Land of Opportunities Offshore Sourcing and Supply Chain Management
China has emerged as one of the leading low cost markets for global sourcing. However, the recent economic downturn has created unprecedented risk for businesses and their supply chain managers. Companies that are sourcing offshore have always needed to consider procurement holistically to be successful. Today, supply chain managers must be cognizant of a large number of risks that are difficult to detect in any market – but even more so in less developed markets. Gaining insight to and mitigating risks in this market requires a different set of tools than in a past. However, if managed effectively the opportunities and benefits remain achievable.
中国是全球采购重要的低成本市场之一。然而，当前全球金融危机 给公司及其供应链经理带来了空前的风险。 实施全球采购的公司必须通盘考虑以确保采购成功。当今，供应链 经理必须认识到在任何市场都存在大量难以觉察的风险，尤其是在 发展中国家的市场中。洞悉和管控风险需要用与以往不同的方法， 同时有效管理仍然可以带来吸引人的机会和收益。 普华永道利用其全球视野和本土知识经验，为企业提供创新的，切 实可行的解决方案，并为企业拓展业务和实现可持续发展提供新的 机遇。
With our global insight and local knowledge, PricewaterhouseCoopers provide innovative and practical solutions to address these key business challenges and turn them into opportunities to expand your business and result in sustainable growth.
To find out more on how we can address your needs, please visit pwccn.com or contact:
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Robert Barrett Tel: +86 (21) 2323 3818 Email: firstname.lastname@example.org Damon Paling Tel: +86 (21) 2323 2877 Email: email@example.com © 2009 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the China firm of PricewaterhouseCoopers or, as the context requires, the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
Robert Barrett 电话:+86 (21) 2323 3818 电子邮件:firstname.lastname@example.org
Publisher: China Supply Chain Council Ltd. (Hong Kong) CHaINA Magazine is a FREE bi-monthly publication for the members of the Council. There is no charge for members and qualified readers to receive subscriptions in China. For your free subscription, extra copies or address changes, please email email@example.com 出版商：China Supply Chain Council Ltd. (香港) CHaINA杂志是为Council会员准备的免费杂志。我们协会会员 和高质量的读者都可以免费订阅。为了及时收到我们的杂 志，额外订阅或地址变更请发邮件至subs@supplychain.cn
Office and Team: Publisher Max Henry Chief Editor Monica Liau Art Director How Xu Graphic Designer Acco Fang
Photographers Kim Jin, Stephan Yang Contributing Writers Bill Dodson , Jeremy Chapman, Charlene Ruan, Charles Avery, Tulei, Damon Paling, knowledge@ wharton, Roy Lenders
CHaINA Magazine is the only bilingual supply chain and logistics magazine in Asia with a strong focus on Greater China. In every issue, we write about the news, trends and best practices that will help manufacturers, retailers and distributors make better business decisions with their sourcing, production, logistics from, to or within Asia. CHaINA是亚洲地区唯一一本专注于中国的供应链和物流行 业的双语杂志。在每一期，我们通过刊登新闻，行业动向 和实践经验来帮助制造企业 零售商和发行商进行亚洲内 外的采购 生产和物流形式的选择。
Distribution: 10,000 copies 6 times a year CHaINA Magazine is offered FREE of charge by direct post mail to qualified readers in Greater China who are involved in all aspects of supply chain management. It is also distributed through selected locations in major Chinese cities, including hotels, restaurants, service offices/apartments, business centers, airport lounges and other key locations. 发行量：一年六期，一万本 CHaINA杂志通过直接向中国各供应链管理的专业读者发送 邮件来提供免费的阅读机会。同样也分发到中国的主要城 市并在酒店 服务楼，商务中心，机场大厅或其他中心地 带免费赠阅。
Target Readers Our target readers are R&D, sourcing, procurement, manufacturing, logistics, warehousing, transportation, retail, distribution and operations managers, directors, vice presidents and decision makers. A majority of our readers are end-users shippers, mainly foreign-invested and local manufacturers and retailers. 目标读者 我们的目标读者有来自采购 制造 物流 仓储 运输 零售和分销的运营经理 总监 副总裁 或总裁。大部分 读者是物流的需求者，外资或国内的制造企业和零售商。
Subscription for Overseas Readers If you are located outside China, you can subscribe to this independent and insightful magazine today with full online access for only US$ 50 for 6 issues per year. For subscription inquiries, please contact: firstname.lastname@example.org Stories Ideas, Comments & Feedback If you have an idea for a story, interview or case study, please contact the editor. We welcome feedback and comments about our content or any issues relating to supply chain management in Asia. Please email email@example.com 反馈和意见 如果您有任何新闻故事 采访或实践 案例，请与我们主编联系。如果您 就杂志内容或亚洲供应链管理有任 何的意见 建议或新鲜资讯，请发邮 件至 firstname.lastname@example.org与我们取得 联系。
THE MAGAZINE FOR GLOBAL SUPPLY CHAIN LEADERS
If someone asked me if supply chain was a sexy field to go into, I’d have to answer yes. Sure, people still compare the supply chain field to a KIA car instead of a BMW. However, looking beyond initial glitz, supply chain management touches on so many sectors that it not only opens doors for career advancement but it is also the key to whole economies. In order for India to advance the entire country, it will rely on revolutionaries like G.R. Gopinath of Deccan 360 to rethink the logistics sector and create new avenues Monica Liau of movement. Cisco slicks up their “value chain” with technology that connects offices across the globe via a Chief Editor product called “TelePresence”, their super-cool version CHaINA Magazine of videoconferencing. At the trucking level, dramas unfold every day between domestic shippers fighting to maintain prices and compete in China’s still fragmented sector. Supply chain education in China is also changing to fit a new role. The Chinese Ministry of Education has recently expressed support and funding for programs that move away from rote learning and support multidisciplinary thinking and teaching. This is an encouraging sign, as one of the biggest complaints of the Chinese educational system is their diet of theoretical instead of practical. Schools like Shanghai Jiao Tong, Jilin and Fudan University have all started programs with international eyes and a domestic base. Some have even partnered with the industry to further bring real life knowledge to the classroom. So, next time some protégé sniffs about going into supply chain management you should have this reply ready. “I’m sorry you feel that way, but we’re the ones moving the world.” 如果有人这样问我，供应链行业是不是一个前途无量令人激动的行业，我的 回答一定是肯定的。当然，人们还是习惯与将供应链行业比喻成新兴崛起的起亚 而不是宝马。然而，撇开那些浮华的表象和光环，供应链行业实际上涉足了许多 部门的发展，这样不仅为职业晋升提供了更广阔的机会，还是整个经济发展的关 键部分。印度为了刺激并推动整个国家的经济发展，就需要像G.R. Gopinath这样 的改革家重新思考物流业的发展轨迹，并发掘市场发展的空白点。Cisco（企业 网络产品的全球领先供应商）就完美地用科技诠释了“价值链”的概念。通过发 布“远程监控”产品—这款超级酷的视频会议平台来连接全球的网点。而在货运 方面，国内托运人为了守住价格而展开的一幕幕闹剧，不得不说货运在中国的竞 争环境依旧是分散和不成熟的。 供应链在中国的教育和培训机制也在不断转变着角色。教育部最近表示会拨 款支持新型的跨学科跨领域式思维教学的发展。这的确是一个振奋人心的开始， 注重理论而非实践是传统教育最大的问题所在。诸如交通大学和复旦大学这样的 名校，都已开始实践已国际化的事业来观察和分析国内的行业发展所遇到的问 题。有些学校甚至还和某些企业合作，把商业战场上的实战经验带入课堂。 所以，下次要是再有人对你即将踏入的供应链行业颇有微词或嗤之以鼻，请 准备好这样的台词：“很抱歉你居然会是这样认为，但我们才是真正撬动地球的 那根杠杆。
DISCLAIMER Editorial and advertising are independent and do not necessarily reflect the views of the Council, the board, its members or the staff. While every efforts has been made to ensure accuracy, the publisher is not responsible for any errors. Views expressed by writers or contributors in this magazine are not necessarily those of the publisher. The publisher is not responsible for product claims and representations. @ Copyright China Supply Chain Council Ltd. (Hong Kong). All rights reserved The contents of the magazine may not be reprinted in whole or in part without the permission of the publisher. No part of this publication may be reproduced without written consent of the copyright holder. CHaINA is a registered trademark of the Global Supply Chain Council.
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Educating the Masses: Challenges and Triumphs in Chinaâ€™s Supply Chain Education
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Spreading the Sandwich: Interview with Kurt Lipson, Subway Restaurant
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Product Study: How much does the new Google phone really cost?
Finding a Better Way: Changes in Indian Logistics
THE MAGAZINE FOR GLOBAL SUPPLY CHAIN LEADERS
MARCH / APRIL 2010
08 Bankrupt DDS Logistics of Shenzhen dissolves, owes hundreds money
44 Road Wars: How domestic trucking agencies fight it out
10 Key stories impacting logistics and supply chain management in the Asia region
12 What the English Media missed A look at what the Chinese media is saying about logistics and supply chain management
52 Green Survey What professionals think about being environmentally friendly at work
55 With talent at a premium, CHaINA keeps an eye on which executives are moving where.
13 Forget London Bridge Wait a Minute
14 Rosy Real Estate Warehouse Finder
PROFILES 16 Sexy Cisco Interview with Jeff Galinett, Cisco Systems
56 Customs Alert Audits and Investigations
EVENTS 58 Luncheon Discussions Dining with Will O’Brien of Havi Logistics
20 Electric Markets Interview with Eric Cassagne, Schneider Electric
60 Book Review Another look at Paul Midler’s “Poorly Made in China”
61 Cocktail Mixer French Flair at the Global Supply Chain Mixer
Sourcing & Procurement
36 Odd Man Out: Is the age of the middleman in China fading?
40 India vs. China: A comparison in sourcing potential
41 Racing Trade: Capgemini says global trade is speeding up
66 Complete Brake-Down Toyota recalls shake the Japanese automotive reputation
Indignant Postman Wait a Minute
Bob D dson s a pr nc pal of rend sAs a Ltd bas d in Shan hai whi h re ea ches and ana yzes s ci eco nomic and m rket re ds that an di rupt or ben fit bus ne s o era t ons in China He c n be r ach d at wdods n@ r ndsa ia a ia
Right n w gr ups like DHL or Fed- x annot cost ffectiv ly compete against lo al players in the expressletter delivery business.
n O tober 1st 2009 the Ch nese gove nment ena ted a l w d cla ing that any pa ce s del ve ed u ing exp ess se vic s w igh ng 50g or ess w th n a ity or 100g packag s b tween ci ies mu t be onro led ex lu ively by Sta e-owned post offi es Th s xpl c t c t t on me ns ore gn compani s c nnot nve t n his part of the post l segment and w s met wi h a gre t d al of p ote t rom m jor nte n t onal players ike DHL Wor dwide Express nc F dEx Corp and he Un ted Parc l Serv ce Inc A lot of th s deb te has been pent on wheth r or not China is vio a ing WTO ules of Na ional T eatment whi h sta es hat memb r coun ri s p esent a evel p ay ng field to dom st c and ore gn ntr nts But does he mp em nta ion of his new aw ea ly af ect he b g boys De pite the r obj ct ons his egment of he bus ness epreents a small l ver of evenue for he m jor nt rna ional car ie s The r s reng h dome t ca ly ies n get ing la ger packag s o heir d st na ions qu ckly s curely ran paren ly and at a onsi tent p i e evel Right now groups ke DHL or Fed ex c nnot ostff ct vely comp te gain t ocal p ay rs in the expre s- e ter de ivry bu ine s g ven he p ice sen i iv ty of he a rage Chine e con umer wh ther pr va e or commer ial B fore the ena tm nt of the new aw he S at owned se vice a re dy ontro ed abo t 20% of he xpre s e ter m rket which grew 21% in 2007 and 7% n 2 08 acco ding to the Wa l St eet Jou nal The move ac ua ly seems more a p rt of an ove ll rend oward guoj nm ntui - l te a ly he ta e dvances as he p iva e s ctor rec des - th n a pec fic j b at for ign inve ted compan es in he og st cs sec or The St te wan ed a pie e of he as -g ow ng ct on In eal ty t s ocal e press ca r ers that wi l be h rdest h t by he new law whi h r qui es api a za ion amoun s hat w ll l t ra ly clo e hundr ds of sma l domes ic expr ss serv ces In 2008 Ch na
had nea ly 2 500 xpress de very se vic s upportng n arly 2 0 000 employe s many of whom r de coote s o de ver parc ls as small as a l tt r o as arge as - w ll many of us h ve een he e ephanine s zed oads scoot rs in Ch na a e cap ble of c rt ng Other more ma ure del very se vic s though h ve prov ded re l compet t on to he Chine e po t o fi e I ve be n rea ly mpr ssed w th domes ic ca ri rs spec ally Shunfeng sa d Bhave h Mis ry Manag ng Pa tner of Eas W nd Prec s on Eng neer ng based in Su hou In the l st ight months they ve rea ly grown apidly and become qu te el ab e nd p ofe sion l Ac ord ng o Mis ry g oups ike Shunfeng have comput ri ed n he same way as he nte nat onal ca ri rs and h ve ormed par ner hips w th small ocal p ayers n towns so ou -o -th -way that t is p ohib t vely xpens ve to use a Fed Ex These car ie s an a so ost a rac ion of what the nt rnat onal arr ers ch rge in China Neve the ess is ng sa ary and uel cos s a e a ready for ing domes ic c rr ers o inc ease heir at s Wi h he fu ther d velopment of nt r-c ty inf as ruc ure ustomer requ rements for qua ity of serv ce nd del very t me w ll mply fu ther domes ic ndustry con ol dat on In wo to fo r ye rs th s ctua ly may tran l te nto new oppor uni ies as a gr ater number of ma ure dom st c compan es wi l be r pe or acqu si ion by for ign players who want o pene ra e more deeply in o he nl nd exp ess m rket t w l be du ing the a quis t ons of hese matu e domes ic comp nies th t arge nte nat onal car ie s w ll come up gain t nother of China s new egu at ons he nt -monopoly law A ready Be j ng has made judgments ag inst Coca Cola P nason c and Gen ral Mo ors wh ch ha e deeply roub ed mul in t onals acro s ndus ri s When he major e press ca r ers get o the po nt of wrang ng wi h Be j ng s diosyncr t c in erp et t ons of he an imonopoly law they may remember the r ar ier rus ra ions wi h the new po tal aw as ju t a wa k n he p rk
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JANUA Y/ EBRUA Y 2010
Send your comments and feedback to: email@example.com
I am the Chief Representative of the Conference of Asia-Pacific Express Carriers (CAPEC) Beijing Office, which represents the interests of DHL, FedEx, TNT and UPS in Asia. I read “Indignant Postman” written by Bill Dodson on your latest edition, and have some follow up comments on the information given. In his article, Dodson says that “On October 1st, 2009 the Chinese government enacted a law declaring that any parcels delivered using express services weighing 50g or less within a city, or 100g packages between cities, must be controlled exclusively by State-owned post offices. This citation means foreign companies cannot invest in this part of the postal segment, and was met with a great deal of protest ….” There is no content about 50g and 100g in the Postal Law passed by NPC on April 28, 2009. There are two relevant articles on market access in the Law. Article 5 says that the delivery of letter articles within the scope of relevant regulations issued by the State Council shall be exclusively operated by postal enterprises. This refers to postal monopoly. However, the scope of postal monopoly is still undefined. China Post adheres to using the weight to define the monopoly while private firms advocate for the method of weight or fee. Article 51 says that foreign businesses are forbidden to invest in or operate domestic express delivery of letter articles. This exclusion provision does not allow Chinese companies and consumers full access to foreign express delivery service providers. As a result, there will be fewer options and lower quality services for customers. I also refer to Dodson’s comment that “right now groups like DHL or FedEx cannot costeffectively compete against local players in the express-letter delivery business, given the price sensitivity of the average Chinese consumer, whether private or commercial.” Cost effectiveness in the express industry is the ability to provide high-quality service at the lowest possible cost. Low price does not equal cost effectiveness. The Chinese consumer is no different than consumers of express delivery anywhere in the world. They require time-definite, guaranteed service with such add-ons as tracking and tracing of shipments. CAPEC members should be permitted to compete on a level-playing field in this market.
We reserve the right to edit the content of letters in order to achieve clarity and meet space requirements. We may also use them in all electronic and print editions. Writers should consider any connection or relationship in terms of the subject of their comments before submitting them to the CHaINA. China’ s Ports
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Correction Notices There were a few mistakes that should be noted in the January/February issue of CHaINA. First off, on page 16, our columnist’s name is Bill Dodson, not Bob. On page 43 in the article “Missing Parts” Lawrence Gavin is from the Delphi automotive company, not Adelphi. Last but not least, the Dell photos from “Bamboo Baby Steps” on pg54-55 should be attributed to their original source at PackWebasia, the online resource for packaging and supply chain in Asia. Some information was also used from their original article “Dell Bamboo Packaging.” Please go to their website at www. packwebasia.com to find out more about this group.
0 China R the M ises to omen t JANUARY FEBRUARY 2010 www ha naon i e om
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DDS LOGISTICS GOES BUST On January 25, 2010 the Guangdong Postal Authority announced that the Shenzhen Dongdao Logistics Co. (DDS) became insolvent and collapsed, leading to mass protests and riots by customers and employees not yet reimbursed by the company. Founded in Shenzhen in 1997, DDS operated over 800 branches in China, including Hong Kong. DDS ran into trouble after their branches in Eastern China began to fail in November 2009. The company started postponing customer payments in December. Gao Wei, the chairman of DDS, along with five other managers were taken into custody by police after the companyâ€™s inability to pay was confirmed by a government investigation. His assets were also frozen.
70% 50 million
OF THE PAYMENT collection business in Southern China was occupied by DDS logistics. DDS also accounted for at least 10% of the courier business in Shenzhen.
RMB (US$7.4 million) was still owed to DDS customers when
insolvency was announced. Many customers had not been paid back for months, far beyond the usual window of 15 days.
wages were also left in the wake of DDSâ€™s closure. Employees are seeking reimbursement from the government.
PEOPLE were arrested during protests for deliberately blocking traffic in Shenzhen, and four other were arrested in Foshan. Thousands of DDS employees and customers gathered together demanding legal rights. Protests touched cities around the Guangzhou district, including Shenzhen, Foshan, and Dongguan.
A man holds a sign which says “Pay Back My Hard-Earned Money” as he protests alongside thousands of DDS clients and staff over wages and debts left unpaid
News Roundup Japan’s biggest logistics firm taps into mainland China Japan’s biggest logistics services provider Yamato Transport Co., Ltd. has recently entered mainland China, following in the footsteps of other global express hot-shots like FedEx and the United Parcel Service. Yamato Holdings Co., Ltd., parent of Yamato Transport, teamed up with Shanghai Jiushi Corporation and a Shanghaibased investment firm to found a joint venture named Yamato (China) Transport Co., Ltd., taking a stake of 65%, 17.5%, and 17.5%, respectively.
OOCL unveils Mobile Cargo Tracking solution OOCL has launched its Mobile Cargo Tracking system allowing customers the ability to search and track their cargo by booking number, bill of lading number, or container number. Customers may also access the service directly from http://m.oocl.com/
China raises rail freight price by 7% China has raised its unified national rail freight price by 7.28%. The price is now at RMB1.031 (US$0.15) per ton km, according to a bulletin issued by the National Development and Reform Commission (NDRC) and Ministry of Railways (MoR). The unified national rail freight price per ton km was raised RMB0.07, from the average RMB0.961 up to RMB1.031. The goods operation price also increased RMB0.07 from the average RMB0.631 per ton km to RMB0.701. The railway construction fee remained unchanged. While the hike will greatly impact the coal enterprises transportation costs, it is hoped that it will also restore the dropping rates of railway cargo transport companies’ dropping rates.
Hong Kong. The hybrid trucks, manufactured by HINO and distributed by Crown Motors, “are cleaner, more fuel efficient vehicles that contribute to a better environment,” a company statement said. Fedex has already launched these trucks throughout Europe, Japan and the United States.
Aramex in talks over Chinese expansion plan Dubai-based logistics firm Aramex is in talks with a Chinese company to finalize a joint venture deal as it looks to expand in one of the world’s fastestgrowing economies. Aramex already operates in China through
its Shanghai office, but plans to expand into Beijing and Shenjing after it concludes negotiations. Aramex posted a better-thanexpected 28% rise in fourthquarter profit and it is looking to focus on expansion in 2010.
Kodak grows in Xiamen In response to the growing plate demand in the Asia-Pacific region, Kodak is opening a second production line for its printing plate plant in Xiamen, China. While the expansion will further serve customers in region, the second manufacturing line will produce CTP plates for other regions. The plant will support development of current and new
FedEx to deploy dieselelectric delivery trucks in HK Fedex launched its first dieselelectric hybrid delivery trucks in
NEWS Roundup products. Kodak previously announced expansion of customer service and internal operations in Xiamen, and last August relocated its Southeast Asia-based Logistics center to Xiamen.
sales in the first year. The Hong Kong-based company funnels clothes, toys and sporting goods to brand-name retailers including Kohl’s, Target, Marks and Spencer and Talbots. Originally
China’s largest logistics park to be built in Changsha ENRUI International Logistics Centre, the largest one of its kind in China, has started construction at Jinxia Logistics Park in central China’s Changsha City in Hunan province. The RMB3.8 billion (US$560 million) facility covers 133 hectares with a total construction area of two million sqm and will have the largest scale and the most comprehensive range of logistics services for industrial raw materials and finished products in China. The unique project is planned to include a traffic network of highways, railways, waterways and air transport. Plans also include service areas to handle steel, chemicals, paper, building materials and equipment plus 1,000 categories of raw material and services to provide manufacturers and operators with products and services.
Li & Fung to partner with Wal-Mart Li&Fung has signed a new non-exclusive agreement to supply clothes and other consumer goods to Wal-Mart Stores Inc, a partnership which could generate an additional US$2 billion of
will be installed at Lerentang’s 20,000 sqm regional DC in Zhengding, near Shijiazhuang City and will be integrated with their automated storage and retrieval systems (ASRS) including conveyors and a pick-to-light system. It will also integrate with Lerentang’s host ERP system.
Fears of Notebook PC shortage grow
William K. Fung, Group Managing director Li&Fung Limited
a company that connected buyers and sellers, in recent years Li & Fung has expanded to control more and more of the supply chain, from logistics to production to product design. Last year it took over Liz Claiborne’s sourcing arm; in October it bought U.S.-based Wear Me Apparel’s clothing and accessories operations, whose products are sold at retailers like Macy’s.
Lerentang chooses Manhattan WMS Lerentang Group, a leading distributor and retailer of pharmaceutical products based in Hebei Province, has chosen Manhattan’s Warehouse Management solution (WMS) as the technology backbone to support its distribution operations serving upstream and downstream customers across China. WMS
A leading Taiwanese laptop maker has warned that labor shortages in China’s booming coastal cities could affect the supply of computers amid an expected surge in world demand. The labor situation could also lead to shortages of components ranging from memory chips to hard drives to computer cases. He said the labor shortfall could worsen following the Lunar New Year holiday because many factory workers visiting their home towns might not return to the major coastal manufacturing zones where Compal and other electronics companies produce personal computers. Taiwanese makers account for more than 80% of the world’s laptop output by setting up assembly lines in China to take advantage of the mainland’s cheaper labor.
Shanghai bans dangerous cargo shipments during Expo APL, the container shipping arm of Singapore’s NOL, is warning that the Shanghai Maritime Safety Authority (SMSA)
has imposed restrictions on shipments of certain dangerous goods during the 2010 Shanghai World Exposition. The carrier announced that from April 15 to November 15 all port terminals located in the middle and upstream parts of the Huangpu River are prohibited from handling dangerous cargo. In addition, all port terminals, except for Yangshan terminals, will be prohibited from handling dangerous cargo from April 30 to October 31. Furthermore, the export of fireworks at WaiGaoQiao (WGQ) terminals will require local authority’s approval on a per voyage basis. APL recommended its customers “exercise caution when accepting prohibited dangerous cargo as there is no recourse when the vessel will arrive between the prohibited periods.”
China Post Logistics selects RedPrairie WMS for Guangxi DC Guangxi China Post Logistics has selected RedPrairie’s Warehouse Management solution to direct operations in its 8,000sqm distribution center in Guangxi. Guangxi China Post was particularly interested in managing inventory at a granular level, with visibility into individual serial numbers. The company also cited access control and global capabilities as core purchasing criteria for their selection of RedPrairie’s Warehouse Management solution.
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What the English Media Missed Haier breaks ground
Legend likes cake
A cornerstone ceremony was held on January 25th to celebrate the beginning of construction on the Haier Qingdao Logistic Center. The new logistic center will cover 237mu (39.04 acres). This main Haier project marks the company’s goal to change from manufacturing industry to services industry. It also shows the beginning of Haier’s goal to build a community of “Haier brand logistics service” operating platforms.
Legend Capital has invested around RMB10 million into 21cake.com, a cake e-business website. Legend Capital Managing Director, Mr. Liu Erhai, said that future investments will be focused on investing new technologies into traditional industries, with sectors like e-commerce to be the main focal point of investment in 2010. 21cake is currently located in Beijing and Shanghai, where they use telephone call centers and independent distributors.
Bank supporting supply chains The Agricultural Bank of China has created new services focusing on the supply chain finances of medium and smallsized enterprises. The goal is to help them solve finance problems and losses. These enterprises rely on the strength of their supply chain, and the bank will offer them comprehensive financial services including financing, settlement and financial management.
New year breakdown Online shopping giants like Taobao, DangDang, and Vancl all had to suspend their deliveries for one week or longer during the Chinese New Year holiday. The reason for this is because all of their regular logistics service providers stopped operations around February 9th not to resume again until at least the 17th or 18th. While groups like China EMS do still run through the holidays, they are too expensive to use for most e-commerce companies.
Forget London Bridge
he new decade began tragically in China with the collapse of a newly constructed overpass to the new Kunming international airport in Yunnan Province. The accident killed seven workers and injured 34. The central government has slated Kunming as a logistics entrepot between China and Southeast Asia, and between China’s east coast and its interior, with its airport positioned to be the fourth largest hub in the country. The speed at which China is developing its road transport infrastructure is truly admirable. China currently has 3.5 million km (2.2 million miles) of road. More than half of that is low grade, according to Reuters. China had only 53,000 km of expressways in 2007. The country is intent on building 80,000 additional kilometers of expressway over the next ten years, surpassing the length of the continental United States interstate highway network. Of course, the development of the logistics infrastructure will have monumental affects on the ease and declining cost of shipping goods throughout the country, and to neighboring countries. However, China’s bridges seem to be falling down - or falling apart - almost as quickly as they put them up. The Henan Road bridge, a busy throughway that spans the Suzhou Creek in Shanghai, developed cracks in mid-2009 as long as four meters in length, with chunks falling off the structure shortly after renovaton. Workers from the company that built the bridge used garbage - including plastic foam and leather bags - mixed with glue to fill the yawning cracks. The workers repairing the newly-built 120 meter Hanzhongmen Bridge in Nanjing were less creative than the Suzhou Creek crew during December 2009, and simply poured superglue into cracks that were large enough to fit one’s hand through. The country has about 500,000 bridges, many of which were built 20 or more years ago, Xiao Rucheng, secretary-general of the Institute of
Wait a Minute Bridge and Structural Engineering, told China Daily just before one of the worst bridge-related accidents in China’s history: the 2007 collapse of the just-completed Jiantuo River bridge, Hunan province, which killed 36 people. Indeed, the frequency of bridge-related incidences seems to have increased considerably since 2007. In August 2009 a road and railway overpass under construction in Guiyang, Guizhou collapsed, killing several workers; a bridge built in the 1970’s collapsed in Heilongjiang in June of the same year when an overloaded truck attempted crossing, taking several other vehicles along with it into the ravine below. Also in the autumn of last year a major bridge near Tianjin port collapsed when five overloaded trucks fell off a ramp leading to the bridge. The accident closed down the Tianjin section of a vital expressway that linked Tianjin to Shanxi Province and to the rest of northern China. The design times of bridges have collapsed, Tao Hongyi, China director for the bridge builder Dorman Long Technology, told the BBC. A lack of adequately trained workers makes it difficult for crews to carry out engineering specifications, as well. “Part of the problem,” Tao continued, “is China’s desire to build infrastructure projects quickly, often to maintain economic growth.” He added that politicians tend to be in control of projects, not engineers. Of course, corruption and collusion sometimes play into the making of catastrophes, too. The Ministry of Communications reported in 2007 that some 6,300 bridges across the country were dangerous because of serious damage to “important structural components”, the China Daily reported. Though China’s transport infrastructure development frenzy has proven to make the transport of goods and people more efficient than ever before, it’s dependability is also proving to be less predictable - and perhaps more risky - than companies have planned on.
Bill Dodson is a principal of TrendsAsia Ltd., a systemic-risks advisory based in Shanghai. He is author of China Inside Out: Revelations and Revolutions (John Wiley & Sons) due out later this year. He publishes the This is China! blog, and can be reached at wdodson@ trendsasia.asia.
China's bridges seem to be falling apart almost as quickly as they are put up
Rosy Real Estate
I Jeremy Chapman is the director of Industrial Investment at Colliers International, which assist clients in the repositioning, disposal and development of projects. He can be reached at Jeremy.email@example.com
The potential pitfall for the market due to a slowness to react and to grasp an opportunity that seldom comes around in China
n late 2008, I was working with financial investment in the industrial real estate sector and experienced the sudden vacuum and short fall of capital destined for the sector. Upon my recent return to the logistics real estate industry, I was surprised to find the sector experiencing a renewed vigor and interest from financiers. It is interesting to note that, from a property perspective, industrial real estate is generally the first asset class that feels the effects of an economic down turn and is also the last sector to recover. By nature of the way the industrial industry has evolved, China is particularly sensitive to such demand shifts given its successful drive to become the worldâ€™s factory. Therefore, this renewal of industrial real estate investment comes with a different set of needs but is more focused and streamlined than in previous years. The Real Impact Looking at the plans of leading developers, the projected supply of logistics warehousing slated for 2009 and 2010, it was a common assumption that there would be an oversupply in 2010 and beyond. Given that the financial brakes were put on during the latter half of 2008, most of this projected supply never actually eventuated. Construction stopped across the market and land was banked for another day. Surviving investment committees pushed back on new potential purchases. It is rare to find investors who secured funding prior to the crash and have continued to develop their facilities. Herein lies the problem for the future of logistics service providers. This halt of development, lag time of funding and development of product will inherently affect the market supply of high grade facilities in many locations. During the frenzy of 2008 and before, a number of investors rushed into the country, buying what they thought to be high potential growth locations without really understanding their customerâ€™s needs. There were also experienced developers
who did all the right homework but due to market forces still got caught out. On the other side of the coin there are those developers who have chosen well and developed Class A logistics hubs and it is these developments that have seen stable and sustained growth over recent years. Hence the creation of a fragmented market with some developers having done well during the recent tough times and others bogged down from a hangover legacy of bad investments. Most carry at least one or two troubled developments. It is this situation that offers a challenge to both the user and to the developer going forward. There are a few well located facilities, which are in short supply and high demand. Then there are those less attractive locations having their own issues. Added to the equation has been the difficulty of borrowing money for the development of facilities, both locally and from overseas. Investors may look to overseas financiers for funding as the cost of borrowing is potentially cheaper over time. This however comes with a myriad of statutory and other investment related issues. Window of Opportunity As was the case back in 1997 during the Asia crisis and again in 2008 to present, Foreign Direct Investment (FDI) into the industrial sector ground to a slow crawl when compared to the boom years. When FDI decreases, local industrial zones and governments tend to show greater leniency and flexibility to other classes of real estate including the development of logistics hubs. The need to attract investment is paramount, but to ensure that tax-income producing manufacturers/industries are balanced with low income generating logistics developers and users. The potential pitfall for the market due to a slowness to react and to grasp an opportunity that seldom comes around in China could result in the dominance of the market by one or two developers facilities, therefore reducing the flexibility and pric-
COLUMNS ing needed to survive in an already competitive market. With the growth of the logistics providers’ business not looking to slow in the coming few years, the need to consolidate multiple businesses and locations into one stop regional hubs will be paramount for a lot of providers survival. It has to be noted that a number of users that took the chance to have design-built facilities back in 2007 and 2008, with delivery of the facilities over the next year or so, are in a good position to benefit from the market given its projected consolidation and growth. Given that there are investors willing to invest, governments prepared to be more flexible and a need for logistics providers to consolidate operations, there is no better time for logistics providers to plan the consolidation of their present and future real estate needs. However this window will only likely be open for a limited time.
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Jeff Gallinat VP, Global Manufacturing Operations Customer Value Chain Management Cisco
PROFILES Cisco recently announced a decision to elevate Greater China (including HK and Taiwan) to its own theater status, separate from the rest of Cisco Asia. Does this affect your department value chain at all? This move is a clear recognition of the strategic importance of the China market and means we’re going to provide a higher level of focus on it in the company, even higher than it was before– and that there will be additional resources to develop the whole ecosystem. However, this won’t affect our department so much as we’ve been focused pretty heavily in terms of enabling business in China – it just may mean that some of our plans get accelerated.
video are absolutely critical for us and our partners to scale the company and create enough bandwidth to create new solutions to move forward.
Which of the newer Cisco technologies have been the most helpful to you? Loosely we could say the video/collaboration technologies; this involves everything from webex (a highly sophisticated PC based collaboration tool) – which we use continuously- to “TelePresence” which we’ve installed with all of our teams major partners and use when we really want to have the full affect of an in person meeting without jetting six thousand miles. There’s also a lot of interesting collaboration platforms we’re will be invested developing on the web like an integrated workspace A lot of people have been telling me the Supply in Cisco’s China experience – which works on the vision that you Chain is not a very sexy field to go into because programs over come everyday and open up your workspace and it it isn’t flashy and it doesn’t allow for much crethe next 3-5 years contains all the normal tools, groups, data and news ativity – if you were talking to a university stuthat you would need to access for your particular job dent, how would you react to this comment? there in front of you for your particular alignment. Well, I don’t know about sexy, but in the scope Many of our team members are expected to work in multiple dimenof my job, there’s a lot of opportunity to be very creative in the sions. So, the ability to tailor and get tools and information to people, supply chain space depending on what part you are operating in. At to collaborate interactively with people around the world, and the Cisco we constantly have a need for creative thinking to set up relaability to have a full featured meeting space is all incredibly critical. tionships with customers to deal with issue resolution and co planWith this technology, you can read every expression and solve the ning. There is a creativity in the way we architect solutions, manage most difficult problems. So I think that the whole sweep of capabilidata, information flow and information systems, in the way we deties that enable collaborations is what’s really important and video is sign our physical network and logical supply chains and in how we a tremendous accelerator to that – you could say that this is one of manage our ecosystems – which often times has many different types the sexy parts of of partners. There’s creativity in how we facilitate and organize and my work. lead our teams in this kind of environment. I think there are boundless opportunities to be creative – I think sometimes when people You teach a class for exsay its not a very sexy field, they’re referring to that fact that to some ecutives at the Supply Chain Leadership Institute (a joint degree supply chain is about making truly excellent execution. Someventure with Stanford University and Fudan University.) What one once told me it’s like making the trains run on time – but there is sort of skills do SC professionals need to advance their career? still a tremendous amount of breakthrough outside-the-box thinking There are certainly a lot of skills that SC professionals should have. and incremental creativity needed. While supply chain people can come from almost any kind of background, most of them tend to be pretty systematic thinkers. But to Cisco has been working a lot with new media outlets – how move forward, they have to be able to think about end-to-end soludoes this affect how you do your job? tions on a broader level. In my opinion, there is also no substitute, As we enter into businesses that are tailored more towards conparticularly in leadership, for experience – learning how to manage sumers, more solutions or products driven, or involve different kinds a project, operating in different environments and countries, knowof business that have different design/manufacturing paradigms, it ing not only theoretically but having experience with multiple discimeans that we have to generate different supply chain solutions. Our plines, geographies and tasks is really important and sometimes a bit executive team spends a lot of time thinking about the different busiunderrated in the world. There’s something to be said for someone ness models in the company and how to design the supply chain to who’s progressed through 10 or 20 different experiences, roles and suit those – you don’t want to have 300 different supply chains, but geographies – it creates a different sense in a person and it often certainly one size does not fit all, so one of the things we’re focused shortens significantly the learning time and prevents a lot of mistakes on is rationalizing and designing end to end solutions for these difand allows people to be more creative and have more bandwidth. A ferent segments and different products. We do spend a lot of time on persons educational or career background doesn’t always matter. that, but it’s also a great opportunity. Also, as a lot of these segments open up – well, we always eat For more information on executive education courses at the Cisco-Fudanwhat we cook – and the technology we produce, in addition to being Stanford Supply Chain Leadership Institute, visit their website www.cisco.com exciting to the world in general, are a major aid that helps our team and click on Cisco China Supply Chain Leadership Institute. The next session run a far more global, complex and broad sort of supply chain – we will be held from March 29-April 2 2010 in Shenzhen China. The curriculum will be taught in Mandarin. have partners around the world and a lot of these technologies like
Jeff Gallinat VP, Global Manufacturing Operations Customer Value Chain Management Cisco
思科最近宣布了一个重要的决 定，将大中华区（包括香港和台湾）作为 脱离亚洲思科的独立发展体系。这会影响 到你们部门的价值链发展吗？ 此举显然是为了进一步强调中国市场 的战略性地位，我们必须承认并接受该市 场在公司长期发展中的重要性，关注度比 以往更高了—将会有更多的资源来发展我 们的整个价值链。然而这对我们部门并不 会有太大影响，因为我们一直以来都很关 注中国业务的发展—唯一的影响或许就是 我们许多计划都要加快速度提前完成。 许多人都这样和我说，中国的供应链行业 并不吃香，因为它要求十分务实的精神并 不允许有太多创造力—如果您和一个大学 生讨论这样的说法，你会如何应对这种评 论呢？ 嗯，我不是很清楚这个行业在大学 生看来是否是一个不错的选择，但在我的 工作经验看来，有很多的机会可以让你在 供应链中从事具有创造力的工作，当然取 决于你所在的职位和运营模式。在思科我 们一直鼓励所有创造力的思维来设立和处
理与客户间的关系，处理问题和制定合作 计划，希望突破常规的思维能为我们找到 管理数据、信息流和信息系统的有效解决 方案。我们始终坚持创造性的思维来设计 我们的实体网络和物流供应链网，以及管 理我们的生态系统—尤其是在和许多不同 的合作伙伴打交道时。可以说创造性思维 是无处不在的，贯穿于整个组织管理过程 中，并带领着整个团队在这样的环境中提 高竞争力。 我认为这里有无穷的机会需要发挥创 意—我觉得当人们说它并不是一个香饽饽 的时候，其实只是指我们的供应链在某种
程度上是以关注执行力为主，就好比打造 一个可以准点到达的精密度极高的火车一 样，但实际上除此之外我们还有大量需要 创造性思维来完成的工作。 思科一直都保持着和新营销媒体的合作— 这些对你的工作产生什么影响？ 我们所进入的领域一直在以客户需 求为导向，不断进行着自我革新，出现了 涵盖更多行业和生产模式的产品和解决方 案，也就是说我们又有了更多样化的供应 链解决方案。我们的执行团队花了许多的 时间研究不同的商业模式以及与之对应的 供应链方案—你肯定不希望有300多种供 应链，但显然一种模式无法满足所有的需 求，因此我们目前关注的就是在保持大框 架一致的前提下，设计出合理的终端对终 端的供应链解决方案来为不同的细分市场 和产品服务。我们的确花了不少精力在上 面，但这是一个很棒的机会来摆脱瓶颈。 此外，许多细分市场是开放式的—我 们总是习惯于接受我们自己所设计的方案 和自主创新的科技，这会帮助我们的团队 学会管理国际化。更为复杂的供应链—我
FOCUS China 们在世界各地都有合作伙伴，视频这类技 术对我们和我们的合作伙伴来说都是至关 重要的，这些技术支持着我们公司的规模 不断扩大，并能提供足够的带宽为进一步 的发展创造新的解决方案。 您认为在所有新的思科技术中，哪些对您 是最有帮助的？ 狭义的来说，视频合作技术应该是 最为重要的，它涵盖了我们一直在用的 WebEx（一个高度复杂的基于PC为平台的 协作工具）的一切技术-这种技术我们所 有的团队和大多数的合作企业都有安装， 这样我们就能十分逼真地进行电话会议而 不用只为了一场会议要长途跋涉六千公 里。当然我们还有一些在网络上发展的有 趣的合作平台，比如一个人高度整合过的 全真模拟办公体验—就像你每天都去公司 上班，所有办公的工具都一应俱全，你所 需要的数据和信息都唾手可得，所有你面 前的一切都能满足你所有工作的需要。 许多我们的团队成员们就十分期待 可以在这样多元化的环境下工作。由此可 见，保证工作需要的信息和资源能分配到 需要的人手里，团队成员间在全球范围内
的有效沟通和互动，并打造一个全真模 拟、功能完善的会议空间情境是多么重 要。有了相关技术后，你就能轻易解读各
种需求，并解决异常棘手的问题。所以我 认为这种促进合作交流和互动的技术能力 对我们来说非常有帮助，因此视频技术就
能加速我们朝这个方向发展的进程—或许 这就是我们工作最令人艳羡不已的地方。 您在供应链领袖学院为员工们授课（一个 斯坦福大学与复旦大学合办的学院）。您 认为哪些技能是供应链专业人士们在以后 的职场生涯中需要提升的呢？ 作为资深的供应链人士，需要掌握许 多方面的技能—虽然从事供应链的人员可 能来自不同的背景，但大多数都具有很好 的逻辑思考能力。不过要想在职场上走的 更远，他们需要在宏观层面上思考终端对 终端的物流解决方案。 我认为，在领导力的经验上是无法代 替的—学会如何在不同的国家和环境下管 理一个项目，知道怎样在理论和实践上都 能结合不同的行业规则，地域特点来处理 问题，这一点很重要，但往往得不到充分 的重视—有一种说法是如果一个人在不同 的地方能经历10-20种不同的工作职位和 经验，那么这些经验就能明显得大大缩短 他所需要学习的时间并能有效避免一些可 以预见的错误，并能激发他更具创造性的 思维。在这个时候，他的教育或工作背景 就已经不再重要了。
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Eric Cassagne Supply Chain Director Schneider Electric
Electric Markets Eric Cassagne has spent over eight years working in New World economies, including India and the Arabian Peninsula. He is now on his third year in China and today talks about the opportunities Schneider sees in this growing market.
What do you see as the main differences in doing business between the different regions you have worked in? Actually all of these regions have common issues in terms of market behavior. For instance with the signal of the demand you have very erratic trends of growth, with sharp peaks and curbs. This is always true in these very project oriented countries. With development comes a diffuse market but a very strong B2B market. To cope with such business environments as far as supply chain is concerned, we focus on the deployment of solid processes such as the collaborative forecast as well as sales and operating planning. As you can see, the supply chain role is really to be the bridge within the organization from the customer (marketing) up to the plant or vendors. In China, as far as distribution is concerned, you have the emergence of strong players with national coverage, including international distributors who are picking up in the country. In India the distribution players are very scattered. In the Arabian countries I’ve worked in like Saudi Arabia and Dubai, they have mostly developed their supply chain philosophy in line with the West and these countries are much smaller, so they are pretty different. Why is such a large portion of your company based in China as opposed to the West? We consider Asia and China particularly as a strong asset to the company. There is a huge market here – I mean, China and India are within 5000km of each other, which means you have 35% of worldwide population right here. So in the long run it makes sense to be concentrated in this part of the world. [This country] can also be used as our low priced manufacturing department but our first priority for moving out here was actually the domestic market which shows some great momentum as far as energy management and energy efficiency are concerned.
How do you see China developing its supply chain structure in the near future? Reaching a good level of consistency is important because right now it’s really a little bit unstable in terms of professionalism and quality of service. Obviously this comes from the fact that supply chain is quite a recent function in China. Even Europe still has problems with efficiency if you remember last year’s French port strikes. In the coming years, I think we will see a concentration of logistics as well as bigger logistics services emerging into the market, both local companies and joint ventures with international players. All the big players are here. In fact, one challenge with criteria of selection is assessing the capability of even national players to address a global account and provide a real consistency of multi services including the right information processes. In many cases, international forwarders or national organizations rely on local branches – and as global accounts it’s difficult to rely on local branches. I think the most I can predict is that in five years time the information side of logistics will be improved and consolidation will definitely happen more. I also think that universities will begin to turn out higher quality supply chain majors. There is a desperate need for them in the market right now. A report I read says that there are about 7000 supply chain graduates to fit around 80,000 job needs. Hopefully, local students will be able to begin to fill this need for supply chain people in China.
It’s not easy to address this market because it’s not yet mature but we are considering the mid term and the long term, not the short.
Does Schneider have trouble with supply chain transparency ? Things are definitely growing here step by step but there still remains room for improvement. In terms of transparency, we sometimes have goods that are damaged en route and we don’t find out until we receive the damage report a week later from a customer, which can be embarrassing. In India we actually face some of the
same situations with transparency. More than transparency I would stress issues with traceability … [but we feel there will be] a real break through in the coming years.
What’s the hardest part of your job? On a daily basis, one challenging part of my job is ensuring customer satisfaction. Chinese customers are becoming more and more demanding and the company has to put out a lot of energy to meet our commitments and make sure we hear the voice of the customer, which is hard and needs humility and an open mind from us. The voice of the customer is there to give us new challenges – and as Chinese customers demand more it’s a challenge to develop in order to offer both free and paid services that meet their wants.
电子市场 Eric Cassagne, Supply Chain Director
Eric Cassagne，施耐德中国的供应链总监，在包括印 度和阿拉伯等新兴的经济发展国家有大约8年的工作经 验，今年是他在中国的第三年。今天他将和我们分享施 耐德在不断发展的中国市场中所遇见的机遇。 您认为不同区域间经营模式和方法的最大不同何在？ 实际上所有区域的经营在市场行为上都有共同的问题。就比如 说在消费者的需求预测上，上下波动的浮动太大，十分不稳定。 或许这种情况在项目导向型的市场中不可避免，因为伴随着我们 发展的是一个分散而又十分强劲的B2B市场。 然而，在中国你有强大的基础设施 和配送体系支持，而印度就相对落后了。 此外，中国的物流体制不会过分集中，并 有强大的B2B配送支持。在沙特阿拉伯和 迪拜这样的国家和地区，他们发展供应链 的逻辑大多和西方国家一样，而这些国家 的面积并不大因此发展的过程显得困难重 重。 为什么公司的许多资源是以中国为总部而 不是在西方国家呢？ 我们认为亚洲特别是中国对企业的发展 有许多无形的资产可供开发利用。这里的 市场潜力无限—我的意思是，中国和印度 之间只有5000公里的距离，也就是说全球 35%的人口都集中在这里。所以对我们的 长期发展来说，将公司的大部分资源集中 在这个区域是有战略性意义的，同时我们 的当务之急就是要成为亚洲市场本土化后 的一部分。这里可以成为我们低价的制造 工厂，但是我们以此为总部的首要考虑因 素还是巨大的消费潜力。目前这个市场我 们很难下一个定义，因为它尚未成熟，所 以我们需要一段时间来规划我们的长期策 略而不只是短期的效益。 施耐德是否有过和供应链透明度有关的困 扰吗？ 我们在中国的发展逐步并有序地进行 着，但仍有改善的余地。在透明度方面， 我们的产品优势会在运输途中被损坏，而 我们在一周之后收到客户投诉的产品毁坏
报告后才得知，这真是让人尴尬。在印度 我们也遇到类似的有关供应链透明度的问 题。 您认为中国需要多久时间来发展一个成熟 的供应链结构呢？ 这个问题很难回答。达到较高水平的 一致性至关重要，因为当前中国的供应链 状况在专业度和服务质量上参差不齐，很 不稳定。但即使是欧洲在效率上也难免会 有问题，一旦出现罢工或其他意外情况， 也缺乏相应的备用方案。我认为在未来几 年中国的发展中，可以预见到的是物流业 脱离政府转而向集中 化趋势发展，而更加 全面完善的物流服务 会在市场中被广为接 受，本土企业和国际 化的合资或跨国企业 都能充分参与到市场 竞争中。所有主要的 大公司都在这了。实 际上，一个选择的标 准就是通过评估国内 本土企业的资质来衡 量国际企业所需要的 能力。
息化的水平会进一步加强，公司间的兼并 也会愈演愈烈。同时大学里会开设更多更 专业的供应链相关专业，因为目前供应链 人才市场需求还是很大的。我看到有报道 说目前只有7000名左右的供应链毕业生， 而实际需要的岗位却有 80000多个。希望 中国的学生在未来的专业选择上能优化选 择，更好地填满足应链产业发展的需求。 你工作中最难的部分是？ 虽说处理经营中的业务问题和推动战 略发展是非常重要的，可我工作时间的很 大部分还需要花在人上—我指的是我的客 户和我的团队。如果 没有合适的团队和人 才与我为伍，我就会 像一个人独行在沙漠 中那样孤立无援。在 每天的工作中，还有 一个挑战就是保证顾 客满意度。中国的客 户对产品和服务的要 求越来越苛刻，因此 我们就需要花更多的 精力来实现我们对客 户的承诺，而即时地 听到客户的反馈和意 见却并不容易。客户 的任何反馈都会给我们不断地带来新的挑 战——随着中国客户需求的提高，提供哪 些免费和有偿的服务并优化组合来满足他 们的要求都是一种不小的挑战。
去处理好这个市场 并非是件容易 的事情。 因为它尚未成熟， 但我们考虑的 是中期和长期 市场潜力， 而不是短期。
在许多情况下，国际货代公司很依赖他 们当地的分支机构，而在世界各地的发展 就很难实现这种依赖的可靠性。我认为我 能预测的未来五年内的趋势包括—物流信
全民三明治 Kurt Lipson, General Manager
首先我们想知道赛百味特许经营的商业模式是如何运作 的？ 概括地来说，赛百味作为一种特殊的QSR品牌，与KFC这样的 快餐连锁相比，最大的不同就是KFC90%的门店都是同一家企业所 有，而赛百味全球32000家的门店是属于不同的被授权经营的企 业。可以说赛百味走的是完全意义上的特许经营模式，也就说不 同被授权企业之间是相互独立的。我们公司就是上海和江苏省的 发展代理。 这种经营模式似乎是一个较为分散的经营模式，那么你们是如何 保证当地供应商的产品和服务质量？ 所有与我们合作的供应商都必须经过康涅狄格州总部和新加 坡区域办事处的审核。为了保证高标准的质量水准，供应商需要 通过相当严格的资质审核程序。新加坡办事处负责选址的实地考 察，检查仓库和所有经过美国进口商批准的产品。麦当劳的物流 合作伙伴夏晖物流负责我们产品的运输与配送。大部分的肉类和 面包等冷冻产品都是实地进行质量检验。一直到夏晖物流的运输 程序前，产品要经过三重检验。此外，我们还有先进的物流跟踪 体系，以便了解每家门店的产品存货情况，这样我们就能知道哪 些商店使用的的确是经过我们查验后的产品，他们也就无法擅自 更换产品的配方或成分。 哪些产品或配方是从国外进口的呢？ 上海和江苏门店的产品中，蔬菜都是由当地供应，但其他配 料都是进口的，比如新西兰进口的奶酪，就能保证产品的优质和 嫩滑口感。 为什么赛百味的菜单和食品配方与美国趋于一致，而其他类似麦 当劳的QSR品牌团体却一般会在菜单上做一些本土化的改变呢？ 中国市场的本土化是一个重要的策略，我们会在3月1日推出 首批更适合中国人口味和喜好的系列产品—鸭胸肉三明治。这个 产品的推出将会在上海率先进行。 不过当赛百味初来乍到时，是有遭遇过一些不顺，有一部分原因 是因为美国人的饮食习惯还是让大多数中国食客无法适应。您认 为三明治快餐的理念能否在上海顺利推广呢？ 我认为这可以变成一种普遍接受的概念。两年前，我们80% 的客户都是外国人，只有20%的中国顾客，而如今这个比例恰恰 相反。我们一直不断努力改变人们对三明治类产品的看法。以往 人们对三明治的印象就是一个无需加热即可食用的三角形汉堡， 并不觉得有多美味可口。而我们就是要通过宣传向顾客传达一种
全新的三明治理念，并激发他们自己动手来做的兴趣和创意。我 们有热狗和其他热饮和新鲜出炉的配料可供中国消费者选择。我 们试图改变中国顾客传统的习惯和选择。这样人们可以自由选择 搭配他们喜欢的面包和配料。记得第一次来的顾客面对这么多选 择都已经无从下手，只能对服务员说“只要好吃的我都可以”。 但是你的确能做到按照你想要的方式选择和搭配。一旦这种理念 被广泛接受了，人们就会认为吃这样的快餐真是一件很酷的事。 您是如何找到合适的人来买赛百味的特许经营权呢？ 我们在商店和一些网站都有广告发布。我们寻求的是长期的 合作关系，因为我们的特许经营合同长达20年。最近我们还在尝 试像大学生群体宣传这种经营模式。我们认为这对双方来说都是 一个难得的机会，毕竟对应届毕业生来说，目前的就业市场并不 乐观，所以如果条件允许的话，小资本的投入而成为自己专营店 的经理也是一个不错的开始。 那么如果有一些经营者处于某些原因，违反了特许经营的协议条 款，诸如达不到相应的质量标准或未经允许就擅自做出改变等做 法，你们会如何处理呢？ 我们会要求特许经营的店主在店内工作，了解赛百味的所有 经营细节，不管是哪一方面都要非常熟悉。我们对每家店都会做 月评估。如果说赛百味的食品在安全或其他任何一个方面违反了 相关协议规定，这家店便会受到我们的调查信并很可能失去特许 经营权。为了保护赛百味的品牌形象，我们始终坚持并维护国际 标准的经营。 目前你们的发展过程中遇到的最大挑战是什么呢？ 在不断发展壮大的过程中如保持各经营门店品牌形象的一致 性应该说是最大的挑战。我们在上海的发展目标是在2010年底拥 有55家门店，启动并投入正常运营。
Iâ€™m Loving It (McDonalds) VS. Eat Fresh (Subway) Headquarters Started in China Stores (worldwide) Stores in China Logistics Provider
McDonalds Illinois, USA 1990 32,000 326 Havi Logistics
Subway Connecticut, USA 1994 32,410 144 Havi Logistics
Spreading the Sandwich Kurt Lipson discusses managing his franchise and how the Subway “QSR” (which stands for Quick Service Restaurant, in place of “fast food”) business is catching on. So how does this whole Subway franchise model work? Basically Subway is a different type of QSR brand much different from like KFC, where 90% of the stores are company owned. Subway has 32,000 stores around the globe and they own only one. Subway is a complete franchise model, which means that different companies run the different franchises. Our company is the development agent for Shanghai and Jiangsu province. This seems like a potentially fragmented system, how do you ensure quality from local suppliers? All of our suppliers must be approved by our headquarters in Connecticut as well as the regional office in Singapore. It’s a very strict process that is really important in order to have these high standards. The Singapore office does site visits, checks out warehouses and all products are approved by US importers. We also have Havi logistics deal with our foods, which is the same company that works for McDonalds. Our frozen products, which are mostly meats and bread, get a Q&A check on site. Once its gets to Havi we do a triple check. Also, we are able to keep track of exactly what products go to each store, so we know what stores are buying, and they can’t replace ingredients with their own. Do you import any of your ingredients? Our vegetables for the Shanghai/Jiangsu region are sourced locally, but many of our other products are imported; our cheese is imported from New Zealand which ensures high quality. Why has Subway kept its menu and ingredients consistent with the American model when other QSR groups like McDonalds have made so many adaptations? Since Subway is a complete franchise model, the R&D and introduction of a new product must be in close coordination with the Subway HQ in the United States in order to maintain consistency and food safety. Brands like KFC and McDonalds have their own R&D facilities in mainland China and are able to release products into the market much quicker. If every franchisee here did its own research and development, Subway would be less able to control quality consistency and food safety. However, localization is an important part of our China market and on March 1st we will introduce our first China based product, a duck breast sandwich, to be launched in Shanghai.
Kurt Lipson General Manager Subway Restaurants (Shanghai)
But when Subway first got into China it hit a few bumps, in part because the American model was so … foreign to Chinese customers. Do you think the concept of a fast food sandwich is catching on in Shanghai? I do. Two years ago, 80% of our customers were foreigners, 20% were local, now it’s the exact opposite. We’re helping to introduce the sandwich and sandwich products into the market. There was a perception before that a sandwich was a little refrigerated triangle thing that was eaten cold and did not taste so good. We give an education on what a sandwich should be, and we give the consumer the creativity to create their own. We have hot toasted subs and other hot options like soup that Chinese consumers can relate to. We’re working to change perceptions and habits. People get to choose based on what kind of sandwich they like and we have lots of options. The first time customers come in, so many options can actually be really confusing, and they don’t know how to choose. Our servers ask them what they want and they say “Just give me whatever is good.” But you can make it good how ever you want it. Once this sinks in, people think it’s pretty cool. How do you find the people to buy your franchise? We do advertising in store and on some websites. What we’re looking for here is a long term partnership because our franchise contract is for 20 years. We’ve also recently began pitching the franchise to college students. We think this a good opportunity for both us and them because the China job market is really difficult for new graduates, so a good option for those with a little start up capital is to become general managers of their own store. What happens if these owners, for whatever reason, violate the franchise agreement either with quality concerns or unapproved changes? We require that franchise owners work in the store and understand every little aspect of Subway, no matter what it is. We give evaluations every month to every single store. If safety or anything is out of compliance they receive a letter from us and could lose their franchise. To protect the brand image we’re very strict at upholding our international standards. What will be the biggest challenge with your job going forward? It will definitely be maintaining brand consistency with high growth. Our goal in Shanghai by the end of 2010 is to have 55 stores open, up and running.
Educat the Masses By Monica Liau
aoke Wang is glowing. He just finished his thesis and is about to graduate with both a management MBA and an MA in engineering from the China Leaders for Manufacturing (CLFM) program, a joint venture between Shanghai Jiao Tong University (SJTU) and the Massachusetts Institute of Technology (MIT). CLFM is unique as it not only combines two education branches into a single program with a supply chain focus, but also includes a mandatory six month industry internship. A pretty tall order, but in Ke’s case, it has paid off. The extra bounce in Ke’s step comes from making it through months of intensive interviews and finally being hired by Cisco Systems, where he interned last year. He is one of the last of his classmates to secure a job, many of whom have gone to equally big name companies like Apple and Honeywell. “We have a unique selling point coming from this program,” says Wang “In China there are big opportunities for us because we can provide knowledge and experience right after graduation.” There are not many other students who can boast Ke’s experience. As companies in China move from manic growth-oriented strategies toward putting more value on intelligent supply chain approaches, demand for supply chain educated pro-
fessionals is growing. However, when dippin g into the local ocal pool, many hiriring compani ess find the educati on n of their targete d talent is under-develop eloped. According to several sources, many supply chain and management graduates have never seen anything as basic as an RFID, which means they will likely require years of training once they are hired. Mind the Gap Many complain that the biggest problems with fresh Chinese graduates is that their education is chiefly fed a diet of theory, not “real world” case studies; most are not ready for the practical application of their profession. This is a complaint heard the world over from anyone who has ever hired new blood. However, Holger Schober, Director of Executive Education at the Supply Chain Management Institute, says that what a lot of Chinese students really lack is the ability to see the supply chain as a bigger picture and solve problems outside the box. “Students in supply chain should be able to look at a truck, and see not only
the truck but the possibilities beyond it,” he says. “These students can learn whole books by heart, but when you ask them what it means…you get blank looks.” Professor Ming Dong, Chair of the Operations Management Department and Academic Director for CLFM says a lot of MA students base their projects on literature without actually having research to back it up. “I recently had one student give his thesis on demand processing,” says Dong. “It turned out that he just reviewed a previous paper in his own words.” Bob Liu, president of executive search firm China Supply Chain Service, says this education gap is nothing wrong with the students and everything wrong with the professors who are teaching them. “If you look at the professors in China, very few of them have done major systematic study or research about supply chain,”
FEATURE Education he says. “How can they teach these students if they just don’t have the necessary industry expertise to educate the people who will go into this work industry?” Liu says that while the professors are still much better prepared than their predecessors of 10 years ago, many are still primitive in the practical side of the profession, don’t stay in touch with the industry, and are not able to move to the next level Jack Kelley, President of the Shanghai Uni Supply Chain Resource (a company focused on supply chain professional education) recently did a project with a domestic MBA program. He also believes many professors are resistant to outside influences. According to him, there are some territorial issues with professors where they simply are not interested in working with people from the industry. “Professors are held in high esteem and because of this often remain unchallenged,” says Kelley. “But many of them don’t want to be challenged and there is some resistance to new adaptations and methodologies.”
universities to educate their students to start contributing 100% right out of college, whereas I have friends from excellent universities in the US who basically did nothing for 2 years but go through an intensive training program with their company.” Patrick Moreton, Associate Dean/Managing Director of the Washington University of St Louis (WUSTL) -Fudan EMBA program says that experience gaps within companies themselves can also make it difficult for new hires to learn necessary development skills when they start work, due to thinner management ranks. According to him, a lot of people in his EMBA class are there because they haven’t had bosses above them who could act as a role model and mentor. “A lot of these companies are very young and don’t have a generation of 50-year-old managers who have huge amounts of supply chain experience” says Moreton. “A lot of people in classroom may never have had a good boss or role model to learn from.”
A lot of people in the classroom may never have had a good boss or role model to learn from
Corporate Responsibility The corporate world, which obviously stands to benefit most from high-quality graduates, also shares some responsibility for enriching the workforce. According to Liu, there are many companies in countries like the United States who invest in and support practical research. This means sponsoring internships, developing training programs together with universities, and allowing students and professors into their factory to talk about the production line. Liu says that companies here, especially native Chinese companies, have higher expectations of their university graduates but seldom do anything to help educate the students. “When hiring new graduates, Companies say hey these guys suck, why do I have to train them?” says Liu. “They expect
Supply Chain Attraction In addition to the influence that professors and corporations have on su p ply chain education, it is also a problem getting the most qualified students into the supply chain field itself. In a world where marketing and finance jobs are considered the most glamorous, it can be hard to convince students that supply chain is the way to go. “To ma nyy students, gooing into marketing is like the promise of driving a BMW, whereas supply chain represents a KIA,” says Schober. “Put yourself into the shoes of a student: What’s sexier? A BMW or a Kia…… Sales or supply chain management?”
David Robb, from the Department of Management Science and Engineering/ School of Economics at Tsinghua University agrees that when his students go to find internships the program requires of them, they’re often unable or unwilling to find positions in logistics and supply chain management. “I think many students go for the remuneration in other fields like finance and accounting.” he says. However, Dr. Martin Stößlein, who teaches at both Jilin University and the University of Dayton thinks that the supply chain field actually has a more of a fan base than it might otherwise seem. “I also think the interest comes from economic trends and working opportunities in the manufacturing and service industry,” says Stößlein. “Students know that supply chain management not only has a high entry level salary, but because it touches on so many different points like strategy and finance, procurement, production, and marketing, it can get you up to top management.” Concentration on Innovation Despite obstacles, there are programs that are beginning to look at supply chain education differently. WUSTL at Fudan University just started a program which exports their students to the US for a year to receive an MA in supply chain management. Moreton feels not enough students in China get the chance to go
abroad, which may ab mean a lack of “inme te national perspecter tive”. In addition to tive ave technical expertis experti e, he says students have also need to be able to acquire soft skills like communicating effectively and understanding practices that maintains a consistency and culture world wide. “We think its best for student to acquire these skills through an immersion program,
FEATURE Education ing,” says Kelley, whose group travels all over Greater China to conduct training programs that last anywhere from two days to two weeks. “As we all come from supply chain backgrounds, we work to tie the curriculum in with contemporary BP’s and modern day examples that our students can relate to.”
which gives them a year of seasoning on experience to improve SC knowledge; in an international environment,” says textbooks are new but fixed, we want to Moreton. “Technical skills are not what put in new information.” is in short supply in China, what we’re missing is people who work effectively Part-Time Solutions For those unable to devote themselves with other people and cultures.” to a full-time program, corporate educaFor groups like CLFM at MIT-SJTU, students have an internationalized and tion with a supply chain focus also seems multidisciplinary curriculum that draws to be a reasonable way to help employees learn new skills from both the engithat they missed at neering and manageuniversity or at work. ment schools. This Education pursued program also requires a by professionals afsix-month-long structer they have actually tured internship, which entered the working often places students world can keep them with their corporate Cost of up to date on some of partners such as Cisco, CLFM Program the latest issues and Amazon, Apple and at Jiao Tong can also help them Honeywell. Students University apply what they have are required to write learned directly to their their thesis based on office, where it is most the projects that they needed. Groups like work on for that period of time. Based on feedback from their the executive education program at the corporate partners, they are able to mold Supply Chain Institute involve not only their curriculum to fit the industries a partnership between international and most current and pressing problems, national universities (Fudan University such as lean technology. “We are not a and Stanford University), but also intraditional Chinese academic program volve a corporate partner (Cisco) who because we are flexible and can meet the influences curriculum. “Companies that requirements of partner companies and hire executive education groups like my students,” says Dong. “We want to know company say they are looking for the how to do it in the real world with hands- ability to stimulate contemporary think-
Encouraging Change Supply chain management education in China is certainly becoming a forefront issue for Chinese companies, but education programs are still working to catch up with demand. Full-time MA and MBA programs like Jiao Tong are only for the few willing to give up their job to study, able to afford pricey tuition, and based in the right city. While more supply chain programs outside of Shanghai and Beijing are often cheaper, many are also underfunded and behind the curve. One manager says that when hiring students out of places like Guizhou or Shandong, students sometimes even have to be taught basic computer skills like Microsoft Outlook. Corporate training, while more flexible, is often left to HR departments. While there are some who study on their own, much of this education relies on company initiatives and funding. However, Stößlein says that the Ministry of Education is encouraging and funding programs which move away from rote learning and support multidisciplinary thinking and teaching; an encouraging sign of support from the government. According to Liu, the challenge for companies going forward lies in producing fewer people with regular skills and finding those who can offer real quality to the supply chain. “Our problem is that we have too many people who are average but are lacking ones who are excellent critical thinkers,” he says. “Industry constantly blames universities and professors blame the industry, but everyone will have to do their own share for things to change.”
Agree, disagree or have a different perspective? Help us continue the discussion, send us an email at firstname.lastname@example.org and let us know what you think.
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高科正在走向成功。 他刚刚完成他的管理 学和工程学的学士论 文，即将从他参与的 中国制造业领袖培训 计划（CLFM）毕业。CLFM是由上海 交通大学和美国麻省理工学院合作的 项目，它的特别之处在于它不仅将两 种学科相结合并专注于供应链方向， 更包括了6个月的工业工程实习。尽管 王高科的另外一个挑战就是在经历了 几个月密集的面试之后，他终于被去 年实习过的思科公司录用。他是学员 中最后就业的成员之一，他们中的很 多人都已经在苹果、霍尼韦尔这样的 大公司任职。王高科说：“这个学习 计划让我们有一个独特的卖点。在中 国，我们的知识和经验在毕业之后就 可以找到用武之地。” 没有多少学生可以有和可同样的 经验。中国的公司正在从狂热的成长
导向战略向优化供应链的战略发展， 供应链专业教育的需求在增长。探究 国内的人才市场，许多用人单位发现 他们锁定的人才有待进 一步的提高。许多供应 链和管理的学生连镭射 商标这样最基本的元素 都没有听说过，这意味 着他们从被录用的那一 刻起，就需要多年的培 训。 注意差距 许多人抱怨说中国 的应届生最大的问题是 他们所接受的教育是笼 统的理论填鸭，而非真 实的案例分析，因而 不足以应对他们所学专业的实践要 求。这样的抱怨可以从任何曾经雇佣 过 应 届 生 的 人 那 里 听 到 。 但 是 Holger
Schober， 供 应 链 管 理 学 院 的 院 长 认 为：中国学生真正缺乏的是将供应链 的概念放大，并置身局外来解决问题 的能力。“供应链专业的学生要能看 得见卡车，更要能预见到卡车背后的 可能性。”他说：“这些学生可以用 心学习整本书，但是当你就一个简单 的问题提问时，他们往往是一脸的茫 然。”运营管理部门主席，CLFM院 长董明教授指出许多研究生的课题都 是利用文献资料缺乏调研的成果来支 撑。“我最近收到一个学生关于需求 处理的论文，”教授说：“完全是复 制以前的论文，只是换了他自己的口 气。” 中 国 供 应 链 服 务 的 调 研 主 席 Bob Liu认为：教育差距和学生没有关系， 有关系的是教他们的老师们。“看一 看中国的教授们，很少有学过供应链 的系统或者拥有调研的学习经验”他 说，“既然他们自己都没有必要的行 业实践，又怎么能去教即将踏入这个 行业的学生呢？”刘宝红认为虽然这 些教授已经比十年前他们的教授有 经验的多，但是大部分在专业的实践 领域还是很落后，没有与工业发展俱 进，缺乏进入更高领域的能力。 上 海 UniSCR（ 一 个 专 注 于 供 应 链 专业教育的公司）的总裁 Jack Kelley 最 近和国内 MBA 团队项目合作了一个项 目。他也认为许多教授有排外思想。就 如他自己而言，就曾经遇到过很多就是 不愿和行业内人士合作的教授。“教授 通常有很高的社会地位，因此他们的学 术不容置疑。”Kelley说，“但是他们中 的大部分反感批评而且也比较排斥新的 版本和方法”。 公司的责任 商界虽然明显地受益 于高素质的毕业生，但 同样负有丰富劳动力资 源的责任。就如刘宝红 所说，在一些国家，比 如美国，有许多公司投 资并支持实践研究，具 体来说就是赞助实习、 与大学共同开发培训课 程以及允许学生和教授 参观并谈论生产线。刘 宝红认为在中国，大多 数企业，特别是本土的企业，对大学 毕业生有很高的期望，却很少做些什 么去帮助他们成长。“当录用刚毕业
的学生时，公司会说，这些新人，为 什么我要培训他们？”刘宝红说，“ 他们希望大学能把学生教育成一出校 门就能百分百工作，然而我的一些毕 业于美国著名大学的朋友，他们在2年 中除了参加公司组织的密集的培训， 其他基本没做什么。” Patrick Moreton，圣路易斯华盛顿大 学（WISTL）的副院长及经理董事--复 旦大学EMBA项目，解释道，由于并不团 结的管理团队，在公司内存在的资历差 距也同样使新员工在刚开始工作时较难 学习到必要的发展技能。就Patrick 所说，在参加他EMBA课程的人中， 许多是因为缺乏一个职位高于他 们的老板能够作他们的榜样和导 师。“在这些公司中，许多公司还 非常年轻，缺乏50岁左右的具有丰 富供应链经验的管理者”， Moreton 说，“在我的课堂中的人们， 有许多是从来没有遇到过一个能够 向他学习的好老板或榜样”。 供应链的吸引力 除了专家和企业对供应链教 育的影响，怎样让最合格的学生 自动进入供应链领域仍然是个问 题。在当今的世界，市场和金融 方面的工作最热门，要说服学 生投身到供应链领域来是一件难 事。“对于许多学生来说，进入 市场营销领域就像承诺驾驶BMW， 然而供应链则代表了KIA”，Schober 说，“如果你是学生，哪个个更具有 吸引力？BMW还是KIA……营销还是 供应链管理？” 来自清华大学经济学院管理科学 与工程系的David Robb同意这种观点， 当他的学生去寻找需要他们的实习项 目时，经常不愿意或无法寻找到在物 流和供应链管理领域的职位。“我想 许多学生追求薪酬而去其他的领域， 比如金融和财务”他说。然而，Martin Stößlein博 士 ， 授 课 于 吉 林 大 学 和 代 顿大学，认为供应链领域实际上应 该有一个比人们认为的更大的粉丝 群体。“我还认为制造业和服务业的 经济趋势和工作机会将会带来很大利 益，”Stößlein说，“学生们知道供应 链管理并不只是意味着一个入门级的 高工资，更重要的是，由于它需要接 触许多不同方面的问题，如战略和财 务、采购、生产以及销售，它能带领 你进入高层次的管理领域。”
关注创新 抛开这些障碍，有一些计划已经 开始让供应链教育发生改变。复旦大 学的WUSTL刚开始了一个与美国合作 的为期一年的供应链管理硕士学位 学 习 计 划 。 Moreton感 觉 在 中 国 ， 有 机会出国的学生太少，这可能会意味 着国际视野的缺乏。除了要有技术实 践，他认为学生同样需要掌握一些“ 软技术”例如有效的沟通和理解那 些维持在世界范围内的一致性和文化 差异性的实践。“我们认为最好的方
法是让学生专注于某一个项目，通过 适应国际化的环境，来获得这些技 能。”Moreton说，“中国所缺的不是 技术技能，缺的是和其他人、其它文 化有效沟通合作的能力。” 像CLFM和MIT-SJTU这样的组织， 他们的课程都是从工程和管理的学校 精选出来的，具备国际性和综合性。 六个月的实习期做为教学计划的一部 分，一般被安排在像思科、亚马逊、 苹果和霍尼韦尔这样的合作机构。学 生的论文也要求以这一段工作经历为 基础来撰写。基于合作伙伴们的反 馈，他们可以依据行业的近况和问题 来打造与时俱进的课程，比如精益管 理技术。“我们不是传统的中国学院 教育，因为我们有更大的灵活性和满 足学员和合作伙伴需求的能力”董说 道，“我们想通过亲身的实践来学习 实际操作过程中所需的供应链知识， 教科书虽然新但是是固定的，我们要 写入新的信息。”
解决时间问题 对于那些无法参与全日制课程的 人，聚焦供应链的企业教育也似乎是 一个帮助员工学习新技能的可行方 法，特别是在学校或工作中遗漏的需 要学习的技能。在教育进入工作环境 后，对教育的专业追求能够使教育与 时代同步，了解最新的问题和情况， 同时能帮助员工将所学的直接应用于 工作，而这正是最需要的。类似于在 供应链研究院所执行的教学计划的团 体不仅涉及国际大学和国家大学间的 合作（复旦大学和斯坦福大学）， 也同样涉及影响教学课程的企业合 作伙伴（思科）。“公司雇佣执行 性教育团体比如我们公司，是为了 培养员工激发创意的能力，”Kelley 说。Kelley的团队在中国各地开展培 训项目，在任何一个地方停留2天至 2周不等。“由于我们都有供应链背 景，我们努力把课程与现在BP的课 程相结合并优化案例，使案例新颖 并且是学生能遇到的问题。” 鼓励改变 供应链管理教育在中国已毋庸 置疑地成为了中国公司最前瞻的课 题，但是教育项目仍在努力追赶需 求 。 全 日 制 的 MA和 MBA课 程 ， 比 如交通大学，只能针对极少数愿意 放弃工作并承担得起昂贵学费的人 在特定的城市去学习。同时更多的 在上海和北京以外的供应链课程则更 为便宜，许多甚至资金不足或遭人冷 落。一位经理说，当在贵州和山东之 外的地方招收学生，有时甚至需要教 授他们基本的电脑技能比如微软Outlook软 件 。 更 为 灵 活 的 公 司 的 培 训 则 由人力资源部门管理。对于一些自学 的员工，这类的教育是基于公司的倡 议和资助。然而，Stößlein说，教育部 门正在鼓励和资助那些摆脱死记硬背 的学习、支持多学科思考和教育的课 程，这正是一个令人鼓舞的政府支持 信号。 就如刘宝红的观点，制约企业发 展的问题在于优化拥有基本技能的员 工数量，并且找出能给供应链带来真 正的质量的人。“我们的问题是我们 有太多达到平均水平但是缺乏出色的 全局思考能力的人”他说道，“行业 不停的在归咎于大学，而教授又在归 咎于行业，但是最终每个人都要分享 自己的成果来推动现状的改变。”
Breaking It Down: Nexus One Smartph rtphone The Google Nexus One was released on January 5th among a swirl of rumors and a buzz of anticipation. Technology buffs and gizmo junkies alike were practically salivating at the prospect of getting their hands on the new phone with Android 2.1 technology and Snapdragon CPU. iSuppli recently conducted a breakdown study of the phone’s material cost and concluded with the cost of US$174.15. This price, when comretailed at US$530 (without a service plan) is impressive, since it has “the most advanced features of any smart pared to the fact that it’s being re phone ever dissected” by iSuppli. The iPhone 3GS, which is a less advanced piece of hardware, had a material cost of $178.96 when iSuppli ta into co consideration other costs involved in manufacturing, logistics or packaging. did an analysis last June. This price however, does not take journey doorstep.. Here’s a look at other pricing factors to consider in the Nexus’s jo ourney from factory to doorstep
MADE IN TAIWAN The Nexus is manufactured by HTC in Taiwan. According to an anonymous source, the margin of HTC for making the phone is over 30%. “The Nexus One is a kind of ODM [original design manufactured] model rather than HTC branded,” he says. “However, I don’t think HTC would accept only manufacturing cost without any margin.”
Taiwan ONLY 80,000 UNITS SOLD IN 1 MONTH!
Google Nexus Phone Stats Height: 119mm - Width: 59 8mm - Depth:11 5mm (slightly thinner than the iPhone 3GS at 12 3 mm) Weight: 130 grams w/battery (vs iPhone 135 grams)
Google only sold 80,000 Nexus One mobile phones in its first month. In comparison, the Motorola Droid sold 525,000 units in its first month and the iPhone 3GS topped the charts selling 1.6 million in its first week.
Goggle Nexus One Phone Cost Breakdown Analysis Per Unit COMPONENT
Total cost of materials (estimated by iSuppli):
Manufacturing cost (est.) HTC
Airfreight costs (est.)
Fulfillment & others
Total cost (estimated by CHaINA):
US$ 5-10 n US$ less than U $ 230
SHIPPED BY AIR TO THE USA Box Weight 0.9 kg - Dimensions: 25x20x16 cm Shipped from Taipei by air to HTC’s 3PL Brightpoint in Plainfield, Indiana, where the final configuration and packaging g g is done. It is estimated that the shipping cost ost is between US$4 to US$5 (based on current nt vol ume, size and weight) for each unit which is very low compared to the final sales price.
BRIGHTPOINT IN CHARGE Brightpoint performs all the fulfillment services for HTC relating to Google’s web store in the U.S., including inbound receiving, inventory management, kitting of product, and packing and shipping of enduser orders and transportation management. Google cut costs by not having warehouses, purchase point staff and any other logistic costs. “Even though US labor is more expensive, the labor content for a ‘finishing’ operation is probably only 5-8 minutes,” says Joe Joy, Supply Chain Consultant. “[These costs] can be more than offset by freight savings and better supply-demand alignment.
NEW HTC DESIRE TO COMPETE WITH GOOGLE In a more recent development, Google’s earnings may get even smaller soon. In February, HTC presented the world with its own smart phone called Desire, which has some characteristics remarkably similar to the Nexus One, including the Android 2.1 technology. It is also rumored that this phone will be sold at US$100 less than the Google Nexus.
产品分析与透视： 谷歌的Nexus One 新款智能手机
歌1月5日推出的Nexus One智能手机占尽了宣传前期的风头，在无数的期待和谣言中总算登陆市场。科 技爱好者们和时尚追逐者们都迫不及待地想要尝试下这款采用了最先进的Android 2.1技术并内置Snapdragon CPU的智能手机。iSuppli公司最近进行了一项对这款手机的材料成本明细的研究，计算出的成本 在US$174.15左右，这个成本和手机的零售价US$529 (不包括其他服务计划费用)相比，的确不足为奇， 因为这款手机拥有比iSuppli史上任何一款智能手机都要先进的功能。而3G版的iPhone在iSuppli六月做的调 查中显示其材料成本为$178.96，而在硬件上未必比Nexus One先进多少。 当然这个价格不包括生产过程中的诸如包装和物流等其他成本项目，以下我们就一起来讨论下Nexus从生产到出货这一过 程可能会影响到价格的其他因素。 谷歌的Nexus One是由台湾的HTC生产制造的。根据富 士康一名匿名员工提供的数据表明，HTC的毛利可能超过 30%。虽然Nexus One走的是原创设计制造（ODM）的模 式，但该员工并不认为HTC会接受没有任何利润的生产订 单。 最近的市场发展还显示，Google手机的销售收入还会缩 水。今年2月，HTC发布了其最新的只能手机，据说该款手 机大部分的特性和功能 都和Nexus One类似，包 括Android 2.1技术。还有 传言称HTC智能手机的 售价很可能会比Google Nexus要低100美元。 Google Nexus是从台 湾空运到美国印第安纳 州 Plainfield完 成 产 品 包 装。Camera Concierge的 合伙人Betty Feng对我们 说到：“我猜测这样的 运输成本分摊到每个手 机上可能不会超过0.5美 元， 这和它的销售价 格相比显然是微不足道 的。相关的市场报告显 示Google手机推出后的第一个月销售出了80000部，（大约 是苹果iPhone手机登陆市场后首月销售的八分之一）。也就 是说将这些手机从台湾运到美国的运输成本不会超过40000 美元。 我们是不是还没提到谷歌手机只通过网络销售？美国 Brightpoint公司与HTC签订了一份协议，将为其提供谷歌手 机在美国网站销售所需要的所有服务，包括收货，库存管
理，产品配套服务，终端用户订单的物流运输，以及订单 跟踪管理等。这就使得谷歌可以减少了使用仓库，或安排 购买门店的员工以及其他的物流成本，而利用Brightpoint优 越的地理位置以廉价的成本将手机配送到客户手里。“虽 然美国的劳动力较为昂贵，但完成所有操作服务只需要5-8 分钟”，供应链和企业商业发展顾问Joe Joy这样说道，“ 这些成本用来抵消运费成本绰绰有余，并能更加及时有效 地调整存货和供求平 衡。” 有很多人对Plainfield 的印象或许只是美国一 个平原上畜牧业发达 的小镇，但事实并非如 此。以下数据或许能说 明些问题： 超过50%的美国和加拿 大人口都聚集在印第安 纳州一日车程的范围内 约有75%的美国和加拿 大人口都聚集在印第安 纳州一日半车程的范围 年内 印第安纳波利斯国际 机场是联邦快递的世界 第二大中转站 这些优势为交通运输，配送和物流操作都提供了极大 的便利。 Telamon公司的物流总监 Joey Cline 说：“虽然我不知道 他们[Brightpoint’s]的成本结构，但我可以确定的是他们的 出货量以及和联邦快递的密切联系的确让他们能制定到一 个极具竞争力的定价方案。
FEATURE Sourcing & Procurement
t began with silk. Since Ancient China, middlemen were often the only ones who would walk the Silk Road, carrying with them goods and ideas. The long, often treacherous route prohibited many companies from making the journey directly, thus allowing traders that did cross the borders to build a lucrative business. This function of the middleman has persisted into modern business practices, and has since been a mainstay for international companies working in the domestic Chinese market. But things may be changing. Hanhua Wang, President of Joyo Amazon, recognizes that the role of the steadfast middleman is shifting, or even becoming extinct. With margins becoming more and more transparent and end users increasingly seeking direct contact with manufacturers, the international trading community is seeing a shift of dynamics in the way things have traditionally operated. The change is bringing to question the sustainability of trading companies and the agents who exist to serve them. “When information was unbalanced and logistics were underdeveloped, the middleman played a very important role [in facilitating each trade],” says Wang.
Out Charlene Ruan
With the advancement of the internet and Chinasavvy companies, do trading agents still have a place here?
It’s not a question of ‘if’, but when. Hanhua Wang Joyo Amazon
“[Now it’s more about] the value-added space that the agent can fulfill.” Amazon.com officially merged with Joyo.com in August of 2004, creating Amazon.cn, and has since been operating as its own entity in China, separate from the U.S. office. Wang says that nearly half of their purchases are still made through third parties, either trading companies, distributors or otherwise, but that it is likely to change in the future. Referring to the elimination of the traditional agent completely, Wang says, “It’s not a question of ‘if ’, but when. Eventually it will happen as a force of the market, and the internet will facilitate that.” With the rise of sites like Alibaba and Global Sources, the World Wide Web not only gives anyone and everyone direct access to manufacturers, but it also allows for information and communication to be passed freely. Quotes are easily requested and logisitcs more efficiently managed. Fall of the Agent? Traditionally, middlemen existed solely based on their ability to acquire specific goods at specific price points. Sometimes it was just a simple matter of making introductions and getting a percentage of the invoice. Now that role has all but disappeared. Buyers are more interested
FEATURE Sourcing & Procurement in middlemen who can do more than just source from the same vendors they can now easily find themselves. More than ever, middlemen need to be able to prove their creativity and value to keep their place in the market. “There is transparency from end to end and [with it] is the desire and ability of a lot of businesses to manage their own supply chain,” says Edwin Keh, referring to the almost instantaneous access to information. Keh is the Senior Vice President and Chief Operating Officer of Global Procurement in Walmart’s buying office in China. Established in 2001, Walmart’s current headquarters in Shenzhen is the largest buying office in the world and just under 1200 people. Though they still outsource things like final quality assurance inspections, the buying is all mainly done in-house and from suppliers who either own the factory or have control of one. Although Keh believes that a good agent could still prove invaluable to a retail operation. “The service required now is a quantum leap from what it was,” say Keh. “In terms of creativity, operation and fulfillment, [agents] that allow their customers to focus on retailing are the ones that will thrive.” Galy Liu, President of V-Mart Industrial Development Limited agrees. His factory produces wooden furniture for retailers like Crate and Barrel, Pottery Barn and JCPenney and he works exclusively with trading companies and agents to fulfill each order.“It’s not about the added cost of an agent,” Liu asserts. “It’s about the added value that an agent brings.” He stresses that the great agents don’t
just source, but they are experts in their industry. They have better relationships with factories and have the responsibility for follow through. Liu believes that if someone has to be hired to do the job anyway, a good trading company is an excellent choice. “Everyone needs to make money, and if a person can justify their cost, then next it’s just about what other services they can offer,” Liu says. Metamorphosis If a retailer doesn’t already have its own operations in China, an agent or an existing relationship with a factory serves as the assurance for quality and delivery. “If we can go direct [to the factory], we will do that. [But that’s] because we have that relationship,” says Jeff Bishop, General Manager or AGD (ACE Global Distribution). With 4500 stores in the U.S. and hundreds more across 60 countries, AGD has their own buying team in Shanghai and a warehouse of more than 1500 skus serving their international storefronts. Bishop, however, recognizes that not all businesses are equipped to start purchasing operations in China and suggests those that can’t ought to look to agents. In China, it’s not uncommon to encounter a flurry of problems when dealing with manufacturers. From quality issues to delivery times to variances from order, issues are a part of doing business here. And those are only the ones you can expect. “We’re here and we still have problems,” says Bishop. “But we can hedge a
lot of them off because we have people on the ground.” Once a relationship develops, however, and a retailer gains the knowledge needed - or the Chinese vendors become more dependable - the agents’ survival is again jeopardized. “China will eventually get to that stage of reliability,” says Jeric Ma, Deputy Managing Director of Premier Resources International’s (PRI) Shanghai office. PRI, a U.S. international trading firm based in Richmond, Virginia operates as the purchasing office for several large retail groups, including Keystone, Midas and formerly Circuit City. In 1995, they pioneered the import direct program for Circuit City and then implemented the same at Best Buy the following year. “In order to ensure our continued existence we have to become more than just a buying agent,” Ma says. “Going beyond the supply chain, we now help our clients do branding and marketing and our core competence has become helping our clients develop their own private label.” Whether it’s offering more services or evolving into something completely different, the middleman seems to be heading in a new direction. Wang agrees that the survival of these middlemen relies on whether or not they can change into something that their clients cannot live without. “If the agent can [continue] to create value in their space, then they can continue to exist there,” he says. “[But] we’ll see - we’re living history.
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丝绸之路开始， 中国古代的中间 商就是丝绸之路 上唯一能能传递 信息和交换商品 的媒介。长途跋涉而又险象环生的路途让 许多渴望交易的商人们望而却步，从而就 需要这样的中间商能替他们在贸易繁盛的 丝绸之路上进行交易。中间商的这种商业 性功能一直延续至今，并成为许多跨国企 业在中国市场最主要的业务伙伴。不过这 种局势在悄然改变。 卓越亚马逊的总裁王汉华承认，经今 坚如磐石的中间商的角色这在发生变化， 很有被取代或逐渐消失的趋势。随着利润 的日益透明和公开化，越来越多的终端用 户尝试与制造商直接洽谈业务。国际贸 易界正经历着一场传统交易方式的动态变 革。这种变化不得不让人开始质疑中间商 和贸易公司存在的必要性。 王说到：“当信息传播不平衡，物 流业也尚未发达成熟的时候，中间商在促 进双方甚至多方贸易时起着至关重要的作 用。而如今，贸易双方关注更多的是中间
代理时代的终结 商的服务所能创造的附加值。” Amazon.com 于 2004 年 8 月正式合并 Joyo.com ，成立了Amazon.cn ，并在此之 后有了独立于美国的经营实体。王告诉我 们他们依然有将近一半的采购是由第三方 采购来完成的，不过无论是贸易公司，经 销商还是类似的中间贸易媒介，都会在不 久的将来发生改变。 谈到传统的贸易商是否被其他模式完 全取代，王说道：“我认为现在已经不是 是与否的问题，而应该问这一刻何时会到 来。这种趋势最终将会成为市场化不可抗 的潮流，而电子商务的进一步普及会加速 这一进程。” 随着越来越多的电子商务交易平台的 不断兴起，像阿里巴巴和环球资源这样国 际性的网站不仅让任何人都能轻易地直接 与制造商联系，还能促进相关信息及时有 效的传递。贸易双方的询价和物流都能得 到更优化的管理。 贸易代理商的末路即将到来？ 传统的中间商存在的前提是，他们有 能力以特定的价格来交易相应的商品。或
者有时他们只是起到引进和推荐某种货 物并赚取差价的作用。如今这种作用已 经不复存在。买家只有兴趣和那些不仅 能做采购这样一件他们自己也能轻易做 到的贸易商合作。此外，与以往相比， 贸易商还必须证明自己拥有不一般的创 造力和价值能在市场中占据一席之地。 沃尔玛全球采购中国办事处的首席 运营官和高级副总裁 Edwin Keh 提到 如今唾手可得的信息流时说道：“随着 终端客户间的信息日益透明公开，许多 企业都希望自己能有能力管理自己的供 应链。” 沃尔玛公司设在深圳的总部成立于 2001 年，虽然只有不到 1200 人的规模， 却已经是全球最大的采购总部。虽然他 们的一些质量监督和审查可能还需要外 包，但主要的购买还是在内部完成，大 多都和自有工厂或工厂控股的的供应商 合作。Keh 还认为一个优秀的贸易代理对 零售运营来说依然有着不可替代的价值。 Keh 还认为：“现在商业服务的需求 与以往相比已有了质的飞跃，在创意， 运营和执行方面，能真正帮助客户专注
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发展零售的贸易商才会是最终的赢家。 V-Mart 工业发展有限公司的总裁Galy Liu 也同意这一点。他的工厂为Crate and Barrel 公司，Pottery Barn 和JcPenney这 样的零售商生产木制家具，并和特定的贸 易公司与代理合作完成每个订单。他认 为：“这种做法与贸易商的成本输出无 关，而和他们所能创造的附加值有关。” 他强调说，真正伟大的代理不单单只 做采购，他们是行业的专家，和工厂的关 系融洽，并极具责任心地跟进相关业务。 刘还认为，如果非要一个人选择他的工作 行业，贸易公司绝对是个不错的选择。每 个人都想赚钱，而当一个人能证明他的劳 动付出与企业的成本相当时，接下来他所 能提供的额外服务就是竞争力的关键所在 了。 变形记 如果一家零售商暂时在中国还没有自 己的运营处，那么与一家贸易代理合作或 与保持与现有工厂的合作关系就是能满足 产品质量和交货期限的最佳保证。艾嵇谛 （AGD）有限公司总经理 Jeff Bishop 说
到：“如果我们能直接联系到工厂，我们 当然会这样做，但前提是我们能有这样的 渠道和平台获得这样的合作方式。 AGD 在美国就有 4500 多家门店，在 60 多个国家还有上百家分店，在上海他们 有自己的采购团队和仓库，约有1500 多个 的SKU库存来为全球的门店服务。而 Jeff Bishop已经意识到并不是所有的企业都适 合在中国开展采购业务，并建议他们应该 需找适合的贸易代理共同合作。 在中国，和制造商打交道的时候难免 会遇到一些问题。比如产品的质量问题， 交货时间和订单差异，这些已经是我们所 能预见到的大部分的问题，还有一些深层 次不易发觉的问题也会遇到。 Bishop表示，即使他们在中国运营分 部，任然会遇到诸如此类的问题，但是至 少我们能有现成的工作人员来负责解决， 所以大部分的困扰我们都还能应付。 而一旦各方的关系深入发展，零售已 获得经营所需要具备的技巧和业务实践能 力或供应商变得更加可靠时，贸易商的生 存将再次受到威胁。 “中国最终将达到这一成熟可靠的阶
段”，PRI 上海办事处的副经理Jeric Ma 这样说。 PRI 是一家以弗吉尼亚州里士满为总 部的国际商务公司，为许多大型的零售企 业服务，包括Keystone, Midas 和倒闭前 的Circuit City 。1995 年，他们率先进口程 序为Circuit City 服务，之后又成为百思买 的制定程序服务代理。 Jeric Ma 还说：“为了保证我们不被 淘汰，我们必须突破只是买方代理人的瓶 颈，在供应链之外，我们还能帮助我们的 客户打造品牌和辅助营销，而我们目前的 核心竞争力就在于能帮助客户开发自己的 自有品牌。” 不管是提供更多的服务，还是从事和 以往完全不同的工作，贸易代理商正不可 避免地经历一场转型和变革。 王汉华也认为，贸易商是否能提供一 些客户依赖而又无法轻易取代的服务，将 决定他们未来的发展趋势。他说：“只要 代理商们还能继续不断地创造新的价值， 那么他们就能继续存在，不过，这也不一 定，时间会证明一切的。”
FEATURE Sourcing & Procurement
China and India: A Comparison in Sourcing Potential Charles Avery, The Beijing Axis the study found higher productivity levels in India, in terms of capital intensity, delivery frequency and stock-turn ratios, China had the edge. In a more recent, broader assessment across multiple industries, Deloitte found that here are many similarities the average number of days an item sits in between China and India inventory favored China at 24.2 compared to in today’s global-economic India’s 32.5. climate. Both have over one Beyond the factory floor, connecting prodbillion citizens, both have ucts to end users poses different challenges experienced resilient growth in output, and in China and in India. Within India there is a both have greatly expanded their roles in in- heavy reliance on roads. Their network is the ternational trade. The relatively inexpensive second largest in the world, behind the US, at yet well educated workforces of these two over three million kilometers. However, only countries have made them key prospects for around half of these roads are paved, and the sourcing of manufactured goods. Yet their width is generally too narrow to allow differences remain in their supplier and lo- the passage of anything beyond smaller, twogistical capabilities which must be taken into axel trucks. Road transit is further slowed account by sourcing professionals. by a fragmented Indian trucking industry Both India and China are capable of world and by state border checkpoints. China, in class manufacturing processes. A study per- contrast, has a far less extensive network of formed by the London School of Econom- roads. Out of its million-plus kilometer road ics on the supply chains of the two countries’ network, only around 300,000 kilometers are automotive industries found that two-thirds paved. But what China lacks in actual length, of their domestic suppliers were able to pro- it makes up for by having newer, more passvide inputs with defect rates of less than 100 able roads. It has five times the number of parts per million – the typical threshold for multiple lane highways than India. suppliers in the China also has Made in China US, Europe, and more transport opShare of world manufacturing output, % Japan. It was tions available to observed that its supply chains in 2003 1993 both Chinese the form of rail, air, 0 1 2 3 5 6 7 4 and Indian auto and waterways. Over manufacturers 78,000 kilometers of China domestically outterrain are connected South sourced compoby rail in China comKorea nent production pared with 63,000 in ASEAN at similarly high India. Goods can be rates, suggesting flown in and out of Taiwan an adequate availChina by way of 500 ability of local airports whereas there India competent supare only 334 locations Source:UNIDO pliers. Whereas to take to the sky in
India. Thanks to geographical endowments, China also has more navigable waterways. Besides some of the world’s most active ports, commerce in China moves on 110,000 kilometers of inland aqueous passageways. This is more advantageous than India’s 16,000 kilometers of waterways, particularly in the movement of bulk commodities. These transportation differences are partially reflected in the World Bank’s Logistics Performance Rankings. China is rated the highest of all BRIIC (Brazil, Russia, India, Indonesia and China) countries at 27th in the world. Its comparatively higher scores in customs clearance, infrastructure adequacy, logistics, timeliness and tracking ability place it above India, ranked 47th globally. Some of the largest discrepancies between the two countries are shown in survey data collected by the World Bank. Responders reported much higher frequencies of compulsory warehousing/transloading and involuntary payment solicitation in India, while in China greater expenses were incurred in the form of agent fees. The infrastructure and logistical differences may explain why India is a more common site for the outsourcing of services, particularly IT services, which do not require a physical good to be brought to market. However, India should not be entirely discredited as a sourcing destination for manufactured goods. Both it and China have allocated over 10% of their GDPs toward infrastructure development which will enhance their future logistical abilities in bringing their products to the world’s consumers. The greatest similarity between China and India: neither can be ignored by the sourcing professional.
The China Sourcing Blog is THE BEIJING AXIS’ online platform on sourcing and the Chinese economy.
FEATURE Sourcing & Procurement
Â„ Roy Lenders, Capgemini
Capgemini Global Trade Flow Index reveals that trade levels are picking up across the globe
he growth of developing growth of 7.52 % in trade during Q3 2009, countries may be taking a back as government liberalization initiatives and seat as a driver of global trade. infrastructure investments were put in place. According to the Capgemini China, (Figure 2) in particular, witnessed posiConsulting groups, the latest tive trade growth of 6.5 % on account of agtrade figures from the 23 largest trade countries gressive macroeconomic stimulus measures, globally (from Q3 2009) reveal that trade levels alongside other tax cuts and consumer subsihave picked up dramatically from Q2 towards dies which helped boost domestic demand. In addition to China, India and Q3 2009 with an increase of Russia, which saw 12.1 % 8.5% (Figure 1). As trade levand 11.5 % growth in total els are a good leading indicatrade respectively, have made tor for country economies a significant improvement in as a whole, we will see GDP their position in the Index levels start growing from Q1 Trade level since before the recession, 2010 onwards. increase in driven by effective governWhere in Q2 2009 global the world top ment stimulus packages. trade was primarily driven 23 countries The big question for the by local market growth in next two quarters will be the emerging countries and whether the world has indeed by big government stimulus programs in the BRIC countries, during Q3 reached a turning point where emerging coun2009 the big developed economies picked up tries will be driving global economic growth steam again and were driving significant expan- and power is moving from West to East, or sion of global trade. The biggest increases in whether the old economic rules drive the martrade were seen in the US, where total trade ket again with growth in emerging countries grew by 8.6%, against a fall of 2.4% the pre- primarily driven by the export growth towards vious quarter, with trade benefitting from the the big developed countries. Also, the ending of government stimulus weak dollar. Stabilization in consumption and investment, in combination with recovering plans will be a key impact on growth in the exports and declining imports, has also put next two quarters. As many governments are European economies on the road to recovery, eagerly waiting to cut their cost levels to get with the biggest growth in global trade seen in their government finances back-in-order, the Germany (8.6 %), France (8.5 %), the UK (7.7 timing of these cost cuts will need to be very precise so as not to disturb the current growth %) and the Netherlands (7.4 %). BRIC economies also witnessed a significant in the global economy.
Figure 1 Total Trade Top 23 Countries (Billion USD) 1497.75
Growth(%) Value (billions USD)
Figure 2 Total Trade China (Billion USD)
General information Description
1170 Billion USD
GDP per Capita (2008)
2010 China Warehousing Map 2010中国仓储地图 The Council recently developed a new digital map to help you find a warehouse for all of your storage, sourcing and logistics needs. Here are a few of the newest pieces of real estate on the market. To search more warehouses, please visit www.supplychains.com/ map. If you are interested in showing your property, please email email@example.com 全球供应链协会最近开发了一种新型在线地图，帮助您在中国找到合适的仓 库，解决任何储存、采购和物流问题。以下是一些新开地产的信息。搜索更多仓 库信息，请登录www.supplychains.com/map。如果您也想加入地图，请发邮件至 firstname.lastname@example.org。
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ROAD By Tulei
n a busy warehouse near the railway station in Zhengzhou City, Henan Province, Fan Jinxing and six other workers have been loading big plastic bags of cargo onto trucks since 8am. This is a common daily scene mirrored all down South Shuncheng Street where about 20 logistics companies of different sizes are closely crammed together on 500 meters of road. “Each day, we load at least two trucks,” said Peng Shimeng, a small-time logistics boss who has worked in the business for eight years. “Most of them run to other parts of the province by the next day, and some to Shandong Province every other day.” Road transport in China is big business and currently occupies a majority of transport volume in the country. According to the Ministry of Transport, the 2008 road freight volume was 19.17 billion tons, accounting for 73% of the country’s comprehensive transport system. However, the nation’s road networks still has a long way to go, especially
when the market is scattered with thousands of players, many that exhibit low efficiency rates and low levels of expertise. Despite intimidating odds and numbers, companies are still working to expand in this bloodthirsty market. Some even think that the opportunity for road delivery has come as the financial downturn forces many companies to give up local air transport due to high costs. Mui- Fong Goh, general manager of A.T. Kearney, Beijing a US-based consulting company says that the road transportation market in China reached $265 billion as of 2008, and there are plenty of players who want a piece of the action. Driving competition When it comes to their business, charge rates are the defining competitive factor , especially in this sensitive market where it is hard to unify prices due to a variety of operators with different levels of service and expertise. Xu Shuibo, CEO of TNT-HoauXu said in the logistics meeting held in Zhengzhou
that in Europe there are around 5000 registered companies providing road transport services and around 7000 to 8000 in the US. This is compared to around 780,000 logistics companies based in China. This means that the competition in China between different players is cutthroat and the logistics sector has often been accused of “disorganized competition.” “Normally, we charge less than RMB10 ($1.46) for one piece from Zhengzhou to Xinxiang, less than 100 kilometers distance,” said Peng, adding that the price is lower than other big players. His smaller business employs about 100 people and uses 20 trucks, all rented. However, TNT-Hoau and DP Express, two large players with business around China, are able to charge RMB100 ($14.65) and RMB60 ($8.79) per cubic meter of goods, respectively, for the same distance from Zhengzhou to Xinxiang. “Along our logistics street, most small operators charge similar prices, with fluctuations of RMB1-2 ($0.15 or $0.30) for more or less for the same
FEATURE Logistics distance,” said Peng. Peng’s words were shared by another logistics operator surnamed Wang, whose shop is across the street. Wang said the price war is still serious even among the smaller-time rivals, because “the boss always has his say on pricing.” ‘Scattered market’ However, prices aren’t the only factor in the competition. Service and transportation lines are also important. In the past eight years, Peng has opened about 50 lines covering Henan, Hebei and Shandong provinces. That compares to the more than 600 cities in China that TNT-Hoau has served over the recent 14 years. “We have about 20 trucks, and sometimes we are short because they may be all used up,” said Peng. “However, we can not afford to buy new ones,” Peng added that their profit is around 10%, or about RMB1000 ($146.46) per RMB10,000 ($1464.62) worth of business, and “the cost is increasing as oil prices soar.” According to Goh, China’s road transpor-
tation market continues to have a “highly scattered market.” For instance, the top 10 logistics companies have less than 3% of the market share. For carload freight, the main leaders are China Merchants Logistics with a 0.6% of the market share, China Post Logistics with 0.4%, and Sinotrans Group also with 0.4%. Goh attributes the decentralized market to its low threshold of entrance because operators may start up their businesses without setting up any comprehensive network or mastering any professional sales methods. Price wars and the different levels of operators are also contributing factors, she said. TNT-Hoau’s CEO Xu agreed and said the low level logistics companies make up most of the market. Invisible hand As for the future of the logistics market in China, the government still believes in a hands-off approach that lets the market determine the future of all companies great or small. “Currently, the government has
no plan to lift the entry level of the logistics sector, and we will let market competition decide who survives,” said He Dengcai, deputy secretary general of China Federation of Logistics & Purchasing, at a Zhengzhou logistics meeting. One company feeling extremely confident in these uncertain times is Hoau Group, the wholly-owned subsidiary of TNT in China, which recently announced its domestic investment plan to add 437 trucks and hundreds of employees. Its third-quarter fiscal report saw a revenue income increase of 19.4% compared with the same period last year. “I expect double-digit growth in revenue and plan to build 12 additional distribution centers around the nation next year,” said Xu. As for small players like Peng, they will continue to concentrate on local markets and advantages. “We only want to do our own business and improve our service,” said Peng. “We will not die.”
Finding a Better Way Can India’s Logistics Industry improve their methods for Transporting Goods? by Knowledge@Wharton
.R. Gopinath revolutionized travel in India with his low cost airline, Air Deccan. Now with his new express transportation and logistics venture, Deccan 360, Gopinath wants to redefine the industry of transporting cargo, not people. “Deccan 360 will change the way deliveries are made all over India,” Gopinath says. “At present, next-day connectivity is limited to the metropolitan areas and a few cities. My goal is to connect 75 cities in India to each other on a 24-hour delivery schedule within the next year.” If he delivers on his promise, Gopinath could change how companies big and small look at
their supply chains and run their businesses. “The idea of starting a logistics business was He began air cargo operations from India to both instinctive as well as fueled by my own the Middle East and Southeast Asia in 2009 frustrations.” Gopinath notes that many times in Air and plans to integrate domestic and internaDeccan’s early days, a flight cancellation tional operations over time. could be attributed to the lack When Gopinath launched of adequate logistics services in Air Deccan in 2003, only 1% India. A spare part would come of Indians traveled by air. By from somewhere in the world the time he sold his venture of Inda’s GDP to Mumbai within 24 hours, to industrialist Vijay Mallya in but several days would be 2007, the figure had jumped Goes to needed to complete the journey to 5%. Why is Gopinath, a Logistics Cost domestically. More often than former army pilot and farmer, not, Gopinath wouldn’t know venturing into the logistics space now? “Many entrepreneurial decisions how long it would take for the part to arare taken at a subterranean level,” he says. rive. Once it took seven days to move a spare
engine from New Delhi to Kolkata; it was cheaper to transport it via Singapore. Gopinath’s experience largely sums up the state of the logistics industry in India: inefficient and expensive. Industry players and analysts say logistics costs in India are among the world’s highest - accounting for 13% of GDP, according to a report by KPMG. That is far greater than in the United States (estimated at 9%), Europe (10%) and Japan (11%). Outside of the metros and a few cities, the timing of deliveries is uncertain. Big Hurdles Logistics is still a nascent and, fragmented industry in India. It is estimated that while outsourced logistics accounts for 54% of total logistics spending in India, organized players have only 10% of the pie. In road transportation, which accounts for the biggest portion (36%) of logistics spending, 74% of operators are small-time players owning a single vehicle. In outsourced warehousing, 92% of players are from the unorganized sector. Even among the organized logistics players, few have offerings across multiple modes (air, water, rail and road) and
services (transportation, warehousing and value-added services such as packaging, cold chain and customs clearance). A lack of adequate infrastructure plus complex taxation and regulations are big hurdles. For example, most domestic airports don’t have adequate cargo terminal facilities. Blue Dart, the leading express logistics player in India, set up in 1983 and now owned by the global player DHL, started cargo airline operations in 1996. In most airports, Blue Dart operates from the same amount of space first given to it by airport authorities. “In this business, turnaround time is critical,” notes Anil Khanna, managing director of Blue Dart Express. “If one does not have the right facilities in terms of size and site within an airport, it is a huge challenge.” Blue Dart is the only logistics player in India with dedicated cargo aircraft (just seven). Other logistics companies typically turn to the belly space in passenger airlines, something even Blue Dart does occasionally, depending on the load. Moving cargo by road has its own set of problems. National highways form only 2% of India’s road network, but they handle
G.R. Gopinath, Deccan 360 “Starting a logistics business was both instinctive as well as fueled by my own frustrations.”
Anil Khanna, Blue Dart Express “If one does not have the right facilities in terms of size and site within an airport, it is a huge challenge.”
more than 40% of road freight traffic. This naturally leads to traffic jams. Regulatory requirements and cumbersome documentation also compromise speed. “On average, a commercial vehicle in India runs at a speed of 20 miles per hour. In Western Europe and the USA, the average speed is over 60 miles per hour,” notes Vineet Kanaujia, general manager at Safexpress, which has a fleet of 3,500 vehicles. Moreover, India’s tax system is complex. To avoid multiple taxation, companies typically have warehousing operations in every state. The result is a large number of small warehouses around the country which lack the latest warehousing processes and technologies and don’t offer economies of scale. Betting on Hub-and-spoke Despite the limitations, industry players see strong potential. Several initiatives and projects are under way to boost development of roads (including the Golden Quadrilateral, North-South and East-West Corridors), ports (Pipavav, Mundra and Dhamra), and airports (Bangalore, Hyderabad, New Delhi and Mumbai). The complex central sales tax is expected to be phased out in coming years. The emergence of India as a manufacturing hub, growth of the organized retail industry, increased domestic consumption, and multinationals bringing in global best practices are all expected to boost the logistics industry. Gopinath, for one, is betting big. He is creating India’s first hub-and-spoke distribution model for express logistics. A 100 acre state-
of-the-art cargo handling facility in Nagpur, Central India will serve as the hub for his operations and will connect the metros as well as tier two and tier three cities through an air and surface network. Deccan 360 will begin operations in October with three Airbus aircraft and a network of 30 franchisees (for surface transport, warehouses and collection points). At first, Deccan 360 will offer nextday connectivity to 30 cities in India. Within a year, Gopinath plans to increase the air fleet to five Airbuses and four aircraft from French-Italian manufacturer ATR, ramp up the franchisee network and offer next-day connectivity across 75 cities. “No logistics player in India has the hub-and-spoke model that we are setting up,” says Gopinath. “Like in the case of Air Deccan, I am establishing a different model ... that will both increase the reach and bring down the cost for the customer.” It may not be all that simple. The huband-spoke model, though new for India, was introduced years ago by the global major FedEx. It is a tried-and-tested model the world over. Yet in India, Blue Dart, which holds 43% of the air express market, does not follow this model. Instead, it flies three different routes: crescent (Chennai to Kolkata via Bangalore, Mumbai and Delhi), zigzag (Hyderabad to Mumbai via Ahmedabad) and direct (Bangalore to Delhi). Blue Dart studied the hub-and-spoke model closely before starting operations. It even had a sales alliance with FedEx at the time. Despite the close association, Blue
Dart chose a different model. According to Blue Dart’s Khanna, “We found that that this model works well when you have a large fleet of aircraft. If you have only a few aircraft, you end up losing capacities. We restudied
Gopinath, is creating India’s first huband-spoke distribution model for express logistics. this model once again a few years ago, and again found it to be unfeasible.” Others who tried running cargo airlines gave up. Gati, a multimodal player with more than 4000 vehicles and six marine vessels, is among them. Mahendra Agarwal, managing director and CEO, attributes the decision to “commercial bottlenecks.” Gati, he says, initially wanted to have its own cargo aircraft. However, faced with regulatory issues and a lack of expertise in running cargo aircraft, it chose to outsource two freighters from Air
India. “We had a successful operation of these two freighters regularly on the Chennai-Delhi route,” he says. “While operating [them], we realized certain commercial bottlenecks and therefore decided to close the operation for the time being.” Competing Approaches Others have made their own moves. In 2007, Blue Dart earmarked a five-year investment of US$250 million to go to aircraft acquisition as well as strengthening its air and ground infrastructure. Last year, to mark the company’s 25th anniversary, Khanna announced 25 initiatives to upgrade the product range and improve quality. At TNT India, managing director Abhik Mitra is working toward expanding the reach and strengthening TNT’s network in tier two and tier three cities. “We also want to invest in the infrastructure in our hubs and depots and take them to the next level of efficiency,” he says. TNT was the first multinational express distribution company to enter the Indian market with a direct subsidiary. TNT came to India in 1994 for international operations. Over time, it realized that the domestic market was a much bigger part of the pie. In 2004, TNT made its domestic foray, and in 2006 it went a step further, acquiring road
Blue Dart hold in the Air Express market
Kolkata and Mumbai express firm Speedplus a network of age Express. slightly smaller distriSafexpress, meanbution centers across while, has zeroed 10 other cities in India. in on warehousing. Srinivasan plans to first The company has approach his own venmore than five mildors for business. Over lion square feet of the next 12 months, he warehousing space aims to spin this off as across the country a separate and neutral and is planning to set logistics company and up 32 state-of-thesecure other IT disart logistics parks tributors as customers. and add another five Vineet Kanaujia, Safexpress But Srinivasan’s ambimillion square feet in “With the phasing out of the tion is not limited to IT the next two years. central sales tax, we expect a huge demand for world-class distribution and wareFive of these parks warehousing.” housing. Redington are already operating. Says Kanaujia of Safexpress: “With the buys products from vendors and sells phasing out of the central sales tax, we to a vast network of channel partners. expect to see a huge demand for world- Srinivasan wants to leverage this expertise and become a third-party logistics class warehousing in the country.” Redington, a leading distributor of service provider across industries. Analysts say industry players’ atIT products, is also eyeing the logistics space and is setting up a state-of-the- tempts to expand their reach, offer art automated distribution center in industry-specific solutions and work Chennai. Spread over 11.6 acres with toward more integrated operations are the latest very-narrow-aisle technology, moves in the right direction. Meanwhile, it is one of the most advanced distribu- what role Gopinath plays in transformtion centers in India. Managing direc- ing Indian logistics remains to be seen, tor R. Srinivasan plans to set up simi- but his entry into the segment will no lar distribution centers in New Delhi, doubt accelerate the pace.
Republished with permission from Knowledge@Wharton, (http://knowledge.wharton. upenn.edu), the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
New Study Says 6.2% In their February 2010 Strategic Analysis of Indian Logistics Market, Frost & Sullivan (F&S) has found that logistics costs actually account for 6.2% of India’s GDP, less than original estimates. The market earned revenues of US$75.19 billion in 2009 and is expected to reach US$120.42 billion in 2014, meaning a compound annual growth rate of 9.9%. Transportation segment accounts for close to 62.0% of the total market reiterating the fact that it is the most important logistics function for all industries. Furthermore, the agricultural sector accounts for slightly over half of the total logistics market in India, owing to the extensive storage and transportation activities associated with agro products within the country. According to F&S, the steady expansion of operations by large domestic industrial groups as well as an increasing number of global majors in industries ranging from automotive to pharmaceuticals have been targeting spots in this highly lucrative Indian market. While the report admits that manufacturers and logistics companies are still hindered by the problem of poor infrastructure connectivity in rural areas, it concludes that multimodal transportation solutions are becoming possible with the development of inter-connected transportation infrastructure facilities. This positive trend especially applies to dedicated freight corridors by railway and improvements in coastal shipping facilities. Similarly, the construction of logistics parks at key distribution hubs are helping to meet specialized warehousing needs of industries. These developments are encouraging companies to increasingly outsource their logistics functions, stimulating market growth.
James McAdam, President APL Logistics
Joseph Lee, Managing Director Greater China, APL Logistics
Harnessing the Domestic Surge James McAdam and Joseph Lee talk with Monica Liau about future plans that are afoot for China. How has APL been able to get over the obstacles posed by the economic downturn? McAdam: Honestly, we saw this downturn coming as early as the summer of 2008, so we started taking steps in the third and fourth quarter of that year. Obviously it was a more severe downturn than even we expected with the extreme slowdown of demand in Asia. China in particular was down into the double digits. This was unprecedented but because of our forecast, we were able to get in line and be prepared to support slowing top line growth with sustained cost management initiatives. How about the China stimulus package, any help there? M: We’ve definitely seen a direct impact from the stimulus package in terms of domestic consumption. For example, there has been an upturn in China’s domestic automotive sales which has been demonstrated by the increase in logistics business that our joint venture, CMAL in Chongqing has been doing with Chang’An motors. Lee: However, the stimulus package has not provided a quick fix for China’s exports
due to the reliance on demand from global markets. On a positive note, the amount of stimulus money that is being spent on infrastructure is definitely opening up new avenues that follow the migration of factories out west. This movement is definitely a long-term business opportunity. What have been some of the challenges of organizing a network of Chinese offices? M: From an international organizational point of view, the process of setting up, organizing and running our company networks here is no different from our strategies in other places. We currently have nearly 600 employees in Greater China, and the overall structure is quite similar to what we employ in other markets, although here we participate in two domestically owned joint ventures, CMAL and Lenovo through Legend Holdings, which is branded by APLL-Zhiqin. This is a Beijing-based firm that focuses on the Chinese markets as they relate to our business. Our involvement in these two JV’s is obviously an enormous advantage for us in the domestic market. L: From the managing point of view, we en-
courage a multinational way of doing business among our employees, but obviously we do have some different cultural nuances. The most sensitive part of managing the team is the importance of business titles. You definitely cannot underestimate the importance and power they have here. It is also important that job titles are meaningful and are supported by a clear scope of work that colleagues and customers understand. I think that there is an internal culture where the contribution that each employee makes to the team is respected and valued at every level. How will APL Logistics address the anticipated surge in domestic demand? M: It is an interesting change. The past role of China has been completely focused on export-driven industries. But what we’ve seen with the economic downturn and the stimulus package is that logistics companies like us need to not only support the export business, but also help our export clients develop business models to get their goods into Chinese markets. We have nearly two million square feet of warehousing and distribution capacity here for our consolidation services, but everything is positioned close to the coast. Industries have not only been migrating from south to north, but are also moving further west. We work on the basic premise that we go where our customers go. This means that more of our supply chain entry points need to move west as well. We have been enhancing our vendor logistics services as well as our first-mile land-based transportation and milk run services. Our two joint ventures in the west have become incubators for developing best practices and supply chain practices. So, where do you see APL Logistics’ biggest potential for growth? M: Historically, I would have said Europe or the US, but today the most impressive growth is greater China and Asia, which is currently the world’s biggest market. In our view, the trade within the Asian countries will begin to accelerate and expand, so for multinational companies like ourselves, this is where our companies need to be. We have a firm foothold in the region and can build out from these strategic points.
Ting Tong Logistics and Manhattan Associates talk with Russell Beron about their technology partnership. Why did you choose Manhattan for your solutions? Roger: We started by looking at a few other American and Japanese companies, but we found that the other group didn’t meet our needs. We have a very diverse number of industry segments and customers that we service – some are electronics, some F&B, and some are cosmetics. We found that Manhattan has the flexibility and scalability to meet all of these needs in each of our different industries. We were also impressed by the experience that Manhattan consultants had. Pete: Most of our employees have over three years of experience in our offices here. This is one of our competitive advantages. Have there been any unique challenges you have had implementing your technology in China? P: Everyone of our implementations generally have some unique problems – but for the most part most of the needs are pretty similar. So as Roger was describing earlier, what they were looking for with Manhattan was someone who covered all of the key areas that they needed help with but also some of the industry or vertical market expertise and that’s pretty common around the world. So there are some unique market requirements, such as language or some local government regulations, which we have to tailor to the Chinese, U.S. or French markets, but by and large the 3PL industry needs are similar around the world. What is Manhattans global strategy? P: Today we have 26 offices in 13 countries so we have a broad geographic footprint and have a direct presence in most of the globes most important supply chain markets. This doesn’t cover the entire globe but in other parts of the world where we don’t have a direct presence we have about 20 global partners in places like South Africa, Russia and the Middle East, who help us meet the needs of customers and markets where we don’t have a direct presence. Our objective is similar to our objective in China – to make
Pete Sinisgalli, CEO Manhattan Associates
Roger Chou, IT Director Ting Tong Logistics
Solving Problems Across Borders sure we can meet the needs of our global partners as they deploy solutions around the world and take advantage of so-called globalization while at the same time being positioned to meet the specific needs of that domestic market. We believe we are one of the few companies that has the deep rich functionality required but also has the global presence to be able to meet their needs in whatever geographies [those companies] choose to operate in. What differentiates you from your competitors like SAP or Red Prairie? P: SAP is a very good company but their depth of solutions within supply chain is not nearly as deep as ours – in situations like Roger’s where there is complexity in the supply chain, SAP generally doesn’t have the depth or breadth needed to meet these specific business needs. Now if you contrast that to solutions like Red Prairie’s one of the things that we believe makes us a more effective partner than them is the number of
solutions we have to help meet customer’s needs, so in terms of warehouse management, labor management etc all of those capabilities are tightly integrated in our solutions. What have been the benefits/changes you have seen in your company after using Manhattan? R: After implementations, the biggest improvements were seen in the productivity and accuracy in our warehouses – it’s very obvious. In terms of accuracy, there were roughly one million RMB in losses – some due to management mistakes, stuff getting lost, and theft – a lot of different reasons. Also our efficiency has gotten better. Before, the exact locations of products were not very accurate, but accuracy rates have improved a lot. Also our transportation uses the Manhattan routine model to improve efficiency and productivity mostly with our land transportation in terms of route optimization, and we also improved a lot here.
Green What are the professionals saying about implementing a green supply chain?
lot of hype surrounds spececulations in China’s “green” en” future, as the country has recently lobbed around some hefty goals for carbon emissions cuts and green technology boosts. But when it comes down to the practical aspects of company and sector application, details grow fuzzy. Motivated to understand current awareness, perceptions, practices and the future direction companies are taking towards green supply chain management in China, the Global Supply Chain Council and global B2B eCommerce solutions provider GXS reviewed the responses of 145 professionals coming from a broad range of industry focuses. It’s no secret that softer concerns such as CSR and green best practices were put on the back burner in the face of China’s rapid growth and industrialization. Perhaps as a result, there is a perception among the professional surveyed that companies here need more information on environmental sustainability before concepts can re-
ally be put into practice. According to the individuals surveyed, the biggest obstacle that companies face in China is a general lack of awareness about environmental issues followed closely by problems of waste disposal. (Figure 1) Other issues such as conserving natural resources and green consumer buying preferences were also of some concern. Despite these challenges, close to one in four (24%) of the companies surveyed said they
would be implementing some sort of green initiative in the next six months, with another third of respondents citing within two years as their target for starting green initiatives. However, one in five companies still say that to their knowledge, they have no green supply chain initiatives. Best Foot Forward Companies have several different options in how they take their first step towards an environmentally friendly supply chain. Many of the more popular ones involve strategies which improve efficiency and cost savings alongside ecological preservation. Using electronic processes to create efficiencies in sourcing and procurement was a top initiative cited by close to half (43%) of the survey respondents. Other initiatives such as employing green friendly design and product lifecycle management or working with suppliers on sustainability and green SCM guidelines were almost equally planned and implemented initiatives. Reducing pa-
FOCUS Green Barriers to Adopting Green SCM Practices (Figure 2)
Incentives for Implementing Green practices (Figure 3) Brand building as a "green company" Compliance with company sustainability goals Increase supply chain eﬃciency/reduce waste A competitive advantage for doing business Complying with customer requirements Save cost through implementing eﬃciency Motivating suppliers to perform better No motivation for applying Green SCM Other
Cost is prohibitive Too complicated to implement/lack of expertise No financial incentives to apply Green SCM Balancing buy side demands with market reality Not a priority No government incentives to apply Green SCM Existing technology does not support green initiatives Lack of Executive support No barriers Other
per in contracts and auditing suppliers were the least commonly implemented initiatives (both cited by less than a third of respondents). There was also a lot of interest recorded on the execution of green warehousing and distribution actions, most likely because these initiatives also often mean added efficiency. Companies appear to be most ahead in green practices when dealing with inventory reduction and product handling (61% have already implemented initiatives), their ability to consolidate orders (51% have already implemented these initiatives) and usage of reusable containers and storage equipment (60% have already implemented these initiatives.) When it comes to reducing energy consumption through the use of solar panels or green roofing options, surprisingly 25% of companies say they have already adopted such initiatives. Similarly around 29% of companies report that they have already optimized the location of their distribution hubs. Many of these initiatives show direct cost and efficiency benefits, but up-front cost associated with them may be why they are not more widely adopted. Surveyed companies in China also say they are fairly well advanced in adopting green transportation focused initiatives. Similar to production and warehousing proposals, there is a crossover between these implementations and levels of efficiency. Almost half of companies surveyed are already reducing expedited shipping and therefore air freight. This along with optimizing routing reduces empty miles and increases cube utilization to
of the price and complications involved with turning green, being perceived as a such in the eyes of society is still very important to over half of the respondents. Brand building was listed as one of the top incentives (Figure 3) for implementing green practices, along with compliance with company goals on sustainability (53%) and increasing supply chain efficiency/waste reduction (52%). Other incentives for implementing GREEN green practices include cost Money Counts SUPPLY CHAIN CHINA SURVEY savings, efficiency and a As seen by these results, 中国绿色供应链 perception that being green costs are ultimately a big will bring a competitive adfactor that companies weigh vantage. There are very few when creating strategies companies in China that and practices in green supfeel there is no motivation ply chain management. This for applying green practicperception is echoed in the es. (Figure 3) voices of the survey parWhile perhaps not alticipants, who cite that costs truistic, this is among the prove the biggest perceived barrier (36% of respondents) to adopting many encouraging signs in the Green SupGreen SCM practices. Many also shrug some ply Chain in China survey results. While methods off as too complicated to be prac- wide adoption of Green SCM practices has tically implemented (35% of respondents). not yet happened, there are positive indicaAlmost a third of the companies surveyed tors in terms of the way that companies are (32%) felt that there were no financial incen- maintaining their supply chain, including the tives to justify adopting Green SCM. Lack intention of many companies to adopt green of executive support was not felt to be a sig- SCM practices in the near future. nificant barrier. The message seems clear that if green SCM makes financial sense and is easy to implement, chances for adoption are To read the full results of this survey and learn more about how other companies are viewing a green supply much higher. (Figure 2) chain, please go to: http://tinyurl.com/SupplyChainGreenSurvey The Price of Going Green Despite the fact that companies seem wary or call us for a hard copy.
create efficiency. Adoption of more sophisticated green transportation measures which have less direct relation to efficiency and cost savings are not in wide practice. More advanced green transportation measure such as using alternative power sources for refrigerated trailers, more aerodynamic trucks and more alternative fuel powered trucks, were adopted by 11% or less of companies.
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Executive Appointments With talent at a premium, CHaINA keeps an eye on which executives are moving where.
Jeremy Chapman Director of Industrial Investments Industrial Department, Colliers
Peter Mackie Group President CHEP Asia Pacific
Paul van Benkelen Chief Executive Officer TÜV Asia Pacific
Colliers recently appointed Jeremy Chapman as Director of Industrial Investment. Jeremy has over 15 years of China industrial real estate experience and 10 years in the construction industry. Prior to his recent charity work in Mongolia, Jeremy was Senior Vice President of Acquisitions at New City Corporation Shanghai. The new role at Colliers will allow him to assist clients in the repositioning, disposal and development of projects including that illusive “Industrial Investment market”.
Peter Mackie will join the executive leadership team as group president of CHEP AsiaPacific, taking the place of Craig van der Laan. Mr Mackie currently is president of CHEP Europe and acting group president of CHEP Europe, Middle East and Africa (EMEA). Mr Mackie will take up his new role once a permanent group president of CHEP EMEA is appointed. CHEP Australia president Paul McGlone will act as group president of CHEP Asia-Pacific, until Mr Mackie assumes the role.
On January 1st, 2010 Paul van Brenkelen joined TUV Asia Pacific Ltd. (a member of TUV NORD group) as CEO and regional manager for China, Japan, Korea, Taiwan and Hong Kong. Based out of Hong Kong he will be responsible for further growth, strategy, M&A, P&L of the entities within the region. He previously held positions with SGS and Bureau Veritas as Global Director Product Development and Director Technical Services Europe. He has been based in Hong Kong since June 2005.
Simon Shaw Senior Director of Sales Smurfit-Stone Global Packaging Solutions
Sean Burke Senior Vice President Sales and Marketing Swan Logistics
Simon was previously the Sales and Marketing Director at IPS and SCA Packaging Asia. Simon has generated significant profitable packaging business through development and implementation of precise sales and marketing activities. Simon graduated from ESSEC Business School, Chartered Institute of Marketing, Kingston University.
Sean Burke recently joined Swan Logistics as Senior Vice President of Sales and Marketing. He will lead a global team to develop the supply chain business, focusing on North American imports inbound from Asia. Burke most recently served as Vice President, Business and Services Development Asia Pacific for YRC Logistics based in Shanghai.
IS THIS YOU? If you have recently changed tions in the Asia Pacific re positions gion,, we want to hear about it! nnounce your new appointTo announce mentt with CHaINA magazine or for more mo information about bout this his ion, please send an email section, email@example.com to firstname.lastname@example.org
MAR AR R CH H
Audits & Investigations Introduction The Customs Authority of China has implemented post-importation audits and investigations as an efficient method for ensuring that companies comply with the law whilst simultaneously enabling daily incoming/outgoing shipments to be released quickly. This article summarizes the Customs department’s recent efforts on implementation of post-importation audit and investigation and also shares practical case studies from selected enterprises that have favourably resolved cases with minimal financial liability, adverse interruption to daily operations, and limited reputation damage. Key Statistics China’s Foreign Trade Import and Export (2009) (Figure 1) Tax Collection (2009) Total tax collection for 2009 was RMB921.4 billion, which represented an increase of 0.6% compared to 2008, but was just below the 2009 target of RMB980 billion. Given the decrease in import and export value in 2009 compared with 2008 this was a remarkable achievement. Sources of Additional Revenue (2009) (Figure 2) Customs was able to preserve its revenue base through conducting more successful post-imporChina’s Foreign Trade Import & Export
tations audits/investigations. Customs handled approximately 12,210 audits/investigations cases and generated additional revenue from the following sources: Case Study # 1 – Valuation Industry: Automobile (Figure 3) Alleged Violation: The gross margin derived by the importer/distributor was higher than the gross profit level of other importers/distributors of completely built up automobiles. The related party transaction between the China importer/distributor and overseas headquarters had influenced the transaction price, which was not arm’s length in nature. An uplift (increase) of import price and duty clawback was requested by Customs. Amount of Potential Exposure: The potential exposure for 2006-2008 was approximately RMB 280 million based on the average gross margin level in the industry. Strategy to Resolve: The Deductive Method was adopted in order to demonstrate an arm’s length import price. Several
(2009) Sources of Additional Revenue
(Figure 1) Value (USD)
Total Imports and Exports
Valuation Tariff Classification
Processing Trade (domestic sales)
12.6% Invoice Flow Goods Flow
SPONSORED Feature explanations and documents were prepared to justify the actual gross margin from a commercial perspective. Full compliance with the Valuation Measures (GAC Order 148-2006) was demonstrated and full cooperation with Customs ensured. After several discussions with Customs, an agreement with Customs on the correct dutiable value was reached. Outcome: The assessment of additional duty by Customs was reduced by over 50% and a good relationship was maintained, enabling future imports to clear customs smoothly. Case Study # 2 – Tariff Classification Industry: Wind power generation equipment manufacturing
HS Code were identified. Inaccurate descriptions in documents previously provided to Customs may have misled Customs to consider use of another HS Code. A formal explanation letter was prepared and submitted to Customs to illustrate the arguments and correct the previous misleading points. Customs conducted a physical examination of the imported equipment and checked the explanation letter. Outcome: Customs agreed that the existing HS Code was correct and did not impose any additional duty/VAT and penalty. Future incoming shipments were not detained.
Alleged Violation: The Harmonised System (HS) Code declared for the importation of equipment for the past three years was wrong. Customs alleged “correct” HS Code attracted a 10% duty rate while the existing HS code declared attracted a 3% duty rate. Customs indicated this “correct” HS Code was determined based on certain product data provided by the Company. Customs required additional duty/import VAT as well as penalty. Amount of Potential Exposure: The duty/import VAT exposure for the Case Study #3 – Processing Trade last 3 years was around RMB 7 million and (domestic sales) Industry: High-tech manthe penalty was around ufacturing RMB 2 million. CusTo avoid toms threatened that detainment and Alleged Violation: they may hold clearance A customs audit was of future incoming delay of shipments, initiated after the local shipments until the isit’s important to in-charge Customs desue was resolved. tected a significant CusStrategy to Resolve: understand laws toms Handbook imbalThe first step was surrounding postance. Customs alleged to agree with Customs on release of incom- importation audits and unauthorized domestic sales of bonded materiing shipments based on investigations als had taken place due the payment of a cash to the “swap” of bonddeposit. The second step was to complete a detailed review of the ed/non-bonded materials during production product specifications (function, composi- by the Processing Trade Enterprise. tion, working principle, etc.); discussion with Amount of Potential Exposure: Customs duty payable up to RMB 4 milengineers to confirm; and reviewing documents already provided to Customs. A thor- lion and import VAT payable up to 17 milough research of the relevant tariff classifi- lion; an administrative penalty ranged from cation rules and rulings for similar products RMB 29 million to 40 million, and a potenwas also conducted. Based on this, strong tial downgrading of Enterprise Classification arguments to support the existing declared from Category “B” to “C”.
Strategy to Resolve: An on-site review was conducted to find out the root causes for the Customs Handbook imbalance. Based on this, the actual Handbook imbalance was re-assessed using a more accurate Unit Consumption rate, grouping and unit price. The final Handbook imbalance reported to Customs was significant reduced. A self-assessment report was submitted to Customs and request for ‘voluntary disclosure’ sought. Outcome: The assessment of customs duty was reduced to RMB 2.5 million (irrecoverable) and import VAT to RMB 14 million (recoverable). Administrative penalty was waived as Customs accepted the voluntary disclosure approach. Summary In 2010 Customs is expected to conduct hundreds of post-importation audits and investigations. Companies need to have a well-planned strategy for responding to this scenario. Companies may consider conducting a self-assessment in advance in order to ensure key compliance areas are well covered, identify any weak points and implement an improvement plan. Companies should also establish an internal protocol for responding to an audit or investigation. Proactive efforts need to be made in order to seek minimal financial liability and avoid adverse impact in daily operations and company reputation.
Damon R. Paling is a partner at PricewaterhouseCoopers. Based in Shanghai, he consults on customs, trade and supply chain issues.
3PL Luncheon with Havi Logistics
illiam O’Brien, President of Havi Logistics in Greater Asia, sees one major trend in the world of 3PL services in China. Price is no longer the most important thing to customers. In a recent 3PL luncheon hosted by the Global Supply Chain Council, O’Brien cited two surveys, one from AT Kearney, the other a joint collaborative between GSCC and FM Logistics. He says both come to the same conclusion as he has. “Anyone can build a warehouse and anyone can build a truck,” he said. “The expectation of us is that we create value and examples.” However, Dominic Gates IDS Logistics said that he has noticed companies taking a much harder line on costs in the past two years in the face of the economic recession, which means that they are less willing to pay for pricier services that have better “intangible” values. This view was shared by several mem-
bers present during the discussion. “If it’s the price that customers are looking at, how do you show them your value?” asked one participant. “Our customers are constantly comparing price versus service, as if these were two opposing concepts.” O’Brien continued the discussion by observing that despite the perceived trend of customers demanding more, there has been no perceivable market impact in terms of infrastructure. In fact, he says it’s moving in the opposite direction because rules and regulations of regulatory bodies are focused on assets instead of the value a company adds. “There’s a load of trucking companies out here and there are a lot of warehouses,” said O’brien. “Creating value out of all these trucks and warehouses are not something that Chinese companies are that good at, due to lack of incentives.” “You get economies of scale if you deliver better value to the customer,” he continued.
“But I don’t see it working in China.” He went on to say that warehouses like Yantian failed because of outrageous expectations of land. He also mentioned that places like Hong Kong should afford huge opportunities in terms of warehousing, especially for things like cold storages. “It’s scary, these places are 40 years old, but no one can invest in Hong Kong,” he said. “You’d think you could build a warehouse, but if you did this as your business you’d never get a return.” O’brien said that the environment in China is moving in the wrong direction in terms of cold chain facilities (in terms of quality and total integration), but yet the expectation of companies like Havi are getting higher and higher without the proper investment materials to support them.
THE MAGAZINE FOR GLOBAL SUPPLY CHAIN LEADERS ⡟㸋㦌㤓⹊䇇㑕㏎㦬㬠㤄㑇⫓䋍⭥䓉䄖䊴䐟 ⡟㸋㦌㤓⹊䇇㑕 ⹊
LIFE Book Review
hen readers join Paul Midler in “Poorly Made in China”, alarm bells are sure to ring. A consultant for companies trying to enter China during the height of the export manufacturing boom, Midler recorded his experiences and turned them into a businessmen’s long and stressful worst nightmare. You keep expecting him to end at least one chapter with “… and then I woke up.” But he never does. Midler’s book has gotten a lot of attention since its publication last year: both raves for his honesty and complaints about his narrowness of scope. Both are valid. However, in light of yet another round of highprofile quality problems like cadmium in children’s jewelry and the resurfacing of melamine in dairy products, his message is - for better or worse - resonant. There’s the shampoo and body-wash factory where workers stick infected hands into barrels of hair gel and slyly tamper with shampoo formulas to save money. There’s the factory which has skimped on materials, turning out hazardous scaffolding equipment. Another group arrives to scout factories, only to find themselves in the back of a shed. As bizarre things continue to go wrong over and over again, you get to thinking that perhaps Paul Midler is trying to drive home a very specific point. Indeed, when asked about his inspiration, Midler says he basically got tired of repeating himself. “I started to realize I was giving the same advice to companies over and over again,” said Midler in a recent interview with CHaINA. “I thought I should put all my experiences into a book so people knew what was going on.” Midler’s book, half comic account and half exasperated dissertation, breaks down his view of the Chinese factory owners’ psyche. For instance, he asserts that Chinese manufacturers do not necessarily maintain the mantra of “the customer is always right.” They do not necessarily think that long term relationships should build trust. They do not necessarily see the wrong in counterfeit. These ideas permeate his explanations as to why companies run into quality fade, delayed shipments, lack of transparency and reluctance to correct mistakes.
Midler also maintains that Chinese factories lure companies in to set up shop by lowering entrance prices and being seemingly accessible and safe; however once these companies are in and the Chinese managers know it will be too expensive for companies to pull out, that’s when the problems begin. “Factories will squeeze until the breaking point,” said Midler to CHaINA. “Then when the camel’s back is about to break, there’s a begging back and the relationship goes back to the beginning.” This is perhaps one of “Poorly Made in China’s” greatest weaknesses. It provides no solutions and no alternatives to the seeming back and forth rut that these companies are stuck in. “[Chinese factories] are taking advantage of what should be a rather respectful, honorable cultural condition,” Midler continued. “But the alternative of a company pulling out and going somewhere else is generally too expensive and risky.” While the information in his book is nothing necessarily new, the way these embarrassing stories are directly told and unabashedly critiqued is oddly refreshing. Midler told CHaINA that oftentimes, companies are too proud or embarrassed to discuss their problems. “There’s a reality in China that people don’t like to talk about,” reflected Midler. “Everyone wants to pretend that everything is fine. We have a huge question mark in China and no one is saying anything because what do we tell consumers? That there is a 1 in 100 chance that their child’s toy is poisonous?” What saves Midler and his book from being just one long and angry rant is the way Midler often lapses into tenderness and understanding for the Chinese culture which has given him so many headaches. ches. In this, many people who live in China can th an relate to the experiences of this foreigner ner navigating the perils of Chinese business. There are so many problemss that we face here, and yet it never ever goes far enough to completely drive us away.
With more quality controversies exploding into the news, CHaINA took another look at the advice Paul Midler gives in his book “Poorly Made in China”
s nt ou 17 isc arch t D lM Ge Unti
4th Indirect Spend China Summit Renaissance Hotel, Shanghai March 17, 2010
he Global Supply Chain kitchen, which is headed by Chef Kenji Council’s (GSCC) Janu- Ishibashi. After studying at Michelin-rataurants in Marseille and Nice, Ishiary networking mixer was ed res restaurants held at Mardi Gras, a gor- bashi was found by Yamazaki, and moved geous restaurant and bar to Shanghai. His training shows in his housed in an 80-year-old Spanish villa food, which offers a range of excellent near the heart of the French concession. handmade fares. Seasonal pastries, pates, Though not normally reserved for large bouillabaisse, and more all make an apparties, owner Ko Yamazaki opened his pearance on the dinner menu. The must distinctive second floor bar so GSCC try at dinner would be the flawless pork confit and the patrons could redark, indulgent lax and talk shop Verona Chocoin its beautiful, late torte. Mardi warmly lit interior. Gras also ofThe stunning Japfers a charming, anese-style sunken newly opened bar and the mix wine bar which of Japanese and serves small Western influplates and Spanences throughout ish tapas, perfect the restaurant to accompany an were designed by after-work drink Tamazaki, who 372 Xingguo Lu (near Tai’an Lu) or to bolster a has lived a truly French Concession Area gathering of prointernational life Shanghai, China fessionals. and draws influ兴国路372号 (近泰安路) Yamazaki’s resence from his ex上海市，中国 taurant, though periences. Phone : 6280-7598 perhaps not used Therefore, Open M-S 5-11:30pm to hosting large Mardi Gras food parties, is certainalso provides an Dinner: RMB200-300/person ly a stylish and elegant though Drinks + Tapas: RMB100/person memorable place perhaps eclectic to take colleagues smattering of ofto dinner or stop ferings. A lot of For information on the GSCC’s next in for a leisurely very traditional mixer, please go to the events page at: www.supplychains.com glass of wine. French cuisine comes out of the
For many companies in China, services account for one-third of every purchasing dollar spent. And yet, few companies have standardized procedures specifically designed for the complexities of services procurement. Often, the result is excessive costs, drawn-out purchasing cycle times, and inconsistent workflow procedures.
By attending this summit, you will be able to: Learn how to translate your knowledge of buying physical goods into the service arena. Hear how leading companies are managing travel and entertainment (T&E) as well as marketing expenses. Uncover and manage “hybrid” or “bundled spend” e.g. services purchases bundled with goods. Develop formal supplier management programs across all service categories. Integrate key distributors to optimize your indirect spend across China. Evaluate new solutions, tools and services that can help your services procurement and management.
Join the debate with China’s leading procurement experts from:
Network with industry peers in an intimate gathering of senior procurement executives
Web: www.supplychains.com Call: +86 (21) 62081232 Email: email@example.com
LOGISTICS SERVICES 4SCM A10, 5/F, 61 Old Warehouse Building, 61 Yangshupu Road, Shanghai 200082 上海市杨树浦路61号老栈商务楼5楼A10室 邮编200082 +86 (21) 6148 9800 www.4scm.com.cn
20/F Broadway Centre, 93 Kwai Fuk Road, Kwai Chung, NT, Hong Kong, China 香港新界葵涌葵福路93号 百汇中心20楼
+852 2211 8721 www.agilitylogistics.com www.alls-sh.com
LOGISTICS SERVICES Shanghai 200031 上海市汾阳路203号轻科大厦138室， 邮编：200031 +86 (21) 6445 1452 www.clasquin.com Damco 5/F, Tian An Centre, 338 West Nanjing Road, Shanghai 200003 上海黄浦区南京西路338号天安中心24楼， 邮编：200003 +86 (21) 2306 2000 www.damco.com Deret Logistics Asia Suite 1703 Shanghai Bund International Tower, 99 Huangpu Road, Shanghai 200080 上海市黄浦路99号上海滩国际大厦 1703室，邮编：200080 +86 (21) 6306 2592 www.trans-access.com.cn DHL Exel Supply Chain 3398, Xiupu Road, Shanghai 201315 上海市秀浦路3398号， 邮编: 201315 +86 (21) 3825 6288 www.dhl.com DSV Logistics 38/F, 1 Grand Gateway, 1 Hongqiao Road, Shanghai 200030 +86 (21) 5406 9800 www.dsv.com www.dsv.com/cn
5/F Raffles City Office Tower, 268 Middle Xizang Road, Shanghai 200001 上海西藏中路268号
来福士办公楼5楼 邮编：200001 +86 (21) 2301 2800 www.apllogistics.com Arvato Services B-1/F XingHong Science & Technology Industrial Park, Feng Huang Gang Village, Xi Xiang, Bao’an District, Shenzhen 200231 深圳宝安区，宝安西乡前进二路凤凰岗村 星宏科技园，邮编：518102 +86 (755) 3386 1666 www.arvatoservices.com.cn BDP International Unit 2101-2110, Shanghai Bund Int’l Tower, 99 Huangpu Road, Shanghai 200080 上海市虹口区黄浦路99号上海滩国际大厦 2101-2110室，邮编：200080 +86 (21) 6364 9336 www.bdpinternational.com Ceva Logistics 19/F, Jiang Nan Shipyard Building 600 Luban Road, Shanghai 200023 上海鲁班路600号江南造船大厦19楼 +86 (21) 5302 9988 www.cevalogistics.com Clasquin Room 203, Qingke Mansion, 138 Fen yang Road,
DTW Logistics Group 16 Tianzhu Middle Road, Zone A, Tianzhu Airport Industrial Area, Shunyi District, Beijing 101312 北京市顺义区天竺空港开发区A区天柱中路 16号，邮编101312 +86 (10) 5923 7777 www.dtw.com.cn Duisport Packing Logistics A, 8/F Shanghai Industrial Bldg, 18 North Caoxi Road, Shanghai 200030 上海漕溪北路18号上实大厦8楼A座， 邮编200030 +86 (21) 6427 2906 www.duisport-packing-logistics.com Elee 375, Kefu Road, Nanxiang Town, Jiading District, Shanghai 上海嘉定区南翔镇科福路375号 +86 (21) 3912 4360 www.eleechina.com FM Logistic 3 West Guangzhou Road, Taicang EDZ Jiangsu Province. 江苏省太仓市经济开发区广州西路3号 +86 (512) 8889 8666 www.fmlogistic.com Geodis 3/F. OOCL Plaza, 841 Middle Yan’an Road, Shanghai 200040 上海市静安区延安中路841号 东方海外大厦3楼，邮编200040 +86 (21) 6193 2323 www.geodis.com H & T International Transportation 5/F, China Merchandise Building 152-155 Connaught Road Central, Hong Kong
LOGISTICS SERVICES +852 2543 0708 http://www.hthkg.com.hk Havi Logistics 6 Xingsheng Jie, Beijing Economic & Technological Development Area, Beijing 100176 北京经济技术开发区兴盛街6号， 邮编：100176 +86 (10) 6788 3335 www.havi-logisitics.asia Hercules Logistics Unit 5A, Bldg. A, Shenfubao Hightech Park, No. 3, Huanghuai Road., Futian Free Trade Zone, Shenzhen, Guangdong 518038 广东省深圳市福田保税区， 黄槐道3号深福保科技工业园A栋5A， 邮编518038 +86 (755) 8358 0000 www.hercules-logistics.com ID Logistics Room 19D, Dong Tai Plaza, 309 Tanggu Road, Shanghai 上海市塘沽路309号19D +86 (21) 6306 7083 www.id-logistics.com
LOGISTICS SERVICES Logisfashion Transportation Tower, Room 1101 218, Hengfeng Road, Shanghai 上海市现代交通大厦恒丰路218号1101室 +86 (21) 5180 1781 www.logisfashion.com Logwin 5/F & 6/F, Ocean Towers, 550 East Yan’an Road, Shanghai 200001 上海市延安东路550号海洋大厦5楼和6楼， 邮编：200001 +86 (21) 2326 2000 www.logwin-logistics.com
13/F Tower, Golden Eagle Mansion, 1518 Min Sheng Road, Shanghai 200135
上海浦东新区民 生路1518号 金鹰大厦A座13楼 +86 (21) 6160 1198 www.menloworld.com
8/F Tower Block, LiFung Plaza 2000 Yishan Road, Shanghai 201103
上海市闵行区宜山路2000 号利丰广场 主楼8楼，邮编：201103 +86 (21) 2416 4700 www.idslogistics.com Kuehne & Nagel Block 1, 11-16F, 1868 Gong He Xin Road, Shanghai 200072 上海共和新路1868号大宁国际商业广场 第一幢11-16楼，邮编：200072 +86 (21) 2602 8000 www.kuehne-nagel.com Linfox Road Transport 26-F, Cross Region Plaza, 899 Ling Ling Road, Xuhui District, Shanghai 200030 上海市徐汇区零陵路899号飞洲国际广场26 楼F座，邮编：200030 +86 (21) 5150 6699 www.linfox.com Linghua Logistics 333 Ke Yuan Road Zhangjiang HiTech Park Pudong New Area, Shanghai 201203 上海市浦东新区张江高科技园区科苑路333 号，邮编201203 +86 (21) 5080 0107 Linkstar Logistics 49A, 199 North Riying Road, Waigaoqiao Free Trade Zone, Shanghai 200131 上海市外高桥保税区日樱北路199号49A, 邮编：200131 +86 (21) 5046 1865 www.linkstarlogistics.com
Nowaday Rational Logistics 685 Huadan Road Qingpu District Shanghai 201708 上海市青浦区华丹路685号， 邮编201708 +86 (21) 5155 6226 www.heli56.com Penske Logistics Room 1801, Honi International Building, 233 Weihai Road, Shanghai 200030 上海威海路233号恒利国际大厦1801室， 邮编：200041 +86 (21) 6227 8566 www.penskelogistics.com P.G. Logistics Group 4/F, Baogong Building, 361 East Longkou Road, Tianhe district, Guangzhou 广州市天河区龙口东路361号宝供大厦四楼 +86 (20) 3848 2090 www.pgl-world.com Schneider Logistics UC Tower,Suite 1605, 500 Fu Shan Road, Shanghai 上海浦东福山路500号城建国际中心1605室 +86 (21) 5058 7970 www.schneider.com SDV International Logitics 20/F, East Building, New Hualian Mansion, 755 Middle Huai Hai Road Shanghai 200020 上海市淮海中路755号新华联大厦东楼20 楼，邮编：200020 +86 (21) 3395 0600 www.sdvchina.com SunJet Freight Express 299 Huaxiang Road, Shanghai 上海华翔路299号 +86 (21) 6127 2637 www.sunjex.com
LOGISTICS SERVICES Toll 18/F, Times Plaza, 1 Taizi Road, Shekou, Shenzhen 518067 深圳蛇口太予路1号新时代广场1801室， 邮编：518067 +86 (755) 2681 9188 www.st-anda.com Werner Global Logistics 5/F South Harbour Building, 1 Fenghe Road, Shanghai 上海市浦东新区丰和路1号港务大厦南5楼 +86 (21) 3887 9520 www.werner.com Yatfai Logistics 39-H, Fortune Building, 88 Fuhua San Road Futian District, Shenzhen, Guangdong Province 广东省深圳市福田区福华三路88号， 财富大厦39楼H座 +86 (755) 3336 6898 www.yatfai.com YRC Logistics 8F, Building 2#, Xinda Commercial Building, 1158 Xiehe Road, Shanghai 200335 上海协和路1158号鑫达商务楼2号楼8楼， 邮编：200335 +86 (21) 6137 7668 www.yrclogistics.com PROFESSIONAL SERVICES
Accenture 30/F, Central Plaza, 381 Huaihai Road, Shanghai 200020 上海市淮海中路381号中环广场30楼， 邮编：200020 +86 (21) 2305 3333 www.accenture.cn Araia Shanghai Times Square Suite 1709, 93 Middle Huai Hai Zhong Road, Shanghai 200021 上海市淮海中路93号大上海时代广场办公 楼1709室，邮编：200021 +86 (21) 6391 8356 www.araia.com Arvato Services 20/F, Cloud Nine Tower, 1018 Changning Road, Shanghai 200042 上海市长宁路1018号龙之梦大厦20层， 邮编：200042 +86 (21) 6161 1866 www.arvatoservices.com.cn Baker & McKenzine Suite 3401 China World Tower 2 China World Trade Center, 1 Jianguomenwai Dajie, Beijing 100004 +86 (10) 6535 3800 www.bakernet.com Barkawi A 705,69 Dong fang Road, Eton Place, Pudong New District, Shanghai 200120 上海市浦东新区东方路裕景国际商务广场 A705室，邮编：200120 +86 21 6859 9686 www.barkawi.com BBK Consulting 17/F Lippo Plaza, 222 Middle Huaihai Road, Shanghai 上海市淮海中路222号力宝广场17楼 +86 (21) 5396 5600 www.e-bbk.com
PROFESSIONAL SERVICES Control Risks Suite 1001 East Tower China Merchants Plaza, 333 North Chengdu Road, Shanghai 200041 上海市成都北路333号 招商局广场东楼1001室， 邮编：200041 +86 (21) 5298 1800 www.control-risks.com
PROFESSIONAL SERVICES Shanghai 200001 上海市黄浦区广东路689号 海通证券大厦1505室，邮编：200001 +86 (21) 6341 1255 www.lowendalmasaichina.cn
Demand Management Systems PO Box 6180, Norwest Business Park, Baulkham Hills BC NSW 2153 +612 9659 4555
Michael Page International 601-603 Shanghai Kerry Centre 1515 West Nanjing Road Shanghai 200040 上海南京西路1515号 嘉里中心601- 603 邮编：200040 +86 (21) 3222 4758 www.michaelpage.com.cn
Dragon Sourcing Suite 1502, Jin Tian Di International Mansions 998, Renmin Road Shanghai 200021 上海市人民路998号今天地国际大厦 1502室，邮编：20002 +86 21 61413955 www.dragonsourcing.com
Poyry 802/8F, Tower One, Prosper Center, 5 Guanghua Road, Chaoyang District, Beijing 100027 北京市朝阳区东三环北路2号 南银大厦809室，邮编：100027 +86 (10) 6410 6550 www.poyry.com
easySOURCING easySOURCING Hong Kong www.easy-sourcing.com ET2C International 23 Wangjiao Plaza, 175 East Yan’an Road, Shanghai 200001 上海黄浦区延安东路175号旺角大厦23楼， 邮编：200002 +86 21 5308 1220 www.et2cint.com Ivie Asia Room 1507, You You International Plaza, 76 Pu Jian Road, Pu Dong New District, Shanghai 200127 上海市浦东新区浦建路76号由由国际 广场1507单元，邮编：200127 +86 (21) 6165 9100 www.ivieinc.com Korn/Ferry International Suit 2501, One Corporate Avenue 222 Hubin Road, Shanghai 200021 上海市湖滨路222号， 企业天地1号楼2501室， 邮编：200041 +86 (21) 6256 7333 www.kornferryasia.com KLB Group Room 2205, Universal Mansion Building, 172 Yuyuan Road, Shanghai 200040 上海愚园路172号世界环球大厦2205室， 邮编：200040 +86 (21) 62480735 www.klb-group.com Lloyd’s Register Asia 20/F Ocean Towers, 550 East Yan’an Road, Shanghai 200001 上海市延安东路550号海洋大厦20楼， 邮编：2000012 +86 (21) 5158 5700 www.lr.org www.lloydsregisterasia.com Logistics Executive Suite 13G, Shanghai Ind’l Investment Bldg. 18 North Caoxi Road, Shanghai 200030 上海市徐汇区漕溪北路18号， 上海实业大厦13楼G座，邮编：200030 +86 (21) 6427 6697 www.logisticsrecruitment.com.cn LowendalMasai 1505 Hai Tong Tower, 689 Guangdong Road,
11/F PricewaterhouseCoopers Center, 202 Hu Bin Road, Shanghai 200021, China 上海市湖滨路202号 普华永道中心11楼， 邮编：200021
+86 (21) 2323 8888 www.pwccn.com Resources Global Professionals Room 2705-06, Lippo Plaza, 222 Middle Huaihai Road, Shanghai 200020 上海市卢湾区淮海中路222号 力宝广场2705-06室， 邮编：200020 +86 (21) 6386 8710 www.resourcesglobal.com Russell Reynolds Associates 4504, Jin Mao Tower, 88 Centure Avenue, Pudong, Shanghai 200121 上海浦东世纪大道88号金茂大厦4504， 邮编200121 +86 (21) 6163 0888 www.russellreynolds.com Smart Sourcing 1210-1213 Guo-Li Plaza, 1465 West Beijing Road, Shanghai 200040 上海市北京西路1465号 国立大厦1210-1213室， 邮编：200040 +86 (21) 5212 1200 www.smart-sourcing.com Tractus Asia Suite B, 22/F, Zhaofeng Universe Building, 1800 West Zhongshan Road, Shanghai 200235 上海中山西路1800号 兆丰环球大厦22楼B座， 邮编：200235 +86 (21) 6440 0990 www.tractus-asia.com
PROFESSIONAL SERVICES World-Check Unit 4C, Times Plaza, 1, Taizi Road, Shekou, Shenzhen, 518067 深圳蛇口市太子路1号新时代广场4C座， 邮编518067 +86 (755) 2688 9786 www.world-check.com
REAL ESTATE SERVICES
AMB Property Suite 2908, Plaza 66 II, 1366 West Nanjing Road, Shanghai 200040 上海南京西路1366号 恒隆广场二座 2908单元， 邮编：200040 +86 (21) 6135 1688 www.amb.com Blogis International Logistics +86 (755) 2669 4211 www.blogis.com.cn CB Richard Ellis Suite 3201 K Wah Center, 1010 Middle Huaihai Road, Shanghai 200031 上海淮海中路1010号嘉华中心3201室， 邮编：200031 +86 (21) 2401 1200 www.cbre.com.cn Colliers International 16/F Hong Kong New World Tower, 300 Middle Huaihai Road, Shanghai 200021 上海淮海中路300号， 香港新世界大厦16楼， 邮编：200021 +86 (21) 6141 3688 www.colliers.com/china Gazeley Suite 805, Kerry Centre, 1515 West Nanjing Road, Shanghai 200040 上海市南京西路1515号嘉里中心805室， 邮编： 200040 +86 (21) 5298 6622 www.gazeley.com
2107 - 2109, Shui On Plaza, 333 Middle Huai Hai Road, Shanghai 200021 上海淮海中路333号 瑞安广场2107-2109室，邮 编：200021
+86 (21) 6133 2000 www.goodman.com Global Logistic Properties Room 2708 Azia Center, 1233 Lujiazui Ring Road, Shanghai 200120 上海市陆家嘴环路1233号汇亚大厦2708 室，邮编：200120 +86 (21) 6105 3999 www.GLProp.com GSE 27C Industry Building, 18 North Cao Xi
REAL ESTATE SERVICES
CARGO OWNERS READ CHaINA Reach on affluent audience who buy logistics and transportation services
To place your advertisement contact firstname.lastname@example.org
Road, Shanghai 200030 上海市徐家汇漕溪北路18号 实业大厦27C,邮编：200030 +86 (21) 6090 1388 www.gsegroup.com
25/F, Tower 2 Plaza 66 1366 West Nanjing Road Shanghai 200040 上海市南京西路1366号恒 隆广场2期25楼， 邮编：200040
+86 (21) 6393 3333 wwwjoneslanglasalle.com.cn Mapletree Suite A-D,14/F, Times Square Office Building, 500 Zhangyang Road, Pudong, Shanghai 200122 上海市浦东新区张扬路500号, 华润时代广场办公楼14楼ABCD单元， 邮编：200122 +86 (21) 5836 7177 www.mapletree.com.sg Vailog Room 702, City Gateway, 398 North Caoxi Road, Shanghai 200030 +86 (21) 6090 5292 www.realtyvailog.com Yupei Group Yupei Building, 2500 Jinchang Road, Shanghai 200331 上海市普陀区金昌路2500号宇培大厦， 邮编：200331 +86 (21) 6627 7577 www.yupeigroup.com IT & SOFTWARE SOLUTIONS
Apprise Software 6009 Changjiang Science Building 40 Nanchang Road, Nanjing 210037 江苏省南京市南昌路40号 长江科技园大厦6009室， 邮编：210037 +86 (25) 8345 5308 www.apprise.com ATMS Number One, Holt Court, Aston Science Park, Birmingham, B7 4EJ, UK +44 121 628 9000 www.atmsplc.com Barloword Optimus 15/F NCI Tower, 12A Jianguomenwai Avenue, Chaoyang District Beijing 100022 北京市朝阳区建国门外大街甲12号新华保 险大厦15楼邮编，邮编：100022 +86 (10) 8523 3103 www.barloworldoptimus.com BravoSolution 19F-08, Chinese Overseas Building,
IT & SOFTWARE SOLUTIONS
129 West Yan’an Road, Shanghai 200040 上海市静安区延安西路129号华侨大厦 19楼08室，邮编：200040 +86 (21) 6145 8500 www.bravosolution.com DDS Logistics & Sourcing Software Suite 2605,26/F, Hong Kong Plaza, 283 Huaihai Road, Shanghai, 200021 上海市淮海路283号香港广场26楼2605室， 邮编：200021 +86 (21) 6103 5715 www.ddslogistics.com/cn Epicor Software 2008 Cross Tower, 318 Fuzhou Road Huangpu District, Shanghai 200001 上海市黄浦区福州路318号 高腾大厦2008单元，邮编：200001 +86 (21) 63912808 www.epicor.com GXS International Room 1602, 16/F, Grand Gateway Tower 1, 1 Hongqiao Road, Shanghai 200030 上海市虹桥路1号港汇广场1座1602室， 邮编：200030 +86 (21) 6120 1088 www.gxschina.com.cn Manhattan Associates Software Unit 2110, 21/F, Shui On Plaza, 333 Middle Huaihai Road, Shanghai 200021 上海淮海中路333号瑞安广场21楼2110室， 邮编：200021 +86 (21) 6386 8800 www.manh.com
40/F, Suites 8-10, 2 Grand Gateway, 3 Hongqiao Road, Shanghai 200030 上海市虹桥路3号 港汇二座40楼08-10室 邮编：200030
+86 (21) 6127 2488 www.chep.com Loscam Packing Equipment Room 508, 707 ZhangYang Road, Pudong, Shanghai 200120 上海市浦东新区张扬路707号508室， 邮编：200120 +86 (21) 6104 8156 www.loscam.com Schoeller Arca Systems Unit 1111-1112, Shui On Plaza, 333 Middle Huaihai Road, Shanghai 上海淮海中路333号, 瑞安广场办公楼1111-1112室 +86 (21) 3133 2081 www.schoellerarcasystems.com
Seeburger Room 523-526, 5F, Cimic Tower, 800 Shangcheng Road, Shanghai 200120 上海浦东新区商城路800号 斯米克大厦5层523-526室, 邮编：200120 +86 (21) 5835 7779 www.seeburger.cn SupplyOn Suite 1515, Silver Centre, 1388 North Shanxi Road, Putuo District, Shanghai 200060 上海普陀区陕西北路1388号 银座中心1515室，邮编：200060 +86 (21) 6149 8042 www.supplyon.com Tradecard Room B, 23/F, Jinrun Mansion, 6109 Shennan Road, Futian District, Shenzhen 518040 深圳市福田区深南路6109号 金润大厦23楼B座，邮编：518040 +86 (755) 8830 9265 www.tradecard.com
Anwood 3F-D4 Jiacheng Mansion, 128 Jinjihu Road, Suzhou 苏州市金鸡湖路128号加城大厦3F-D4 +86 (512) 6761 5558 www.anwood.com.cn Dexion (Shanghai) Logistics Equipment 155, Zha Yin Road, Shanghai 200438 上海市闸殷路155号， 邮编 200438 +86 (21) 6505 0011 www.dexion.biz
2010 A.T. Kearney ..................44 AGD ..........................37,39 Agricultural Bank of China .......................................12 Air Deccan ................46,48 Amazon ..........28,31,36,38 AMB ..........................42,43 APL ...........................11,50 Apple ..............26,28,30,31 Aramex ..........................10 Asia-Pacific Express Carriers ............................6 Axis ................................40 BBC ...............................13 Blue Dart Express.....47,48 Blogis .............................42 Brightpoint ................33,34 Bureau Veritas ...............55 Capgemini .....................41 Chep .........................45,55 China Merchants Logistic .......................................45 China Post Logistics ......45 China Supply Chain Service...........................26 Cisco..3,16,17,18,19,26,28 Colliers.................14,42,55 Crate and Barrel .......37,39 DangDang .....................12 DDS ..............................8,9 Deloitte ..........................40 DHL ............................6,47 Dongdao Logistics ...........8 Dorman Long Technology .......................................13 DP Express....................44 EMS ...............................12 ENRUI ...........................11 FedEx ....................6,10,48 FM Logistic ....................58 Gazeley .........................43 Global Logistic Properties ..................................42,43 Goodman ....................7,43 Google .................32,33,34 GXS ...............................52 Haier ..............................12 Havi Logistics ...........24,58 Honda ............................66 Honeywell .......26,28,30,31 HTC .....................32,33,35 IDS Logistics..................58 F&S................................49 IPS .................................55 JCPenney .................37,39
KFC ..........................23,25 Kodak .......................10,11 Kohl’s .............................11 KPMG ............................47 Legend...........................12 Lenovo ...........................50 Lerentang ......................11 Li & Fung .......................11 Liz Claiborne..................11 Jones Lang Lasalle........15 Mapletree.......................42 Marks & Spencer ...........11 Manhattan.................11,51 McDonalds................24,25 Menlo .............................12 Motorola....................32,34 NOL ...............................11 OOCL ............................10 Pottery Barn..............37,39 Premier Resources International ...................37 PwC ............................2,57 Qualcomm .....................33 Red Prairie.....................51 Safexpress................47,49 Samsung .......................33 SAP ...............................51 SCA Packaging Asia ......55 Schneider Electric .............................20,21,22 SGS ...............................55 Sinotrans Group ............45 Smurfit-Stone.................55 Subway ................23,24,25 SupplyOn .......................19 Swan Logistics...............55 Taobao ...........................12 Target.............................11 Ting Tong Logistics ........51 TNT...................7,44,45,48 Toyota ............................66 TrendsAsia ....................13 TÜV Asia Pacific ............55 UniSCR.....................27,30 V-Mart Industrial Development ............37,39 Vailog .............................43 Vancl ..............................12 Wal-Mart ........................11 Wear Me Apparel ...........11 Yamato Transport ..........10 YRC ...............................55
Pharma Procurement Workgroup Shanghai Venue:
Logistics of High-Value Consumer Goods Log WG Meeting Shenzhen Venue:
Damco Office Organizer:
European Chamber TOC Asia Conference & Exhibition Shanghai Venue:
Shanghai International Convention Centre Organizer:
Supply Chain & Logistics Roadshow in Chongqing Chongqing Organizer:
25 27 THU-SAT
Development Zones Conference 2010 Shanghai Venue:
InterContinental Hotel Puxi Organizer:
3PLs Executive Workgroup Shanghai
TOC Events Worldwide
Logistics Real Estate Workgroup Shanghai
Sourcing Leaders Workgroup Shanghai Venue:
2010 Indirect Spend China Summit Shanghai Venue:
Renaissance Shanghai Zhongshan Park Hotel Organizer:
The Council China (Qingdao) International Material Handling and Logistics Exhibition Qingdao Venue:
Qingdao International Convention Center Sourcing Forum Shenzhen Venue:
European Chamber Shenzhen Office Organizer:
Retail & Distribution Operations China Summit Shanghai Venue:
Renaissance Shanghai Zhongshan Park Hotel Organizer:
21 23 WED-FRI
China Cold Chain Expo Shanghai Venue:
Exhibition Hall of Shanghai Mart
28 30 WED-FRI
TThe Council The 4th Annual ShippingTech Summit 2010 Shanghai Venue:
Global Leaders Institute
he Japanese automotive industry reputaation has gone from squeaky clean to dubious is the span of two months. Cringing, the world has watched as its biggest automaker, Toyota, recalls over 8.5 million cars. Problems range from sticky accelerator pedals in the steady Corolla, floor mats that block brake pedals in the trusty Tacoma and issues with anti-lock brakes in the new Prius. The widespread problem em has been enhanced by Toyota’s practice of cutting costss by ini creasingly using common parts in different models. This may m be a good model for fast expansion, but when one part goes wrong in one model, other models are sure to follow. While automotive recalls are a relatively common occurrence, the reason these announcements are particularly panic-inducing to the public is due to the problems being roughly connected to at least 30 deaths. Not only this, but the company has been accused of “dragging its feet” in the face of complaints. Toyota Motor’s president, Akio Toyoda, is now facing the U.S. House Committee on Oversight and Government Reform in an investigation of negligence. Recalls have also spread to other companies that share factories and therefore, parts with Toyota. The French car maker PSA Peugeot Citroen said it will recall 97,000 small vehicles including Peugeot 107s and Citroen C1s, which were made at a Czech joint venture plant with Toyota. GM has also recalled the Pontiac Vibe, which is essentially the same car as the Toyota Matrix. While this model is no longer being manufactured, the Vibes used to be built at a factory shared with you guessed it, Toyota. Toyota factories around the world, but especially in the United States were forced to close operations for days and sometimes weeks, in order to avoid parts oversupply. Japan’s Toyota headquarters are also scrambling to figure out how to fix the broken models as well as Toyota’s broken image. In other bad news for Japan, Honda also released leased recalls for over one million vehicles this year. While media dia back-lash has been relatively light in the shadow of the Toyota mess, Honda has recalled 646,000 Honda Fits (also known as a City Ci y or Jazz depending on the country) due to window switches that can overheat if exposed to liq-uid, causing smoke, melting and fire. The last 378,758 vehicles involved in the recall have issues with the driver’s airbag, which could deploy with more pressure than needed causing injury or even death. Overall, not a good start to the year for Japa-nese automakers hoping to lure consumers back ck into the market.
Cars and their Defects Pedal entrapment+Sticking accelerator (Toyota) 2005-2010 Avalon 2009-2010 Corolla 2009-2010 Matrix Pedal entrapment (Toyota) 2004-2009 Prius 2008-2010 Highlander 2005-2010 Tacoma 2009-2010 VENZA Sticking accelerator (Toyota) 2007-2010 Camry 2009-2010 RAV4 2008-2010 Sequoia 2007-2010 Tundra Driver’s airbag (Honda) 2001 & 2002 Accord 2001 & 2002 Civic 2001 & 2002 Odyssey 2001 & 2002 CR-V 2002 Acura TL Anti lock brake problems oblems (Toyota) 2010 Lexus HS250h 0h 2009 Lexus Sai 2010 Toyota Prius Window switches (Honda) 2007 & 2008 Fit