2010 May-Jun Issue by Chain Media

May/June 2010

THE MAGAZINE FOR GLOBAL SUPPLY CHAIN LEADERS 一本为全球供应链管理人士倾力打造的专业杂志

Hong Kong of the West

中国西面的“香港” Chongqing working to become logistics hub 重庆的物流枢纽建设之路

Ins and Outs 接受&摒弃

Taking a Look at Packaging Trends in China

一探中国包装业发展趋势

Logistics Roulette 物流赌轮

The Next Level of B2C competition 下一轮B2C竞争

Pavilion Break Down

Cover Picture Stephen Yang

透视世博场馆

How far do you source when building a green pavilion? 建设环保场馆去哪里采购？

Land of Opportunities Offshore Sourcing and Supply Chain Management

机会之地海外采购和供应链管理

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.

了解更多的业务范围，请访问普华永道网站：pwccn.com，或联系：

To find out more on how we can address your needs, please visit pwccn.com or contact:

Damon Paling 电话:+86 (21) 2323 2877 电子邮件:damon.ross.paling@cn.pwc.com

Robert Barrett Tel: +86 (21) 2323 3818 Email: robert.barrett@cn.pwc.com Damon Paling Tel: +86 (21) 2323 2877 Email: damon.ross.paling@cn.pwc.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:robert.barrett@cn.pwc.com

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 subs@supplychain.cn 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 Jimmy Kim, Stephen Yang Contributing Writers Bill Dodson, Jeffrey Clark, Todd Lowe, Eileen Chow, Ceva, Roland Berger Research Amber Wu

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：一万本，一年六期 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: subs@supplychain.cn 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 editor@supplychain.cn 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 editor@supplychain.cn与我们取得联系。

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THE MAGAZINE FOR GLOBAL SUPPLY CHAIN LEADERS

It’s not often an entire city is given five days off independently from the rest of China. However, the start of the Shanghai Expo 2010 marked a very special event which, in the government’s mind, warranted a vacation from work. While perhaps partly motivated by city pride, this benevolent motion from above was also instated to ease traffic congestion during the predicted hectic nature of the Expo’s first few days. Finally, the long years of construction, panic and advertisements are paying off. Pavilion construction Monica Liau materials have more or less arrived safe and sound from around the world. Migrant construction workers Chief Editor are packing up and moving on. Logistics companies CHaINA Magazine can breathe a sigh of relief, right? Wrong. Those using Shanghai as a hub to transport goods now need to be more on their toes than ever. The city has blocked off a 7km circle around the Expo site and restricted movement for all delivery vehicles, except those with a pass. According to CEVA, there is probably no reason to panic. However, they caution that it’s best to be prepared for any number of temporary restrictions; all of which are certain to make a manager’s heart beat a little faster. While I risk being Shanghai-centric, the most interesting part of this year’s Shanghai Expo 2010 is whether or not the ensuing six months will be anything beyond business as usual. While the government may tag on a couple new restrictions here and there, I see no reason for supply chain and logistics personnel to lose sleep at night. Being able to react to changes is just part of supply managers every day life and with a couple of extra Expo scenarios in your pocket , the roads should stay pretty clear. “The Expo may change things up, but sign of a good logistics or supply chain department is always having a plan B no matter what,” one supply chain manager recently told me. “When plan B doesn’t work, you move on to plan C; this is just part of the job.” 上海这次有别于中国其它城市，放五天长假，这可不是常有的事情。然而，2010上海世博会开幕，对上海政府而言，这是一次理应让市民放假的盛会。虽说这种“善举”部分来自于城市自豪感，但同时也是为了缓解世博开幕前几天预计的拥挤交通状况。这么多年的建设、惶恐、宣传终于有了回报。世博场馆的建筑材料差不多从世界各地安好抵达目的地。外来建筑工人已经开始收拾行李，准备离场。物流公司终于可以松口气了？错。把上海作为运输货物枢纽的货主现在可谓是蓄势待发。上海在世博场馆周围围起了一个7公里长的隔离带，禁止任何无通行证的运输车辆进入。CEVA物流认为可能根本就没有惶恐的理由。然而，他们也提醒大家最好做好准备，接受任何临时制约，这可得让经理们心跳加速一阵了。虽说我大肆吹捧了上海一番，但本次上海世博会最值得关注的是这连续六个月的活动是否仍然只是以商业为利益着眼点。上海政府可能时不时的下达一些限制政策，我可不认为供应链和物流业界人士有理由失眠啊。供应链经理们每天要做的就是时刻应对变化，倘若为世博多做几份备案，就不会碰到太多麻烦了。近日一位供应链经理告诉我：“世博会可能会改变很多事情，但优秀的物流或供应链部门的指标一直是一样的——始终做好一个储备计划，储备计划不成，那就再用另一个储备计划，这就是我们工作的一部分。”

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.

May/June 2010

FEATURE 20

Logistics Roulette: The B2C battleground

Chilling Out:

Interview with Denny Yang, Metro

MAy/June 2010

Hong Kong of the West:

Is Chongqing ready to take over?

What’s Hot, What’s Not: Packaging trends in 2010

Case Study:

The new IDS network

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THE MAGAZINE FOR GLOBAL SUPPLY CHAIN LEADERS

may / june 2010

CONTENTS First:

06 The Cost of Drought The worst drought in history has everyone feeling the burn

News Roundup

Feature

Sourcing & Procurement 36 Pavilion Break Down How far do you go to build a green pavilion?

Logistics

08 Key stories impacting logistics and supply chain management in the Asia region

42 Rules of the Game Tips to avoid an Expo meltdown

10 What the English Media missed A look at what the Chinese media is saying about logistics and supply chain management

Fraud

Online

11 Linked-In Debate Whats your number one problem when managing inventory

Columns

12 Dealing with Rejection Wait a Minute 14 Changing Fashions Straight off the Showfloor

Profiles

16 Bringing in the Booze Interview with Samuel Liu, Maxxium 17 Cultural Connections Interview with Kerstin Petterson, Delavel 24 State Opportunities Interview with Michael Romeri and William Li, Emptoris

Focus 52 Tight Watch Controlling supply chain fraud

Indirect 56 The Indirect Path Hard times make easy going

Customs 58 Customs Crunch

Executive Appointments

55 With talent at a premium, CHaINA keeps an eye on which executives are moving where.

Events

50 An Eventful Season The latest talks on pharma, lean and more 62 CLASSIFIED 65 COMPANY

LISTINGS

INDEX

Final

66 Building a Warehouse CEO Greg Goodman on the Interlink

Feature

26 China Warehousing Map 2010 Insider tips on hot warehousing picks

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May/June 2010

March 4, 2010: A resident painstakingly collects water from a dried-out reservoir in southwestern Yunnan province.

MAy/June 2010

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FIRST Word

The Expenses of Drought Southwest China is currently baking under one of the worst droughts experienced this century, affecting over 61.3 million people and five million hectares of crops. The provinces hardest hit, including Yunnan, Guizhou, Sichuan and Guangxi, are also some of China’s richest in terms of agriculture and natural resources. This means Chinese consumers are also beginning to feel the burn. While conditions are predicted to ease in the next few months, it may take years for many of the regions to fully recover. The National Climate Centre estimates 10 downpours will be needed to alleviate water shortages in the south. To try and help speed along the process, authorities fired over 10,000 silver nitrate shells and over 1,000 rockets into the clouds to induce rain.

40% 1 million

is the amount that rubber prices have increased as the giant rubber plants of Xishuangbanna, Yunnan province report a sharp fall in production.

farmers have left Southwest China in search of other jobs. In Guangxi, the county government has ordered the lower governments to summon 10,000 laborers to relocate for work in the Pearl River and Yangtze River Delta.

10% 350 RMB/Kg

Imaginechina

is the amount that sugar prices have increased, in direct relation to the drought. The southwestern area in China produces 20% of the nation’s sugar.

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is the price of notoginseng, one of China’s most highly prized natural herbs. This is six fold more expensive than its 2008 price of RMB50/Kg due to drought conditions. Yunnan produces nearly 97% of the country’s notoginseng, a fact that has hit many pharmaceutical companies in the pocketbook.

May/June 2010

NEWS Roundup

The multinational pharmaceutical maker BMS follows a long line of major pharmaceutical companies who are moving their R&D center from Japan to China. Last year, major players such as Novartis, AstraZeneca, and Johnson & Johnson all set up their global R&D centers in the Chinese financial center of Shanghai. In developed nations, the annual cost of R&D for a new drug is about US$250,000, while for a Chinese pharmacist it may only be US$ 25,000.

Sanofi-Aventis opens 1st China R&D center

Sourciong

French multinational pharmaceutical company Sanofi-Aventis opened its first regional R&D center in Shanghai, China. The company expects that the AsiaPacific R&D center will accelerate the development of therapies and health solutions in the region. Sales in emerging markets such as China, Russia, South Korea and India will account for around one-third of the drug maker’s total sales income in the next few years.

Dell denies Indian claim

Dell has denied the truth of an Indian government release which said CEO Michael Dell discussed shifting procurement from China to a “safer environment” with Indian Prime Minister Manmohan Singh. “There was no discussion concerning any change in how or from where Dell will source component parts for the computers it manufactures in Asia,” Minari

MAy/June 2010

Shah, a Dell spokeswoman, said in an emailed statement. The PIB website, where releases of Mr. Singh’s official speeches are posted, no longer has a copy of the remarks.

China Minmetals goes for Swedish Copper China Minmetals Corp has signed an agreement to purchase copper from Swedish miner and smelter Boliden. China Minmetals says it will purchase 36,000 tons of copper from the Swedish company over three years, a value estimated at US$300 million. This is the first long-term copper supply contract that Boliden has ever signed with a Chinese firm and is expected to help Boliden enter the Chinese market. China Minmetals, the largest iron and steel trader in China, reported RMB3.15 billion in profits last year, 55.6% less than in 2008.

Rubber prices bounce higher As rubber prices continue to rise and Chinese tire exports are hit by high US tariffs, tire makers in China are feeling the pressure. The serious drought in Yunnan province has slashed the

output of China’s major rubber production base in half, causing already rising rubber prices to hit RMB24,800/ton, more than double the price/ton last year. This has helped to cause raw material cost pressures for

downstream tire industries, and China’s largest tire companies like Hangzhou Zhongce Rubber, South China Tire & Rubber, and Bridgestone have all announced price hikes ranging from 5-15%.

Sony pours work on Taiwan Sony is going to raise its budget on outsourced electronic products made by Taiwanese contract suppliers to over US$10 billion, accounting for around 30% of their total budget. The company will especially focus on products like the PlayStation 3 and LCD TVs. This move indicates that Taiwan has become the Japanese

firm’s largest production arm in the world, according to Sony Taiwan’s newly installed chairman Naoki Aramaki.

Rio Tinto still growing in China Rio Tinto announced that they will purchase products and equipment worth over US$400 million from China this year, reiterating that China is one of Rio Tinto’s key sourcing markets. Last year, the company purchased 2,500 mining cars from China and wants to maintain a so-called active relationship by helping its Chinese partners explore mineral resources in China. According to several sources, Rio Tinto recently signed a memorandum of understanding with Aluminum Corp of China also know as Chinalco (the country’s largest nonferrous metal producer) to jointly develop an iron ore project in Guinea. Manufacturing

BMS moves R&D base to China

Apple admits child labour used at its assembly plants

Logistics

R&D

News Roundup

China Southern extends freight options

Apple has said child labor was used at factories where iPods and other electronic items were made. At least 11 15-yearold children were discovered to be working last year in three factories which supply Apple with computers, iPods and mobile phones. The company did not name the offending factories, or say where they were located.

China Southern Airlines signed a cooperation agreement with Danzas Z.F. Freight Agency under which the two sides agreed

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NEWS Roundup

Damco, the Denmark-based freight forwarding arm of A.P. Moller-Maersk Group, officially announced the opening of its office in Chengdu, Sichuan. Damco is one of the world’s largest logistics and supply chain management companies and employs over 1,000 staff in their new customer service center which provides the back office functions for companies owned by the group. Apart from centralizing customer service and better tapping into the domestic market, the move is also expected to reduce costs for the company.

Beijing tries to attract more 3PLs Beijing hopes to attract eight to 10 world-renowned logistics companies and 15 to 20 leading

domestic logistics providers by sending out official invitations. This is part of the government’s plans to develop Beijing city’s logistics industry. Beijing has set a target of RMB7 trillion by 2011 for the total value of the cargo using logistics services, and has its eyes set on an average annual growth rate of 12% in the added value logistics industry. The city’s ambitious plan also expects logistic industry value to reach RMB60 billion by 2011, according to a Logistics Week report as well as speed up the development of their five major logistics facilities. Their annual growth rate target is to have over 30% in sales revenue of these five logistics bases.

Li&Fung hits a snag

Li&Fung, the biggest supplier to retailers in China, reported a lower-than-expected profit, leading to their first annual sales drop in at least 18 years. Sales fell 6% to HK$104.5 billion, the first decline since the com-

pany’s initial public offering in 1992. Li & Fung set a sales target of $20 billion this year and has been acquiring rivals and signing outsourcing pacts, including one with Wal-Mart that may generate an additional US$2 billion of revenue in the first year.

China’s retail sales to grow 19% in 2010 China’s retail sales are expected to grow about 19% year on year in 2010, said Wang Yao, director general of China National Commercial Information Center. Retail sales are predicted to rise about 19.5% year on year in urban regions while those in rural areas will increase about 18%. Wang said that retails sales per capita are also expected to exceed RMB10,000 this year due in part to changing consumption structures. The country’s retail sales totaled RMB2.5 trillion in the first two months of this year, up 17.9% year on year, according to the National Bureau of Statistics.

According to reports in the Financial Times, Wal-Mart, the world’s largest retailer, plans to launch e-commerce businesses in China and Japan, and it is currently establishing the technology platform. The reports say that Wal-Mart’s recent job advertisement for a “product localization manager” for Japan and China lists responsibilities that cover preparing for the launch of an ecommerce business. So far, WalMart has opened 282 physical stores in China, but has no direct online sales. IT

Maersk moves west

Wal-Mart to launch ecommerce in China

Retail

to work together in the air cargo business of 19 Chinese cities including Guangzhou, Shanghai and Hangzhou. This is an extension of the cooperation they already had in nine other cities. Danzas Z.F. Freight Agency is a JV subsidiary of Danzas, a specialized logistics company affiliated with Deutsche Post World Net. The company is one of the few international forwarding companies fully licensed in China.

Railway Express goes with Avaya

China Railway Express has selected contact center solutions from Avaya to enhance operational efficiencies and customer service across the country. China Railway Express has 28 customer service centers that are attached to a single phone number. However, the service centers operate in isolation and use different brands in their communications systems, resulting in low efficiency and an inconsistent customer experience. With this new system, 200 contact center agents will have access to the same customer and transaction information, even though they are based in 28 different cities.

Any news you think we can use? Let us know what your company is doing

CHaINA Magazine is always looking for updates and news from its readers. If you think your company is doing something that is interesting to others, help us help you get the word out. Contact us at editor@supplychain.cn to submit a story or to get more information on guidelines Correction Notice: In the January/February issue of CHaINA, we would like to note that the Chinese translation of Yang Li’s former company, Schneider Electric on page 33 was translated incorrectly. It should be 施耐德 not 施奈德. We apologize for any embarrassment or inconvenience.

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May/June 2010

NEWS Roundup

What the English Media Missed Americold Coming to China CMHI (China Merchant Holdings International) and world’s largest cold chain logistics service provider Americold Realty, have entered into an agreement to form a joint venture company held 51% by CMHI and 49 % by Americold. Both companies will invest about RMB 70 million into the new company, which will target the cold chain logistics business in China as well as in other Asian countries. The new company currently has no name, but the agreement is in place and ready for further negotiations.

Yunnan cold chain logistics center to open Yunnan’s first cold chain logistics center will be ready for use by the end of this year. This center, with total investment of RMB 0.6 billion and capacity of 100,000 tons, will be the largest cold chain logistics center in Southwest China. There will be different temperature zones for different product requirements, with temperatures ranging from 。 -35 to -5 C.

MAy/June 2010

Hai’er goes for high-end

Logistics research comes to Shanghai

Hisense signs contract with Vtradex

The China logistics research and training center was completed in March in the Putuo district of Shanghai. This is a joint effort by both the Putuo government and Tongji university. The center, funded by the Putuo government, will rely on the the academic resource of Tongji university as well as technology from logistics groups from Europe. The Putuo district holds 75% of all logistics in Shanghai and the research center is expected to be the largest of its kind in the city.

Hisense signed a contract with Vtradex with a pledge to create a unified logistics platform to support Hisense’s large sales net. Hisense now has over 200 branches and 10,000 service networks. Vtradex, as one of the the earliest and largest logistics software service providers, says it will help Hisense build up a better logistics system to improve its service.

360buy to invest RMB3 billion in logistics development

Suning online sales volume tripled during Spring Festival

Lianhua supermarket eyeing Taiwan

360buy claims that they will invest RMB 3 billion in logistics development in the next three years. CEO of 360buy Liu said that “US$ 0.15 billion is far from enough to build up four warehouses in China.” Besides the government loan of RMB 0.5 billion, 360buy plans to invest all the profit of the next few years into logistics. Its sales volume is expect to increase to RMB 10 billion this year compared to RMB 4 billion in 2009.

Suning says its online sales volume tripled during spring festival due to its strong logistics system. As most logistics companies were on holiday, Suning, which continued its 24 hour logistics service, became more popular among online shoppers. Since the establishment of online shopping, the Suning shopping website has become a major platform for online home electronics shopping.

Hai’er is driving hard to clinch the high-end market in home electronics with its sales volume of high-end products expected to increase from 5% up to 15% in the next 3 to 5 years. This will account for over a 50% market share in high-end home electronics in China. In 2009,the sales volume of high-end refrigerators increased by 41.1% and is expected to increase to over 50% in 2010. Hai’er is currently the fourth largest supplier of whitegoods in the world.

The Lianhua Supermarket has signed a contract with three companies in Taiwan to purchase a total of RMB 1.5billlion worth of commodities within the next three years. As food products from Taiwan are becoming popular among customers in Mainland China, Lianhua has been increasing its purchasing in Taiwan for the past few years. Lianhua supermarket currently has over 5,000 branches in Mainland China and is also planning to open new branches in Taiwan.

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APL Logistics. For award-winning service and innovation. • 2009 Gold Medal Award for Global Logistics Services in Consolidation – NIKE, Inc. • Five Time Top Gun Winner – The Kellogg Company • Best Logistics Par tner – NETGEAR, Inc. It’s great to be recognized by our customers and industry peers for just doing our job. In fact, solving complex supply chain solutions is all in a day’s work for us. Whether you require a comprehensive integrated solution or individual logistics components, we have the resources and exper tise to deliver. While awards are nice, it’s our customers we have to thank for inspiring us to constantly innovate and create more flexible, scalable and ground-breaking supply chain solutions. Visit www.apllogistics.com for a full listing of our awards, and discover why our customers consider us to be their award-winning partner.

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Origin and Destination Logistics Services in 260 Locations Worldwide Innovative IT Solutions for Maximum Supply Chain Visibility and Control Scalable and Flexible Solutions to Meet Your Needs

May/June 2010

columns

Dealing with Rejection Wait a Minute

E Bill Dodson is a principal of TrendsAsia Ltd., a trend analysis consultancy based in Shanghai. He is author of China Inside Out: Revelations and Revolutions (John Wiley & Sons) due out later this year. He can be reached at: wdodson@trendsasia.asia.

Good-enough is often more than enough for Chinese manufacturers

MAy/June 2010

arly in 2010 reports began circulating in China that dairy producers had once again been lacing dairy products with melamine, a chemical derivative of plastic. Wang Dingmian, former chairman of the Guangdong Provincial Dairy Association, told the China Daily (Jan 25, 2010) that the products likely contained tainted milk recalled after the 2008 scandal but had somehow made its way back into the market. In 2008 the first dairy scandal resulted in the sickening of hundreds of thousands of infants, the hospitalization of scores and the death of two dozen. Almost a dozen countries embargoed products made with dairy from China. A US$18 billion domestic industry disintegrated within a matter of weeks: no one trusted Chinese milk. The supply chain scandal directly affected foreign-invested operations in China such as Starbucks, the Danish-Swedish Arla Foods, the Tokyo-based Lotte Group, Britain’s Cadbury, Unilever, Heinz and Nestlé, costing other companies millions of dollars more in recalls and product replacements. Product contamination with materials already rejected by auditors has also affected supply chains producing children’s toys, pet food, toothpaste and, most recently, children’s jewelry, in which exporters replaced hazardous lead content with harmful cadmium. The common practice of feeding rejected materials and components back into supply chains in China has distinct systemic causes that require constant attention and discipline to keep them from bringing down a company.

Cutting Corners From the time Marco Polo returned to Europe to tell of the riches of China, nearly every Western businessman has considered the allusion that to add an inch to the sleeve of every Chinese would make any businessman rich indeed. The Chinese operate on the flip-side of the aphorism: instead of adding an inch to every sleeve, wouldn’t it be glorious to subtract an inch instead? In this, the average Chinese businessman often thinks to himself “imagine all the savings one can pocket with such sales!” According to one American quality manager, it’s quite common for suppliers in China to re-introduce components that buyers have already rejected. “Usually, they slide rejects back in a bit at a time,” he explained. “It’s especially common when new tooling has to be built to address the defect; suppliers don’t want to take on the additional expense.” The lesson to learn from this is to watch out for compulsive-corner cutting by suppliers, and fire the recalcitrant ones. Face It The Chinese have a saying: “if the water is too clean there can be few fish.” In other words, how can anyone in business possibly profit in the glare of a truly transparent system? The Chinese proclivity toward opaqueness in business dealings is also another major contributor to the creation and re-introduction of quality defects. “I used to have my guys in production mangle rejects before they sent them back to the supplier,” a former GM of a Fortune 500 manufacturer said. “ The defects could be as small as millimeters, so it was otherwise difficult to tell at first sight whether a component had already been rejected. Ear-marking made it clear the component had been unacceptable.” In

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columns order to nip problems like these in the bud, it is important to implement clear controls and regular audits to enforce transparency along the entire China supply chain. “Good Enough” is Seldom Enough Sometimes when problems are found and returned to suppliers to fix, the new result is just as bad. One General Manager of a British contract manufacturer found this out when one of his suppliers had done a terrible job plating some components. “I told them to re-plate the parts, but when I received the parts back they were in even worse condition,” he said. ”They had let the parts sit for several days until they rusted, and then they just re-plated over the rust!” The goal of “good-enough” is often more than enough for Chinese manufacturers, for whom opportunities in today’s go-go marketplace are aplenty. Attention to detail for many suppliers is a numbers’ game: if they pass enough rejects along to enough buyers in enough volume, they believe they will be able save enough money in the mid-term to justify any

re-work customers actually insist on. Details that are not properly addressed upstream cost time and money once in port. Collusion Chinese are born into and cultivate guanxi nets – networks of reciprocal obligation – that begin with family, extend to classmates and coworkers, and perhaps even to people from the same hometown. The cliques are tight, mobile and highly adaptable to circumstances. The transactions within the guanxi networks can run counter to the interests of customers. “Sometimes, suppliers will offer

a ‘red packet’ of money to purchasing managers to re-introduce components the buyer had already rejected back into production ,” a British senior quality consultant to Chinese suppliers offered. Flesh out as best as possible the guanxi networks suppliers rely on: the closer to family members and local governments the relationships revolve, the more opaque operations are likely to be, and so the more risky. Exercising these few critical observations in supply chain management will go a long ways to keeping executives from crying over spilled milk.

GLP Park Suzhou – IFTZ Bonded Warehouse Double-story Ramped-up High-efficiency Warehouse For Lease Key Advantages • GLP Park Suzhou is located at the east end of Suzhou Industrial Park (SIP) – one of the most successful industrial parks in China • The park is 1.5 km away from the SIP exit of Shanghai-Nanjing Expressway and one hour’s drive from Shanghai • A cooperative project of the China and Singapore governments, SIP has attracted over 3,000 foreign investors to date • GLP Park Suzhou features China’s first Integrated Free Trade Zone (IFTZ) • VAT Rebate function and Bonded warehousing • International trading and procurement center • Combination function for the seaport/airport and IFTZ • Provides one-stop customs and quarantine For more information and lease service inquiry, please contact us: • GLP currently serves over 100 customers in its 1.2 million-sqm facility in SIP

Alan Shen tel +86 512 6258 4892 mobile +86 138 1266 8282 ashen@glprop-sz.com

Lawrence Li tel +86 21 6133 5622 mobile +86 138 1885 9161 lawrence.li@ap.jll.com

www.joneslanglasalle.com.cn

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May/June 2010

columns

Changing Fashions Straight off the Showfloor

A Jeffrey Clark is based in Shanghai, China. He has an online supply chain management and sourcing website for apparel manufacturing SourceTheGlobe.com. He also offers supply chain management, procurement and sourcing solutions. See more at: www.jeffreyliving.wordpress.com.

Apparel related fashion OEM and branded shows need to differentiate to show the strength of the industry. 14

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s someone who has been deeply involved in the tradeshow floor scene for over 20 years and attended or exhibited at over 100 apparel related tradeshows around the world, I currently find myself adapting to Chinaâ&#x20AC;&#x2122;s show floors changes, the decline or maturity of OEM and the growth and opportunities of new or emerging brands. It appears that in a bad economy everyone wants to take control of their own destiny by creating their own brand. This is a very expensive proposition, with brand and marketing costs exceeding many companiesâ&#x20AC;&#x2122; budgets. It is often these same companies who find their spending is to no avail, as every year they come to the show looking for international and/or domestic buyers. In addition to tradeshow expense there is the extensive additional capital required for marketing, advertising and promotion around the globe that many of these companies are not accustomed to utilizing. In China, 2008 and 2009 marked the decline of OEM, and I noticed the quality of the OEM exhibitors had diminished with it; it was appearing the OEM growth was in agents or third parties who represented or acted on behalf of factories. Brands were starting to dominate at previous OEM only tradeshows. In Guangzhou, the Canton Fair which I attend regularly used to be known for top notch OEM suppliers but now their offerings were mixed and sold by different agents across the show floor. It was starting to look like the Canton Fair was trying to compete against other brand fairs including but not limited to the largest and most well known brand show in Mainland China the CHIC (China International Clothing & Accessories Fair) show in Beijing. One reason for this was due to the decline of OEM in South China and

the growth of OEM in North China. The other obvious reason was the declining and changing economy. This change of supply chain location helped improve OEM only shows like the InterTextile fair in Shanghai and Beijing. The CHIC show has always been a brandfocused show and does not stray into the OEM arena. It has a strong following for domestic and international (Italian, France, Japan, Korean, and Taiwan Pavilions) fashion and accessory brands. One major issue of this show is that it only operates once a year when fashion has a minimum of two seasons and all larger shows will have two shows a season. In Dalian at the China (Dalian) International Garment & Textile Fair there was a huge presence for Italian, French, and Spanish brands looking to expand into the Chinese marketplace while there are plenty local Chinese brands looking for retailers, distributors, and wholesalers outside of Mainland China. Dalian has even gone to the extent of opening an international brand agency (IBAC) for foreign brands which includes new and leading brands. For the Fall 2009 fair there were over forty foreign brands listed in their show catalogue, including companies like Costume National and Byblos. Shanghai and Beijing also have the InterTextile show which operates once a year in each city. The intertextile show is the largest OEM tradeshow in mainland China, which focuses on OEM suppliers in apparel, fabric and trimmings and has great success attracting domestic and overseas exhibitors and attendees In Shanghai you have plenty of shows that cater to both brand and OEM shows such as the Shanghai International Clothing and Textile Expo, Shanghai Textile and Apparel Trade Fair, China International Textile and Apparel Trade Fair, and the East China Fair, trying to grab as

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columns many exhibitors and attendees as available. Like regional shows, these shows are challenged to attract domestic and overseas buyers. This is because these shows are smaller and not well known with exhibitors and attendees. In an effort to attract foreign buyers, the China International Garment Fair (formerly known as Shanghai International Clothing and Textile Expo) offers up to a US$1000 travel allowance. In Mainland China there are also the smaller regional shows (Ningbo, Suzhou and Keqiao) filling the OEM void and highlighting their regional strength. But one issue is these shows are not well known and have difficulty attracting domestic and overseas buyers. Last year I attended shows in Ningbo, Suzhou and Keqiao and found that they were lacking show atmosphere, energy and attendees. The only show that stayed open for the duration of the show time slot was the Keqiao fair. The Suzhou show closed after the first day and the Ningbo show had many booths leaving on the afternoon of the second day. Imagine if you are a foreign buyer traveling to a show that is closed when you arrive. To conclude, I believe the strong will survive; the industry canasia_supply_chain_2010_V3 13/4/10 14:59 1 not support so many tradeshows with the same focus. Page Apparel

related fashion OEM and branded shows need to differentiate in order to show the strength and opportunities of the industry. There are too many shows trying to be everything to everybody. In Shanghai, I have been noticing the successful growth of category or product focused OEM shows. This year I attended the Spin Expo which is a smaller show with a focus on knitwear. Knitwear is in everyone’s closet and is a necessity in fashion. The show was great for organization, inspiration, creativity, and suppliers. I liked how this show focused on the OEM suppliers (garment, yarn) and designers for the knitwear segment. In addition, there is the Mode Lingerie show in Hong Kong and Shanghai, as well as the other fairs like the China (Shanghai) International Hosiery Expo and the Functional Fabrics High Performance Exhibition. In theory only a few shows can be everything to everybody and those shows are the Canton Fair, the InterTextile Tradeshow and Fashion Week in Hong Kong, which combined equals six shows a year. Tradeshows need to make a presence that engages, entertains, and educates the exhibitors/attendees while also getting the industry talking.

How stable is your global supply chain? With the global business world as complex as it is, supply chain risks have never been higher. A crisis in a key raw material supply in China has the potential to disrupt the manufacturing process in South America. In order to better prepare your organisation to deal with supply chain crises, the starting point needs to be a 360º assessment of your risks. Control Risks’ multi-disciplinary team of political and social risk analysts, corporate investigators, security consultants and risk management professionals can help. Our supply chain risk assessments include: • Political Risks – short-term local government policies; • Security Risks – theft, travel security for employees, organised crime; • Reputational Risks – product integrity and counterfeiting; • Integrity Risks – supplier integrity, corruption, code of conduct breaches; • Social Risks – supplier factory working conditions, health and safety breaches. Our unrivalled network of 27 offices around the world means that we can only help you assess, mitigate and stablise your supply chain risks better and faster. Let our risk experts help you today. Start the conversation with us by contacting Neal Beatty in Shanghai at neal.beatty@control-risks.com or call + 86 21 5298 1800.

www.control-risks.com

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May/June 2010

profiles

Bringing in the Booze

n Samuel Liu

Supply Chain Director, China & Hong Kong Maxxium

Samuel Liu of Maxxium discusses making the transition to a local Chinese company and how he avoids counterfeit

Can you tell me a little bit about Maxxium? We are distributors of premium spirit products imported from other countries, which includes including cognac, Scotch whisky, American whisky, vodka and tequila. All of our products are imported from Western countries including France, UK and the United States. How did you get into your current role? I started at Nestle as a production programmer. Back then my role was extended to order-taking and distribution, and managing a RDC for Nestle. Five years later I joined an American company and worked at the senior level in different areas of supply chain management. Before I joined my current company, I had 10 years experience in two multinational corporations. My job covered almost all major areas in supply chain. This was attractive to Maxxium, who at the time was planning to move its local system to a global platform by implementing SAP solutions. What specific changes have you noticed in the way your company’s supply chain operates? How has your industry changed in regards to supply chain management? The company was more of a local Chinese distributor in the early stage, meaning it was a local system that was used for managing inventory and sales. The number of accounts was limited and customers had to wait for the few account owners for information. Some managers complained that information they needed was not available in the system, which meant they had to download raw data to an excel file and do analysis by themselves. Efficiency was seriously impacted. With SAP solutions, we are able to trace changes in great detail, run MRP, generate various reports with support of data warehouse, and

MAy/June 2010

have interface with other business partners. Also, top management can trace the business status by themselves in their office with a click of the mouse. In the current business environment, how are you working with your suppliers in China? Our finished goods are 100% imported from other countries. We don’t source much from China except for some tailor made packaging materials for promotional purposes. Right now, we are establishing new quality standards for our vendors, but this is still in the developing stage. Our volume is not as big as many of our competitors, but we have the advantage of flexibility in managing our business in order to support our customers. Is counterfeit something that your company has to be concerned about? To ensure that the quality of our product is at the same level in international markets, we only import pre-bottled products. To protect ourselves against the impact of counterfeit products, we also do reverse logistics for the empty liquor bottles on the marketplace. This means that each month, we collect bottles from outlets and destroy them all – our view is that if there are no empty bottles it’s harder for them to leak back into the market. We outsource this service and have a contract team to do this in each city. People say that there is counterfeit here because it is really accepted in the market, and people can make money from it. From my view though, there is one good side to having this problem …. it indicates that the brand is well known and very popular. Obviously though, for some brands it’s a very serious issue.

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profiles

Cultural Connections

n Kerstin Pettersson Director of Purchasing and Logistics, Asia Delaval Shanghai

Kerstin Pettersson of Delavel on earning the trust of suppliers and adjusting to China’s ups and downs You’ve been with Delaval China since they first started operations. Why did your company decide to come here, and what were the challenges of starting up? Well, basically the headquarters moved here a year before opening a sourcing office. They tried it out for a year and realized it had high potential to do cost savings, and then I joined this very hard department. We only had six people in the beginning – and it was really difficult finding materials to meet the standards of Europe, which includes both the material composition and the different countries’ tolerances. I think the key to working here is having successful communication in a team with local Chinese staff. Everyone in the office has to be pretty open-minded. I work a lot with culture differences and it’s about understanding both the customer as well as the supplier – to be able to bridge the communication gaps, understand both sides and communicate the differences. In the beginning, I had to work a lot on hiring and training the right people. As you said, you are a relatively small player in China, how do you get suppliers and build up trust with them? That is one of the major reasons I’m here – it’s very much about building and earning the trust of suppliers and I am the speaking partner of the China headquarters. We were the only two expats in the office from the start and the knowledge that the two of us came with meant that we could train the department that we were building up here – thereby training them to talk to the suppliers about whatever . In the end, it’s about securing the quality of the items before they leave the supplier, because if we find the problem when they arrive, then we’ve lost a lot of time.

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Part of being successful in sourcing is anticipating problems. How do you work to ensure that you face as few problems as possible? You have to be prepared for the things you don’t expect because they will happen. In my experience, if something can go wrong, it will. Honestly, it’s more surprising if [the unexpected problems] don’t happen. To be functioning here as an expat, you need to have a lot of patience and be really flexible – because the base of how people make decisions and the values for what is common sense differs between the west and China. This makes things unpredictable – everyone has the same experience – at the beginning you figure you could write a book on it and without patience it can drive you nuts. What kind of challenges will Delaval be facing in sourcing? When it comes to the price of raw material, our company follows the trends of Europe very closely. So if the prices go up here, they have gone up in Europe as well. Our prices will still probably be 10 to 20% less though compared to Europe. I think that environmental pressure and an interest from the rest of the world will have our company see an increase of fees. We will need to focus much more on our containers and packing in order to use our space better. I think it’s the next step when it comes to controlling the costs. There is more insight from Samuel, Kerstin and other speakers. To see our latest videos, please visit www.supplychains.com/TV. If you have something to share with the rest of the community and would like to join us for a taping session, please email tv@supplychain.cn.

May/June 2010

profiles

引洋酒入中国 n Samuel Liu 供应链总监

Maxxium的Samuel给您讲述为何他会转投中国本土公司，并告诉我们如何防止品牌被造假。能否介绍一下

Maxxium？我们是高级酒精进口批发商，我们进口的产品包括法国白兰地，苏格兰威士忌酒，美国威士忌酒，伏特加酒，龙舌兰酒。我们所有产品都进口于西方国家，包括法国，英国，美国。为了保证产品质量与国际市场等级相一致，我们只进口瓶装酒。你是如何做到现在这个角色的？我一开始在雀巢做生产程序员，之后我的工作内容扩展到订单接收和分配以及区域分发中心管理。五年后我进了一家美国公司，做过不同领域的供应链高层管理工作。在加入现在公司前，我已有10年多两家跨国企业工作经验，我的工作几乎涉及供应链的所有主要领域，这一点对于 Maxxium 来说很有吸引力。当时，他们正计划运用SAP将自身本土化系统推向国际平台。你注意到你们公司供应链运行上有什么具体变化吗？该行业就供应链管理方面有什么变化？我们公司先前是很本地化的批发商，这就是说，公司运用本地系统管理存货销售，供应商资源有限，顾客不得不从为数不多的供应商那里获取信息。有些经理抱怨从系统中无法获得所需有用信息。他们不得不通过自己下载源数据进行分析来了解情况。这就严重影响了效率。

MAy/June 2010

运用了 SAP 系统后，我们可以随时发现各个阶段很多细微变化，可以做物料需求计划, 可以利用数据仓库生成各种报告，还可以与其他合作伙伴交流。更重要的是，高层管理人员只需用鼠标轻轻一点就能了解产品一切动向。在目前的商业环境下，你如何与中国供应商合作？我们的成品 100% 属于进口，除了一些为了起宣传作用而特制的包装材料外，我们在中国没有物品采购。而这些包装材料早就由商业人员负责操作，在6个月前就送到供应链部门。我们正在针对供应商建立新的质量标准。就规模而言公司还处于发展阶段，销售量没有竞争对手大，但我们能比较灵活地管理我们的业务，服务于我们的客户。你们公司是否关注假货现象？为了保护公司的销售不受假货产品的影响，我们对市场上的空酒瓶采取逆向物流的做法。这就是说，每个月我们从商店收集瓶子然后销毁他们，我们认为没有空瓶子，就很难造出假货。我们找别人去做这个业务并在每个城市与他们签约。都说有假货是因为市场上能接受假货，能从中赚钱，而我认为有一点是好的，一个品牌有仿制品可以表明这个品牌是很有名，很受欢迎的。当然，对于一些品牌来说，这也是一个严重的问题。

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中西文化连线 n Kerstin Pettersson 采购&物流总监（亚洲区），利拉伐（上海）乳业机械有限公司

利拉伐的Kerstin Pettersson畅谈顺应文化差异，与供应商建立信任合作关系。利拉伐中国公司刚成立时您就加入了该公司。利拉伐在中国设立公司的原因何在？公司启动过程中又遇到了哪些问题？利拉伐将总部搬至中国一年后才开设了采购部。经过一年的摸索，公司发现在采购环节上可以节省大量成本，于是我接受了这个艰巨的任务，加入了采购部。最初，我们这个部门只有 6名员工，而我们很难找到符合欧洲标准的材料。此标准对材料组成及各国公差都有要求。我认为在中国工作，关键要注重和整个中国员工团队的有效沟通。每一位部门成员都必须有开阔的思路。我常常与不同文化背景的人打交道，也要理解客户和供应商的想法，因此，我必须克服交流上的障碍，理解双方的想法，消除双方的分歧。一开始，在雇佣和培训员工上，我花了不少功夫。您说过，利拉伐在中国的规模并不大，那你们是怎样赢得供应商并取得他们的信任的呢？与供应商之间建立信任合作关系是我在利拉伐工作的一大原因。我充当了利拉伐中国总部的发言人的角色。部门刚起步时只有我们两个外籍人士。我们凭借我们的专业知识培训这里的新员工，教授他们如何与供应商沟通。最后，我们要在供应商发货之前确保货物的质量，否则，待收到货物后再发现问题，我们已经损失

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了许多宝贵的时间。成功的采购在于做好多手准备，解决问题。您是怎样将问题发生率降低到最小值的呢？我们必须做好准备，应对不请自来的问题，因为问题一定会出现。经验告诉我，问题总会发生。老实说，如果没有任何差错，我反倒会十分惊讶。作为外籍人士，我们必须饶有耐心，也要十分变通，因为在中国，人们做决策的基础和理念与西方人完全不同。我们都有相同的经历，这种不同导致许多不可预测性。最初，我着实是问题重重，而我只有唯有耐心，方能保持冷静。利拉伐在采购环节现面临何种挑战？对于原材料的价格，利拉伐紧紧遵循的是欧洲市场的价格走向。因此，如果中国市场的价格上调，那意味着欧洲市场的价格也是如此，但中国市场的价格仍比欧洲市场低 10%20%。我认为环保带来的压力及国际上对中国的关注将抬高公司的成本。我们必须更加注重装箱及包装以更好的利用装货空间。我想这就是我们为控制成本应采取的下一步措施。请登录www.supplychains.com/TV 收看最新视频，了解Samuel和Kerstin及诸位发言人的详细观点。若您想分享您的观点并参与我们视频采访节目，请邮件至maxhenry@supplychain.cn。

May/June 2010

profiles

Chilling Out Denny Yang of METRO Cash& Carry China spends a lot of time thinking about quality and how to ensure that his cold chain systems go right. As one of two suppliers for the World Expo, his job is now more important than ever. How would you describe the current state of cold chain in China? It’s definitely a challenging part of the supply chain, and a lot of it has to do with the situation of the industry and the awareness of the market. When I say the industry situation, I refer to whether or not suppliers and retailers take temperature controlled related operations seriously. Do they think it’s important and do overall customers think it’s important? Obviously, if they thought it was important then they would pay attention and wouldn’t mind spending money on it. METRO is really a market leader in terms of cold chain, hygiene, and quality. We spend a lot of money and make huge efforts and have built up our own cold chain supply chain based on our distribution center. Have you seen a change in approaches to cold chain? I do see the change in China as cold chain quality and hygiene are getting more and more important to the market – although I have to say the change is not as quick as we expected. In China, we have seen plenty of quality issues in the last few years and you would think this would be a wake up call to the rest of the industry. But I’m afraid the players in the market haven’t done enough as a group to ensure that the results of cold chain are good enough. How do you think China can improve its overall cold chain system? First of all, awareness from the market is super important– which means the consumers. They are the end users of the supply chain and their opinion matters. If they don’t demand quality and food safety from the market and pay for that, how is change going to be driven? And who is going to pay for cold chain logistics? Laws and regulation regarding regulation and food safety are also very important - the government has done a lot on building up rules and laws – but the implementation can be improved. Retailers, wholesalers and manufacturers should follow these demands and regulations by spending money on cold chain as they will eventually benefit. Last but not least, we need more market leaders like METRO to lead this change – then we can expect more and more manufacturers and retailers to join us and build up a much better

MAy/June 2010

business environment. It also has to do with the awareness that surrounds the retailer industry. When customers go into different retailers’ stores, they may notice obvious differences in quality and temperature-control between different retailers. Sometimes you may even smell the difference, for example, in meat or fish zone. In places like Europe or the U.S, you usually don’t smell it so strongly. Is risk management assuming greater importance in China? Yes, I do see the trend, and as a professional in the market who thinks quality is so important, I regard risk management as an important part of quality management. This means products should all be track-able and traceable all the way through the logistics process. To do that, you need well developed and strictly implemented standard operation procedures and hardware like temperaturecontrol monitoring systems. Also, all METRO stores in China are HAACP certificated; we were the first one to have this done and are probably the only one so far. Also, via STAR farm, qualified farmers are signed to supply agri-products to METRO China wholesale stores directly, without middleman links, so as to guarantee quality and freshness from the source while raising farmers’ income. We have also improved the traceability of our food. Now, via a barcode, customers can check the origin of the product either at the information terminals in the store or at www.starfarm.com.cn. This way, our customers know exactly what farm and field their food came from. What is the most challenging part of your job? As a cross functional leader, time management is always one of my challenges – to face challenges from various functions and improve overall supply chain performance in your limited time, you have to be intelligent and innovative enough. Cross functional collaboration on supply chain is another challenge, since basically no achievement can be made without alignment throughout supply chain, but it’s never easy. It’s also a challenge to build up mature industry standards, such as logistics operation standard, cold chain operation stardard, etc. To do that, you need strong mission, excellent collaboration with supply chain partners, and influence in the industry. Besides, it takes time.

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profiles

n Denny Yang Head of Supply Chain Management and Logistics METRO Jinjiang Cash and Carry

METRO TESCO Headquarters Cologne Area, Germany Enfield, United Kingdom Started in China 1996 2004 Stores (worldwide) 670 3700 Stores in China 44 58 Newest store in China Suzhou Qingdao

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May/June 2010

profiles

零售商加入，形成一个更好的商业环境。零售业的质量意识对于改进整个冷链物流也很重要。顾客到不同的零售企业可能会发现不同零售企业之间明显的质量和温控方面的差别，有时你甚至可以感觉到这种差别，比如在肉类或水产品区域—— 事实上，这取决于零售企业想要为其顾客提供什么，当然也取决于顾客想要什么。

n Denny Yang 供应链管理及物流总经理锦江麦德龙现购自运有限公司

冷链中国作为麦德龙中国区域的领导人，杨先生非常注重冷链物流系统环节和产品质量。作为世博的供应商之一，他的工作显得更为重要。

你如何看待当今中国冷链物流的形势？当今冷链物流确实是整个供应链的一个挑战，而这在很大程度上与行业状况有关。行业状况指的是供应商或者零售商是否注重温度控制系统这一环节。他们认为这是否重要？大多数客户认为是否重要？很显然，如果他们认为这很重要，他们当然就会注重这一点，也不会计较资金投入。从冷链物流、质量和卫生质量方面来讲，麦德龙确实在市场上处于领导地位。我们投入大资本，花了大力气，以我们的分配中心为基础，才建成了麦德龙自己的冷链供应链。你认为对于冷链物流的态度有没有变化？有，冷链质量和卫生在市场上越发受到重视，虽然这一变化不如我们期望的快。过去几年在中国发生了很多质量问

MAy/June 2010

题，可以说，这对于全行业是一个警钟。但我认为整个供应链行业对于保证冷链商品质量恐怕做得还不够。你认为中国应如何改进整个冷链物流系统？首先，市场对冷链的意识很重要，因为消费者是终端用户，他们的意见至关重要。如果消费者对产品质量和食品安全没有任何要求，随随便便就付钱了，冷链的情况怎么能改善呢？谁来为冷链物流买单呢？政府建立许多法律法规，然而法律法规的实施还有待改进，毕竟食品安全的法律法规是十分重要的。零售商和制造商也应当顺应这一要求，遵守法律法规，在质量和食品安全上投入，他们最终会因此获益。当然，我们还需要更多像麦德龙这样的市场领导者做领头羊，这样才会有越来越多的制造商和

风险管理在中国将会变得更重要吗？是的，我确实看到了这一趋势。作为着重产品质量的市场专业人士，我认为风险管理是质量管理的重要组成部分。我们必须确保质量在整个供应链上处于严密控制之下。这就意味着产品在整个物流环节都能被跟踪。为此，你需要有完善的标注操作流程、严格的执行和相应的硬件设施（如温控监控体系）。麦德龙在中国的每一家门店都有着对于温度控制区严格而具体的要求，并在冷链物流运作中有着同样严格而具体的温度控制要求。此外，麦德龙在中国的所有门店都有危害分析关键控制点证书，在中国我们是第一个，也可能是目前唯一一个做到这一点的企业。顺便介绍一下，通过 STAR farm 公司，经认证的农产品生产者不必通过中间商，而是直接为麦德龙的商场供货，这样，不仅农产品的品质和新鲜度得以保障，而且也可增加农民的收入。同时，我们能更好的跟踪我们的食品运送。通过条形码，消费者可以在商店信息终端或登录www.starfarm.com.cn查询产品的生产地.。在麦德龙商场内或者通过麦咨达的网站，产品可以被追溯到原产地。通过这一途径，客户可以得得十分具体的农产品原产地信息，例如一只苹果产自具体那一片土地或果园。这样一来，我们的消费者可以精确的指导他们享用的食物都来自哪个农场和农田。工作中最具挑战的是什么？作为跨职能领导，时间管理总是一份挑战——在有限的时间内应对来自供应链不同职能的挑战并提高绩效，你必须拥有足够智慧和创新精神。供应链上的跨职能协作是另一挑战，因为离开了跨职能协作，供应链管理很难有所成就，而跨职能协作从来不易。建立起成熟的行业标准（比如物流运作标准，冷链运作标准）也是一个挑战——实现这一目标，必须具有强烈的使命感、与供应链伙伴的精诚合作，以及行业影响力，此外，这需要时间。

www.supplychains.com

profiles

为什么在上海开一个分支？李：主要有两个原因：从经济的角度来看，中国IT市场已经开始繁荣。Sunshine Purchasing Program选择了一些中国公司作为最佳典范，比如，中国移动，在将来的几年很多中国SOE会开展这些项目。春节后我们接到很多来电。我们希望能迎合中国市场,比如我们的最新客户，中海油在进行这方面的努力，国有资产监督管理委员会也相当鼓励这一行为。从个人角度来说，我曾在Emptoris最大的竞争对手Arriba工作，他们从不关注中国市场，所以我决定跳出来，与 Emptoris联合，我看到未来五年很多的商机，所以决定需要采取进一步措施，在中国建立分支赢得更多潜在商机。所以我个人促进了分支的建立，这也是我进入emptoris 的主要原因。进入中国市场有哪些困难？李：这个问题比较有趣。我们必须确保我们了解市场动向，注意政府决议和公司的轻重缓急等问题。进入中国市场，我们当然会注意政府政策的动向，并推出迎合顾客需要的产品。你们一些竞争对手早已进入中国市场，为什么你们现在进入？ MR：我觉得从某种程度上来说我们有点迟了。我们公司一直以来主要注重技术，我们专注于做好产品。现在有很多其它公司只是提供较低性能的产品。而与我们合作的公司都是在工业上处于领导地位，他们有相当复杂的采购需求，我们想要合作的是那些想处为世界领先地位的公司。这儿有种趋势，认为达到要求就差不多了，但是就对于采购而言，这是远远不够的。公司可以将此看作是供应链优化问题。优化会好很多，因为有些公司供应链非常复杂，每6天一次投资回报率。

Emptoris打算在中国建立研发中心，为什么会有这一需求？打算在哪建立？李：我们正在决定在哪建立这个中心，目前有两种选择，上海或者成都。选择哪个地方与知识库情况有关。上海有太多研发中心，我们可能会失去很多人才。我们想要提供最优质的产品，但也要有合理的价格，如果单单在上海，我们的成本可能要高出一倍。但在成都，可能更难找到合格的人才。虽然现在四川大学质量越来越

www.supplychains.com

n Michael Romeri

n William Li

执行副总裁

副总裁，大中国区总经理

Emptoris

紧抓市场机遇 Michael Romeri 和 William Li 与你分享Emptoris如何进入中国市场，又是什么原因让他们认为国有企业将成为下一个供应链解决方案的大市场的。好，但就这一行还是不够专业。我更希望在上海或北京雇佣高级设计师，他们离客户也近很多。关于地点的选择，董事会将最终做出决定。 MR：研发中心会担任不同的角色，并迅速发展。从客户化角度而言,人员雇佣是很重要的。中国已经成为最佳典范，我们建立研发中心就需要中文和其它语言的支持。曾有客户建议我们创造一个世界级体系。上海还是成都，从客户区域角度来说上海更好，但从长远来看，四川更有竞争力。有趣的是 SAP和 Orcale已经落户成都，我们可能会跟他们在同一个发展园。就运用Emptoris技术而言，公司将面临哪些困难？ MR：EPR系统中的软件已经成为一种商品，这就是说，你为公司建立一个循环系统，公司面临如何充分利用该系统的问

题。我们得尽可能将软件自动化，这个非常重要，但需要很复杂操作和协调。对于我们，有一种叫做支出分析，一般当我们开始与公司合作时，我们必须分析数据的质量，这些数据可能不够精确或难以推算出结果。采用软件的公司很重要，变革管理也很重要。我们最大的风险就是客户可能对这样的过程不感兴趣，如果其它功用不能实现，他们觉得太难了。我们必须确保他们懂得软件，并且确保他们对于采购的观念与公司人力资源是相符的。李：就公司来说，有很多全球机会，特别受采购的影响。全球化已经成为一个水平线，一个好的供应商在任何一个国家都是好的，但对于行业和国家的了解可能并不够多，所以供应绩效管理至关重要。就像在拔河，公司要全球化，但环境变了，风险也加大，我们需要从供应商那了解更多信息。

May/June 2010

profiles

State Opportunities Romeri and Li talk about how Emptoris entered China and why it sees SOE’s as the next big market for supply chain solutions

n Michael Romeri

Executive Vice President Emptoris

Why did you decide to open a branch of Emptoris in Shanghai? William Li: This decision was driven by two major reasons. From a business point of view the China IT market is getting ready to boom. The Sunshine Purchasing Program picked up some Chinese companies to become models of best practices, for instance, China Mobile, and a lot of Chinese SOE’s will open up these projects in the next couple of years. After the Chinese New Year, we really got a lot of calls. We are hoping to cater to the Chinese market, for instance our newest client, CNOOC was really encouraged by SASAC to advocate this change. On a more personal note, I was originally working for one of Emptoris’s largest competitors – Arriba – and they don’t care about China marketing at all. I decided to step out and set up a relationship with Emptoris – and I saw a lot of coming business in the next five years and decided we needed to go to the next level and take a step into China to up business potential. Some of your competitors have already entered the market. Why are you coming to China now? Michael Romeri: I think partly we’re a little late. Our company was more technology driven up till now, and we were working on getting our products finished – so now, there a lot of other companies already here who offer a lower functionality. But the companies that we’re working with are industry leaders and have complex sourcing needs– we’re looking for companies that really want to be the best in the world. There’s a trend here that says good enough is good enough, but for sourcing in particular you can treat this as a matter of optimization or automation. Optimization is a lot better – we have companies that get an ROI every six days. Emptoris is looking to set up a R&D development center in China. Why do you need one here, and where are you going to locate it? WL: We’re trying to decide on where we should open a tech center, and right now it’s between Shanghai and Chengdu. First off, it’s all about the knowledge base. There are too many centers here in Shang-

MAy/June 2010

n William Li

GM & Group Vice President China Operations, Emptoris

hai; we might lose a lot of candidates. We want to provide the best solutions, but at a reasonable cost, and if we’re solely based in Shanghai our costs may double. But in Chengdu, it may be more difficult to find qualified applicants. Even though places like Sichuan University are getting better, they are still not as specialized out there. I would prefer to have senior architects that sit in Shanghai or Beijing, as they would probably be closest to the customers. The decision is pending final board meeting approval. MR: Shanghai is better in terms of client location, but in the long run the competiveness will be better in Chengdu. The funny thing is that SAP and Oracle are both already in Chengdu; we might even be in the same development park. What are the challenges that companies face in terms of adoption of Emptoris technologies? MR: Software used in the ERP systems is becoming a commodity, which basically means that you create the circulatory system for a company – and companies face the question of how to apply value with our system. We have to automate things in the best possible way – this is potentially very valuable, but it presumes a level of sophistication and coordination. For us, one part of the application is called spend analysis – typically when we start working with companies we have to analyze the quality of data which can be inaccurate and hard to draw conclusions from. The big risk that we run is that people get turned off by this experience – they find it too hard if the other ingredients are not there, and we have to make sure they understand the user software and make sure that their concept for procurement is appropriate for the human infrastructure. WL: On the company side, the world has got a lot of global opportunities – and sourcing in particular drives that. This globalization is very much a leveling process – a good supplier is good in any country. But when you spread out so far, your knowledge of the context of the industry and country may not be as good, and supplier performance management is really important. There’s this tug of war that goes on – companies want to globalize, but you add more risk in a volatile environment – we need better information on our suppliers.

www.supplychains.com

Online Gossip Gunaraja Subramaniam, Control & Compliance Manager at DKSH The main challenges are high stockholding of inventories that could drain the company’s cash flow and impact on provisioning for stock obsolescence in the event the stocks do not move. Pilferages of stocks is another challenge.

Walter Bawell, Director, European Region at Foresight Systems M&S The number one problem with inventory management is estimating demand. The demand forecast for an SKU is the single most important variable and is the driver for setting the EOQ, for establishing demand during ordering and shipping time (OST) and for setting a safety level (SL) which determine the reorder point (ROP). The second most important variable is forecasting the length of the lead time for replenishment.

Gary Smith, P.Log Replenishment system not accounting for promotional or season activities, also in retail environment not selling through of special purchasesbuyers/cat managers not always checking to make sure that happens- so Logistics SCM must follow up to get those taken care of or you end up with excess or obsolete inventory

Stuart Emmett, CEO at Learn & Change Well the number one problem we find all over the globe in our training and consultancy work, is the failure to monitor and control the supply lead time (SLT). The result: either out of stocks (SLT longer than anticapated), or over stocks ( got “caught” last time so add on more SLT as a contingency = order more stock). Here, it seems many simply forget that actual stock levels are down to both demand and supply factors.

Rudraksh Saxena, University of Petroleum and Energy Studies Another problem is concerned with the inventory management of the seasonal products. There are products which undergo manufacturing say, for eight months to be sold during the remaining four months of the year. In this case, demand predictability is critical because the manufacturers have very little time to respond to the changed demand of the customers. The strategy followed here to manage inventory is called postponement, by which a particular step of the product value chain is postponed till the orders are obtained from the market.

www.supplychains.com

Seen on What is your No. 1 problem in managing your inventory? by Dinesh Divekar

Quentin Samelson, Director, Materials Programs at Motorola In terms of improving overall performance, we have found that, even with less-than-perfect forecasts, sharing information with your suppliers makes a big difference. Sharing forecast, short-term firm demand, and on-hand inventory information on a regular basis helps the supplier do a better job of anticipating your requirements. Having your suppliers keep you updated on leadtimes is helpful as well. (You also want to understand the difference between leadtime and manufacturing cycle time - especially if you are a high-volume consumer of their product.) And - it should go without saying that developing long-term, cooperative relationships with your suppliers is of critical importance.

Dan Capitanu, PC/L-Prod. Control & Logistic Manager at Calsonic Kansei I consider as being the safety stock level definition which is “killing” us. How much shall we consider ? I am not expecting an answer because that I am sure that depends on specific conditions already mentioned till now. The way that I consider to facing this issue ? Again and again to revise it (safety level ) considering constraints such as lead time, obsolency risk, supplier risk, own manufacturing process stability, customer forecast accuracy .. I did not discover yet any mathematical formula to calculate it so I continuously revise....

Donal Lynch, Former Vice President Supply Chain & Logistics My experience has been the challenge of ‘connecting’ customer demand to supplier capability! I once asked a number of suppliers, ‘what can we do to help you, help us, help our customers with on time delivery?’ Without exception their answer was... ‘please provide accurate forecasts’. So my belief is that we must have visibility in the supply chain, visibility of customer demand back upstream to our suppliers! Supplier KPI’s must also be in place and these must tie into logistics provider KPI’s also.

May/June 2010

2010 China Warehousing Map

ࡇϜጲ ⇣ࡇ ⇣ࡇⰱ Heb bei AMB Beijing

䫊 ᎱᏖ The Council digital map helps you find a䫊Ꮁ warehouse for all of your Yingchuan ngchuan ngchua 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 map@supplychain.cn

Year Built: 2006 Xiqing Building Area: 48,584 sqm Single-story building of 5,422 sqm, 2 mul�story buildings of 11,021 sqm each reinforced.

໾ॳᏖ

䮅㺯 ⰱ Shaanxi

Taiyuan

4006308018

ᆡ ͌ ͌ ⰱ ͌ Shandong

ᆡ 㺯 ⰱ ⰱ Shanxi Hefei Warehouse

Year Built: 2009 Building Area: 6,400 sqm

㽓ᅝᏖ

Xi’an

⇣ ࢇ ⰱ ⰱ Hen n Hena

(551) 4395999

Located in the Yaohai Economic Development Zone, 4-storey warehouse, RMB 15/sqm/month.

Wuhan Warehouse Year Built: 2009 Building Area: 3,000 sqm

13995633479

Good quality and modern warehouse located in Hangyang District in Wuhan.

⎆ ࡇ ⰱ ⎆ Hubei

៤䛑Ꮦ

Chengdu

ఋ ግ ⰱ Sichuan

ড়㙹

Hefei

Ⴙ ᓭ ⰱ Ⴙ ᓭ ⰱ Anhui 㡰␪

℺∝

Wuhan Jinhua/Yiwu Warehouse

Chon Ch Chongqing

Year Built: 2009 Building Area: 3,000 sqm

13615891215

Brought to you by BlueScope Butler

⎆ ࢇ ⰱ Hunan

䉥 ጎ ⰱ Guizhou

Located only 20km away from Yiwu city, near Jinhua and Yiwu Toll-gate.

↏ 㺯 ⰱ ↏ 㺯 ⰱ Jiangxi

⺿ ᐪ Fujiaa

䌉䰇Ꮦ

Guiyang

ᯚᯢᏖButler is the global leader in Pre-Engineered Metal Buildings. BlueScope Kunming -全球预制轻钢结构建筑的领先者博思格巴特勒

Interlink in Hong Kong

For more info, please contact ρ Jude Li, VP Sales at +86 (21) 57741717 ρ ࢇ ⰱ Yunnan uWebsite: www.bluescopesteel.com.cn

Year Built: 2012 Building Area: 220,000 sqm Grade A ramp up warehouse

adjacent to Container Ꭿ 㺯 พ ᫿ 㜚㜚 ⇫ ࡪ Terminal 9 and great Gu uan ng+852 xi22493188 accessibility to the airport Guanggzho ho ou Guangzhou and China’s borders.

फᅕᏖ ᅕᏖ

Nann n ing in ng MAy/June 2010

ԯቅᏖ ԯቅ Ꮦ

Foshan Fosh han

Hong H ong Kong Kong www.supplychains.com

≜䰇

Shenyang

䓭 Ⴑ ⰱ ⰱ Liaoning ing

GLP Shenyang SEDA

2010中国仓储地图

Year Built: 2010 Building Area: 18,000 sqm High-qaulity warehouse close to Beijing-Shenyang Expressway.

໻䖲Ꮦ

Dalian

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map@supplychain.cn。

(411) 87599566

⤔ ⼄ Bohai

䴦䴦ቯᏖ

Qingdao ⿧⼄ ⿧ ⼄

Yell Yel llow low Sea Sea Warehouse Yellow Zhangjiagang Year Built: 2009 Building Area: 18,000 sqm

↏ 㟿 ⰱ 㟿㟿 ⰱ (512) 58320221

Located in the Bonded Logis�cs Park, this modern facility has a height of 11.8 m.

Goodman Pudong

Zhangjiagang Z Zhangjia

̺ ⊧ ጲ ̺ ⊧ ጲ Shanghai

Suzhou

Year Built: 2011 Building Area: 160,000 sqm

Goodman Taopu Ⰼ ⼄Built: 2007 Ⰼ ⼄ Year

(21) 61332000

Building Area: 45,359 sqm Available Space: 16,000 sqm (units from 5,500 sqm)

Yiw Yiwu

Close to A12 and airport,

⊉ ↏ ↏ ⰱ ⰱ ⊉ ↏ ⰱ Zhej jiiang ngg Zhejiang Б∈

ishui

ᐪ ⰱ ᐪ ⰱ an a

Mul�ple Storey Distribu�on Center for BTS/lease, only 500m to third runway.

(21) 6133 2000 Northwest Logis�c Park.

⌺ϰᮄऎ ⌺ϰᮄ ⌺ ϰᮄऎ ϰᮄ ᮄऎ ᮄऎ

Lishui EDZ Warehouse Year Built: 2009 Building Area: 11,000 sqm Located in the Lishui Economic Development Zone, asking rental price is RMB 8/sqm/month

ᵒ∳ऎ Songjiang District

13357713005 䴦⌺ऎ Qingpu District

ॺ䮼

䯉㸠ऎ

Pudong DC (21) 21) 6133200 61332000 1 2 13 20 00 00

Year Built: 2011, 10 Building Area: 102,319 sqm Available Space: 102,319 sqm फ∛ऎ फ ऎ

Xiamen

Xiamen Logis�cs Park

䞥ቅऎ Jinshan District

Nanhu Nanhui nhui hu Di D Distric District Distr iss ctt Mul�ple ༝䋸ऎ ༝䋸 ऎstorey distribu�on ༝䋸ऎ next Fcentre en i rito Pudong Fengxian District (21) 61413502 Interna�onal Airport.

Year Built: 2007 Building Area: 100,000 sqm

(592) 2613663

Located in Xiamen Xiangyu F.T.Z., the project enjoys all the preferen�al policies of F.T.Z..

www.supplychains.com

supplychains.com/map May/June 2010

Feature Logistics

Logistics Roulette

n By Monica Liau

B2C online groups next platform for competition rooms in order to monitor losses that occur between ordering and delivery. The uncertainty of service can also lead to huge losses. For instance, when the Chinese begin to celebrate Spring Festival the country grinds to a stop. Shops are closed. Restaurants go on holiday for weeks. Sending packages is a nightmare, as only the more expensive China EMS is open. Other logistics companies may take more than 10 days off, practically forever for a business that relies on logistics to connect with customers.

hina’s love-affair with online shopping is no secret. While the ratio of buyers is still not on par with the US or Europe (where two in every three people shop online), China’s community of 384 million netizens, in which one in four is engaged in online shopping, is still showing signs of rapid growth. Last year, Chinese shoppers spent an average of RMB 10,000 per shopper per year online, a fact not unnoticed by the market. According to CNZZ, by the end of December 2009 there were 9,400 separate B2C online sites selling everything from electronics to fruit baskets. With the competition fierce and differences small, B2C online platforms are working aggressively to differentiate themselves by customer service as the Chinese are becoming more demanding, expecting to receive their goods on time and in one piece. In a land where kuaidi and logistics companies are many, but reliability is rare, meeting these seemingly simple demands is not always easy,

MAy/June 2010

even for big experienced companies. “A lot of times big companies like Carrefour have an online shopping center, but they don’t pay much attention to the logistics aspects of it,” says Moritz Fischer, founder of Smardirect. cn, an online supermarket store in Shanghai. “From my experience, you order 10 things from them and only five of your products actually arrive, usually broken.” The Problem with Logistics. Ensuring smooth and efficient logistics services around the country is a difficult matter. Much of China’s logistics infrastructure is fragmented and smaller companies don’t necessarily track their orders correctly. Many are unable to account for missing or broken products, and do not think they should be held accountable for the mistake. In fact, an employee from Joyo Amazon, who wishes to remain anonymous, says that their company is having so much trouble tracking their losses that the company plans to install video cameras into the Joyo Amazon packaging

Investing in Self Logistics. Many of the big online players in China have decided to take matters into their own hands. 360buy.com, China’s second largest B2C online shopping center, invested RMB20 million in a logistics subsidiary last year, which will distribute orders in eastern China and Shanghai, areas that account for 40% of the company’s total orders. More recently, 360buy CEO and Chairman Liu Qiangdong announced a RMB 3 billion investment into logistics and warehouse services, saying that their former budget was just not enough to meet their customer needs. Vancl, an online shopping store focused on selling clothing and apparel and ranked sixth largest online platform in China, also recently invested in their own logistics department. They say that the inconsistencies in the quality of logistics and kuaidi companies were the main reason behind this investment. “In order to ensure a timely and customer tailored service for our customers, it’s very necessary for Vancl to have its own system,” Vancl told CHaINA, “We believe by doing this, Vancl will be able to better expand its order base.” Unfortunately, Vancl’s new logistics service not only means them cutting back on the delivery area they can cover, but it also means a price hike of up to 30% on goods. This increase could alienate buyers, many who shop online for the relatively cut rate prices the platform affords. To get around this, Vancl expands its service by offering things like 24 hour delivery service, which they say helps set

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Feature Logistics way to make deliveries. “Logistics is amazing in China because it’s a nightmare,” Fischer says. “Anything can happen.” In order to ensure their stock is relatively stable, groups like Smartdirect.cn and other small startups have begun to diversify their supplier base.

them apart from other services. Other giants like Suning, whose online platform earned less than RMB 10 billion last year, while the firm made an estimated RMB 60 billion in sales, are also hoping to expand their sales by utilizing their own logistics team and offering service during holidays and odd hours. The Small Guys. While investing in a private logistics operation may be an option for the big boys, there are still thousands of B2C companies that lack the resources to do it themselves and must therefore rely on local 3PLs to get the job done. For Smartdirect.cn, a small online supermarket which defines itself by three hour service of fresh goods, keeping their schedules means creating strict guidelines and contracts that hold the 3PL accountable and in tight check. This helps cut down on broken cookies and missing products. “You have to shift responsibility to the guy,” says Fischer. “It always has to do with the money… rewards don’t necessarily work, but you have to be clear about what happens if

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something goes wrong.” Smartdirect.cn keeps very close track of the kuaidi service people and generally asks that customers call headquarters when after they check that all contents arrive intact. As smartdirect.cn only makes about 60 (albeit high-speed) deliveries a day, this strategy seems to work. Groups who ship dry goods, like Yihaodian or Taobao shopping center, don’t have to worry as much about expiration dates and spoiled food. This gives these sorts of companies more leverage when it comes to late deliveries – as long as you stay in these products. Small B2C services also are often faced with suppliers who, because the volume is not as big, are not as willing to go out of their

Bright Prospects While the logistics aspects of B2C platforms are a bit hairy, is hasn’t seemed to dampen market or investment enthusiasm. In the past year, Legend Capital and other firms have invested in several online platforms including men’s clothing retailer MasaMaso, shoe retailer OkayBuy, jewelry retailer 9diamond.com as well as dessert maker and retailer 21cake.com; all of whom secured investments ranging between US$1.5 million to US$10 million. Internet giants and traditional retailers like Baidu and Walmart are also eager to jump into the China internet game. Each have announced plans to launch their own online platform. Whether these groups will be able to navigate the jungles of China’s 3PL services is yet to be seen.

May/June 2010

Feature Logistics

物流赌轮在线B2C公司的中国对在线购物的热衷已经不是什么秘密了。虽然中国在线购物的比例还不能与美国或者欧洲相提并论（后者有三分之二的人选择在线购物），但在3.84亿的中国网民中，有四分之一的人有过网购经历，而且这个比例在迅速地增长。中国市场注意未曾忽略，去年中国网络购物的平均消费额达到1万元，比上一年增长了？？%。根据CNZZ的数据，2009年12月底，商品销售范围广泛的独立B2C在线商城有 9400个。面对激烈的市场竞争和微弱的市场差异，中国客户的要求日益增高，既要求货物到达准时，又要包装集中，各个 B2C在线平台积极改善客服能力。在快递和物流公司遍地的中国，信任可靠的

红孩子 3.3% 新蛋 4.6% 当当 12.4% Vancl 13.7%

卓越 14.7% 其他 24.0%

MAy/June 2010

下一站竞争平台

公司却不多。即使对运作成熟的公司来说，满足这些基本的需求也并不容易。“ 许多诸如家乐福的大公司，他们设立了在线购物中心，但对物流环节却并不重视。”Smardirect.cn（沪上某在线超市）的创立人 Moritz Fischer 说道，“ 以我的经验来看，你从那里订的货，１０个里面只能收到５个，而那五个通常还是破损的。”

运送间的损耗。服务的不确定性也会导致巨大的损失。举例来说，当中国的春节来临的时候，整个国家都进入休整状态。商店关门了，餐厅也开始持续几周的放假。此时发快递便成了噩梦，因为除了中国ＥＭＳ还在照常接受订单，其他的物流公司则至少要休息１０天，几乎所有需要依赖物流运输的商品也陷入停滞。

物流问题

投资缔造自己的物流系统

在国内，确保顺利和高效的物流服务成了一个问题。中国大部分的物流公司基础设施建设是不到的，规模较小的公司甚至不会跟单。许多公司没有能力统计货物缺失或者破损的情况，也不会为此种过失负责。一位不愿透露姓名的卓越亚马逊职员说道：他们麦网 2.5% 公司在追踪梦露时尚网 2.0% 99网上书城 1.9% 遗失的货物易迅 1.6% 上已经面临世纪电器网 0.5% 很多问题，为此，公司京东商城 28.8% 计划在他们的包装库房安装视频摄像，以此来 (数据：艾瑞咨询) 监控订单和

许多大型的在线商家决定自己解决这个问题。京东商城，中国第二大B2C在线购物中心，去年投资了2千万人民币成立自己的物流公司，负责其华东地区的订单，而这部分订单占到整个公司业务量的 40%。最近，京东总裁刘强东先生向媒体宣布他将把刚获得的老虎全球基金高达 750万美金的融资基金的一半，用来改善仓储、物流和售后服务。凡客诚品，一个以服装服饰为主的在线购物中心，在中国的在线交易平台中排名第六，最近也开始投资自己的物流部门。他们表示这项投资背后的主要原因还是公司和物流公司之间合作的不稳定性。“为了保证给客户提供及时和量身定制的服务，凡客诚品有必要拥有自己的物流系统，”凡客对《CHaINA》表示，“我们相信，凡客的这个举措，可以为每一个订单提供更优质的服务” 不幸的是，凡客新的物流服务不仅意

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Feature Logistics

味着他们缩小物流服务范围，同时也带来了其商品价格30%的上涨。而这样也就失去了吸引在线消费者最重要的价格优势。为了走出这个困境，凡客推出了他们独一无二的客户服务，那就是“24小时送货”。苏宁等业界巨头去年通过电子平台赚入100 亿人民币，但公司实质销售额为600亿人民币。这些公司也希望能通过各自的物流团队提供假期和非常时段的物流服务扩大提升他们的销售量。

“小作坊”的出路在线购物的“巨头”们可以通过自己投资物流公司来完善他们的配送系统，而对大部分在B2C市场上奋战的“小作坊”来说，还不足以自立物流门户，只能继续依靠本土的第三方物流来完成配送。Smartdirect.cn一个将自己定义为三小时内运送新鲜商品的小型网上超市。完

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成其配送计划意味着要和第三方运输公司制定严格的运输计划和合同，以便对物流状态进行查询。这样损坏的饼干和丢件的状况就自然减少了。“ 你必须把责任传递给这些人。”Fischer，“总是要和钱挂钩，奖励不是必要的工作，但是做错了就一定要有惩罚。” Smartdirect.cn也对第三方物流进行紧密的追踪，大体上，他们会要求客户在收货后致电公司总部，确认商品的类别和完好程度。他们现在只接受一天60份的订单，目前为止，运营的相当不错。然而，为了提供三小时送货的服务，Smartdirect.cn也给自己造成了点小麻烦。团队中负责运输干货的，比如像Yihaotian和淘宝购物中心，他们没有食物变质和过期的问题，只要顾客仍愿意收货那么这些公司在应对快递延误上有更大的灵活性。

小型B2C公司同样也要面对供应商，由于他们的业务量不大，供应商通常不愿意认真提供物流服务。Fischer说：“在中国的物流业着实惊人，简直就是噩梦，什么事情都可能发生。”为确保出货稳定，诸如Smartdirect.cn等诸多小型新兴企业开始变换他们的供应商基础，不只依赖于一家供应商。

光明的未来尽管B2C平台的物流环节还有需调整，但这似乎没有减弱市场和投资者的热情。在过去几年中，联想投资等公司投资了一些在线交易平台，包括男士服装零售商MasaMaso，鞋子零售商OkayBuy，珠宝零售商9diamond.com，和在线甜品商 21cake.com；这些都保证了150万和1000 万美金不等的稳定投资。网络巨头和传统的零售商包括百度，苏宁和沃尔玛也想要加入到这个中国游戏中来，分别成立了他们自己在在线交易平台。而他们是否能在逾越第三方物流服务所带来的障碍，还是让我们拭目以待吧。

May/June 2010

case Study

IDS: Driving Change

n February 2009, IDS began to head up a Carrier Management System (CMS) initiative to improve their service level and quality to their customers. Right from the start, the implementation team knew they were facing a monumental project with many potential challenges. IDS’s CMS – better known as Transport Management System (TMS) to the industry at large --- would bring sweeping technological updates to 9 trucking carriers and 56 trucking depots in 27 different cities across China. Many of companies who would be learning the new CMS system would have to learn how to use a scanner, a computer, and even the internet. Held under the umbrella of Li&Fung, the world’s leading consumer goods and supply chain management company, IDS is working with the goal to streamline its supply chain and no longer provide just the logistics portion of the supply chain; but to focus also

MAy/June 2010

on customer service as the demands of China’s market develop. “We want to be able to increase sales through making sure we have stock housed in key locations,” said Lawrence Ger, General Manager of IDS Transportation, China. “With a controlled volume,

we can better push out goods to meet demand in the marketplace.” The CMS system is named thus because it focuses directly on bringing IDS’s carriers into a more modern and efficient logistics era.

Getting Things Organized According to Christopher Teoh, Network Planning Manager at IDS, IDS decided to make the shift to a CMS system because the simple excel-spreadsheet process they originally used just wasn’t cutting it. The basic information -- such as source, destination, pick up date, arrival date etc – was either input by carriers or by IDS through phone calls and emails. The information that was received was often delayed and spotty, which meant poor visibility of transportation operations and accordingly, low accuracy. “On many occasions where we had to do an audit or check, it always took multiple phone calls to obtain the correct information,” said Teoh. “Our goal is to implement this system so that all of our carriers can and will use the same platform in order for all the same tracking information to show – we need everyone to see the same data as close to real-time as possible.”

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case Study Oracle Transportation Management (OTM) was chosen over other methods because it is web enabled, which makes streamlined integration between the systems of IDS and the carrier a lot easier. “A webenabled system basically allows our carriers to log in from any location and even if something breaks down, they can access the system from their homes,” said Teoh. With the new system, IDS requires its carriers to create Shipping Manifests in the system, update any exceptional events that may have occurred with a delivery order, update delivery dates, and scan/upload signed POD’s upon delivery. “OTM is highly configurable,” said Mandy Ting, Senior Manager of IDS Transportation. “Our operations are tailor-made to meet many of our clients’ requirements, so we needed a system that can support our dynamic functions.” An Exercise in Patience When the implementation team of 20 assembled from various IDS offices around Asia began to implement the first phase of the CMS operations, they found that most of the carriers had no experience using CMS and required hands-on training and constant supervision. According to Ting, she and the on-the-ground team of five or six had to teach very basic concepts to their carriers, as well as explain the advantages and challenges that CMS offered. “Basically what we had to do was to train people who didn’t know how to use Internet Explorer or Outlook,” said Teoh. “We pretty much had to bring our users out from the Stone Age. Due to many of the carriers’ relatively low expertise with technology, the team found they were often running maintenance and problem shooting when certain, seemingly simple directions were left out. This was especially clear when one “mom and pop” carrier in the NE region began to transfer over

to CMS. “It was just one couple running this company – I wouldn’t even call it a company, I would call it a truck,” said Teoh. “They knew how to use a computer but something was still going wrong.” According to Teoh, this couple already had CMS set up at their site, and the couple thought they had it all figured out. “But after a few days we saw they weren’t uploading POD’s, even though the couple said they were,” Teoh continued. “Finally, after some debate and multiple phone calls we realized they had scanned the PODs but they didn’t click on the upload button – a lot of the simple things that we take for granted were overlooked in the user training.” Moving into the Future The team responsible for CMS implementation finished training and implementation with nine of their different carriers

in Q1, which completed the first phase of this project. Now, the team is concentrating on process monitoring and improvement of this first group. “What we have configured in the system so far solves 70-80% of our problems,” said Teoh. “The next step will be re-looking into our process designs, making sure our carriers stick to the process, and figuring out the best way to improve our overall process.” While IDS is talking about offering performance incentives to their carriers to use CMS in the future, the payback that these nine carriers have is the potential to run their operations faster and more efficiently, while entering into a partnership of trust with IDS. “We’re working to establish a strategic partnership and alliance with our carriers,” said Teoh. “This obviously allows us to reap benefits, but also to share them.” By making these carriers “trusted partners”, IDS’s philosophy is that in return, the carriers will be more willing to help them out in times of need and move in the direction that corresponds with IDS’s goals. “So far, the reception to our project has been positive, but we still have to monitor the carriers to make sure they continue to use the system completely and correctly,” said Teoh. “Our goal is to have all carriers within our transport network under this system…eventually.”

case Study

利和物流“在路上”

009年2月，利和物流开始着手准备一个由甲骨文公司发起并支持的货运管理体统（CMS），而这必将是一个面临许多潜在挑战的浩大工程。利和的CMS其实更多的时候在业内被称作运输管理系统（TMS），旨在对控制着中国27个城市56个运输枢纽（货运站）的9个卡车运营商进行革命性的技术更新。这就要求使用CMS系统的企业必须学会如果使用扫描仪，电脑甚至是网络。作为世界领先的消费产品和供应链管理企业利丰集团的旗下公司，利和物流希望可以精简其供应链并不在只局限于物流服务，而是跟随着中国市场发展的需求而更加关注与客户服务。利和物流中国区总经理Lawrence Ger 说道：“我们希望通过在各大枢纽位置都放置足够的库存商品来促进销售。这样近乎微观控制的供应量可以更准确地调配商品补给，以更好地满足市场的需求。关注于如何将利和的运营商们直接带入一个更加现代化和高效率的物流时代，这便是CMS系统的意义所在。信息整合根据利和网络规划经理

MAy/June 2010

Christopher Teoh的介绍，利和之所以决定将信息系统向CMS转变，最主要的原因是因为原先他们使用的简单的 EXCEL表格十分不方便。一些最基本的信息，比如货物发出地，目的地，提货日，到达日等，往往都是通过利和或运营商的员工通过电话沟通之后输入的。双方获得的信息参差不齐，还能随意修改，这就导致相应的物流操作的准确度大大降低了。Teoh还说道：“每次遇到信息不吻合的情况，我们都要再打许多电话重新复核这些信息的来源并进一步确认，所以，我们就要利用这个全新的系统来让我们的运营商通过同一个沟通平台，让同一个运单的信息都完全透明化，我们要每个人看到的数据都是同样准确无误的信息。 CMS使用到的条形码扫描仪，相比其他方法而言，由于得到了甲骨文的技术授权并有网页直接输入的优势，使得利和与其运营商间的系统兼容和整合更为便捷。Teoh为我们解释道：“ 这样的系统在使用前就必须安装一款软件，这对我们下一步工作的实施和部署带来很大的不便。因为一旦系统出现漏洞，我们就必须重新安装该软件。而网页式输入的方式则能让我们

的运营商从任何地点登陆，而即使企业网络出现漏洞，他们也能从家里登陆网站进行信息的输入与更新。”当然，新的系统会要求运营商在系统中创建好货运单，并提交所有可能在交货单提交前会发生的意外情况报告，输入配送日期，在配送钱扫描并上传签章后的运单。“甲骨文运输管理系统（OTM）的使用要求高配置的设备环境，”运输管理系统的高级经理Mandy Ting告诉我们，“由于我们的操作流程和环境并不固定，因此我们需要一个能支持动态功能的系统。” 练习你的耐心当10-20人的的执行测试小组在 CMS系统实施的第一阶段，他们发现大多数的运营商都没有使用该系统的经验，需要手把手的训练指导和监督。Ting还说到，她和五六个实地操作的同事们不得不先和运营商们解释非常基本的操作概念，以及CMS系统所能带来的各种机遇和挑战。Teoh则说的更为幽默：“基本上我们首先要做的就是让那些还未脱离石器时代的人们学会使用网页浏览器和Outlook。” 由于大多数运营商缺乏基本的技术经验，执行小组发现，他们在数据维护和更新上往往会忽略一些十分简单但重要的指令。最夸张的例子是一家刚刚准备使用CMS的东北地区的运营商。Teoh说：“这其实就是夫妻档，我宁愿称做一辆卡车而不是一家

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case Study 公司。他们知道如何使用电脑，但还是会出错。这对夫妇通过远程连接安装了CMS，之后他们就认为已经完全搞懂了所有的操作事项。但是几天过后我们发现仍然是哪些工作人员们在上传运单信息，即使这对夫妇说这是他们已经做过的。最后，经过几番确认，我们才发现这对夫妻的确扫描了运单，但居然没有双击上传按钮，很多我们认为理所当然的简单步骤往往在操作手册中被用户忽略。从第一阶段开始努力该小组负责完成了第一季度对8个运营商进行的CMS系统培训，也就完成了工程的第一阶段目标。现在，团队成员们便专注于对这一组运营商的操作监控和执行力改善。“我们系统中的功能配置目前已能解决70-80%的问题”， Teoh说，“下一阶段的目标就是要再次审核我们的程序审计，保证运营商们始终都能按照这个程序来进行日常的操作，并不断努力改善我们的整体进程。” 利和目前比没有采取任何形式的

激励措施来鼓励与利和合作的运营商，但利和的确需要这么做。当利和谈论到如何设计奖励机制时，他们意识到接受过培训的那8家运营商确实能在和利和建立起相互信任的合作关系时，有极大的潜力让日常的操作变得高效而准确。Teoh说：“我们一直致力于与我们的运营商建立良好的合作关系，来更好地得益于双方的信息共享。” 通过使这些运营商成为“值得信

赖的合作伙伴”，利和的经营理念还在于回报，在利和需要的时候，这些运营商们会更愿意不遗余力地帮助利和，朝着目标一同努力。“到目前看来，CMS的初步计划收效是十分积极的，但我们依然要继续对运营商们进行必要的指导和监控，以确保他们都能正确使用该系统”，Teoh最后说道：“我们最终的目标就是让这所有的运营商们能完全熟练地掌握并运用该系统。”

WHAT NEXT? JOIN THE ELITE FAST TRACK TO WORLD CLASS COMPETENCE Develop your competence to the highest levels internationally International Green Belt in Advanced Purchasing & Supply ® International Red Belt in Advanced Purchasing & Supply ® International Black Belt in Advanced Purchasing & Supply ®

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For further details about IIAPS and its corporate accreditation & benchmarking services visit www.iiaps.org, or contact us at info@iiaps.org. To attend our next Black Belt Showcase Event in Shanghai on 2nd September, go to www.iiaps.org/events.html.

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May/June 2010

Product Study

Huangming Solar Panels: Each panel produces 60KW of energy Amount: 364 panels, each panel 1m2 Costs: RMB6000/panel Made in: Dezhou, Shandong Province Delivered by: Cargo train Distance: 1086km

MAy/June 2010

Windcowls (for passive air flow)

Low-E Glass

Amount: 22 Cost: RMB100,000/windcowl Made in: Shanghai

Amount: 600m2 Cost: RMB200/m2 Made in: Shanghai

50watt Windmills Amount: 4 Cost: Donated Made in: Xiangtan, Hunan Province Distance: 1527km

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Product Study

Expose: The Zero

Emissions Pavilion The ZEDPavilion, located in the Best Urban Practices section of the Shanghai EXPO, is a zero carbon building constructed by the Tianjin national real estate group and designed by England-based ZEDfactory. Designed with the environment in mind, this pavilionâ&#x20AC;&#x2122;s suppliers include Huangming and Suntech, focused on sourcing most of the products as locally as possible to cut down on carbon emissions and costs. CHaINA magazine breaks down this zero emissions pavilion by taking a look at the construction materials and where they come from.

Total Budget: RMB12 million RMB Materials imported: 0 Total Area of building: 2500 sqm

Bar Ceiling: Discarded beer bottles Amount: 3000 bottles Cost: RMB1 / bottle Sourced from: Local Shanghai recycling plant

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Wood Floors Amount: 1800m2 Cost: RMB200/m2 Materials Sourced from: Kunshan, Jiangsu Province Made in: Guangdong Came by: Cargo Rail Total Distance: Kunshan Guangzhou 1818km Guangzhou Shanhgai 1650km

XPS Foam Insulation: the most efficient insulating materials available Amount: 800 m3 Cost: RMB700-800/m3 Made in: Shanghai

May/June 2010

Product Study

世博零碳中心位于城市最佳实践区的世博零碳中心由英国零耗能工厂和天津房地产开发集团共同规划设计。包括皇明太阳能和尚德电力在内的场馆合作商以环保为中心，尽可能就地取材以减少长途运输所产生的碳排放及成本。CHaINA 此次深入这一2500平米场馆，带您一窥这些零碳材料及其来源。

总成本: 人民币

1200 万

进口的材料：0 总面积：2500平方米

多孔聚苯乙烯泡沫绝缘材料迄今为止最有效的绝缘材料用量：800 立方米成本：每平方米700-800元制造地：上海

低辐射玻璃用量：600 平方米成本：每平方米 200元制造地：上海

MAy/June 2010

皇明太阳能板每一片太阳能板可产60 千瓦电用量： 364 块，每块 1 平方米成本：每块6000 元制造地：山东省德州市运输工具：货运火车运输距离：1086 公里

废弃啤酒瓶酒吧天花板用量：3000 只啤酒瓶成本：每只瓶子1 元来源：上海本土垃圾回收站

木地板用量：1800 平方米成本：每平方米200 元原材料生产地：江苏昆山制造地：广东运输工具：货运火车运输距离： 49 公里 +1818 公里

50瓦特风车用量：4 台成本：免费受赠运输距离：1527 公里

空气循环系统用量: 22 成本：人民币10万制造地：上海

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Product Study

汉堡馆上海姐妹城市汉堡业已投入资金，欲建造一座生态房屋，其原上海姐妹城市汉堡业已投入资金，欲建造一座生态房屋，其原型是德国的“汉堡之家”。同世博零碳中心一样，这幢“被动型是德国的“汉堡之家”。同世博零碳中心一样，这幢“被动房”采用的是太阳能板，热回收系统好地热泵，因此不消耗任房”采用的是太阳能板，热回收系统好地热泵，因此不消耗任何外界发电的电能。然而，与零碳中心不同的是，“汉堡之何外界发电的电能。然而，与零碳中心不同的是，“汉堡之家”的设计师和建筑师并不着急琢磨怎么从上海从世界各地进家”的设计师和建筑师并不着急琢磨怎么从上海从世界各地进口建筑材料。Bencer项目管理团队称，虽说针对中国本土未口建筑材料。Bencer项目管理团队称，虽说针对中国本土未曾使用过的产品，为取得3C认证书的过程冗长又繁复，进口材曾使用过的产品，为取得3C认证书的过程冗长又繁复，进口材料却并没那么多的障碍。现在，让我们来瞧瞧这些建筑材料足料却并没那么多的障碍。现在，让我们来瞧瞧这些建筑材料足迹遍布哪里。迹遍布哪里。

总预算: 人民币

4000 万

进口项目：幕墙，窗户，门，泵，热回收机汉堡馆总面积：3000平方米

定制的砖块

Groundfos 泵

制造地：福建省用量：230，000 块运输距离：约607.5公里成本：单价5-7元（通常的单价为0.5元）总成本：人民币100万元

制造地：德国，瓦尔施泰特运输距离：4592.03公里总成本：人民币3万进口的原因：赞助商的项目

幕墙制造地：德国运输距离：8,856公里材料：木头/钢材总成本：人民币200万

热回收系统制造公司：德国公司，Burlinair 组装地：中国，昆山总成本：大约人民币100 万运输距离：49公里进口的原因：建筑标准

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巴斯夫绝热材料制造地：中国，上海用量：2200平方米总成本：未知

滤热遮光布

地热泵

制造地：中国，上海用量：60块总成本：人民币35万元

制造地：中国，无锡运输距离：128公里总成本：人民币70万

Pazen公司三层式玻璃窗 40千瓦太阳能板制造地：中国，上海用量：51块总成本：未知

制造地：德国，采尔廷根－拉赫蒂希运输距离：8951.11公里成本：单价人民币10,238–13,650元进口原因：在中国无所需技术和工厂

May/June 2010

Product Study

Expose:

Hamburg Haus Hamburg, sister city to Shanghai, has also funded an eco-friendly house which will stand as a fraternal twin to a building located in the city of its namesake. Like the ZED pavilion, the Hamburg â&#x20AC;&#x153;passive houseâ&#x20AC;? is designed to consume no electricity from the National Grid and boasts solar panels, a heat recovery system, and geothermal energy pumps. However, unlike ZED the people responsible for designing and building the Hamburg Haus had no qualms about importing materials from around China and around the world. According to the Bencer Project Management team, there were not that many barriers to imports, though applying for a 3C certificate for products never used in China was a long and difficult process. Hereâ&#x20AC;&#x2122;s a look at how far some of their materials have traveled.

MAy/June 2010

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Product Study

Total Budget: RMB40 million Items Imported: Facade, windows, doors, pumps, heat recovery units Total Area of Pavilion: 3000 sqm

Custom-Made Bricks Made in: Fujian Province # of Bricks: 230,000 Distance traveled: about 607.52km Cost: RMB5-7/brick (itâ&#x20AC;&#x2122;s usually about RMB.5/Brick) Total Cost: RMB1 million

Facade Made in: Germany Distance traveled: 8,856km Material: Wood/Steel Total Cost: RMB 2million

Heat-Reducing Window Shades Made in: Shanghai Amount: 60 Total Cost: RMB350,000

Pazen Co. Triple Plated Windows Made in: Zeltingen-Rachtig, Germany Distance Traveled: 8951.11km Cost: about RMB 10,238 â&#x20AC;&#x201C; 13,650 / window Reason for importing: The right technology/factory could not be found in China.

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Groundfos Pumps Made in: Wahlstedt, Germany Distance traveled: 4592.03 km Total Cost: RMB 30,000 Reason for importing: Sponsor items

BASF Neopor Thermal Insulation Made in: Shanghai Amount: 2200sqm Cost: Not disclosed

Heat Recovery System Made by: Burlinair, Germany, Assembled in: Kunshan, Jiangsu Cost: about RMB1million Distance traveled: 49 km Reason for importing: Building Standards 40KW Solar Panels Made in: Shanghai # of Panels: 51pieces Cost/panel: unknown

Geothermal heat pump Made in: Wuxi Distance traveled: 128km Total Cost: RMB700,000

May/June 2010

Feature Logistics

Rules of the Game

CEVA Logistics lays out what it takes to be prepared for the Expo

The coming Expo has every talking endlessly about how the six month long event will affect logistics movement in, out and around Shanghai. Businesses are practically trembling in anticipation of the Expo’s perceived benefits, but also feel the need to keep on their toes in light of possible restrictions and changes that everyone will have to react to in a moments notice.

Visual for Traffic Restriction Area with sub-text n The core area of the expo (7km) is forbidden for access, except for Expo partners suppliers. n Trucks will be limited to free-pass security holders up to the city’s middle ring. Expo Impacts Major Issue

Contingency / Impact

Actions You Can Take

n The

movement of dangerous goods will be embargoed for the duration of the EXPO n Total ban on DG imports (air and ocean) and domestic transfer within Shanghai

n Total

ban on the movement of DG within Shanghai n Ban on DG imports Shanghai air and ocean. Yang Shan port will accept and store DG but not release. n Additional controls on vehicles’ entrance & waiting time to/in certain areas.

n DG

n Increased

n Additional

inspections caused due to additional d ocuments inspection, clearance process

n Delays

n Traffic

restrictions Vehicles without green label restricted n Control on odd/even vehicle plate number (TBC) n Traffic from outside Shanghai prohibited

MAy/June 2010

n Average

CS staff to be made available. transit time (trucking) will in-

goods will be embargoed into Shanghai city. Goods need to be sent out before or after the Expo

trucks with green label local plates

crease n All

trucks should have got green label since 2008

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Feature Logistics

Forecast situation

Suggested Countermeasures

Inspection will be reinforced

Delay in delivery

Space limitation

Air Freight

n Flight cancellation and unstable flight schedule

n Pro-active communication with customer regarding documents (Li-battery, Magnetism, etc)

Update customer with latest information regarding: - cancellation/delay flights - traffic control restriction n Inform overseas counterparts regarding: - oversized/DG cargo should be moved before/after expo - Suggest customer to deliver 0.5 day earlier

To ensure space commitment to customer: - Pro-active increase of capacity agreement with airlines in Shanghai. - Pro-active increase of capacity agreement in close gateways (NKG/HKG/BJS)

n Flexible gateways to serve as backup for the potential risk of flight cancellation, carrier removal :NKG/HKG/BJS

Inspection will be reinforced

n Work closely with carriers, terminals (WGQ & YangShan), transportation department and customs to ensure the most updateS on any official announcement

Delay in delivery

Update customer with latest information regarding: cancellation/delay vessels Inform overseas counterparts regarding: - oversized/DG cargo should be moved before/after expo - Suggest customer to deliver 0.5 day earlier n n

Space limitation

Ocean Freight

n To ensure space commitment to customer: - Pro-active increase of capacity agreement with carriers in Shanghai. - Pro-active increase of capacity agreement in close gateways (NKG/HKG/BJS)

Vessel cancellation and unstable schedule

n Flexible gateways to serve as backup for the potential risk of vessel cancellation, carrier removal :NKG/HKG/BJS n DG goods or other special shipment will be moved from the back up loading port based on carrierâ&#x20AC;&#x2122;s capacity (such as Taiwan).

Only Shanghai license trucks may go into Shanghai city restriction area

n Consolidation center for all shipments should be moved outside of the restricted areas - Make sure licensed truck make deliveries to airport/port/Shanghai - 0.5 day longer transit time is expected n Register existing plate number, increase trucking pool

Odd / Even Plate number traffic control

Restricted area

n n n

Ground Service

Back up resources

All vehicles entering the city will have to go through stringent security checks April 15th until Nov 15th.

Courtesy Of:

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Work on alternative routing planning and earlier pick up Arrange smaller truck (2T/mail car/microbus) to access Transit depot to make fast delivery

restricted area

GPS equipped to enhance trucking security, tracing location of truck and protect goods in transit.

To shorten the checking process, free fast-track passes are available for drivers. Holders of the passes will not need identity documents, including ID cards and driving licenses, checked when entering the city at six expressway toll gates. n All CG trucks have the free-pass security. n On special days all trucks will have to pass the security check, even pass holders trucks. http://www.shanghai.gov.cn/shanghai/node22848/node24565/userobject44ai1960.html n n

May/June 2010

Feature Packaging

What’s Packaging Trends in China, 2010

Reducing Paper Use According to several sources, the price of paper in China has increased by about 30-40% in the past few months, a big deal when boxes are involved. While some companies are still willing to pay the extra dime, many others are looking for ways to control pricing and maintain efficiency. Sharon Reason, from L&E International, says several of their clients including Target, Northface and Tommy Hilfiger, have asked her to re-engineer their packaging in a way that demand less paper and helps control pricing. “We’ve spent a lot of time on re-engineering clients packaging to find ways to keep the price very similar,” said Reason. “We’re obviously a little restricted and we can’t save massive amounts, but we can keep the prices pretty controlled.” Cutting back on paper also has other practical applications, such as consolidating goods and the ability to ship more at one time… as long as quality is maintained. “Green” Initiatives When we say “green”, we don’t necessarily mean initiatives of altruism. The best of these initiatives not only help the burden of Mother Nature, but also help lighten loads of expenses while upping efficiency. The CEO of Wal-mart, one of the highest profile users of “green packaging” recently told the media that green is part of their plan because it just “makes good business sense.” Megalith

MAy/June 2010

Hot

companies like Cisco Systems agree. Oleg Kolosov, manager of packaging engineering at Cisco Systems, says that there is a higher demand among customers to have greener packaging methods, which in turn makes him put a little pressure on his Chinese suppliers. “Even though most green solutions are coming out first in the US or Europe I’m seeing them move much faster to China,” said Kolosov. “China is really leading the region in availability of recycled materials, I can get materials here that I couldn’t in Malaysia.” Sharing Standardization The problem of pallet sizing in China is no secret and no one thinks about this more that Farid Pazun, a logistics specialist in freight and packaging at Continental Automotive. Continental has been working on a pallet standardization project since 2008. To meet the challenge of having over 20 pallet sizes, Continental re-calculated the dimensions of all of their outer boxes to fit, with the most flexibility, two pallets and are slowly introducing these sizes back to their packagers. Continental is not “exclusive” with its new project . As many of their manufacturing sites are in hubs with other automotive industries, Pazun hopes this project will gather a group of companies together who will all use and demand the same pallet size – he has already spo-

ken with major local and global OEMs in China as well as different automotive alliances. According to Pazun, the higher volume and demand for these pallets, the more efficient everyone will be. “We’re quite open with this project,” he said. “From our point of view, we don’t compete on logistics, we compete on the product; if this project helps to harmonize the industry it gives the highest benefit to our customers.” Upping Luxe Creativity Companies who package everything from shoes to food are finding that more and more, it’s whats on the outside that counts. Chinese consumers are more willing to pay for high-end goods from companies that shell out for the packaging, which leads to some very flashy inner boxes. Some are studded with decorations, cleverly constructed to become something else or even hand painted. “If you buy a pair of 20 dollar shoes you don’t expect the box to be high end,” said Reason. “But if they’re 800 dollars they’re not going to put into a 30 cent box, it will be a 20 dollar box.” The philosophy behind these pricey boxes is that the whole sale should be around the whole item, and high end brands like Ugg Boots and Puma are catching on. “They want the customer to buy the shoes, but they should also be impressed by the box,” Reason continued. “Women especially love that kind of stuff.”

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Feature Packaging

What’s

Not Opaque Packaging Relationships For ease’s sake, many companies allow their manufacturers to choose their own local packager, without interfering in the relationship. This is a big no-no. While it is important to find packagers who are local to the source of product origin, people in the industry say that the less control you have over the packaging, the more susceptible you are to higher prices for lower quality. For many, an independent party gives you more ability to certify the materials, control what gets bought and ensure the product that comes out. Getting manufacturers to use an independent factory though can be quite a chore. “The factories hate this when you say you want to use an independent party,” said Reason. “Sometimes when we arrive at the factory to discuss it, they won’t let us in!” Despite the misgivings of factories, Reason says many will give in once they realize that the customer won’t stand for anything else. “They’ll make you jump through a lot of hoops that aren’t really necessary,” Reason continued. “But at the end of the day, we’ve some good reactions because the factories see a marked improvement in packaging.”

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Paying More for Second use When the idea to use recycled materials for packaging first came out, much of it was over 30-40% more expensive than the new stuff. This premium price was key in preventing widespread adoption. Kolosov says this problem is no longer as much of an issue, as recycled and green materials are entering the mainstream – in fact, it can also be a cost saving technique. “In the past couple of years we’re seeing comparable products and we’re able to have an overall reduction of total packaging cost while at the same time use more sustainable products,” said Kolosov. “We able to use things like 100% recycled plastic cushions, foam and corrugated products – stuff that we couldn’t use as much before.” Unattractive Packaging “Functional” packaging just doesn’t satisfy today’s Chinese consumers, even when they’re buying everyday household items. Target says that it makes over 70% of its sales through appealing packaging. If something looks bargain and discount, chances are the Chinese don’t want to buy it. The lesson here is never underestimating the power of pretty looks.

May/June 2010

Feature Packaging

你应该知道的包装趋势 —潮流 & 禁忌

潮流趋势:

减少纸张的使用据一些消息来源称，中国的纸价在过去的几个月已经上涨了30-40% ，这对需要大量使用纸箱包装的商家来说实在是个不小的影响。虽然一些公司依然愿意支付这额外的10美分，但大多数企业已经开始通过各种方法来在保证效率的前提下控制成本的增加。L&E International的Sharon Reason 告诉我们，许多他们的客户都要求她重新设计用纸量少的包装来控制成本，其中包括Target,Northface 和Tommy Hilfiger 这样的大客户。Reason说道：“我们已经花了许多时间和精力来为客户重新设计精简的包装来使成本价基本不变，但是这种方法毕竟范围有限，并无法应用在大批量的产品设计上。不过我们已经可以将价格很好的控制在一定的范围内。”减少纸张的使用还有其他行之有效的办法，比如在保证商品质量的前提下将货物压缩，提高货运承载量等。倡导“环保” 我们说的“环保”，并不意味着我们倡导一味的利他主义举措。而若能最优化利用这些举措，不仅能减轻

MAy/June 2010

人类活动对大自然的负担，还能在提高效率的同时减少开支。沃尔玛的CEO 作为绿色包装最忠实的拥护者，他最近向媒体证实，会将环保概念纳入未来的商业计划，因其具备良好的“ 商业意义”。CISCO公司也同意这一做法—包装部工程经理Oleg Kolosov 说，客户对更加环保的包装的需求日益增长，这反过来让他对国内的供应商也要施加不小的压力。“虽然许多先进的环保包装技术解决方案率先出现在美国或欧洲，但他们在中国的推广和发展则要快的多，”Kolosov还补充到，“中国的确在可再生材料的供给上有着明显优势，我能在这里得到我在马来西亚找不到的材料。标准化共享托盘的尺寸问题在中国并不是什么大不了的秘密，或许没有人像Farid Pazun一样认真思考过。自2008年以来，大陆汽车就致力于托盘标准化项目，Pazun告诉我们大陆汽车在中国的起家生产基地至少有20种不同的托盘尺寸。为了应对这个问题，大陆汽车重新度量了外包装的尺寸，并腾出了最优化的可调整空间。公司将两种托盘尺寸一一推荐给对应的包装厂家。大陆汽车在努力尝试托盘表转化项目的同时，也在努力做别的努力。由于大陆汽车许多工厂同其它汽车制造商设在同一制造中心，Pazun希望别的公司也能加入这个项目，使用统一的托

盘尺寸。Pazun已经和在中国的国内外贴牌生产厂家和汽车联盟商讨过这个提议。Pazun认为，对统一尺寸的托盘的需求量上升，可以提升所有人的效率。 Pazun说：“我们对这个项目的御用设想是十分广泛的。在我们看来，我们并不靠物流，而是靠产品和别人竞争。如果这个项目有助于协调整个行业，那我们的客户将获得最大的收益。” 大胆奢侈的包装创意从事食物和鞋子包装的公司会越来越明显地发现，似乎很多时候是包装觉得了产品的销售命运。我们可以发现一些内盒上镶嵌了小装饰，巧妙地设计结构，甚至还有手绘的图案。“如果你只是买一双20美元的鞋子，你并不指望鞋盒的设计能给你多少惊喜，” Reason说道，“但如果是一双800美元的鞋，那么它绝对不会躺在一个30美分的廉价鞋盒里，而更有可能被一个价值20美元的盒子包装。”背后的哲理就在于这些昂贵的盒子实际上也随着鞋子一起作为商品来销售，一些高端的品牌诸如UGG 和彪马也逐渐认识到了这一点。Reason 继续解释道：“他们总是希望顾客尽可能多地购买他们的鞋子，但同时必须做到首先在包装上吸引他们的注意，女性尤其喜欢那些精致而有创意的东西。”

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Feature Packaging

Out 不透明的包装合作关系为了方便起见，许多公司允许他们的厂家选择本地的包装公司合作，而不干涉相互间的关系，这实际上犯了个很严重的错误。虽然当地的包装公司在产品的原产地的确具备优势，但业内人士解释道，企业对包装的控制力越少，越容易在劣质的包装上浪费较高的成本。对大多数企业来说，一个独立的包装供应商能提供正规的原材料，控制每一个环节并保证包装产品的质量。Reason还说道，“当然工厂方面对企业要求的独立包装供应商的做法显然十分反感，当我们想

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包装禁忌

进工厂和他们讨论此事时，他们甚至不让我们进去！”虽然工厂方面有着诸多的疑虑，但一旦他们意识到顾客不能忍受原来的包装时，往往也就不会过分坚持。Reason这样说道：“这会让工厂跳过许多不必要的环节，到最后，工厂给到我们的反馈都很积极，因为他们也看到了包装上明显的改进。” 为循环利用付出高价当可再生利用材料的概念刚刚推出的时候，这些材料的价格往往要比新材料要高出30-40%，溢价的必要性就在于防止竞争对手轻易的模仿。Kolosov说，目前的情况已经大不一样，可再生和绿色材料已经是市场中广泛采用的主要材料—实际上，这

已经成熟发展为更加经济的成本节约技术。Kolosov还说：“在过去几年里，我们已经能发现有相当部分的产品能在降低整体包装成本的前提下，更多地使用可持续的材料，我们已经能利用100%可回收的再生塑料垫子，泡沫和瓦楞纸材料，这些再以前是很难使用的。” 毫不起眼的包装 “功能性”的包装已经无法满足如今中国消费者的需要，即便是他们平时购买的家庭用品。一些调查数据表明，那些更吸引人的包装能让销售提高70%。可以理解，如果一样产品的包装就像廉价的打折货，大多数的顾客都不会有想要购买的欲望。这里的教训就是任何时候都不要低估了外表在影响客户决定时的力量。

May/June 2010

FOCUS Region

Fiery

Chongqing Pros and Cons in the City of Spice In a recent Supply Chain Roadshow, the Global Supply Chain Council along with 35 supply chain and logistics leaders, explored Chongqing’s many industries to analyze its logistics, manufacturing and supply chain potential.

hongqing, a massive city municipality located on the Yangtze River, has long been the Western China darling in terms of garnering growth numbers. Once the capital of China and a hotbed for rebellion, Chongqing today is less mutinous though no less ambitious when it comes to getting their piece of the pie. Listed as the number one city in China to draw foreign investment the past two years running, Chongqing attracted US$2.7 billion dollars in 2008, a number that grew to over four billion in 2009 and is expected to hit five or six billion dollars this year. In the past, the foreign investment mainly came from HK and focused on heavy industry. Today European and American companies are pouring in, bringing with them trade,

MAy/June 2010

finance and IT business. The city currently boasts 113 Fortune 500 companies, and the Chongqing Municipality Government plans to up it’s prestige by nabbing 10 more Fortune 500 companies, 15 multi-national companies and 20 national Fortune 500’s by the end of 2010. With it’s multitudes of incentives (see sidebar) and powerful economy, Chongqing has wooed such big names as Foxconn, IBM, Dell, and Mazda with promises of free land, no taxes and lodging without charge. Recently, a representative from the Wuhan government, another city on the Yangtze River located closer to the east, complained to CHaINA that “as soon as Wuhan makes an offer (to a company), Chongqing steals it away with bigger promises.” Infrastructure Development Chongqing has proudly dubbed itself

“The Hong Kong of the West,” referring to its steep winding roads that emphasize dramatic peaks and valleys. While these geographic extremes offer a breathtaking view of the city at night, the nature of the land itself poses some obstacle to infrastructure. This fact has not deterred the municipal government, which recently announced plans to spend over US$147 billion on infrastructure and property projects to boost its economy, with one-fifth to be spent this year. A visit to the Chongqing Western Logistics Park (CWLP) shows just how ambitious Chongqing is. Located outside the city center in Shapingba, the Chongqing Western Logistics Park covers a massive area of 33000sqm and expects investment of over RMB110 billion to fund its logistics, business and urban development. The logistics project, which is 70% foreign investment from several sources

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How important are incentives? A recent study by Roland Berger Strategy Consultants explored the factors influencing European companies’ decisions to set-up operations in the Western provinces. As a whole, companies ranked these factors in order of importance: 1. Market attractiveness 4. Cost level 2. Infrastructure development 5. Economic promotion / incentives 3. Staff 6. Natural resources

oes this mean provincial governments should scrap their incentive policies? Far from it. Incentives still matter, but they matter more at the end of the decision cycle, i.e. government incentives are not what initially attracts a company to a province, but can help “sell” the company on the province once the latter sees the value of operating there.

in Hong Kong, Japan and Germany, lies in the flattest area close to Chongqing city. According to Sun Dongfang, Foreign Investment Manager of the CWLP, Chongqing wants to be a hub like any other of China’s major cities. It plans to connect by high-speed cargo rail to Chengdu, Xi’an, Lanzhou and Kunming. “We will build a city that runs through the entirety of the southwest,” he said. “Plus, we will have a rail that takes only two to three days to get to Shanghai.” CWLP is also working on a high-speed line which will take 15 days to make the trip from Chongqing to Poland. Chongqing’s other valuable logistics resource is its location at the crux of the Yangtze and Jialing River. Chongqing benefitted greatly from the construction of the Three Gorges Dam, which created a deep safe port out of Chongqing. However, the

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Chongqing has been widely recognized as a province that offers more attractive economic incentives than other Western provinces. For example: n A large manufacturing company found Chongqing authorities more willing to capture value in their province than those in Sichuan or further east and supported this company’s move by offering lower raw material prices. Tax incentives were also offered at 50% of the federal rate. n A small consumer goods company was offered VAT reimbursements for machinery and equipment by the Chongqing government and had to deal with minimal bureaucracy. In addition, the government offered them qualified local staff trained

under the three Gorges Training Plan, reducing recruiting costs and concerns. n A heavy materials company was attracted by the lower tax rates and willingness of the government to help smooth the process of set-up. Furthermore, the government has continually supported them in their operations because the government’s incentives are aligned with that of the companies, i.e. increasing investment while protecting the environment. n An automotive supplier found Chongqing more open to foreign investment than other provinces in the region, which facilitated their establishment there. In addition to pure economic incentives, it’s important to foreign companies that conditions be attractive for foreign expats and East Coast Chinese. Chongqing still lacks a substantial western expat community as well as international schools, lowering its attractiveness to companies that need to rely on management from other locations. By improving these conditions, Chonqing’s government could present an even stronger case for foreign companies to establish there.

May/June 2010

FOCUS Region Dam has not made river logistics impenetrable. While the region is suffering from one of the worst droughts of the century, the Chongqing section of the Yangtze has fallen over eight meters, nearly four meters more than it did last year. According to several sources, the water level drop has made it impossible for barges to dock on the coast, and the waterways are faster and more dangerous. Gassy Clusters One of Chongqing’s more attractive geological features comes from it being positioned in the middle of a huge natural gas field which spans nearly 60,000km2 and contains an estimated 320 billion m3 of gas. This accounts for about 15% of the total natural gas in the entire country. This gas has not only attracted big petrochemical players like Sinopec, China National Petroleum Corporation, and Mitsubishi gas; it has also given birth to several manufacturing parks including the Changshou Chemical Development Park. Porton Fine Chemicals, one of the 10 chemical plants located in this development park, earns revenue of over US$38 million, which they attribute to their easy access to natural resources and one of the reasons they based their operations in Chongqing in the first place. Auto Star Chongqing’s automotive industry is perhaps one of the most interesting indicators of the city’s growth and expertise. The total 2009 output value of the automobile indus-

MAy/June 2010

try in Chongqing was RMB258 billion, which accounts for over 34.4% of China’s entire automotive industry. Last year, over 1.698 million cars were produced and sold in 2009, with only about 28,000 exported out of Chi-

na. This number also suggests the huge domestic appetite that residents of Chongqing have for motorcycles and cars (Chongqing officially has the highest density of motorbikes in the country). Chang’an-Ford, a joint venture between Ford, Mazda (the Japanese company in which Ford has a majority share) and a local company, Chang’an Automotive Group, has the distinction of being the biggest car manufacturer in Chongqing, producing up to 250,000 cars a year. Sun Xiaoyue, head of material handling and customs clearance of

the Changan Ford Mazda Automobile Factory, says that their customers are mostly within the Asia region. Located close by, Zongshen Automotive is one of the only truly local success stories. Founded as a small operation in 1992 that specializes in engines, motorbikes and cars, it is now the second biggest dealer in Chongqing and operates its own manufacturing in an area that looks like a development zone. While they do have a plant in Vietnam that manufactures motorbikes for local demand, they have mostly worked on developing their China market. According to Wang Zaibin, Deputy General Manager of Zongshen Engine, the company produces nearly 600,000 motorbikes a year and RMB 3 million worth of engines every year. Another benefit of the automotive sector in Chongqing is that, due to the density of car and engine manufactures, parts suppliers often cluster their factories around automotive manufacturing centers. The advantages of this set up are obvious. Chongqing Yanfeng Johnson Controls, a JV established in 2003 between Jason Controls, Shanghai Yanfeng Johnson Controls and Chongqing Yanfeng Co., Ltd, has buyers located about a three minute drive from its doors. The company, which designs and produces car interiors such as seats and tunnel consoles, supplies companies like Changan Ford, Chongqing Chang’an Suzuki and Chongqing Chang’an and has an annual capacity of over 300,000 sets at present. According to Wang Zhigang, Purchasing Manager of Chongqing Yanfeng Johnson Controls, their business is able to fill customer demands at short no-

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FOCUS Region

Recent Companies Attracted to Chongqing

tice, which lends itself to a flexible supply chain and quick order turnaround. From the car manufacturer’s side, a close proximity to their parts lends itself to a smaller likelihood of shortages and pauses on the assembly line. Is Chongqing Cheaper? What is attracting these hundreds of companies to Chongqing and is it really worth the move? Despite its huge size and Western location, the real costs of Chongqing are not necessarily that much less than they are in Shanghai. While many companies enjoy the benefits of VAT exemption and other such tantalizing morsels, hiring people to move out to Chongqing often takes a little more financial incentive. For companies who need to transfer their higher-skilled/higherlevel employees from the east coast of China or expatriates, the incentives they have to offer are often on par or higher. While Chongqing is huge and growing, it still seen as off the beaten track. Whereas cities like Chengdu are more attractive to transfer to, due to a reputation for a slower and more attractive lifestyle, Chongqing is viewed as a manufacturing city rife with mafia activity and contrary locals with heavy accents. According to an employee from HP, they pay their upper/office staff about the same as they do their staff in Shanghai or Beijing. However, as the cost of living in

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Chongqing is lower, manual labor is actually cheaper. According to Portan Chemical, the cost of manual labor is less in Chongqing. Tan Yongqing, Sourcing Manager at Porton Chemicals, says that Porton pays their standard operators around RMB2000/month, where in Shanghai they would have to pay at least RMB 3000 or higher. Sun, from Chang’an agrees that the average non-technical production line worker earns RMB 18,000/ year, between a quarter and a third less than in major manufacturing centers of the south and east, where the average urban salary is RMB 25,000. Rabid Consumers Chongqing has a large local market with a total population of 28 million and an average disposable income of RMB 15,709 in 2008, up 14.5% from 2007. When compared to the urbanites of Shanghai, whose disposable income per capita reached RMB 26,690 in 2009, this sum may still seem lagging, but a recent report says that oftentimes, urban consumers in tier two cities are just as eager to spend their renminbi. Therefore, local and international companies alike are working to enter the Chongqing market in the hopes to attract the interest of the new money. This is exactly the type of validation that Chongqing is looking for, a city eager for development and connection to the rest of China and the rest of the world.

n BASF BASF will build a new PU system in Chongqing, based in the same location as the German chemical company’s planned 400-kilotonne-per-annum MDI (methylene diisocyanate) plant. BASF said it expects the Chongqing systems house to start operations in 2012, working closely with two current systems houses and development centres in Shanghai and Nansha. n Suning Appliance Chinese home appliance leader Suning Appliance has started building a logistics base in Chongqing. The Chongqing logistics base has a planned construction area of more than 110,000 sqm. With adopting the thirdgeneration logistics experience and model, it is expected to reach a cost reduction of around 50%. n Anheuser-Busch InBev Anheuser-Busch’s new RMB 650 million plant will be located in Ziyang, Sichuan Province. It will have an area of 136,000 sqm and will produce 300,000 tons of beer annually. The plant will be put into operation June 2011. Ziyang, located between Chengdu and Chongqing, may give the company competitive advantage over Sichuan Blue Sword Breweries Group and Chongqing Brewery Co Ltd. n China South Industries Group A subsidiary of China South Industries Group Corp plans to spend around RMB 2 billion to set up an automobile logistics base in Jianxing Village, Yubei District, Chongqing. The auto base will have an area of 8,093,712sqm and will be completed within three years. Reportedly, the subsidiary will also build a 4,046,856sqm logistics center for auto transportation and maintenance in Nanpeng.

May/June 2010

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FOCUS Fraud

Closing the Cookie Jar

Controlling Supply Chain Fraud

2009

exposed years of fraudulent activity in the supply chains of many companies working in this country. While the threat of fraud in China is not a new revelation, this was the first real recession impacting multinational companies (MNCs) in China since the early 90’s. After 15 years of almost continual rapid growth, the economic slowdown forced companies check their spending. This meant that as more attention was put on cost reduction, certain employees who feared for their jobs were more tempted to indulge in malfeasance. Pre-existing relationships between internal and external “partners in crime” became additionally strained due to the reduction in money flowing between them. With the chances of enforcement or penalty minimal, it’s not surprising that, according to Tsinghua University, China lost almost 15% of the country’s GDP over the last decade to fraud and kickbacks. This is over twice the figure reported for the United States according to the Association of Certified Fraud Examiners’ 2008 Report to the Nation which approximated America’s GDP losses to fraud at roughly 7%. Different stages of the supply chain are particularly vulnerable to different types of fraud, and it’s important for companies to keep an open eye to nip these problems in the bud. Familial Sourcing Sourcing departments reign king when it comes to conflicts of interest in a supply chain, and commonly involve employees that have undisclosed relationships to a supplier which result in buyers paying above market rates for items. The supplier generally rewards the ‘inside person’, be it family or

MAy/June 2010

n Todd Lowe friends, with large gifts or a cut of the surplus. Extreme yet not uncommon cases involve conflicts of interest at the management-level, where insider relationships are controlled by a supervisor through a loyal ‘tribe’ of follow-

ers. One large international company with a significant portion of its worldwide sourcing coming from China discovered that its manager, “Mr X”, had family, friends, and ex-colleagues at almost all of the company’s suppliers. It was not enough that the company was paying exponentially higher prices for goods when compared to market rates, but additionally most of the items were sub-standard. Thus the company was losing money by accommodating customer product returns, along with over-paying. The scheme was first discovered after the global audit team flagged varying payments from the China sourcing team for the same products to a number of suppliers. The auditors, recognizing that they had scratched the surface of something much larger, requested an in-depth investigation to discover the sourcing department’s local management and reputation among its suppliers, as well as the ownership structures of the suppliers them-

selves. It became clear Mr X had had a hand in each of the suppliers’ selections. After interviewing a group of lower level buyers, clerks and assistants, it also became very clear that Mr X had followers in the organization that would report to him if anyone started asking questions or thought about bringing up quality concerns to individuals above him or outside his control. The core members of Mr X’s ‘tribe’ within the company had joined the company around the same time as Mr X and all of them, including Mr X were previously employed by the same competitor – a common, but avoidable, factor found when identifying tribes in organizations. Other types of tribes in organizations in China can be found through identifying a common school or university of attendance, a common spoken dialectic, or a shared home city, county, town or village. Mandatory background checks for crucial potential employees can often help curtail these types of problems before they begin. Losing Products At the front end of the supply chain, manufacturing also faces its share of fraud. Some scenarios are simple and can be caught early with manager-led factory checks. For instance, production staff who horde raw materials or steal basic tools to resell is a relatively small, common fraud. Unfortunately, one worker taking scrap materials or tools can quickly snowball into five, six or even the vast majority of the production line staff doing the same. For one international company operating in eastern China, these types of actions became commonplace in their production line and eventually escalated to staff purposely damaging semi-finished goods so they could dig them out of the scrap pile to be sold for a personal gain. This cost the company hundreds of thousands of US dollars.

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FOCUS Fraud

A more serious production-related fraud involves key production staff who start their own competing businesses. This may seem difficult to pull off without anyone noticing, but one plant manager who had been with a foreign fabric manufacturer since the ‘90s, managed to do so. The foreign manufacturer’s management was alarmed at the number of customers it was loosing to a new and completely unheard of China-based competitor. Once the foreign company realized that the new competitor’s products were identical to their own, they began to suspect someone in their operation was involved. The company requested an investigation on employees with access to the company’s key processes, as well as the background and ownership structure of the new competitor. The owner of the new competitor ended up being the foreign manufacturer’s own plant manager. Not only was his plant producing identical products, but he was located directly across the street from the original, foreign-owned fabric company. Production staff revealed that he had developed funding for his own plant by running operations at night at the foreign company’s facility and keeping the profits, a scheme which had gone undetected for years. After his factory opened, he stayed on as plant manager of the original factory while his wife ran the factory across the street, in order to maintain access to trained employees, proper production procedures, suppliers, and even customers. Where Your Products Go Agents, while good tools for distribution,

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also need to be carefully watched to ensure Through discreet enquires under the guise distributors are legitimate and have the right of an interested buyer, it was discovered that track records. For instance, on a routine tour, the sales associates were taking orders from one quality control team of a large consumer customers but issuing invoices to them from goods manufacture, “Company Y”, came Customer Z. After intensive forensic acacross their products that were past the sell counting, it was clear that the Xiamen sales by date in a small third-tier city shop of cen- office was selling items to Customer Z at a tral China. Company Y later found out that 15% discount. The sales associates would the expired products in question had been then funnel orders through Customer Z distributed through an approved agent; but who then sold them at normal market rates. when Company Y issued a notice to collect The excess 15% mark-up was pocketed by any unsold products from customers, the the Xiamen sales office manager. As a result agent for this region complied but simply Customer Z had no overhead costs because resold the expired products to undisclosed items purchased by Customer Z stayed in the smaller shops instead of disposing of the multinational company’s warehouses until a product. Consequences were not life threat- customer placed an order. While fraud issues that companies face ening this time, but the unknown actions of this distribution agent put Company Y’s here are not new, companies have had a wake up call in the last 12 months and are taking reputation in helpless jeopardy. Risks within the distribution chain do not greater care to investigate whistleblower allealways involve outside parties. Particularly in gations, weed out the fraudulent activity and China, it is commonplace for sales staff to then look how to build better internal conuse fake or shell agents under their own controls in order to reduce supply chain fraud trol to personalize profits. One multinational in the future. This is a serious challenge, and company, with a small sales office in Xiamen requires a comprehensive approach. However, if companies depend on found that despite performChina for a large percentage ing well, the vast majority of The excess of their global sourcing and/ its sales went to one customor manufacturing, it would be er (“Customer Z”) and yet prudent to assess the fraud no shipments had ever been risks along the supply chain in made to their warehouse. mark-up China and prepare themselves Customer Z turned out was pocketed for when the economy picks up to be a corporation regisby a Xiamen full steam. tered and wholly-owned by sales office the manager of the multinamanager tional’s Xiamen sales office.

15%

May/June 2010

MAy/June 2010

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Executive Appointments

Executive Appointments With talent at a premium, CHaINA keeps an eye on which executives are moving where. Hans Hickler CEO Agility, Asia-Pacific Region

Oliver Lemanski Regional Manager for Service Logistics TNT, Southeast Asia and India

Rajiv Srivastava COO Hewlett-Packard India

Hickler joins Agility from DHL, where he most recently was CEO for Global Customer Solutions, based in the United States. He was responsible for leading the development and sales of customer solutions for all DHL business units including DHL Supply Chain, Warehousing & Distribution, Forwarding and Express products. Previously, Hickler served as CEO of DHL Express USA. Earlier in his career he was CEO of APL Logistics. He will be based in Hong Kong.

Lemanski has almost 10 years experience in the service logistics industry. Prior to his appointment at TNT he ran the Asia-Pacific division of a boutique management consultancy firm focused on strategic development and implementation of service logistics solutions. He has worked with many high technology manufacturers, repair vendors and logistics providers across Asia and Europe. Lemanski is also a published author, guest speaker, and committee member for many industry specific forums.

Hewlett-Packard (HP) has appointed Srivastava as COO of its India operations. In his current role, Srivastava will be part of the central leadership team of HP India, responsible for driving the companyâ&#x20AC;&#x2122;s growth and business performance. He will be in charge of managing the overall commercial and financial impact across all organizational decisions and activities. Srivastava received his engineering degree from BITS and holds an MBA degree from the Faculty of Management Studies, Delhi.

Marc Hantscher CEO Bosch and Siemens Home Appliances Group, India.

Tim Farey, General Manager, Greater China Consona Corporation

John Hong Regional Supply Chain Director BP Asia & Pacific

As GM of Greater China, Farey will manage the greater China operations with a focus on growing the business for Cosonaâ&#x20AC;&#x2122;s main ERP products. Farey came from Apprise Software in Nanjing, where he was a Business Builder focusing on sales and marketing for the software. He was also with SoftBrands Inc for 13 years, where he built up a new business unit in China selling, supporting and implementing SAP Business One.

Hong has been with BP since 2002 and has over 16 years of international experience in challenging business, political and cultural environments; four of which were based in China. In his new role, Mr. Hong will lead and manage all supply chain operations and strategy development for the lubricants business in the Asia & Pacific region, supervising a total staff of 800. Mr. Hong will be based in Singapore.

Hantscher has been appointed CEO of Bosch and Siemens. He has been with Bosch and Siemens for two years and was previously the managing director of built-in sales at BSH Bosch and Siemens Home Appliances Group (China). Hantscher previously worked as the General Manager at Gaggenau China for three years where he was responsible for business development into the Chinese market.

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May/June 2010

FOCUS Indirect Green

The Indirect Path

hen the economic crisis hit, indirect spending departments were called to arms. Demands were suddenly passed down from the upper management which gave indirect departments the goahead to reel in company spending and cut down on all the little wastes that were slowly leaching into the bottom line. During the boom days, things like cheaper flights and office supplies seemed like a petty expense in the face of massive growth. But now, many companies have had a wake up call which brings indirect back into the limelight. “When things are all fine, our job is harder because there is an excess of capital,” said Christoph Schittny, Head of General Procurement in Bayer Health Care. “When the economy gets tough, our job actually gets easier because people suddenly realize they need us and will listen to our suggestions.”

MAy/June 2010

n Monica Liau

Seeking the Road One of the biggest problems that companies seem to face when looking at indirect is the way to take control of how their companies procure MROs, goods and services. Oftentimes companies with several branches with different functions and needs will have a fragmented, decentralized and relatively opaque form of purchasing practices. “When I first started, I was dealing with a company that spent US$1 billion on indirect every year with eight subsidiaries and 2000 employees,” said Joseph Zhou, sales and marketing director of Grainger China. “Each purchasing and finance platform was piecemeal, and I had to figure out a way of consolidating it all.”

Another problem that companies have to solve is how indirect can gain control of department spending, which is often made on a case-to-case, and specialized needs basis. Helge Hildenbrant, GM of procurement and logistics of Siemens China, says that indirect departments were seen before as service providers who no one wanted use because they were perceived as not able to understand the market or departmental needs. To address this issue, many companies have created cross-functional indirect departments that are more specialized to understand the needs of every step of the supply chain. Companies are also beginning to play it tough when it comes to employee spending on the company’s dime. Everything from business travel to dinners paid on the company credit card is coming under scrutiny and carefully monitored. Some companies have joined in a partnership with certain banks, most commonly China Merchants Bank, which not only provides detailed spending reports but also can be specialized to work only in approved locations. “Our credit cards know which hotels and travel agents the user is allowed to utilize,” says Hildebrant. “This guarantees a transparency in booking behavior and also can mean lower rates for the company as a whole.” Tightening the Web Stepping onto an online platform that helps to standardize operations is another way to whip companies into shape. At a recent Indirect Spending Summit held by the Global Supply Chain Council, several heads of indirect expressed departmental transformations that involved ERP, e-catalogs and e-sourcing. Zhou says that he was facing MRO purchases that were unplanned and non-transparent. To bring together and track the MRO spending of Grainger China, Zhou and his team used an E-BIZ solution create MRO partners that could bid online so that all purchases were tracked by a central source. But e-platforms also need to be monitored closely to ensure that they are actu-

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FOCUS Indirect Green ally efficient. Brian Selby, Senior Vice President of Elemica Asia said that his company has been using esourcing for over 10 year and warns that online platforms only work if you have enough volume to attract meaningful suppliers. “Tyco made a strategic commitment to an e-catalog system, but not all companies can say that,” said Simon Chuang, Regional Procurement Director of Tyco Electronics Asia-Pacific. “If you don’t have a commitment, you’ll miss out on resources and support.” Another problem that companies may have is figuring out how to bring online sourcing templates to China, where not only language but understanding needs to be translated. An employee from Bayer mentioned that their company is trying to introduce e-sourcing to the company, but is having difficulty with language and training barriers. “The e-sourcing platform that we use can’t be used in Chinese,” he said. “This means that a lot of the users can’t input data using their native language, which is a big problem.” One to Rule Them All While many companies are working to consolidate their spending and plug all those little holes that translate into big bucks, some companies have created a central office which muscles in and determines the budget of every single office all over the world. Siemens has even gone so far as to create a new organization that not only helps all other department branches manage their buying, but ensures that nothing gets bought without their support. “People used to laugh at us and joke that we’re the department that buys the pencils,” said Hildebrant of Siemens. “Now they all have to consult with us to create a proposed spending budget.” Hildebrant’s new procurement integration system, which has linked the worldwide indirect departments of Seimens, now acts more as a spending consultant to differ-

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ent branches. While Siemens still has local branches and headquarters to determine specialized needs, they all communicate extensively with the global office. Michelin Tires has also created a team that brings together their relatively decentralized branches in to

confer with indirect, in order to have a clearer understand of needs and spending patterns. “We want to act like consultants now,” said Jenny Wang, China Service Purchasing Manager of Michelin Asia-Pacific. “Each section of the business comes to us for help managing their spending.” While to some, this centralization of indirect procurement may seem like a cumbersome way of adding more hoops to jump and less flexibility, Hildebrant says this model has direct support and the indirect spending targets can come straight from the top. “We are no longer the nice anymore,” said Hildebrant. “We want to become part of the industry benchmark of the company.”

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May/June 2010

Focus Customs

Customs Crunch

usinesses have been feeling the pressure of tighter Chinese Customs controls as customs officials enforce and re-interpret existing rules to meet their revenue targets and promote domestic consumption, which means that companies may need to reconsider and reevaluate their methods of bringing things into the country. Last year, Chinese Customs had a duty claw back of RMB 1.3 billion, an astounding increase of 1045% from 2008. Starting from January 1st, 2009, adjustments to supervision conditions, HS codes, and import tariff rates were implemented. VAT refund rates for 3,486 items were adjusted in June and July, while additional corrections on previously published commodity classification decisions were posted in December. Customs is demanding more information about products and from further down the supply chain, which seems like a small task but requires detailed planning and communication on all points of the supply chain. “Customs now requires labels on boxes explaining what items are inside,” said Bryce Wu, Asia Trade Compliance Manager at Honeywell and recent speaker at a customs and trade seminar organized by the Global Supply Chain Council and Pricewaterhouse Coopers. A small change that requires detailed instructions and leaves no room for mistakes. In addition to demanding more information during declarations, reportedly some key challenges that compliance officers are dealing with include tightened regulations, maintaining good relations with port Customs, and implementing best practices

MAy/June 2010

n Eileen Chow within the company. “Customs has no standard format when asking questions, so you need to get as much information as possible about your product from your overseas supplier,” Wu said, citing origin of the product as a particularly tricky question. “You need to leverage local relationships, negotiate to get clearance to release goods and file the missing information later.” Stanley Shen, Asia Trade Compliance Manager at Tyco Fire and Security says that companies really need to stay one step ahead of the customs process and take responsibility to produce accurate information. He suggests that having a proactive strategy to standardize documentation, communicate with suppliers, and convey information to Customs authorities in advance is very important. His warning is echoed by many who maintain that any discrepancy in the documentation can and probably will be found by Customs. Benefits in Simplicity One of the ways many companies are looking to simplify and automate the Customs process is through e-supervision. The advantages to using an automated system are clear: changes can be made instantaneously and information input is standardized. Helen Du, Asia Pacific Trade Compliance and Logistics Manager at Ingersoll Rand said that her company has completely transferred over to an e-book format. The logistics team at Ingersoll Rand has access to an Oracle system that they update weekly. Jerri Stroup, International Trade and Compliance Officer at Tyco Electronics, said that these sorts of automated systems are needed to trace prod-

Pepsi

epsico has run into some of their own Customs mishaps over the past few months. According to Chinese media (though from foreign media there was not much noise), Pepsi made another appearance in the courts of Guangzhou. This time there were two former executives charged with smuggling and tax evasion: Huang Xuyi, originally a procurement officer and Lin Dong, former purchasing director of Pepsi. According to several media sources, Pepsi allegedly imported over one thousand tons of Kola nut extract, the key ingredient of their signature Pepsi soda, using the incorrect commodity code, which corresponded to a 5% tariff drop rate (20% to 15%). If true, this means Pepsi evaded over RMB1.1 million in taxes between 2005 and 2007. While the case seems a little late in coming to court, apparently a recent audit sent up warning bells when

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Focus Customs

Fizzles they found out about how Huang Xuy discovered the code discrepancy during a self-audit in April,2005. In light of this, Pepsico China not only continued using the mistaken product code, but also asked Pepsico’s U. S. suppliers to delete the code on the invoice, to which the American supplier agreed. How much information the American supplier was given is unknown. While this could have been simply a breakdown in communications originally between foreign and domestic counterparts, it has become an embarrassing example of Customs thoroughness. Pepsi is still treading on dark waters after being fined RMB700,000 last year for commercial bribery, and (in an unrelated incident) put on the China’s “black list of bad foods” for importing 38 tons of frozen concentrated orange juice with high levels of yeast and an unclear point of origin.

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ucts from one stage to another. “We’ve got a ways to go,” said Stroup. “But internal customs say they have to do it.” Garnering an upgraded rating from Customs could be a side benefit of increased electronic supervision. Companies with A or AA ratings enjoy benefits like shorter lead times, lower cargo inspect rates, and waived deposits on restricted products. As a compliance officer, “You get more support and trust from corporate headquarters [if you have a good rating],” said Shen of Tyco Fire. “If anything happens, HQ trusts you and is on your side.” To upgrade a company’s account status to A or AA, the company must prove that it complies with Custom regulations, which means being able to show Customs that your company has robust internal controls, on-site audits, coordination with finance teams, and engages with supply chains. The more information and the more transparent a company’s process it, the harder it is for a company to violate Customs rules. However, Damon Paling, Partner at PricewaterhouseCooper Worldtrade Management services, said companies should be careful when choosing their systems, since e-books “can cost a lot of money if it goes wrong.” Problem Dodging The best way to avoid problems with Customs – besides having all the necessary documentation – is to keep lines of communication open. This means making sure that your company has the right people discussing and describing your companies actions to the authorities. “You need to find the right person to articulate your operations to Customs,” said Daniel ZumBrunnen, General Motors Regional Manager of North Asia Customs & Indirect Tax. “It has to be someone who understands the logistics, valuation rules, and finances.” However, ZumBrunnen qualified this statement by adding that the person who is in direct contact with Customs must be able to describe these processes clearly to someone who may not be an expert, which may not necessarily be the logistics team or the finance squad, as technical products have become much more complicated in the last

five to ten years and more efficient designs have led to parts having multiple uses, and hence, multiple classifications. “Understand who is connecting with the Customs group,” ZumBrunnen continued. “Different divisions ask different questions and you need to make sure you get the whole picture and all information is shared.” Paling also advocates greater and more detailed communication with Customs authorities when disclosing potentially sensitive information. “If Customs doesn’t understand [your company], it’s difficult for them to rule in your favor,” said Paling. “If you don’t disclose all your information, things get harder down the road.” Jerry Qian, former Customs official and current Customs Manager at Cargill Investments , says that once problems arrive, either with cargo being impounded or audits being taken, negotiations with Customs becomes difficult. “It is not like a fishmarket, where if Customs says four, you say two, and then the final price is three,” said Qian. “No, you need documentation to support your position.” PepsiCo China learned this the hard way. The company recently stood trial on charges of smuggling more than 100,000 tons of kola-nut extract into China under an incorrect HS code (see sidebar), which meant that they evaded taxes amounting to RMB1.11 million. Not all companies are forced to stand trial. Until this year, Customs officials have traditionally had more discretion when evaluating how severe a company’s transgressions were. A company could be given a penalty or be downgraded from a higher rating, though fines above RMB 10,000 automatically resulted in a downgrading. There was talk at the seminar about the possibility of officials raising the bar to RMB 30,000, which could grant officials some additional leeway when levying fines. Change goes both ways though, and recently more multinational companies have been willing to take on the Chinese Customs authorities under the Administrative Reconsideration Law. “Who’s winning and who’s losing remains to be seen,” said a cautiously optimistic Paling.

May/June 2010

events

An Eventful Season

It’s been a busy spring for the Global Supply Chain Council (the Council) as several different groups of supply chain professionals from all walks and sectors gathered together to discuss some of the hottest issues in their fields. Sourcing Olivier Levy, managing director of Dragon Sourcing, led a lively discussion on managing sourcing in China, focusing especially on the China food export business. According to Levy, sourcing food from farms in China is especially difficult due to the fragmented nature of farms and low technology. “Many of these farmers try to cut costs as low as possible,” said Levy. “This is a big setback in our industry, because it’s not so easy to control materials and regulations on Chinese produce are many.” However, some of the agricultural sectors are easy to source than others. Tomatoes were a long topic of discussion, as many tomato farms are highly consolidated and have a very strong infrastructure to support them. The table also discussed how the export food business is increasing slower than other sectors. “The increase is slower because there is a huge demand for agricultural and logistics capabilities,” said a representative from GM. “This and food export regulations are a huge barrier to the business.

Green GXS officially introduced its new Green Supply Chain survey, published in coordination with the Council. Richard Zhong of GXS logistics and Max Henry of the Council discussed some of the survey results and what they mean for the future green supply chain in China. While the survey in general cites a relatively optimistic view in terms of actions companies are taking, it also mentions that most companies are not motivated by green motives but rather by efficiency.

Pharmaceutical Parexel International hosted a roundtable discussion entitled “Clinical Research in China: the Role of Clinical Research Organizations” which included members from such powerhouse pharmaceutical companies as Novartis, Eli Lilly, GlaxoSmithKline and AstraZeneca. The general feeling at the table was relatively optimistic as to the future of the pharmaceutical industry though some worries were voiced about whether China was the right production and sourcing platform. “Places like India are much more advanced when it comes to pharma,” said a representative from Novartis. “While we are expanding to China, we feel we should still keep a very strong sourcing base there as well.” However, participants also mentioned the importance of supporting the local pharmaceutical industry, citing growing healthcare initiatives and China’s massive market as an important factor for expanding operations here. “China has a huge population here that will be demanding more and more pharma resources, said one representative from Parexel. “Pharma needs to make sure medicines cater to their needs.” According to Parexel, many companies are working on speeding up trials to leverage a lot of data on the Chinese health demographic. They hope that by doing this, they will be more able to attract the Chinese market as it expands.

MAy/June 2010

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events Lean In light of the still on-going Toyota recall problems, the Lean Practice Workgroup led by Patrick Daly, Managing director of Alba Logistics, tried to decide exactly where Toyota had gone wrong. To this luncheon group, many of whom have been in lean supply chain for decades, Toyota was one of the founding fathers of the lean concept. In fact, Daly lauded Toyota for having successfully created partnerships with their manufacturers, expanding effectively into the U.S., and for having what had seemed like a very transparent set of processes. “Toyota is unique because all of its different units work as a team,” said Daly. “In this way, Toyota was able to know where all of their cost and profits were coming from.” Discussion about where the golden company fell off the path led to speculations that Toyota’s former CEO, who the current CEO Toyoda came out of retirement to replace, was actually the root of the problem. “Kinks in the supply chain can take years to be realized,” said one discussion participant. “I can’t help wonder if the problems started as far back as 2005.” Speculations also went to whether the “Toyota Scandal” wasn’t blown out of proportion by the American media and exacerbated by Toyota’s poor public relations reaction. Despite all of these problems, most of the professionals at the talk agreed that this was merely a kink in the road and wouldn’t take Toyota out of the game. “Consumer trust is an issue and Toyota’s going to have to work to smooth things over,” said Liam Cassidy, managing director of a lean supply chain consulting company. “But there is no doubt in my mind that Toyota will bounce back.

July 15, 2010 － Shanghai This event will draw again upon the experience of manufacturers, retailers and services providers from both pharmaceutical, chemical, FMCG and retail sectors and will deliver case studies of cold chain and safety issues in China. More information: www.supplychains.com/en/cev/522

此次峰会将再次聚焦包括医药、化工、快消品和零售连锁等行业的制造商，零售商和服务商的运作经验和冷链及中国的食品安全问题的案例分析。了解详情: www.supplychains.com/en/cev/522

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May/June 2010

CLASSIFIED Listings

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

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

Agility 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

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

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, 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

MAy/June 2010

DSV Logistics 38/F, 1 Grand Gateway, 1 Hongqiao Road, Shanghai 200030 +86 (21) 5406 9800 www.dsv.com www.dsv.com/cn 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号主楼8楼，邮编：201103 +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

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

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 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

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CLASSIFIED Listings

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

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PROFESSIONAL SERVICES

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 Demand Management Systems PO Box 6180, Norwest Business Park, Baulkham Hills BC NSW 2153 +612 9659 4555 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 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

PROFESSIONAL SERVICES 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

力宝广场2705-06室，邮编：200020 +86 (21) 6386 8710 www.resourcesglobal.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

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

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

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

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

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

LowendalMasai 1505 Hai Tong Tower, 689 Guangdong Road, 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 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 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

27/F, Room 02 418-428 Jiang Ning Road 200041 Shanghai, China

上海市江宁路418-428号 27楼02室，邮编：200041 +86 (21) 6217 0253 www.iiaps.org 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

PROFESSIONAL SERVICES

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

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

May/June 2010

CLASSIFIED Listings

REAL ESTATE SERVICES

CARGO OWNERS READ CHaINA Reach on affluent audience who buy logistics and transportation services To place your advertisement contact ads@supplychain.cn

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

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 GSE 27C Industry Building, 18 North Cao Xi 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 www.joneslanglasalle.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

MAy/June 2010

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

IT & SOFTWARE SOLUTIONS 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

ATMS Number One, Holt Court, Aston Science Park, Birmingham, B7 4EJ, UK +44 121 628 9000 www.atmsplc.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

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

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

BravoSolution 19F-08, Chinese Overseas Building, 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

Suite 1515, Silver Centre, 1388 North Shanxi Road, Putuo District, Shanghai 200060 上海陕西北路1388号银座中心1515室，邮编：200060

+86 (21) 6149 8042 www.supplyon.com

EQUIPMENT PROVIDERS 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

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 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 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

www.supplychains.com

COMPANYINDEX

21cake.com �� 29, 31 360buy.com �� 10, 28 9diamond.com �� 29, 31 A.P. Moller-Maersk �� 9 Agility �� 55 Alba Logistics �� 61 Aluminum Corp of China �� 8 AMB �� 26 Americold Realty �� 10 APL Logistics �� 55 Apple �� 8 Apprise Software �� 55 Arla Foods �� 12 Arriba �� 24 AstraZeneca �� 8, 60 Avaya �� 9 Baidu �� 29, 31 BASF �� 39, 41 Bayer Health Care �� 56 BMS �� 8 Bencer �� 39, 41 Boliden �� 8 Bosch and Siemens �� 55 BP Asia & Pacific �� 55 Bridgestone �� 8 Cadbury �� 12 Calsonic Kansei �� 11 Cargill Investments �� 59 Carrefour �� 28, 30 CEVA �� 3, 42, 43 Changan Automotive �� 50 Changan Ford �� 50 China EMS �� 28, 30 China Nat’l Petroleum Co 50 China Railway Express �� 9 China Southern �� 8 Chongqing Chang’an �� 50 CIC �� 66 Cisco �� 44, 46 CiTT �� 11 CMHI �� 10 CNOOC �� 24 Colliers International �� 27 Consona �� 55 Continental Auto �� 44, 46 Costume National �� 14 Damco �� 9 Danzas Z.F. �� 8, 9 Delaval �� 17, 19 Dell �� 8, 48 Deutsche Post �� 9 DHL �� 55, 66 DKSH �� 11 Dragon Sourcing �� 60 Elemica Asia �� 57 Eli Lilly �� 60 Emptoris �� 23, 24 Foresight M&S �� 11 Foxconn �� 48 General Motors �� 59, 60 GlaxoSmithKlin �� 60 GLP �� 27 Goodman Group �� 26, 27, 66 Grainger �� 56 Groundfos �� 39, 41 GXS Logistics �� 60 Hai’er �� 10 Zhongce Rubber �� 8 Heinz �� 12 Hewlett-Packard �� 55

www.supplychains.com

EVENTSCALENDAR

Hisense �� 10 Honeywell �� 58 HuangMing �� 36, 38 IBM �� 48 IDS �� 32, 34 Ingersoll Rand �� 58 Interlink �� 66 Jason Controls �� 50 Johnson & Johnson �� 8 Joyo Amazon �� 28, 30 L&E International �� 46 Learn & Change �� 11 Legend Capital �� 29, 31 Li&Fung �� 9, 32, 34 Lianhua Supermarket �� 10 Lotte Group �� 12 MasaMaso �� 29, 31 Maxxium �� 16, 18 Mazda �� 48, 50 METRO China �� 20, 21, 22 Michelin Tires �� 57 Mitsubishi Chemical �� 50 Motorola �� 11 Nestlé �� 12, 16 Northface �� 44, 46 Novartis �� 8, 60 OkayBuy �� 29, 31 Oracle �� 24 Parexel International �� 60 Pazen �� 39, 41 PepsiCo China �� 58, 59 Portan Fine Chemicals �� 50 PricewaterhouseCoopers 58 Puma �� 44, 46 Rio Tinto �� 8 Roland-Berger ��49 Sanofi-Aventis �� 8 SAP �� 24 SASAC �� 24 Shanghai JiaoYun �� 42, 43 Siemens China �� 56 Sinopec �� 50 Smardirect.cn �� 28, 29, 30 Sony �� 8 S. China Tire & Rubber �� 8 STAR Farm �� 20 Starbucks �� 12 Suning �� 10, 29 Suntech �� 37, 38 Taobao �� 29, 31 Target �� 44, 45, 46, 47 Tesco ��21 Tiger Global �� 28, 30 TNT �� 55 Tommy Hilfiger �� 44, 46 Toyota �� 61 TrendsAsia �� 12 Tyco Electronics �� 57, 58 Tyco Fire & Security �� 58, 59 Ugg Australia �� 44, 46 Unilever �� 12 Vancl �� 28, 29, 30 Vtradex �� 10 Wal-Mart �� 9, 29, 44, 46 Yanfeng Johnson Controls �� 50 Yihaodian �� 29, 31 Yusen �� 66 ZEDfactory �� 37, 38 Zongshen Engine �� 50

2010 MAY

WED

Winning Across Global Markets: How Nokia Creates Strategic Advantage in a Fast-Changing World Shanghai Venue:

Osteria

Organizer:

2010 MAY

French Logistics Luncheon Shanghai Venue:

Osteria

Organizer:

The Council

WED

The Council

2010 MAY

13 14 THU-FRI

2010 MAY

19 WED

Supply Chain & Logistics Roadshow in Xiamen Xiamen Venue:

Marcopolo Hotel Organizer:

The Council

CPO Agenda: Aligning Chinese Suppliers with International Standards (members only) Shanghai Venue:

Osteria

Organizer:

2010 MAY

13 14

China Hi End Retail Summit 2010 Shanghai Venue:

InterContinental Pudong Organizer:

THU-FRI

OPPland

2010

The 7th Shanghai Textile & Apparel Trade Fair 2010 Shanghai

MAY

19 21 WED-FRI

Venue:

Shanghai Mart Organizer:

Shanghai Mart

The Council

2010 MAY

20 THU

2010 MAY

China Outsourcing: Trends, Strengths and Challenges Shanghai Venue:

Shanghai Organizer:

EUCCC

Sourcing & Product Liability Workshop Shanghai Venue:

Osteria

Organizer:

The Council

TUE

2010

MAY

27 THU

2010 JUN

MAY

High Tech & Electronics Supply Chain Summit Shanghai Venue:

Shanghai Organizer:

Automotive Supply Chain Workgroup Shanghai Venue:

Osteria

Organizer:

The Council

FRI

2010

MAY

26 27 WED-THU

2010 JUN

China Port & Shipping Conference 2010 Tianjin Venue:

Binhai International Convention & Exhibition Center Organizer:

Tianjin Port Holdings Company Limited Chemicals & Oil Transportation & Storage Exhibition 2010 Shanghai Venue:

Shanghai Mart

The Council

THU-FRI

Organizer:

Transport Logistic China Shanghai

2010

Zhejiang Investment and Trade Symposium Ningbo, Zhejiang

Venue:

TUE-THU

2010

Messe Muenchen Organizer:

The Council

JUN

TUE-FRI

CBI China

Venue:

Ningbo International Conference and Exhibition Center Organizer:

Ningbo Municipal People's Government

May/June 2010

Executive

Hong Kong

and Beyond

The Goodman Group recently broke ground on the Interlink, the first major new warehouse and distribution center to be built in Hong Kong in over a decade. CEO Greg Goodman and Managing Director Phillip Pearce discuss the new HK$4 billion logistics facility and the companys’ plans for expansion across Asia.

n Greg Goodman

CEO, Goodman Group

Hong Kong is notoriously difficult to get property in, especially industrial, and at 222,000 sqm, your development will become the fourth largest warehouse in Hong Kong. How and why did Goodman decide to build here? Goodman: Well, we already are the biggest warehouse operators in HK with over 743,224sqm of space. We assessed that there was demand from our major customers in Interlink - DHL and Yusen have already signed up for approximately 50% of the building. Hong Kong is one of the biggest ports in Asia right now, and we’re seeing the market start to rise and move forward. Plus, a trend we saw was that Hong Kong consumers have a very high demand for retail goods, so this warehouse will also be driven by local consumption of HK, serving the domestic market What were the challenges of planning this facility in the middle of Hong Kong, which is already very densely developed and difficult to plan new construction? Pearce: We’ve been planning the building for about three years. It’s a seriously big build-

MAy/June 2010

n Philip Pearce,

Managing Director, Goodman Greater China

ing for HK so we took our time. Obviously, there are always big challenges with planning out larger products. For Hong Kong, land was hard to get, especially as there’s been a lot of interest in commercial and residential real estate, so money was poured into those products. All we do is industrial, but we kicked our plans off as soon as we felt the financial markets stabilized. What about your strategies for expansion in mainland China? Goodman: I think in China, one of our main challenges is making sure we have the right sites but I think our goal of A$3-4 billion products over the next five years is very doable. Our relationships with China are very close, as the Chinese sovereign fund, China Investment Corporation (CIC) is our largest investor – 18% of the capital of the company, and we’re very keen to help China with our expertise in logistics. Mainly in China there are some great opportunities and we’re working with a lot of local and international customers to help them grow their businesses and reconfigure their supply chain.

Your products, as you say, are very high end and more expensive. How do you compete in a market like China, which is still developing its logistics capabilities? Goodman: We build standard long term facilities and we don’t build any cheap stuff. Basically, we compete on the basis that we have global customers and some seriously good people in HK and in China. We’re a good team of people and have got global expertise in the area. Our facilities are also incredibly user friendly. We build them very practically so they appeal to a number of users – they’re adaptable to different types of business. Plus, as you know, logistics properties are all about location location location – and we are always very well located. Location can make or break a logistics facility. How does Goodman make the difficult choice of pinpointing the right location? Goodman: We just go for the obvious ones – because Goodman is focused on the needs of their customers, we simply have to create a warehouse that is well located and of good quality that will last for a long time. We have a very big customer base and our information on where they want to be and where the infrastructure is, is very high quality. How has Goodman been affected by the world economic crisis? Goodman: We’ve been through 12 months when the world has been very uncertain. Asia was pretty good but Japan was pretty terrible. The UK was pretty devastated. Europe was not as bad as the UK, but it was also very tough. Australia came through relatively ok because it was driven by the growth of China. Hong Kong and China were our best markets, followed by Australia. It was a heavy time for most people. However, now we see the world is getting a little more comfortable with itself and we’re starting to get more new opportunities. Right now, we think it’s a pretty exciting future for our company, and are confident we’ll meet our goal of having A$10 billion in the development pipeline, of which A$1.2 billion will be in Asia with a focus on China.

www.supplychains.com

MAy/June 2010