager-salary-insingapore/?q=operations+manager&l=singapore http://www.kellyservices.com.sg/res/content/sg/services/en/docs/salaryguide_201011.pdf http://www.careerbliss.com/salary/dhl-express-salaries-1732511/ http://www.glassdoor.com/Salary/DHL-Express-Senior-Business-Analyst-Singapore-SalariesEJI_IE38615.0,11_KO12,35_IL.36,45_IN217.htm http://www.careerbliss.com/salary/logistics-analyst-salary-insingapore/?page=8&q=logistics+analyst&l=singapore

Part C http://fedex.com/sg/careers/compensation.html https://ups.managehr.com/SCS_ben.htm http://www.dhl.com.sg/en/careers.html Part D http://www.europhia.com/docs/work-life-balance-final.pdf http://europhia.com/docs/women-in-logistics-en.pdf

APPENDIX B Job Evaluation (TABLE1) Work simple and highly repetitive Equipment specified High physical strength Operations performed had been decided Work simple with little variation Less physical strength Rarely require initiative Work simple with little variation Some initiative needed Most decision require independent reasoning Some coordination with customer Work moderately complex with dome variation fewer coordination with customer Work complex and varied Decision often involves optimum allocation of resources to support plan. Frequent coordination with customer

Grade 1

Grade 2

Grade 3

Grade 4

Grade 5

FIGURE 2

FIGURE 3