The global provider of business communications applications, software and services will ship S$136 million worth of IT equipment from Singapore.

Avaya, one of the world's leading Intelligent Communications solutions provider, has opened a finished goods distribution centre in Singapore, as part of its new supply chain management strategy for Asia Pacific. All Avaya products manufactured in its facilities in Asia Pacific - namely, China, Thailand and Indonesia - will be consolidated and shipped to regional customers and business partners in Australia, China, India, Southeast Asia, Korea and Japan, from this new centre in the Republic.

The US-based company estimates that the first phase will see an annual turnover of more than 500 tonnes of IT equipment worth over S$136 (US$100) million shipped from the island. The new centre is also expected to provide cost savings of up to 80 per cent and a reduction in lead time for product delivery from 14 to two days for most of the region.

Says Mark Leigh, President, Avaya Asia Pacific, "With service as the cornerstone of Avaya's corporate culture, being close to our customers was an important business consideration in establishing our supply chain management centre in Singapore. We are now able to deliver real-time support to our business partners and respond to customers by having the right product available at the right time."

Excellent connectivity

In any supply chain management operation, location and connectivity of its base from its various manufacturers and markets are key to long-term success.

Singapore's strategic location in Asia and close proximity to Avaya's manufacturing facilities, clients and business partners were critical in the company's decision to site the centre in the Republic. This translates into cost savings in freight and shorter delivery time. A boon to Avaya is the fact that its new hub is situated close to Changi Airport, which means the company is now able to respond more quickly to orders from its customers, and pass on cost savings to them.

Before Singapore was finally chosen, Avaya considered Hong Kong and Malaysia, but the Republic's world-class infrastructure, on top of its strategic location, swung the vote. Avaya already has significant business interests in Singapore with its Asia-Pacific headquarters and R&D and shared services. And last September, it added a corporate training centre for the region to this list.

Linda Sein, Executive Director, InfoComms & Media, Singapore Economic Development Board (EDB), says, "The EDB is pleased to note that Avaya's regional distribution centre will add to the company's existing activities in Singapore. Singapore's central location and excellent logistics capabilities give network equipment providers like Avaya strategic advantage to expand further into the growing telecoms market of Asia."

"With service as the cornerstone of Avaya's corporate culture, being close to our customers was an important business consideration in establishing our supply chain management centre in Singapore."

- Mark Leigh, President, Avaya Asia Pacific

Leveraging Singapore's logistics capabilities

To manage its new centre in Singapore, Avaya will collaborate with leading global integrated logistics service provider DB Schenker, which has the largest integrated freight and logistics facility in the Airport Logistics Park of Singapore (ALPS). The ALPS is a key infrastructure developed by the Singapore government to facilitate the management of global supply chain activities.

Located at DB Schenker Megahub, Avaya's distribution centre is actually within the Free Trade Zone, and hence, enjoys minimal customs formalities, tax suspension and reduced touch points. Outsourcing the warehouse operations makes sense as it also allows Avaya to focus on its core competencies, and to leverage DB Schenker's global expertise in logistics and transportation.

And when it comes to logistics, Singapore is a natural choice as the Republic hosts operations from more than two-thirds of the world’s most established third-party logistics players (3PLs), like DB Schenker. 3PLs provide companies with end- to-end logistics solutions, and as in the case of Avaya and Schenker, forge mutually beneficial partnerships for regional product distribution.

"3PLs are an integral part of our value proposition to companies considering Singapore for their supply chain management hub. The EDB is happy to have companies like Avaya use Singapore as a partner to grow its business. We are committed to putting in place both infrastructure investments and manpower programmes to prepare for the future growth of the Infocomms industry in Singapore," Sein reveals.