ai h ng a Sh , 3 2r e b Keyno tes + Streams + Awards Novem
CHaINA ’11 Live: The Global Supply Chain Event for Asia CHaINA’11 Live is the largest and most anticipated event in Asia for businesses thriving or interacting in supply chain management.
CHaINA’11 Live 是全 亚 洲 最 大
CHaINA’11 Live helps you stay on top of the game with a broad range of presentations, networking opportunities, workshops, and exhibitions, followed by the unique CHaINA Awards ceremony, which recognizes excellence in supply chain management, logistics, and procurement in Asia.
数以百计的同僚参会，这将是 您扩大人际关系网络，树立中 国供应链领袖形象的绝佳机会
供应链行业庆典
Council Media:
Follow up on
http://cha.in/a11live
Publisher: Global Supply Chain Council Ltd. 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：Global Supply Chain Council Ltd. CHaINA杂志是为Council会员准备的免费杂志。我们协会会员 和业内专业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
Graphic Designers Cherry Chen Susy Song
Chief Editor Kevin Foehner Photographer Junior Editor & Jimmy Kim Translator Chenyin Pan, Carmen Ren Contributing Writers
Edward Antczak, Dave Meyer, Greenpeace, Mui-Fong Gob, Chee Wee Gan, Karen Chen, Apple Zhang
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 on print (6 times a year) CHaINA Magazine is offered FREE of charge by direct post mail to qualified readers in Greater China who are involved in all aspects of supply chain management. It is also distributed through selected locations in major Chinese cities, including hotels, restaurants, service offices/apartments, business centers, airport lounges and other key locations. 发行量：一年六期，每期一万本 CHaINA杂志通过直接向中国各供应链管理的专业读者发送 邮件来提供免费的阅读机会。同样也分发到中国的主要城 市并在酒店、服务楼，商务中心，机场大厅或其他中心地 带免费赠阅。
Target Readers Our target readers are R&D, sourcing, procurement, manufacturing, logistics, warehousing, transportation, retail, distribution and operations managers, directors, vice presidents and decision makers. A majority of our readers are mainly end-users, shippers, and 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、 零售和分销的各级管理人士。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 Go to supplychains.com/apple 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 your operations. Please send your email to 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。
The China market is simultaneously the most lucrative and unpredictable in the world, due to the sheer amount of variables, expected or not, that the local competitors and landscape present. Whether you’re in logistics, sourcing, or manufacturing, new challenges are constantly popping up all around you. In our latest issue, we showcase a variety of industries being challenged by China’s erratic Kevin Foehner business environment. From foreign 3PLs Chief Editor and express delivery companies struggling CHaINA Magazine to find the right strategy to compete locally, to manufacturers attempting to produce, given China’s unstable power supply. Knock-offs of international brands like Ikea, Apple, and Dairy Queen are forcing companies to take a hard look at their distribution and IP strategies in China. Sourcing, labeling and import/export strategies also come into view with DaVinci Furniture making headlines. For every new strategy, a strategist must take the helm, so for this edition we get tactical input from professionals at ITT, LVMH and Spar. We also debate the best location to manage your APAC supply chain, see how green packaging strategies can reduce your costs, and much more in your September/October issue of CHaINA magazine! 仅凭可变因素的数量，本土竞争和大环境，可以说中国是世界上最有 前景也是最难预测的市场。无论你是从事物流、采购或者制造行业，新 的挑战无时无刻不出现在你身边。 在最新一期的杂志中，我们展示了一系列被中国多变的商业环境所挑 战的行业。从努力寻求应对本土竞争战略的国外三方物流公司和快递公 司，到在中国不稳定能源供应下的制造业公司。还有宜家、苹果和冰雪 皇后的山寨店迫使这些国际品牌不得不重新审视他们在中国的分销和产 权保护战略。而随着达芬奇家具事件的曝光，采购、贴标和进出口战略 也成了我们关注的焦点。 对于每一个新的战略，一个成功的战略家必须掌握主动权，所以这期 杂志的内容包括了来自埃梯梯、路易威登和喜伴的业内人士的战术分 析。此外我们还讨论了设立您亚太地区供应链管理总部的最佳城市，以 及绿色环保包装策略是如何为您节省成本的，更多精彩内容尽在本期杂 志中！
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. 1
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SEPTEMBER/OCTOBER
CONTENTS
frontlines
Procurement
7
Big photo Quotes 9 Supply Chain Aps 10 In & Out 11 Wisdom from Weibo 12 Invest-O-Mania
14
8
16
7 8 9 10 11 12
18 20 21
大事件 微博 物流软件、游戏 斗转星移 从业者说 建设一览
Procurement News The Sourcing Strategist The DaVinci Case M&A LinkedIn Poll
September /october 2011
MANUFACTuRING 22 Manufacturing
News
Growing Pains 26 Chendu VS Chongqing 24
14 行业短讯
22 行业短讯
16 采购战略家
24 电力青春期
18 达芬奇“密码”
26 成都VS重庆
20 企业并购资讯 21 采购业调查
Logistics
DISTRIBUTION
The LINKS
28 Logistics
40
Distribution News 42 An Alternate Approach 44 The Imitators
58
News 30 The Logistics of Beauty 32 The Long Haul Lifestyle 34 China’s E-Commerce Market
Back Home Silk Road 59 The Sweet Spot 60 Going Green 65 Linkedin Question 58 中国式的发展
28 行业短讯 30 奢华物流
40 行业短讯
59 甜点
32 长途生活
42 为超市服务
60 走向环保
34 国内电子商务市场
44 山寨概念店
65 采购人士的报告
Preview
LIVE
11
Get a sneak preview of Asia’s Largest Supply Chain and Logistics event! See some of the top speakers and most interesting tracks on tap for CHaINA’11 Live!
2 September/October 2011
www.supplychains.com
FEATUREs
46
The China Dream
50
A Tough Nut to Crack
55
Dirty Laundry
The struggles of American 3PLs in China’s challenging market 他们的中国梦
Chinese domestic express woes 中国国内快递业之殇
Unravelling the corporate connections to toxic water pollution in China 工业污染
Engage “AA” rated Customs Brokers Reduce and consolidate the number of Customs Brokers used Adopt best practice for Customs Broker selection Standardise evaluation and performance scorecards and service contracts
3 www.supplychains.com
SEPTEMBER/OCTOBER
Dotcom
2011/12 Logistics and Warehousing Map Your office wall is not complete without the 2011/12 Logistics and Warehousing Map! Our latest offering has more than 150 key warehouses and distribution facilities. Check online for more information. Cha.in/logmap
cha.in/posterlogmap
Upcoming Events Sept
2
Fri
Sept
8
Thu
Moving from captive to a third-party service model
Too many invitates and flooded with updates on LinkedIn?
Looking for the best logistics providers in Asia?
On Supply Chain Times
On CHA1N
On Vendorsdirectory
The Indian transportation and logistics industry has been the witness to as well as the driver of several path-breaking trends across different pockets of the value chain.
Might be time to switch towards a “niche� networking site where you can share similar interests and passions, which helps you network better!
Vendors Directory connects manufacturers, retailers and shippers with the best 3PLs, logistics providers and consultants. Try it today!
Scmtimes.com
CHA1N.com
VendorsDirectory.com
Sept
14 Wed
Sept
15 Thu
Sept
23 Fri
IIAPS Shared Learning Roundtable The Longemont Hotel Organizer: IIAPS
5th Indirect Procurement China Forum
Renaissance Shanghai Zhongshan Park Organizer: GSCC
Supply Chain Finance Forum
Renaissance Shanghai Zhongshan Park Organizer: GSCC
Supply Chain Networking Mixer Shanghai Organizer: GSCC
1st China Aviation Supply Chain Forum Shanghai Organizer: GSCC, PwC
4 September/October 2011
www.supplychains.com
RMB 309,600,000,000 ASSETS UNDER MANAGEMENT 资产管理总值3,096亿人民币
3,500
MODERN LOGISTICS FACILITIES 拥有现代物流基础设施3,500处
4,500
CUSTOMERS 服务全球企业客户4,500家
1,300
PROFESSIONALS 拥有专业人才1,300名
55.7
MILLION SQUARE METERS 物业面积5,570万平方米
22
COUNTRIES 覆盖22个国家
4
CONTINENTS 分布于四大洲
TRULY GLOBAL 真正的国际化企业 AMB Property Corporation and ProLogis have merged, creating the undisputed leader in the global logistics infrastructure business. In this combination, two great companies have come together to form the new Prologis. AMB和ProLogis两大行业巨头的成功合并，开启了安博作为国际物流基础 设施行业全球领袖企业的崭新篇章。
Learn more at www.prologis.com
更多详情，欢迎浏览公司网站 www.prologis.com www.supplychains.com
SEPTEMBER/OCTOBER
FRONTLINES
Follow - up
A look at some of the previous stories covered that are still making headlines.
Top 25 Demystified gets attention! In the previous issue, CHaINA Magazine explored the shortcoming of Gartner’s Supply Chain Top 25 ranking. The article was quickly noticed by companies trying to be on the list and Gartner themselves. Here are some of the most interesting comments: “I found it interesting for example that RIM who was unranked in 2009, then ranked #9 in 2010, and then jumped all they way up to #4 in 2011. Despite RIM’s current financial troubles one reason for the jump may be that RIM provided a webinar sharing their SCM strategies to potential Peer voters. The webinar was hosted by Gartner / RaptureWorld. Seems that more exposure via Gartner garners more votes...” - Kevin Kyunam Park, Principal Consultant, SC & Logistics at Samsung SDS “As a company that is not a client of Gartner’s, we can attest that it is not an easy process to appear on a Gartner list. When we do appear, there are many inconsistencies - it is frustrating that many potential clients look to this list for guidance.” – Cindy Cornman, Marketing Director at Puridiom “The author questions the objectivity of Gartner’s research, and suggests that Gartner engages in “pay-to-play” in our research coverage. This is not the case. Gartner does not accept sponsorships for our published research, specifically to avoid any appearance of influence.” - Jeff Snyder, VP Ombudsman, Gartner
The Japanese Disaster: What have we learned? So what should professionals take away from the Japanese disaster? “Don’t ignore risk management!” says Brian Dreckshage, Senior Business Solutions Specialist at ASC Associates. He also acknowledges the issues lean principles create in supply chains that can be affected by disasters. “Lean works to remove unnecessary buffer inventory throughout your supply chain and that means that your supply chain must work without fail,” he says. “If you find yourself without inventory as a result of a natural disaster, your risk management plan probably wasn’t complete and now you are paying for it.” The moral of the story, plan ahead and plan for the worst. Electronics Supply Chain Unaffected The IHS iSuppli Inventory Market Brief has reported that semiconductor inventories have increased worldwide in the first quarter, despite the disaster that affected several manufacturers in Japan. As a result of a build-up in supply for the six months preceding the earthquake, Japan’s disaster had “a minimal effect on the electronics supply chain”, according the report. Manufacturer’s ability to shift production to countries outside of Japan was another major reason behind the small disruption to the electronics supply chain.
Japan Shifts for Rare Earth Metals
Several Japanese manufacturers are mulling shifts of their production to Mainland China in order to avoid Beijing’s restrictions on export quotas and to reduce their costs. Among them are Hitachi Metals, the top producer of rare earth magnets, and Showa Denko KK, a top allow producer, both of which are mulling the option. Rare earth mines outside of China could face a loss of clients if this shift in production becomes a trend. China currently controls about 97% of rare earth supplies, more than enough to meet demand from the top companies. While shifting production to China would solve their supply issues, Japan’s manufacturers also face a higher risk of their technology being copied, which would result in the country losing their biggest advantage. For example, the only three companies in the world that can produce magnets for hybrid vehicles are from Japan. China is currently vying for several of Japan’s advanced technologies and several analysts are seeing this as a ploy for China to gain access to top technologies. Japan’s manufacturers face a serious conundrum: easier access to rare earth metals but a higher risk of technology leaks. Corrections from the Previous Issue P.17 – The IIAPS text box should read: “Wally Krey, an IIAPS advisory member, shares his advice on HR initiatives as the key to retaining qualified people. P.49 – Xiamen vs Qingdao: The 2 hours to fly from Shanghai to Qingdao should be corrected to 1 hour. – Should be noted that the Jiaozhou Bay Bridge project was completed shortly after the article was published. P. 58 – Subtitle should read: “An overview of the current best practices in Asia”
We Want to Hear From You! We invite you to share your thoughts and opinions regarding all of our articles. We will publish selected readers’ comments in future issues of CHaINA Magazine. Correspondence may be edited for clarity or for length. Email us: editor@supplychain.cn
6 September/October 2011
www.supplychains.com
FRONTLINES
Happy Hour! US$26.5 BN China’s Beer Market Value (2009)
US$1266
Monthly logistics cost per truck to deliver 60 tons of beer from breweries to retail stores in Beijing.
+25%
China’s share of worldwide beer consumption by 2015
43%
China Top 3 beer manufacturers’ (CRB, Tsingtao and AB InBev) market share
12
Number of Beer festivals in China
At the Spanish Beer Festivial in Wuhan, Hubei Province. 7 www.supplychains.com
SEPTEMBER/OCTOBER
FRONTLINES
US$100 The top price for a bowl of bird’s nest soup in Hong Kong. TCM retailer Tongrentang recently pulled birds nests from its shelves because of elevated sodium nitrite levels.
US$7,800
Quotes ‘The day of reckoning is inevitably coming.’
Sergio Marchionne,
CEO of Chrysler, fearing the impact that exports of Chinese cars will have on established carmakers.
‘I do not think Chinese private enterprises have any sense of social responsibility. Their biggest mission is making money for share holders. Money sugar-coated with morality, personal interest wrapped under social responsibility, and this formed one big feature of Chinese: hypocritical.’ Xiaonian Xu , Professor of Economics and Finance, China Europe International Business School, comments on the excessive emphasis Chinese private enterprises put on profit instead of social responsibility
The top price of a real or fake bottle of Chateau Lafite Rothschild 1982 in China. “There is more Lafite 82 in China than was Lee Harle, Diageo’s General Manager for Chinese white spirits, who plans on introducing produced in France,” says baijiu to foreign markets like Singapore and Los Angeles, where several Chinese businessmen travel. Romain Vandevoorde, head of wine importer Le Baron.
‘Just like people will not accept factory-made mapo tofu, they no longer want the Disneyland version of baijiu.’
US$218.3 Mn Foxconn’s 2010 Net Loss after increasing wages and other labor related costs.
US$11 Bn the expected total revenue of the express delivery industry in China for 2011 (according to China Federation of Logistics & Purchasing)
‘I can’t remember so many companies from a single industry, some of which many people hadn’t even heard of, entering the Bundesliga with such force in such a short period of time.’ Pascal Schulte,
senior consultant at Sport+Markt on the marketing efforts of China’s Suntech Power Holdings and other solar companies in the German Football league.
‘We’re going to need a U.N. resolution very soon - they’re going to have to declare a sugar-free zone over Shanghai.’
Paul French ,
founder of Access Asia on the looming battle between doughnut retailers in Shanghai.
US$132 Bn China’s estimated cost to complete the 26 highspeed rail lines currently under construction. 8 September/October 2011
www.supplychains.com
FRONTLINES
Supply Chain Apps Can’t get enough supply chain in your life? Give these apps a whirl…
Games
Cargo Runners Navigate the weather, go after the best contract, and work with the various local governments to become the richest fleet on the seas! Only problem with the game: it’s currently online multiplayer only. Trouble Brothers, the producer, is currently working on a single player version. Cost: US$5.99 Forklift guy The Forklift Guy is an easy and funny strategy game. The object of the game is to successfully manage a container depot, and to unload and load vehicles in time with your forklifts. Cost: US$0.99
Apps
SCM Buddy SCM Buddy is a free app for Android based smartphones that allows you to quickly calculate the following: Economic order quantity, Break Even Analysis, Safety Stock, Present Value, Reorder Point, Inventory calculations. Simple UI. Cost: Free
Android Market
Package Buddy Package Buddy is a package tracking app designed to allow you to track your packages from several carriers, anywhere you go with your phone. Also allows you to send package information to others by SMS or Email.
Parcel Panic The goal of Parcel Panic is to use your truck to pick up and deliver packages to specific locations in the shortest amount of time. You must balance speed with precise driving, as erratic movements and big bumps could send boxes tumbling from your truck bed. Cost: US$0.99
Cost: Free
Android Market
Factory Asset in Waigaoqiao for Sale 外高桥中心区域厂房土地出售 Exclusive Sales Agent 独家销售代理 Port Phase III
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核心优势 • 位于浦东国家级开发区外高桥保税区 核心地段，土地资源稀缺 • 规划优良的工业园区，高效、成熟的 政府服务机构 • 总土地面积约20,300平方米（规整长方 形地块） • 总建筑面积10,300平方米，包含一栋 三层行政办公楼及一栋三层标准厂房 • 公用设施及商业配套齐全完善 • 与众多世界500强公司为邻，凸显企业 形象 • 至地铁6号线车站步行仅需8分钟 • 交易模式灵活：可选择产权转让或股权 转让
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Key Advantages • Prime location within Waigaoqiao Free Trade Zone with rare and valuable land resource • Well-planned industrial park with highly efficient government service • Total land area of approx. 20,300 sqm (regular rectangle site) • Total construction area of approx. 10,300 sqm with one three-floor office building and one three-floor factory building • Complete public and commercial facilities • Surrounded by many Fortune 500 companies to highlight corporate image • Only 8-minutes walking distance from Metro Line 6 station • Flexibility for either asset or equity sale 如需了解更多物业信息，请联系
Richard Huang 黄晖 先生 +86 21 6133 5341 139 1750 4868 richard.huang@ap.jll.com
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www.joneslanglasalle.com.cn 9 www.supplychains.com
SEPTEMBER/OCTOBER
FRONTLINES
with
Recently changed jobs? Send us an email to publicize it here! editor@supplychain.cn
Jason Guan Head of Procurement BASF Shanghai Coatings With more than 10 years of sourcing experience, Jason Guan has become the Head of Procurement for BASF Shanghai Coatings.
Lim Bee Koong Regional Director for Healthcare UPS Lim Bee Koong will step up as Regional Director for Healthcare to lead UPS APAC’s healthcare related business. She has previously worked for TNT and Johnson & Johnson.
Gerry Mattios Expert Principal
Bain & Company Gerry Mattios has joined Bain & Company and will take on the role as Expert Principal.
Simon Constantinides Regional Head of Trade & Supply Chain APAC HSBC
HSBC has announced that Simon Constantinides will be promoted to Regional Head of Trade and Supply Chain APAC, covering operations in Mainland China, Macau and Taiwan.
Patrick Xu VP Operations Hengdeli Holdings Patrick Xu has become the VP of Operations for Hengdeli Holdings Ltd. Patrick spent the last 4 ½ years working for Best Buy.
Joseph Nuzzi Head of Global Supply Chain & Operations United Technologies, Sikorsky Aircraft
Joseph Nuzzi been promoted to Head of Global Supply Chain & Operations, China, and will lead the supply chain team at United Technologies, Sikorsky Aircraft.
William Wu Sourcing Director, CBF Asia Pacific
Carlisle Brake & Frication William Wu has become the new Sourcing Director, CBF Asia Pacific at Carlisle Brake & Friction. Previously, William worked for Delphi Automotive Systems.
Dong Wei Asia Sourcing Director Grainger Global Sourcing Grainger Global Sourcing has recently announced the appointment of Mr. Wei as its new Asia Sourcing Director.
Allen Xu Director Sales Operations dianping.com
Allen Xu has moved to Dianping.com to lead the company’s sales operations. He previously worked for Unilever as the Logistics Manager.
Leonard Ng Regional Director of Sales Rockwell Collins Mr. Ng has been appointed as the new Regional Director of Sales for Southeast Asia and India, after working for the company for more than 8 years.
Nicolas Golovko BD Manager Projects & Break Bulk Ahlers
Mr. Golovko has been appointed as the new BD Manager Projects & Break Bulk at Ahlers. He previously worked as the BD Manager for Yat Fai Logistics.
Frederic Houdoyer GM, Sales & Development
SDV PRC International Freight Forwarding With more than 15 years of industry experience, Frederic has become the GM of sales and development at SDV.
Sheridan Tang Global Strategic Sourcing Director The Clorox Company The Clorox Company has chosen Sheridan Tang to become the Global Strategic Sourcing Director, covering Asia, Africa and the Middle East.
Alfred Wang Sales Director GE Aviation
Alfred Wang has been promoted to Sales Director at GE Aviation, covering Air China and Cathay Pacific.
John Ermatinger Asia Chief Executive Tommy Hilfiger John Ermatinger, the former President of Gap Asia Pacific, has been poached for a new role as Asia Chief Executive for Tommy Hilfiger.
10 September/October 2011
www.supplychains.com
FRONTLINES
Wisdom from Weibo Sina Weibo, China’s answer to Twitter was launched in 2009, and now has over 200 million registered users. More than 5000 companies and 2700 media outlets have accounts on Weibo as well. Here’s what China’s chatting about:
In order to speed up reducing inventory at the retail end, Chinese sportswear manufacturer Li Ning will invest US$ 47 million to retrieve products in stock from some distributors. Branded sportswear wholesaler China Dongxiang also decided to invest US$ 34 million for the same purpose, which will result in its net profit rate falling to 17% - 19%. @EC品牌观察：【李宁、中国动向10亿回收库存，搅乱体育用品市场】此前李宁公司表示，为了加快零售端 存货清理速度，计划回收部分经销商存货，并称今年将为此投入3亿元。中国动向同样表示，作出2.2亿元除 税前非经常性拨备，购回经销商的过剩存货，这将令其纯利率降至17％-19％。
~weibo.com/fadway
Acquisition in logistics industry has become the trend: there were already 9 acquisitions in logistics during the first 7 months compared with 11 cases throughout 2010. The acquisition cases from 2010 to the first half of 2011 mainly happen in the distribution and warehousing industry. 供应链每日时评：物流业整合提速 前七月已完成9起并购— —物流业的并购正呈现出逐渐升温的态势。今年 前七个月物流行业并购完成9起案例。而去年全年物流业并购案例仅为11起。2010年至2011年上半年发生的 并购案例主要分布在配送及仓储、物流管理和其他二级行业，其中，配送及仓储行业位居第一。
~weibo.com/supplychaindaily
SF Express has an efficient operating model, an innovative management system, a reputation for speed and a shared concept of value among staff; EMS has policy advantages, well-established networks, a free pass in operations and government subsidies. With the government’s new strategy of integration of state-owned enterprises, if there is a consolidation between SF and EMS, would that be China’s UPS?
航运界：【遐想:顺丰并购EMS,电商物流是否会迎来新格局?】顺丰拥有良好运营模式,创新管理体系,速度 与效率口碑,员工共赢的价值观,创新的快递文化…EMS拥有国家政策优势,完善网点优势,配套资源基础,运 营绿卡通行,国家资金补贴…伴随国家十二五国有企业优化整合的战略,顺丰若能发展整合并购EMS,中国的 UPS会诞生吗? ~weibo.com/davidscm
In the first half of 2011, China spent US$11 trillion on logistics with an icrease of 13.7% since last year. The total amount of national logistics accounts for all the costs of logistics services, among which transportation cost takes up a big portion. Due to problems such as excessive tolls and repeated taxes, the exorbitant logistics costs has contributed to the bubble in China’s economy.
黄刚-物流与供应链： “2011年上半年,社会物流总额 74.7万亿元,按可比价格计算,同比增长13.7%”…社会 物流总额是记录整体社会物流服 务多项成本总和…其 中,运输成本占重要份额,物流顽症中乱收费、乱罚款、 重复征税问题无形中拉高了中国物流成本,从而泡沫话了社会物流总额, 这个数据很悲哀,很“蛋疼”
~weibo.com/davidscm
Going offline can be a good option for the future development of Dangdang.com. Instead of operating in the traditional offline model such as airport bookstores, Dangdang can provide customers with the possibility to order from mobile phones. Once an order is confirmed, the customer can go directly to pick up the book with the verification code sent to his mobile phone. Payment can be done in various ways: mobile payment, cash, POS. Logistics and warehousing cost can be largely reduced in this way. 当当网李国庆 ：当当未来的发展，线下也可以是条不错的路，当然不是传统的线下模式。比如说，机场书店，用 户可通过手机端在当当订购，当当确认订单后，发送验证码，用户可以凭验证码直接到书店取书。支付方式可 以多种：移动支付、现金、POS。用户就近取货，省了物流和仓储的成本，关键是如何分润了。
~weibo.com/1878923963
11 www.supplychains.com
SEPTEMBER/OCTOBER
a i n a M O t s e Inv Shanxi Rail and Highway Network Shanxi Prov. - US$16 Bn Shanxi Province has invested more than US$16billion to expand its railways by 2000km and add 11 new highways by the end of the 2011.
Mercedes Global Design Center Beijing - 1000 sqm Mercedes has become the first luxury carmaker to open a global design center in China. Beijing’s design center will be the company’s 5th worldwide.
San Dao Kang Railways Logistics Park Wuhai - US$466 Mn Taixi Coal Group of Inner Mongolia and ABLE LOGIWIS will build a 1.5 million sqm Railway Logistics Park to ease the transportation of coal from the region. The park is set to open in late 2012.
Suining Railway Logistics Park Suining - US$250 Mn Suining, Sichuan, has made plans to build an 800,000 sqm, modern integrated logistics park combining warehouses and staple goods distribution and trading hubs to service freight railways.
Rakon Component Factory
Lhasa
Chengdu - US$35 Mn New Zealand’s Rakon opened a new manufacturing facility to produce components for navigation systems and smartphones. The facility can produce up to 400 million units annually.
Tibet’s Solar-Lit Highway Lhasa - US$246 Mn Gongar Airport and Lhasa have been linked by a four lane, 38km stretch of modern road, with the lighting being powered by solar panels. September/October 2011
Changsha New Airport Terminal Changsha - 212,000 sqm Changsha now has the 5th largest terminal in China, designed to meet a passenger load of 15.2 million per year, and handle a peak of 40 flights, or 4000 passengers, during peak hours. www.supplychains.com
ErlingKlinger
Lanxess AG Leather Chemical Plant
Changchun - 130,000 sqm
Changzhou - US$40 Mn
ErlingKlinger has opened a 130,000 sqm plant to keep up with local demand from the automotive industry for its plastic housing modules and metal-elastomer gaskets.
Construction has begun on Lanxess’ largest leather chemical plant in China, and the largest of its kinda in Asia. The plant features a designed capacity of 50,000 tons per year and will serve the Chinese market.
Faurecia’s Car Seat Plant
Huangxin Logistics Center
Yancheng - US$42 Mn
Huangxin - US$155 Mn
Faurecia will build a new car seat plant to supply Donfeng Yueda Kia Automobile. The plant will begin production in mid 2013, and will produce 4 million seats annually.
The local government in Huangxin county, Hunan, will invest US$155 million to develop a 53,000 sqm logistics center, which should be operational by the end of 2011.
Changchun
Goodman’s Logistics Center Kunshan - US$18.6 Mn Goodman Group’s 38,000 sqm logistics center in Kunshan (composed of 2 large storage facilities) has begun operations. Goodman plans to invest an additional US$101 million over the next 3-5 years.
Beijing Wuhai
Shanxi
Tesco’s Freehold Logistics Center
Changzhou
Yancheng Kunshan Jiashan
Chengdu
Suining
Jiashan - 240,000 sqm Tesco’s newest logistics center will use 45% less energy, 40% less water and generate 35% less carbon emissions. The center will serve 53 hypermarkets and 12 convenience stores in East China.
Huangxin
Suning’s DC
Changsha
Zhuhai - US$154.9 Mn Suning appliance will build a 250,000 sqm distribution center in Zhuhai’s Hongwan Commerce and Logistics Centre. The DC is predicted to have a trade turnover of more than US$775 million annually.
Zhuhai
www.supplychains.com
Railways Logistics
Airport
Road Infrastructure
Warehouse
Factory Design
SEPTEMBER/OCTOBER Center
Content ► Procurement News /14 ►The Sourcing Strategist /16 ► The DaVinci Case/18 ►M&A /20 ►LinkedIn poll /21 行业短讯/14
采购战略家/16
达芬奇“密码”/18
企业并购咨讯/20
采购业调查/21
PROCUREMENT
Puma & Nike accept Greenpeace Challenge
Two of the worlds largest apparel producers have stepped up to take on Greenpeace’s challenge of removing hazardous chemicals from their supply chains. Puma was the first to pledge a full-scale cleanup of its supply chain and be toxic-free by 2020. Puma is set to publish a plan of action over the next 2 months, detailing their approach to chemical management in the supply chain and a clear timeline to reach their zero-discharge goal. Shortly after Puma’s statements, Nike followed suit, proclaiming they would also work to rid their supply chains of toxic chemicals by 2020. Nike has one-upped Puma, announcing it will also give the public full-disclosure of the chemicals being released by its suppliers.
Greenpeace’s Detox campaign, which ties together with their “Dirty Laundry” report, challenged the CEOs of several international clothing brands to use their influence to clean up their supply chains and stop dumping toxic chemicals into China’s rivers. “Round one of the Detox challenge goes to Puma - now Nike and Adidas better get in gear, or else risk falling behind in the race towards a toxic-free future”, said Martin Hojsik, Coordinator of the Toxic Water campaign at Greenpeace International. The Detox campaign also spawned the world’s largest striptease, as thousands of volunteers gathered outside Adidas and Nike stores in 10 different countries to provoke change at the companies.
China’s still Key in Fashion Industry
There’s been a lot of noise over the pending doom of China’s garment and textile industry. However, as pointed by just-style.com in an interesting report on the sector, more than 75 % of the world’s textile investments were in mainland China in 2010. Furthermore, world orders for more than 70% of modern spinning equipment, 84% of the most modern weaving looms, and 75% of efficient new knitting machines were delivered to mainland China last year. What does this all mean? China spinning mills have the most cutting edge and efficient technology, that has yet to be matched by any other country. So even if the manufacturing moves, companies will still be sourcing fabric and yarn from China.
14 September/October 2011
www.supplychains.com
Target reconsiders Chinese Suppliers
of their presence on the assembly line,” said Li Qiang, the executive director of China Labor Watch.
Troubling Times for Li&Fung
China Labor Watch has revealed that the second largest retailer in the US, Target, has been linked to suppliers who use child labor and forced overtime. Ningbo Lucky Craft, Hangzhou Ownseas Pen; and Dongguan B&N Industrial, all supply finished goods to the American retailer. Workers as young as 15 years old were discovered working in their factories, working between 11 and 13 hours per day. “It is naïve to believe that Target and other global companies are not aware
US$1.5 billion in operating profit by 2013. Li&Fung is the second biggest loser on the Hang Seng this year, and has struggled due to slow sales in the US and rising costs. Roughly 65% of its US$15.8 billion in revenue came from US sales in 2010.
Nestle to source from Vietnam
Li&Fung’s troubles continue as the company has lost US$11 billion, or 47%, in market value since the beginning of the year. After making 11 acquisitions last year and then pledging to grow organically from this year on, analysts are predicting that the company will need to make further acquisitions to reach its target of
Nestle has announced that it will build a US$270 million factory in Dong Nai province, southeast Vietnam, and hopes to source from 20,000 local farmers in the next five years. The company hopes that the local sourcing with help to reduce the impact of soaring raw material cost, as coffee future have risen by 38% over the past year. This factory will produce products under the Nescafe brand for local consumption and export.
Swiss quality worldwide
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Excellence delivered. For distance selling.
8718 173x120 Asia Distance Selling CHaINA Mag 6.6.indd 1 www.supplychains.com
01.06.11 14:31 SEPTEMBER/OCTOBER
15
PROCUREMENT
The Sourcing Strategist Wendy Liu, Director of Global Strategic Sourcing China, discusses ITT’s sourcing strategy, moving west, and internal challenges. How many suppliers do you have in China? We have more than 100, but not just in China. We also cover sourcing markets in Malaysia, Singapore, and other Asian countries. We have a special team to source from India. In China, we have around 80 global contracted suppliers that provide components in the long term with global ITT projects.
Can you give us a brief overview about ITT and their operation in China? ITT is an US$11 billion dollar company focusing on high-tech engineering, manufacturing, products and solutions for water and fluids technology, defense and security as well as flow control. We provide sourcing solutions for fluids management and motion and control technology, but not for defense in China. What is ITT sourcing for these two sectors? We source castings, machined parts, PCB, motors, plastics, rubber and fabrication. We cover a few different markets: first is motor and electronic parts, second is casting and machining, and the third is plastics and rubber then raw material etc. How many products does ITT make? Thousands. We produce the water treatment equipment and solution in residential waste water or the beverage industry. Our high engineering products are used in aerospace, fast trains, and cars. Some of our products are used for the electrical control system in the Chinese high-speed rail project.
Where are your strategic partners in China located? Are you moving west? If we talk about electronic components or electronic commodities or motors, the suppliers are mostly based in the south, like Shenzhen or Fuzhou. If we talk about casting, they are more likely to be in the northern or central area. If we talk about plastics and rubber components, Shanghai has a lot. We have also thought about moving west. The labor cost is half or sometimes 30% compared to Shanghai or Delta area, but our company is a high engineering and innovation company. We focus on speed to the market and quickly meeting customers’ demands. It takes two years to develop a new project in west China, while in Shanghai, Shenzhen or the Delta area it takes only five months.
13% Asia Pacific
46% Europe
6% Other
35% U.S.
16 September/October 2011
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PROCUREMENT What are the procurement challenges in this region? The key concern is that Chinese suppliers, especially the good ones, are moving up the value chain and that means two things: they are much better at meeting quality, manufacturing, and delivery standards, but the cost is rising. ITT is trying to find strategic suppliers and also work with them on cost reduction, on innovation and lean. If a supplier doesn’t want to work with us, they usually quote a higher price to indicate ‘no’ or less interest. Of all the increasing costs in China (labor, raw materials, etc), which one are you concerned about most? People outside China seem to over exaggerate the combination of inflation, labor and currency. China has a high inflation for food and real estate, but in terms of commodities and manufacturing, the inflation is the same as any city in the world. For labor and currency, the trend is not that high if you think about the quality improvement. We work with strategic suppliers on value engineering, innovation and lean manufacturing. Using these approaches, we build a strategic and strong bond with suppliers and also we grow the business together with cross functions. How do you convince your global teams that these issues are exaggerated? About 50% of the job is influencing and persuading global cross-functional teams instead of just working with the suppliers. We are a global team, so sometimes oversea colleagues get caught up in the noise from local media talking about how high the prices are. Sometimes they send quotations to a lot of suppliers and they think that demonstrates that the prices in China are high, but actually it is not. Some suppliers don’t know this team, or they think they are not strategic customers, so they give a high quote to indicate less interest in working with them. For our team, they quote a much cheaper price because they know we are building long-term contracts with them.
$
US$11 Bn
2010 GlobalRevenue
40,000
Employees Worldwide
140
Countries with ITT customers
采购战略家 刘焱， 全球战略采购中国区总监，探讨了 ITT公司的采购战略，向西部发展以及外部挑 战等问题。 能简单介绍一下ITT公司以及在中国的运营情况吗？ ITT公司价值110亿美元，专注于高技术工程和产品制造，服务于全 球三大重要市场，包括水利和射流技术、全球防御和安全以及流程 控制。我们在中国的全球战略采购团队从中国为全世界的工厂采购 水利和液体管理、运行以及流程控制所需的部件，但在中国我们不 参与防御和安全。 为这两个部门你们采购些什么呢？ 我们在五个市场进行采购，包括铸造和机械部件、印制电路板、电 动机、塑料和橡胶以及加工制造。 ITT有多少种产品？ 很多，几千种吧。我们为居民用水、废水处理、化学制品&石油和 饮料工业生产水利设备和提供有革新意义的解决方案。我们的高技 术工程产品被用于航天工业、高速火车、航海和汽车制造业。 你们在中国有多少供应商？ 我们有100多个。我们的采购市场还分布在马来西亚、新加坡和其 他一些亚洲国家。在印度我们还有一个很出色的采购团队。而在中 国，我们有大约80个全球合约供应商长期为世界各地的ITT项目提供 产品部件。 你们的中国战略伙伴都在什么地方？有计划向西部发展吗？ 电子零件、电子产品或电动机的供应商大多在南部，比如深圳；而 铸造就以北方或者中部的供应商居多；塑料和橡胶部件，上海有很 多供应商。我们也考虑过向西部发展，那里的劳动力成本是上海或 者珠江三角洲地区的一半甚至30%。但我们是一个重视创新的高技 术工程公司，我们专注于到达市场的速度并且要尽快满足客户的需 求。在西部开发一个新工程大概要两年，而在上海、深圳或者珠江 三角洲地区则只需五个月。 在这个地区采购面临什么挑战？ 最主要的挑战是优秀的中国供应商正在朝价值链上端走去。这意味 着：他们能更好的达到质量、制造和运输标准，但同时成本也在增 加。中国的供应商们一直试图寻找战略客户并和他们一起在降低成 本、价值分析/价值工程、技术革新和精益制造上共同合作。如果某 个客户不符合他们的战略方向，供应商通常会开出较高的价格表明 他们没有太大兴趣。 在中国不断增加的成本中（劳动力、原材料等），你们最关注的 是哪一个？ 在中国以外的人们总把中国的通货膨胀、劳动力和货币问题夸大 化。当然，中国在食品和房地产行业有很高的通货膨胀率，但商品 和制造业的通货膨胀情况和世界上其他任何一个城市是一样的。而 质量的大幅度提高抵消了劳动力和货币升高的趋势。我们应对成本 增加的解决方案是和战略供应商在价值工程、创新以及精益制造上 共同合作，建立起战略上的紧密联系，在ITT公司跨功能的支持下共 同发展业务。 你们如何让你们的全球团队相信这些问题只是被夸张化了？ 我们工作的一半就是影响和说服全球跨功能团队，而不仅仅只是和 供应商们合作。我们是一个全球性的公司，有时候海外的同事被当 地媒体谈论涨价所影响。他们会给中国的供应商发询价单，报价很 高的话，他们就误以为在中国没有任何成本优势。其实就像我们刚 才说的，这种情况只说明供应商不确定是否要与不熟悉的海外客户 进行合作。而与战略性的或者长期的客户合作，中国供应商在很多 行业还是非常有竞争力的。 17
www.supplychains.com
SEPTEMBER/OCTOBER
PROCUREMENT
The
case
High-End Luxury Labels under Fire ► Carmen
Ren
A
Xiuhua Zhuang, General Manager of DaVinci Furniture at the press conference
s a high-end international furniture dealer and distributor, DaVinci Furniture opened its first retail store in Singapore in 1994, eventually expanding to Mainland China. Currently it has seven stores in several major Chinese cities. In early July, CCTV’s ‘Weekly Quality Control Report’ accused DaVinci of mislabeling products, false advertising and sub-standard production quality. It was exposed that the Italian-made furniture sold for thousands of dollars are not really made in Italy at all. On top of that, instead of using expensive solid wood as claimed by DaVinci, the furniture was made of polymer resin and fiberboard, which in turn reduced the cost to produce each piece of furniture to a few hundred dollars. DaVinci Furniture held a press conference in Beijing acknowledging partnership with Changfeng, a Chinese furniture manufacturer in Guangdong, but insisted that all the Italian brands are originally produced and imported from Italy. DaVinci refused to make comments on CCTV’s exposure and did not arrange any media interview session. DaVinci’s Misdeeds According to recent Chinese media reports, DaVinci’s procurement procedures could be called a “one-day tour”. After shipping the furniture from their supplier in Guangdong to the Waigaoqiao Free Trade Zone in Shanghai, the company then re-imported them as foreign
products, which were then sent to DaVinci’s Shanghai warehouse. DaVinci would then place the “Made in Italy” labels on each piece, before sending them to their retail locations as high-end luxury items. However, what DaVinci did was perfectly legal. “There is nothing wrong with exporting products from China and then importing again if all the procedures are legal,” stated Changling Zhu, the Chairman of China National Furniture Association. “The government has established the Development Zones for specific reasons and it is legally valid to move a product out of a zone and call it an ‘import’, “said Gaurev Mahajan, Manager of Strategic Projects, Supply Chain Services at Johnson Electric Int. “All companies do that to benefit from VAT refunds and duty rebates.” The problem lies in DaVinci misleading its customers about the origins of production, the failure to meet safety standards, and the components used. By relabeling their products as “Made in Italy”, DaVinci took advantage of China’s insatiable appetite for high-end luxury goods.
I accept the criticism, I will make improvements. But I never lied. Xiuhua Zhuang, General Manager of DaVinci Furniture
18 September/October 2011
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PROCUREMENT
DaVinci furniture checked by Administration of Industry and Commerce
China’s desire for Luxury Due to the rapid economic growth, the high-end consumption market has witnessed a tremendous expansion. Chinese consumers’ purchasing mentality is to ultimately trust imported brands and accept the idea that price and quality are equal. “Most foreigners cannot understand these Chinese consumers!” said Leon Yu, CEO at China Grand Crown Industrial. “These people become rich in money but they are poor in education, so buying luxury goods is the best way to prove their success.” This type of mentality sets up the perfect situation for companies looking to take advantage of China’s luxury consumers. “Whether the luxury good is real or fake, the customers will still buy it because of the psychology of pursuing luxury.” commented Martin Qian, a consultant at Docenwell. Possessing luxury goods has become a symbol of social status and wealth for the Chinese nouveau riche. In this case, a premium price on a foreign label means everything, and this motivated DaVinci mislead their customers and gain exorbitant profit.
If the consumer loses faith and trust in the goods they buy, then the retailers and vendors loose the consumer. Greg Poulos,President at Bluefin Productions Inc.
Who’s in charge? The DaVinci case has lead many professionals to call on the government for stricter actions towards businesses who mislead consumers in China. “If DaVinci made false claims, and mislabeled products by saying ‘Made in the UK’, then it is unethical on their part and they should be fined by the government,” said Gaurev Mahajan. China currently has laws in place, but has had difficulty enforcing them due to the rapid development of business in the country. Other professionals have a more realistic opinion of the situation, and believe tighter restrictions are just not a viable option given China’s current business
environment. “I am not sure whether Chinese law is ready for this,” said Ronald van de Meent, Financial Systems specialist. “Besides, I think they have issues that are a bit more important than to protect the producers of 45K sofas.” The Chinese government’s focus is on many other bigger issues like inflation, an aging population, and currency valuation. Others cite a well known fact that import/export is an area that is plagued by corruption. Even if restrictions were tightened, some professionals believe that nothing would change due the powers in place. “As for a governing body for luxury goods, how has that worked out so far?” commented James Cranford, International Sourcing and Procurement Manager at PMG. “My experience in China is that people tend to abuse policy and position.”
Italian brand Cappelletti bed US$34,000 from DaVinci Furniture store
Final thoughts The problems stemming for labeling issue has arisen before and will continue to be highlighted as China’s luxury market grows. “Chinese consumers are ready to pay higher prices for luxury brands, but they don’t want products to be manufactured in China,” said luxurygoods consultant Armando Branchini in a Wall Street Journal Interview. Several high end luxury brands are lobbying for more transparency in the labeling systems. Santo Versace, owner of the Versace fashion house and an Italian Average daily revenue of Davinci Furniture senator, lobbied in his country for a system that After would see at least half of the Before components of a product US$ 310,000 ~US$23,000 from Italy, in order to bear the “Made in Italy” label. 80% - 90% Whether other countries will adopt this system, remains to be seen. For now, it seems like businesses and consumers are stuck with the current laws in place. As more high-profile luxury brands move their production to China, this labeling issue will surely make headlines again.
19 www.supplychains.com
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PROCUREMENT
Mergers & Acquisitions US$1.7bn 8 9 US$2.1bn
US$1.7bn 8 7 US$900m
US$585m 6 5 US$539m
US$500m 4 3 US$135m
US$51m 2 1 US$10m
1 Singapore Post has acquired a 20% stake in 4PX, the global distribution partner for Ebay and Paypal, for US$10 million. 2 Sino Fibre Communications has acquired a 60% share in Dalian Xinbao Biomass for roughly US$51 million. Xinbao Biomass is a high-tech company focuses on research and design of Biomass energy. 3 CR Snow will acquire a 49% stake in Jiangsu Dafuhao Breweries and a 100% stake in Shanghai Asia Pacific Brewery, both from Heineken for a total US$135 million. 4 Airbus has completed a deal to buy Danish aircraft parts distributor Satair Airbus in a deal valued at over US$500 million.
For more information, please visit: http://cha.in/mixer0911
20 September/October 2011
5 Guangsheng Property Management Co. has acquired all shares of Caledon Resources, an Australian Coking Coal producer, for a total of US$539 million. By 2015, Caledon Resources plans to produce 4 million metric tons of raw coal annually.
6 Joy Global has agreed to pay US$585 million to acquire a 41% stake in International Mining Machinery. The deal will heavily boost Joy Global’s presence in China’s coal mining machinery market. 7 Lenovo Group has agreed to buy German electronics retailer Medion AG for around US$900 million. The deal will increase its western European market share to 7.5%. 8 Nestle has agreed to buy a 60% stake in Hsu Fu Chi for US$1.7 billion. This would be Nestle’s largest ever purchase in China, and would dramatically increase Nestle’s footprint in China’s food market. 9 CNOOC has agreed to purchase OPTI, a Canadian oil sands producer, for US$2.1 billion. Opti has been struggling lately, and CNOOC will assume more than US$2 billion in debt from the acquisition. 10 Google has purchased Motorola Mobility for US$12.5 billion, a move that will put Google in the ultracompetitive hardware market for the first time. www.supplychains.com
PROCUREMENT
As cost increases in China, how will this impact your low cost supply chain strategy? Source: Overall demographics
Go back near-shoring Move to other low cost countries
CxO & VP
No change now, but watching it closely Go further into China inland provinces
Manager
Work with suppliers to reduce costs
i
GÊrard Buasa Lead buyer Diagnostica Stago China’s potential will not be based on costs but rather on market opportunity. The time when companies were moving to China for its low price structure is over from my point of view.
i
Ole Kristoffersen Group Assortment Manager-Beroe So far we have had good experiences with manufacturing in Sri Lanka and Vietnam for clothes, and when it comes to construction materials we are now looking into the Philippines.
i
Stanley Yuan Chang Project Manager, SC & Purchasing, Philips Moving to Inner China will be the best choice, you will get plenty of lower cost labor, government tax benefits, developed infrastructure. The risks are lower than moving to India or Vietnam.
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Shanghai
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Geodis is part of the French rail and freight group SNCF. With its 47,500 employees located in 120 countries, SNCF Geodis ranks among the top six companies in its field in the world. The Group's ability is to coordinate all or part of the logistics chain: supply chain coordination and optimisation, air and sea freight forwarding, groupage, express, contract logistics, part & full truck loads and reverse logistics.
www.geodis.com
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Content
►
行业短讯/22
Manufacturing News /22 ►Growing Pains/24 ►Chengdu VS Chongqing/26 电力青春期/24
成都VS重庆/26
MANUFACTURING
Foxconn Plans on 1 Million Robots
Foxconn recently announced that it will put 1 million robots in to use over the next 3 years at its assembly facilities in China. The company plans to use robots for simple tasks such as spraying, welding and assembling work which is currently done by workers. Terry Gou made the announcement at a workers’ dance party, which more than likely killed the festivities. Foxconn currently employs over 1 million people at its Chinese assembly facilities and says it plans on moving its employees up the value chain to departments like research. Analysts argue that the move is more likely a response to rising labor costs and issues like strikes, shortages and suicides over the past year. Foxconn has been forced to steadily increase its wages, install anti-suicide nets,
hire counsellors and improve working and living facilities. It is uncertain how many of jobs will be cut, but estimates currently range in the tens of thousands.
Large Factory Shutdowns Create Fears
Two large manufactures in Dongguan have recently closed or announced bankruptcy, sparking fears in China’s manufacturing sector. Suyi Toy Co. closed its doors in mid-July and its Korean boss took off and is still nowhere to be found. At one point, Suyi Toy employed more than 3000 employees. Another Dongguan textile manufacturer, Dingjia, announced that it was bankrupt in late July, putting more than 2000 jobs at risk. Both companies have cited rising wages and raw material prices as the reason for their company’s struggles.
China cracks down on battery plants
Of the 1930 lead battery product, assembly, and recycling plants inspected, 583 have been ordered to close down. Another 1013 have had their operations suspended. The crack-downs come in an effort to reduce heavy metal pollution in China. In March of this year, 168 people were poisoned in Zhejiang province as a result of heavy metal pollution.
Baby Pill Manufacturing
A South Korean documentary has exposed a rather disturbing market, in which hospitals in rural Chinese cities were selling deceased babies to a pharmaceutical company
22 22 September/October 2011
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MANUFACTURING with the consent of the wouldbe mother. The company would then dry the babies in a medical drying microwave, then grind them up and put them into pills, which could supposedly enhance stamina. The pills were then sold to Chinese and Korean customers.
unexpectedly due to sensor issues. The company plans to overhaul all delivered and undelivered trains over the next month. The news comes after Beijing ordered all high speed trains to reduce their speeds. Trains previously traveling at 350, 250, and 200 km/h will reduce their speeds to 300, 200, and 160 km/h respectively.
Nokia Siemens expands Chennai Facility Changchun Railway Vehicles suspends delivery
A key manufacturer in the bullet trains for the Beijing-Shanghai high speed line has suspended delivery of new trains after three stopped
www.fmlogistic.com www.fmlogistic.cn
Nokia Siemens Networks (NSN) has doubled their Chennai factory to 55,000sqm to produce up 33 product lines. According to Herbert Merz, Head of Operations at NSN, the Chennai factory will likely overtake their Chinese facility in terms of volume by next year. The Chennai plant now
produces a wide range of telecom equipment including base stations, receivers and cables for 2G, 3G and 4G technologies with 37% for worldwide export and the rest for the local Indian market.
Cambodian Factory workers faint
Over 300 factory workers at Hung Wah textiles factory and another 300 workers at King Fashion Garment in Phnom Penh, Cambodia fainted on two separate occasions during working hours over the summer months. Both these textile factories were producing clothing for western brands such as H&M, Hennes & Mauritz AB, Marks and Spencer Group, Tesco, Next and Inditex, owner of Zara. A combination of heat, exhaustion, and exposure to chemical fumes were the likely causes.
Contact: sales@fmlogistic.cn Tel: 0512-8889 8601
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MANUFACTURING
Growing Pains A Glimpse at China’s Power Shortage ► Chenyin
P
ower shortages continue to threaten the development of China’s manufacturers. According to a recent report on China Daily, in the first 6 month of 2011, over 20 provincial regions have suffered power shortfalls. Unseasonal drought was partially to blame, but the continued friction between the National Development and Reform Committee’s (NDRC) and the power producers seems to be the main cause. The NDRC is reluctant to increase electricity prices, as the means to clamp down on inflation, while the power producers refuse to operate below the market price as coal prices continue to rise. As a result, several power plants are choosing to shut down rather that lose money by continuing their operations, which is exacerbating the power shortages. Making Do with Power Rations Heavy industry and energy intensive manufacturing accounts for 30% of power consumption nationwide, and the power shortages have hit them the hardest. Provinces have imposed power rationing quotas and schedules. For example, the Dongguan manufacturing base in Guangdong province has had a scheduled power down once every four days since April. Hisense, the Chinese white goods giant, has a refrigerator production facility in Chengdu and operations have also been disrupted by the ongoing shortages since last December. “As far as I know, most factories in the development zone have been affected by the power shortages,” says Yu Cheng, Assistant Minister at Hisense’s General Management Department. “The city government is rationing power to all the factories in the zone. The quota we got is 850 kwh which means that we can’t run at full capacity.”
Pan
Due to the July and August shortfall of 30 million kilowatts for Sichuan, Chongqing, Zhejiang and Jiangsu, production in many companies located in those regions has come to a halt. “Our suppliers are all in the Chengdu area, and they are having problems meeting our deadline due to the power shortage,” Yu admitted.
The Indirect Effect on Manufacturers Even facilities that are not directly affected by the power shortages are feeling the pinch. While power shortfalls have not been a problem in Fujian province, Schneider Electric, which has a manufacturing site in Xiamen to make switchgears, has suffered due to the distribution of its supplier base. “We have suppliers in Shanghai and Jiangsu that have had problems delivering on time because of power shortages and rationing in their respective regions,” commented Amy Zhang, Schneider Electric’s Logistics Supervisor. “It has left us in a difficult position to either find a new supplier in an impossibly short time, or to ask our clients to extend the delivery date.”
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MANUFACTURING
Power shortage( in gw)
Electricity shortage by province 12
11
10 8 6 4
4.85
2 0
4
4
4
3
2.5
2
1.2
1
Jiangsu Zhejiang Hubei Anhui Chongqing Henan Guangdong Beijing Jiangxi Shandong Source: China Daily
How Companies are Coping While the NDRC and the power producers continue to squabble, the end-users continue to struggle through the dilemma. “The power supply cannot be developed or increased quickly, so the responsibility lies largely on the end-users,” said Professor Xu Cai, the Vice Dean of Shanghai Jiaotong University’s Energy Research Institute. Smaller factories in Guangdong province have resorted to using gas powered generators to continue operations, but larger operations have not had the luxury of using backup generators. In response to the rationing, Hisense has taken full advantage of times when operations are slower in their industrial zone. “We make the best use of the night shift from 8pm to 6am,” Yu Cheng said. “Of course, we have to prioritize the use of machines that consume the most powers. On many occasions we have to turn off all the other peripheral equipments to ensure they run properly.” Schneider Electric has taken a different approach. “We are using ETO to optimize our manufacturing process, so that our production won’t be disrupted by suppliers and incidental power shortages,” said Amy. Engineering to Order (ETO) is a process where production starts only after the confirmation of the order. An opportunity for LCCs China’s inability to provide sufficient electricity for the millions of manufacturers has become an opportunity for other low cost countries. Vietnam’s unexpected surplus of electricity has lead regulators to pledge sufficient supply to all operations in the country. “The output of electricity for the rest of the year is scheduled to be 3-10 percent higher than expected, meeting the country’s power demand,” read the official statement. While the statement was not directed at manufacturers facing shortfalls, it certainly improves Vietnam’s status as a viable sourcing base for certain industries. However, other countries like India and Thailand are facing similar power shortages which means that production is quite likely to stay put for most industries.
The ripple effect on society Nevertheless, the power shortage is not just confined to the manufacturing sector. Recent railway interruptions for high speed trains running between Shanghai and Beijing have provided proof of the far-reaching power shortfalls. During the first six days of operation, seven power failures occurred, which resulted in passengers being stuck inside the trains with no air conditioning during the peak of China’s sweltering summer. To many, the high-speed train project epitomizes China’s ambition to grow faster than is currently sustainable. In order to feed China’s ever-growing appetite for electricity, the government has justified the speedy construction of power plants. There are 27 nuclear power plant projects currently being constructed or under state council evaluation, compared to 38 projects currently underway in the rest of the word, according to the European Nuclear Society. Ganjie Li, Director of China’s National Nuclear Safety Administration warned, “At the current stage, if we are not fully aware of the sector’s rapid expansions, it will threaten construction quality and operational safety of nuclear power plants.” Conclusion In late July, Fusheng Jia, a senior official at the Bureau of Economic Operations Adjustment under the NDRC admitted, “The energy shortfall also reflects problems caused by imbalances in the economic structure and the unsustainable development modes of some regions.” Government officials are finally admitting that the speed at which China has developed has become one of the main causes of the energy crisis. In the wake of China’s devastating high-speed rail crash, which killed more people than any high-speed rail crash in the world combined, several critics are seeing this as wake up call for China to slow down. The same concerns are being directed to China’s aggressive nuclear energy program. Given the current global opinions on nuclear power, China’s aggressive nuclear program is making several critics nervous. Until China slows down and reevaluates the importance of safety and sustainability, this energy crisis will surely continue and new problems will surely arise.
4.7 TN kw 12% 30-40 Bn kw
the estimated power output nationwide Increase in power output since 2010 power shortfall nationwide 25
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SEPTEMBER/OCTOBER JULY/AUGUST
MANUFACTURING
Chengdu vs Chongqing Frontrunners for your Go West Strategy
A
► Kevin
lmost every major multinational compaChengdu ny with branches in China is beginning Pop’n: 15 Mn (2020) to look the next steps that will push Available land: 660 Km2at (2020) ChinaHi-tech, supply chains to the next level, Industries: Newits Energy, Auto both domestically and internationally. Trans. & Logistics: Largest Railwayprices are going up, and The market is more demanding, logistics hub Zone in China it’s time to factor organizational and flow technology
Foehner
Because of these new implementations, Charling says Chongqing that the platform has optimized the process Pop’n: 31ofMnprocure(2020) ment planning in his department increasing work Availablewhile land: 865 Km2 (2020) Industries: Modern Services, Hiefficiency. “Before, we got purchasing orders from our Tech, Manufacturing Clusters suppliers by email or fax, which wasted time and couldn’t Logistics: Largest ensure 100% data transfer,” heTrans. said. &“Now the data can bonded zone in China, Largest be delivered accurately on time, and suppliers can also Western China download our procurement planAirport at fastinspeed.” For the suppliers, advantages of a new platform mean that they can see order requirements on SupplyOn imdustrial product, and natural resource industries. Howmediately. The Bosch system will get Advanced Shipping ever, Chengdu seems to favor pharmaceutical investNotification (ASN) automatically. There is no manual ments, while Chongqing provides more benefits the operation during the process, which means less for chance new energy industry. for human error and less need for re-confirmation of These types everything from data. There is of no benefits manual include operation or entrance of disdata counted land to promises of infrastructural expansion. during the process, so the data becomes more credible.
成都 重庆
into the equation. In order to help with the efficiency and the sustainability of their business, Bosch China is in the process of fter thesolutions recent government push, alogismarolling out SupplyOn in their purchasing, jority of companies are finally seeing the tics, and quality departments as part of a greater global potential of Western China and are begininitiative. Bosch, which already has 15 departments and to the make their moves into the marplants in Chinaning using SupplyOn platform, operates ket. By 2009, KPMG research showed 47 entities in China and sees their branches here asthat the Western China now for 19% of China’s total next important nodeaccounted of modernization. “Our purchasGDP, grewreached a staggering 266% since 2001. The 12 ing hasand already an economy of scale in China,” provinces making up Western China have a total says Huang Bin, Corporate Purchasing Director,popuAsia lation of million, which is largely untapped to Pacific at 360 Bosch (China) Investment Ltd. “At thisdue point, the longtime focus on Eastern China. it’s very important that we have a very clear purchasing In July,and thea well Council put together another successful strategy structured organization.”
A
roadshow to Chengdu, a city which is growing in interest from Purpose forinternational Using It organizations. A group of 40 professionals werein able to visits companies and With these goals mind, rollingseveral out a new IT platform zones in one of west China’s fastest developing cities. was the next step in streamlining purchasing practices Among theChina. companies Intel,different Timken forms (bearfor Bosch Whilevisited there were are many ings for the aviation industry), Sunfor (LED lighting), that SupplyOn can take when dealing with a company, in and CSR(tunneling equipment). Bosch’s case the solution acts as a web-based platform With a large working population, plenty governbetween Bosch and suppliers, on which theyofcan share ment support, and lower costs, Chengdu has emerged as purchasing information and delivery forecasts in order a frontrunner for any multinationals “Go West” strategy. to help the transparency of procurement transactions. Chengdu the fourth population in China “It’s reallyboasts important to uselargest modern technology in orand the top ranked infrastructural construction in West der to secure information and to establish a standardChina. However, its proximity ized process,” saysdue Mr.toHuang Bin. “IT tois Chongqing, increasingly the economic center of the upper Yangtze a leading important through all of the supply chain,and especially in modern manufacturing base, it seems reasonable to give the logistics and purchasing areas.” each fairBosch assessment before making reAt athe Automotive branch the in decision Suzhou, toSuplocate or expand. plyOn WebEDI works to shorten the communication
length between Bosch and the suppliers, which saves Government Support both and and the suppliers a lot time.known Charling BothBosch Chengdu Chongqing are of widely for Shen, Production Planner ofWith Bosch Automotive their generous governments. more and moreProdcomucts (Suzhou) also says thatcity, for it’s his important department, panies movingCo. intoLtd, each respective to SupplyOn helps to ensure and transparency of know which industries theaccuracy governments are encourageach transfer. Boschtohas also recently promoted ing todata come. According a recent KPMG report, botha new mode via entitled Vendor Mancitiesbusiness are welcoming theSupplyOn IT/telecom, automotive and inaged Inventory (VMI).
For example, as a result of Foxconn and HP’s US$1 billion in Chongqing, the government expandSet investment up ed In theterms airports runway by 400 meters to of effort, Bosch is working to accommodate slowly roll out HP’s needs. Professionals from Jones Lang Lasalle (JLL) this system to all of its large- and small-scale suppliers. and KPMG studying the region both agreed that despite During their kick-off introduction meeting with supplithese benefits not being setand in stone, anything and everyers, they do initial training monitor the suppliers until thing was potentially negotiable with the local governthey get the hang of the system. Charling says that from ments. start to finish, the rollout process normally takes a total Infrastructure of one month.and TheInvestments advantage of this system is that new Chengdu has been working training. diligentlyThomas at developing a users only need short-term Fendt, more business-friendly environment and the appropriSenior Manager of Supplier Quality and Supplier Develate infrastructure accompany it. Chengdu has focused opment at Bosch to Power Tools (China) Co. Ltd. says that apeople lot of attention on its airport infrastructure, upgrading can be fully trained and ready in a matter of half its original Shuangliu withto a second runway and a day, which can alsoAirport be applied new users entering athe second terminal. Chengdu has also planned to build a company. The most difficult part of this whole probrand new airport, which will be completed in 2016 and cess seems to be making sure new users understand the will be capable of SupplyOn, handling 80not million passengers annuconcepts behind the actual mechanisms. ally, similar to Shanghai’s Pudong Airport. To help with this issue, Bosch does regular check-ups on Other newand additions to Chengdu have been and the help Hithe process, SupplyOn offers maintenance tech Integrative Bonded area, which was approved in desk services for users who run into trouble. February 2011 and the Financial Headquarters zone to One huge concern about online platforms for many be finished this year. Chengdu is actually positioning itsuppliers is information security. To mitigate this, Bosch self to become the future capital of West China. Global recently signedfinancial a non-disclosure agreement Chongqing has also invested a fair amount, however (NDA) with SupplyOn. SupplyOn also has very limited not on the scale of Chengdu as of late. By the endinofother this access between Bosch and individual suppliers; year, a third runway at Jiangbei Airport will be complete words, SupplyOn assigns different authorization to evwhich will the airport to handle 50 million pasery user IDallow to ensure data security. sengers annually. One of Chongqing’s main attractions for business is
Influencing Suppliers
26 September/October 2011
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MANUFACTURING the Liangjiang New Area, a 1200 square kilometer area which features China’s first inland bonded zone, the Lianglu-Cuntan Bonded Port Area, and of course a reduced rate of 15% enterprise income tax compared to the usual 25%. Chongqing is also home to Xiyong Integrative Bonded area, the largest comprehensive bonded area in China. Logistics investments JLL’s research reveals Chengdu’s decision to focus on railway and air logistics, while Chongqing specializes in water logistics due to its proximity to the Yangtze river. Both cities have significant investments in road transportation. Chengdu has four logistics parks and an additional four logistics centers, while Chongqing has three logistics bases and 4 harbors. The Chongqing Government also recently announced an investment of US$4.6 billion to build West China’s largest Air logistics Park. The infrastructure positions each city to better cater to specific markets. While Chengdu is very capable of providing for central and western China, Chongqing has
Warehousing Both Chengdu and Chongqing have worked diligently to expand their warehousing space, however each city faces tight capacity at present. According to JLL research, Chengdu currently has a vacancy rate of 4%, and by next year there will likely be a shortage of space. A large portion of capacity is taken up by Chengdu’s manufacturing base, however e-commerce companies also take a significant 25% of current space. Chongqing faces an even more severe shortage, with all warehouses fully occupied, and no clear sign of when supply and demand will equal out. More than 65% of Chongqing’s warehousing capacity is used by the enormous manufacturing base within the city.
Retailer 18% Manufacture
41%
3PL 13%
E-commerce 25%
Source: Jones Lang LaSalle
E-commerce 11%
Retailer 9%
3PL 16%
Manufacture 67%
Source: Jones Lang LaSalle
Talent Another major drawback of setting up in West China is the lack of high-level local talent and the difficulty to relocate talent. According to research by KPMG most cities in Western China are facing talent shortages. Chengdu holds a slight advantage over Chongqing in terms of talent prospects, due to its higher concentration of high-level universities. It is also the center of higher education for Southwest China.
more economical transportation services, namely the water transport, to ship goods to the more mature Eastern China, and then internationally.
Conclusion Both Chengdu and Chongqing present significant advantages for companies in terms of lower operating costs, access to cheap labor pools, and substantial government support. However, despite the rivalry between the cities, it seems like to truly meet the demands of the international and the emerging China market, a company must divide their operations in both locations. With Chengdu better suited to provide for western China’s consumers, and Chongqing positioned to meet the needs of companies transporting goods east and exporting internationally, it seems that both cities are essential for a multinational organization. Each city has its own pros and cons, but by dividing a large operation across both, companies can better mitigate risks and take full advantage of each city’s strengths. Statistics and information were sourced from Jones Lang Lasalle’s Chengdu and Chongqing Logistics Market Overview 2011 and KPMG’s Go West report.
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Content ► Logistics News /28 ►The Logistics of Beauty /30 ► The Long Haul Lifestyle/32 ►China’s E-Commerce Market / 34 行业短讯/28
奢华物流/30 长途生活/32
国内电子商务市场/34
LOGISTICS
Slow Steaming Impacting Asia
With fuel prices on the rise and increasing pressure to reduce emissions, over 225 shipping companies have decided to slow their vessels down from 25 knots to 20, sometimes 14 knots, a practice called slow steaming. As a result, a transpacific trip from Hong Kong to Los Angeles that previously took 14 days now takes an extra four to seven days. A 20-day trip from HK to Europe is now 25-27 days. Among these shippers is industry giant Maersk, who’s taken the practice to the next level: super-slow steaming. Maersk’s 600 ships now cruise the seas a 12 knots, which the company claims has reduced their emissions and fuel consumption by 30%. According to BDP research, 92%
of Asian businesses are being affected by slow steaming. Cargo owners say their costs are rising because they need to keep more inventory and raw materials to overcome possible supply disruptions. A major complaint is that despite the savings on the shippers end, no savings have been passed on to the cargo owners.
bought into Yupei in 2008 for US$46 million. Some analysts are predicting a full takeover of Yupei by GLP.
GLP acquires Yupei
The DPRK has given China access to Rajin Port, which will allow China to ship goods from northeast China to cities on the east coast. Access to Rajin Port will greatly reduce current transportation times and costs to ship from Jilin province. It is estimated that the cost of coal shipped via Rajin Port from northeast China to power plants in southeast China can be reduced by US$9.26 per ton.
GLP has made headlines by acquiring a 49% stake in Yupei Group, which own four industrial parks totaling roughly 253,000 sqm. GLP also has the option to buy an additional 1% share from shareholders in China, and buy a 70% stake in three of the four current projects. It’s interesting to note that GLP acquired this stake from Equity International, A Chicago-based firm who
Rajin Port opens to China
28 28 September/October 2011
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LOGISTICS
DHL Expands
With a current 600,000 sqm of warehousing, DHL will look to expand its warehousing space in China by an additional 200,000 sqm. Victor Mok, the CEO of DHL Supply Chain North Asia, believes the warehousing space will help his company tap into the growing demand for domestic transportation services. DHL Supply Chain has invested more than US$124 million over the past few years in China.
Kerry Logistics buys 2 Chinese companies Kerry Logistics has purchased a controlling stake in Shanghai Wisdom Group and Shanghai Huicheng Logistics. Wisdom is a large non-vessel-operating common carrier and sea-freight consolidator, while Huicheng is a 3PL specializing in logistics for chemicals, a special focus on dangerous goods, FMCG and the electromechanical and automotive sector.
Cross-border Logistics
Some creative smugglers’ plans were foiled after police discovered a 300 meter line extending across the Sha Tau Kok river, from a 21st floor apartment in Shenzhen to a small rural house in Hong Kong. The smugglers used a crossbow to shoot the line from the Shenzhen
apartment to the small HK house, then used a nylon bag and pulley system to shuffle apple products across the border in the early morning. More than US$45,000 in iPad2s and iPhone4s were confiscated by police.
Port of Dunkerque looks to China After signing an agreement with the Shanghai Port Authority last year, the Port of Dunkerque in Northern France is looking to develop further relationships with China’s coastal ports. Dunkerque has invested roughly US$30 million into six major projects to improve the facilities surrounding the port in anticipation of new business.
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LOGISTICS
THE
LOGISTICS OF BEAUTY
Pamela Lin, Logistics Director for LVMH Cosmetics and Perfumes, discusses the benefits and challenges of doing business in China’s luxury goods market. Tell us about your logistics operations in China. At the moment we have one DC that manages 7 brands under the LVMH name, which are Dior, Guerlain, Givenchy, Benefit, Acqua Di Parma, Kenzo, and Make Up For Ever. All the products were imported from France and Italy. For delivery, we pick up the products from bonded logistics warehouses after they pass through customs, and after that products are delivered to our DC. In the end, the DC is responsible for shipping to 150 points of sale in 35 cities across China. How are you keeping up with China’s growing demand for LVMH products? Our business growth has been in double digits every year and we continue to bring in more brands. As the business increases considerably, we put more emphasis on our supply chain’s sustainable development. We focus on people development, finding mature and experienced people to handle the operation. We also look into the system to enhance accuracy and efficiency. For example, we recently launched a new warehouse management system. Can you elaborate on your people development programs? We do a wide variety of training including SOP training and WMS training for the new system. We also do external training, where we find programs that are suitable for our managers and we send them to learn about specific topics. Also, we do site visits to our other facilities in different regions to learn from each other. For example, we recently sent our warehouse managers to Taiwan to see their facilities, and to compare and make improvements. Every month, we also do training
for the warehouse staff, like simple quizzes asking how to manage the 5Ss in the warehouses. We put them in groups and make it a competition, which helps them improve. Are there any particular difficulties to serve the China market? One is our ability to foresee business demand. The other is the new e-commerce business platform which pushes our supply chain managers to meet the need of the diversified business model. Currently BeneFit has an e-commerce platform and Dior will be the next brand to have an e-commerce platform. Diversified sales platforms will bring the challenge to our supply chain managers. And the third challenge is to figure out how to enhance our employees’ professional skills and how to retain talent. We address these challenges from 3 aspects. First of all, based on our 3-year-plan, we’ll update our warehouse management system, as part of the plan for infrastructure development. Second, we’ll try to improve our supply chain management efficiency. For example, the bonus we give to our employees is based on orders without
6,300 sqm
Warehouse space
150+
No. of Retail locations in China
2
3PL partners
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LOGISTICS mistakes and not on how late they stay. And third, we’ll try to make our operations leaner. How does your retail network affect your logistics operation? Our retail networks are mostly located in department stores. We are doing quite well in managing our retail network. Once again, logistics challenges are mostly from the newly added e-commerce business. As BeneFit products are sold online, it affects our logistics network’s location. We are now working with Arvato and FedEx for solutions on how to manage online sales and distribution. Are there any particular cities that are more difficult to serve? For the last mile delivery, we’ve found that Beijing is quite difficult to serve. We have over 30 POS in Beijing, and many of them are in the downtown area. In the inner-ring in Beijing, big trucks are not allowed, so we have to use vans to deliver our goods. Most of our stores are located in the inner-ring, so this has become a challenge for us. We ask the shopping assistants who work in the shops not only to be specific of the delivery time, but also to be exact on shipment specifications and details. How is perfume & cosmetics logistics different from LVMH’s other offerings? Perfume is considered a dangerous good, so handling in the warehouse and for transportation has higher requirements. For the luxury cosmetic business, there are lots of SKUs, so the picking is complicated, but also the delivery to the counter requires the sales staff to check that the orders are correct. If they don’t check the shipment and they find out after a few days that the order is incorrect, that’s a big problem because of how expensive the products are.
奢华物流 林正娣，LVMH物流总监谈奢侈品 品牌的在华发展与挑战 能谈谈公司在华物流运营的情况吗？ 目前我们在中国有1个 物流中心服务于公司旗下的7大品 牌：Dior, Guerlain, Givenchy, benefit, Acqua Di Parma, Kenzo, Make Up For Ever。先通过保税仓库，等进口手续 完成后再由物流中心完成对35个城市的LV柜台直接配送。目 前在全国范围内我们有150个直营柜台。 我们的物流团队为这7大品牌的产品提供物流服务。服务涵盖 了从进口，配货一直到柜台派送。 LV在中国市场的发展很快，你是怎样面对不断增长的需 求的？ 奢侈品行业在中国的发展很快，这对我们来说是件好事，业 务的增长要求我们对更加注重物流的可持续发展。再者，公司 在中国业务的增长能让总公司高层积极重视公司在华员工的 建议，倾听他们意见。我们很重视对员工的培养，不断挖掘有 经验，技术的员工来完成物流操作。同时我们也在寻求更好的 系统去提高准确度以及效率。最近我们启用了新的仓库管理 体系（WMS）。 能详细谈谈你们的员工发展计划吗？ 我们有包括SOP计划在内的一整套的员工培训计划，目前我 们对给员工进行WMS上的培训。我们也进行外训，一旦有适 合的培训计划我们就让物流经理们去接受培训。同时，我们也 组织公司内部的参观与学习。 物流服务中国市场有哪些难处？ 挑战主要来自三个方面，一是决策者对业务需求的预见。其 二是新的业务渠道-电子商务促使业务发展的多样化。目前 benefit已有网上销售平台。Dior将成为下一个拥有电子商务 平台的品牌。这样来 看，销售渠道的多样化将为供应链管理带 来挑战。第三是人员管理上如何提供员工专业水平，如何留住 人才也是我们未来工作的重心。 我们将从三个方面着手，来面对这些挑战。一是根据公司制定 的3年发展计划，在硬件上，不断完善仓储管理系统。第二是 提高物流环节的运作效率，我们给以员工的奖金制度是基于 员工对订单完成的准确率。第三，我们要加快仓库的库存周转 率。 零售网络的分布对公司物流有影响吗？ 零售网络主要还是分布在各大商厦，百货商场里。挑战主要还 是来自于新近添加的网上购物平台。随着benefit品牌网上购 物平台业务的开通，公司现有供应链网络布局将受到影响。 相比较而言哪个城市的物流配送难度大一些呢？ 我们在北京有30多个柜台，这对供应商来说有配送上的难 度。我们要求柜台不仅要清查货物的到货时间，还要与供货商 确认物品的明细，款式。在这点上，我们还有难度。珠宝，名 表，酒水品牌都是独立运营的，但他们的相同点是他们都是进 口的，CIQ流程比较长，这是我们需要面对的。同时，进口渠 道也有不同。珠宝品牌的进口，运输是由批发商完成的，业务 量也比较小。但服饰，箱包这一块就比较大了。 香水和化妆品对物流的要求与其他商品有什么不同？ 香水是属于危险品一类，所有对仓库等级以及运输的要求也 就相对较高。同时正是由于他们价格不菲，所以取得CIQ认证 的时间也就更长一些。 31
www.supplychains.com
SEPTEMBER/OCTOBER
LOGISTICS
The Long Haul Lifestyle On the road with China’s domestic long haul truckers
► Kevin Foehner
R
oughly one year ago, down to the coast of South China, Rachel Katz began and all the way east to Shanghai. conducting research “On those trips I was going short on behalf of the segments with several drivers, so US Department of I go to talk to a lot of people,” she State. The research brought her to stated. Chengdu, to study the lives on long The Driver Profile haul truckers in central and western Almost all the truckers own their China. “The goal was to identify the trucks, which are mostly Dong conditions that they face on a daily Feng, FAW or Foton. Due to recent basis, and how those conditions regulation changes, truck sizes shaped the type of service that they have increased, so Rachel noted that choose to provide,” said Rachel. most of the trucks are fairly new She soon realized that she on the road. On the trips she took, wouldn’t really understand what the loads consisted of anything these truckers were facing until from produce and tobacco, to steel she got on the road, which is and heavy industrial equipment. exactly what she did. “I left and I Almost all of the drivers that did a bunch of trips around central Rachel met were shipping goods and southern China,” she said. for the domestic market. Rachel did several medium and The main focus in not about long-distance hauls, which saw her traveling all over China with safety, it’s about making money. several drivers that she met at truck Getting Work stops and service stations. Her first In order to get work, drivers head trip was one of her longest, taking over to freight forwarding centers, her from Chengdu to Kunming, often very low-tech operations
where shipments are written down on chalkboards. Like most industries in China, long haul truckers usually make connections down at the freight forwarding centers in order to get better jobs. “Basically, the drivers make money coming from their hometowns into Chengdu,“ said Rachel. “But they almost always lose money when they’re going out of Chengdu.” The sheer amount of trucks entering Chengdu causes a bidding war for contracts, and Rachel suggests that most tier 1 or 2 cities in China are not very profitable for drivers either. Rachel discovered that some of the most successful drivers have been able to establish connections to get work directly from the shippers, but most go through freight forwarders. “One of the functions of these freight forwarders is a form of insurance for the shippers,” she said. “If a load is lost or stolen, it’s the
32 September/October 2011
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LOGISTICS responsibility of the intermediary, not the trucker.” What was most surprising to Rachel was not really on the road, but the unpredictable timetable to load the trucks once a contract was won. “Loading almost never takes less than half a day, usually a whole day,” said Rachel. “I’ve waited with drivers for up to three days just to load their trucks.” Mentality While the shippers take their sweet time preparing their orders, the drivers also play a role in how slowly things get done. “On the part of the drivers, they aren’t rushing or pushing which to me was surprising because they own their trucks,” she pointed out. “Their profits are completely based on how many loads they pull, but they don’t rush.” Most of the local shippers always award contracts to the absolute lowest bid, which means speed and higher service levels are not pushed for. Through conversations with several truckers, Rachel discovered that they had simply adapted to the mentality of the shippers. Another aspect that adds to the slow pace is the choice by most drivers to travel in caravans of multiple trucks. “If one truck blows a tire and has to wait for six hours, they’ll all wait,” she said. Despite how inefficient this is, the group mentality is what keeps these truckers safe and sane, considering they spend about 90% of their lives on the road and away from their families.
Overloading Overloading is a major concern on China’s roads, but Rachel discovered that is has progressively gotten better. One of the reasons that overloading is not as bad anymore is due to the increase in the size of trucks. “Intense overloading of small trucks has been replaced by moderate overloading of larger trucks,” she said. While once very common because of how profitable it was, due to new regulations, truckers have been deterred from overloading. However, Rachel heard stories of lots of cases of overloaded trucks on the road, and how they get around the checkpoints on the highways. “I never saw this, but when overloaded trucks are caught, they are allowed to pay a fine and pay to have the extra weight unloaded [before being weighed],” she stated. “Then they’ll pay again to have it reloaded and then they’ll continue on. That’s a service provided by most local police stations.”
Final thoughts Rachel has now returned to the US to submit her research. What she learned on her travels will surely be an enormous help for the US government, and more so the companies that are moving their business to west China. What’s the biggest takeaway that Rachel
Fines-￥10,000 Vehicle maintenance-￥15-20,000 insurance-￥25,000 Hired driver salary ￥37,500
Gas ￥240,000 48%
Tolls ￥168,000 34%
can share? “The main focus in not about safety, it’s about making money,” she said with a laugh.
Tolls One of the major financial burdens that truckers face are the rising tolls on China’s major highways. Rachel was surprised at how much money the truckers carry on them, which is largely dedicated to paying tolls. On average a toll is about RMB1200 per stop, and on a 30 hour drive, a trucker will hit anywhere between six and ten toll stations. Local Freight Forwarding Center in Chengdu
33 www.supplychains.com
SEPTEMBER/OCTOBER
LOGISTICS
China’s E-Commerce Market:
The Logistics Challenges Distribution gains importance as online markets heat up in China ► Mui-Fong, Chee Wee Gan, Karen Chen , Apple Zhang AT Kearney
E
-commerce has expanded at a compound annual growth rate (CAGR) of 90 percent over the past five years, rising from roughly $750 million in 2004 to more than $32 billion in 2009.1 By 2014, we estimate the Chinese e-commerce market will be worth $175 billion (figure 1).
Figure 1:
E-commerce is expected is toexpected continue to its growth Figure 1: E-commerce continue its growth spurt through 2014 spurt through 2014 1156 950 E-commerce market size (2004-2014, RMB billion) 360 120 112 9
213 182 31
575
544 470 373
276 85
691 C2C
738
172
268
375
465 B2C
Note: Figures for 2010-2014 are estimates. Sources: iResearch, Analysys International, A.T. Kearney analysis
10 5
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 in a city per day
TNT
-------------------------------------------------
Average last mile delivery cost per parcel
0.44
More geographic spread. The geographic growth 0.4 0.8 1.2 1.6 2.0 2.4 2.8 3.0 in online shopping is becoming a vital issue for Sources: Taobao, A.T. Kearney analysis the e-commerce industry. The consumer market is currently concentrated in regions, with the top 10 cities (in terms of Taobao usage) all located on the coast (figure 2). However, eight of the top 10 fastest-growing cities on Taobao in terms of total online spending are inland tier-2 and -3 cities (figure 3). This trend is expected to continue as wealth in the inland cities increases. As Figure 5: The competitive landscape for overall geographic coverage expands with deeper domestic B2C parcel delivery providers penetration into tier-3 and -4 cities, the ability to offer reliable and consistent delivery Companiesand compete on service will be High services Topname among the biggest challenges—and a major source of FedEx competitive advantage. -------------------------------------------------
However, success in this rapidly growing market is not a given. In particular, logistics will be a challenge as e-commerce players attempt to reach more customers over wider geographic regions while improving the quality of their offerings. The growth of domestic Figure 4: Last miletied (intra-city) express delivery—most directly to e-commerce— delivery economics is lagging the exponential growth of e-commerce (RMB/parcel) in China,40raising concerns about how well logistics Owned players can Outsourced 35 handle ever-increasing volumes. In fact, 30managing logistics may be the main differentiator as the online market heats up—along 25 with other B2C segments, such as TV and mail-order. 20 We researched the e-commerce industry to determine 15 how major players are tackling the logistics issue.
Total parcel volume September/October 2011delivered
Increase in B2C business. China’s e-commerce 2.6 market Shanghai Beijingthe C2C industry, accounting is dominated by for 85 1.76 0.99and driven primarily percent of theShenzhen market in 2009 Hangzhou by Taobao’s early successes. 0.85 However, B2C is gaining Guangzhou 0.74 momentum and to reach 40 percent of Nanjingis expected 0.53 the market bySuzhou 2015. As 0.51 C2C consumers gain more Tianjin 0.44 e-commerce experience, they are moving to B2C sites Online spending coastal cities Wenzhou 0.44 searching for higher-quality products(2009-2010, and services US$ Billion) Ningbo
2008 2009 2010 2011 2012 2013 2014
34
Trends in e-Commerce Rise in access channels. An estimated 150 million people shop online in China today, according to Shanghai-based iResearch. That number is expected to rise significantly as more Chinese consumers purchase Internet-enabled cell phones—today more than half of China’s Internet users already use their mobile phones for Internet access. On Figure 2 Taobao.com more than 200,000 sellers have opened “cell phone stores,” which could Top e-commerce cities today are along the increase salescoast, even but more. tier-2 and -3 cities are growing fast
------------------------------------------------ZJS
Fixing Logistics: Three Proven Strategies STO The relative scarcity Service of high-quality logistics providers YTO in China often means problems for e-commerce firms: ZTO EMS late deliveries, damaged------------------------------------------------and lostHTOparcels,Yunda negative attitudes from delivery people, slow Starcash-on-delivery Express Low
Companies compete on service Regional Sources:
Coverage and density
National
www.supplychains.com Taobao, A.T. Kearney analysis
LOGISTICS Figure 2
Top e-commerce cities today are along the
Figure 3
Figure 2: Top e-commerce along the fast coast, butcities tier-2 today and -3 are cities are growing coast, but tier-2 and -3 cities are growing fast Shanghai Beijing Shenzhen Hangzhou Guangzhou Nanjing Suzhou Tianjin Wenzhou Ningbo
2.6 1.76 0.99 0.85 0.74 0.53 0.51 0.44 0.44 0.44
Online spending coastal cities (2009-2010, US$ Billion)
Macau 10.52 Luohe 10.48 Figure 1: E-commerce is expected to Ezhou 9.30 continue its growth spurt through 2014 Simao 7.74 Qiqihar 7.71 1156 Yunfu 7.03 950 Honghe 6.22 Online spending, tier-2 and -3 Wenchang 6.07 inland cities 738 691 C2C Xingtai E-commerce market size 5.33 (2009-2010,X times growth) Guigang (2004-2014, RMB billion) 5.05 544 575
0
0.4 0.8 1.2 1.6 2.0 2.4 2.8 3.0 Sources: Taobao, A.T. Kearney analysis
120 112 9
2 Sources: 213 182 31
4 360 6
8 470 10 12 373 Taobao, A.T. Kearney analysis 375 276 268 172 85
465 B2C
2008 2009 2010 2011 2012 2013team 2014 city, deploying a company-owned delivery could Figures 2010-2014 estimates. cost 15 RMBNote: ($2.28) orformore perare parcel, eating away Sources: This iResearch, Analysys at profits. cost couldInternational, drop to A.T. lessKearney than analysis 2 RMB ($.30) per parcel with more than 10,000 deliveries per day in a city (figure 4). As such, it is doubtful that even the largest e-commerce players can fully address the demand internally and profitably, considering the wide geographic spread of the market. Figure 4:
Last mile (intra-city) Figureeconomics 4: Last mile (intra-city) delivery
delivery economics
Average last mile delivery cost per parcel
-------------------------------------------------
-------------------------------------------------
(COD) processes, poor return procedures, and no special services such as installation or “product tryon.” Such last-mile delivery and customer interface issues inevitably affect the creditability and brand image Figure of e-commerce firms. 5: The competitive landscape for Furthermore, leadersproviders in certain domestice-commerce B2C parcel delivery industries—including baby goods, consumer Companies compete on servicestruggling with High and electronics, furniture—are Topname logistics suppliers’ inability to handle large or FedEx shipments at lower costs. Few irregularly shaped TNT domestic express companies are equipped to handle ------------------------------------------------ZJS freight, and freight companies cannot provide door-toSTO Service door service.
Online spending in tier-2 and -3 cities is growing fast
(RMB/parcel)
40 YTO Owned ZTO Outsourced EMS Strategies for------------------------------------------------improvement 35 HTO Build your own networks. ManyYunda large e-commerce 30 Star Express players are choosing to build their own internal 25 logistics Low networks, incorporating own teams into Companies competetheir on service 20 the business model ensure Regional to Coverage andquality. density National 15 For example, 360buy.com posted a 300 percent growth Sources: Taobao, A.T. Kearney analysis 10 rate in the past five years after logistics bottlenecks 5 forced the company to establish its own express delivery operation, headquartered in Shanghai, in 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 January 2009. With its own network, this consumer Total parcel volume delivered in a city per day electronics, computer and telecom company now provides same- or next-day deliveries from four distribution centers in Beijing, Shanghai, Guangzhou and Chengdu. The company plans to invest more Outsource to third-party providers. Given the lack than $100 million to build a massive new distribution of scale and capabilities, most e-commerce companies center in Shanghai in 2012, which is said to include a still outsource their delivery services to third-party 300,000 square-meter land with a 150,000 square-meter express companies. Most express delivery providers warehouse and the capacity to process 100,000 orders in China can be grouped into two types (figure 5). 4% Collection Large networks offering basic services. Firms in this per day—what would amount to a $3 billion business. 6% Sorting However, building a logistics arm is not for every group typically have large network coverage but can 3 only basic delivery services. Most rely on provide company—only for those with large volumes and Figure efficiencies, especially in last-mile delivery, which franchised models to expand rapidly (only 20 to 40 often accounts for half of total costs. For percent are self-owned) and compete mostly on speed 37% logistics 53% Last-mile Sources: A.T. Kearney analysis and price. Network coverage is wide, especially with example, with fewer than 500 Line deliveries day in a Macau haul per 10.52 delivery
www.supplychains.com
Luohe Ezhou Simao Qiqihar Yunfu
10.48
9.30 7.74 7.71 SEPTEMBER/OCTOBER 7.03
35
------------------------------------------------ZJS
LOGISTICS
Service
-------------------------------------------------
-------------------------------------------------
Low
High10000Companies compete on service 6000 7000 8000 9000 Topname FedEx TNT
------------------------------------------------ZJS Service
ZTO
STO YTO
EMS HTO ------------------------------------------------Yunda
Star Express
Low
Companies compete on service Regional
Coverage and density
National
Sources: Taobao, A.T. Kearney analysis
ZTO
STO YTO
EMS HTO ------------------------------------------------There is a Yunda clear gap in the market—as no player offers Star theExpress breadth of services needed at a competitive price across a broad Companies compete on servicenetwork demanded by e-commerce companies. However, many logistics companies are Regional Coverage and density National investing heavily to broaden their capabilities to Sources: Taobao, A.T. Kearney analysis fill this gap, particularly in line haul and last-mile deliveries (figure 6). Warehouse pick-and-pack, which could represent 40 percent of total logistics cost of a parcel (and is a manual operation today), is another opportunity. When sizing up a potential third-party logistics provider, it is important not only to look at their current capabilities but also at their growth and investment plans.
The competitive landscape for Figure Figure 5: 5: The competitive landscape for domestic parcel deliveryproviders providers domestic B2CB2C parcel delivery
elivered in a city per day
-------------------------------------
TNT
-------------------------------------
Outsourced
Logistics companies are investing heavily to broaden their capabilities
4% Collection 6% Sorting back-up from the state postal service for remote areas. 10.52 These large networks do not offer more complex 10.48 services such as scheduled returns, exchanges or 9.30 collect-on-delivery (COD). Given their franchised 53% 37% or sub-contracted models, there are also inherent Last-mile Sources: A.T. Kearney analysis Line haul risks. For example, most players offer a one- or twodelivery week COD repayment cycle, exposing e-commerce nline spending, tier-2 and -3 to a significant amount of risk, especially inlandcompanies cities 2009-2010,X when times growth) many of the logistics and express players are franchised or heavily subcontracted. Ensuring the 4% Collection the entity collecting the cash 10 12 integrity and viability of6% Sorting is a crucial element to consider. analysis Form partnerships or acquire existing firms. A third An exception is Shunfeng Express. The largest private approach is to invest in existing logistics companies or express company in China with more than 2,000 fullyform partnerships with them. Alibaba, the e-commerce owned locations and reliable 37% and fast service, 53%Shunfeng giant that owns Taobao, invested $4.5 million in Star Last-mile maintains a premium position the market. But itsSources: A.T. Kearney analysis Line in haul Express. Alibaba’s founder, Ma Yun, also invested delivery standardized services are not for everyone. China in Best Logistics, which subsequently acquired a 70 Post’s EMS, with more than 20,000 locations, has the percent stake in HTO; Star Express and HTO are the largest network, but speed and reliability continue to major Chinese express delivery companies. However, be issues. given Taobao’s size (3 million shipments a day) no Smaller networks offering more complex services. logistics player or acquisition alone will meet its speed These typically fully owned companies have relatively and service requirements. As such, Alibaba plans to smaller network coverage—some, such as Topname, invest $4.6 billion over the next five years to build a only compete regionally—their focus on regional network of warehouses across the nation. services enables full-fledged value-added services such as warehousing, COD and customized delivery. Logistics: The Key to E-success These companies are selective about where they The solutions are unlikely to come from e-commerce expand their networks, selecting cities only if there in-house logistics, for market growth will soon is enough volume, and they focus mainly on the B2C make these unsustainable. The real solutions are more likely to be found in strategic partnerships market. International companies such as FedEx and TNT between e-commerce firms and third-party logistics also fall into this category. They have more limited providers. Indeed, within a few years, we expect to networks than the domestic players but offer a broader see a transformation in China’s e-commerce logistics range of services and are more reliable and consistent. landscape, where e-commerce plus logistics providers Other providers, such as Kerry EAS, also serve the B2C will equal market success. market, with strengths in warehouse pick-and-pack operations rather than delivery. 36 September/October 2011
www.supplychains.com
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CHaINA ’11: The Global Supply Chain Event for Asia Nov 2-3, Shanghai Sponsors:
CHaINA’11 is the largest and most anticipated event in China for businesses thriving in supply chain management or interacting with other businesses in this profession. CHaINA’11 keeps you on top of your game through a broad array of presentations, panel discussions networking opportunities, and exhibition, followed by the unique CHaINA Awards Ceremony, dedicated to promoting and strengthening the presence of supply chain management, logistics and procurement strategies in Asia. With a turnout in 2010 of over 400 attendants from all sectors and industries in Asia, CHaINA’11 will be the largest and most prestigious gathering of supply chain professionals and specialists of the year! At CHaINA’11, discuss, exchange and find solutions with your peers to adapt your supply chain to the business environment allowing your business to thrive despite the current economic climate.
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作为中国最大的供应链活动CHaINA'11以独家方式提供了组合介绍，联网机会， 研讨会和CHaINA颁奖午餐宴会，致力于促进和加强目前亚洲供应链的管理，物 流采购战略。 这场活动对于供应链，采购和物流经理来说是独一无二的机会，不容错过，参会 者可以从领先公司的同行处学习并且将同参加这场活动的上百个专家建立新的联 系。
CHaINA'11 将是迄今为止最大的年会，集聚了众多供应链的专家和学者们， 在 2010 年我们的参会人数令人印象深刻，从赞助商到参展商有超过 300 的本行 业的参与者，诸如，第三方物流公司，咨询公司， IT 公司，房地产公司等等。 CHaINA'11将会更加令人激动，在这里你可以与同行们讨论如何迎接金融危机的 挑战并且探寻如何能让企业振兴的方法。
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Speakers
Johnny Saldanha, Vice President
Global Purchasing and Supply Chain, GENERAL MOTORS Johnny Saldanha was previously Vice President for Global Purchasing and Supply Chain for GM’s Latin America and Middle East regions from April 2007, where he is responsible for purchasing, supply chain, plant material handling, supplier quality and logistics.
Keith Miears, Director
World Wide Procurement, DELL Keith Miears is responsible for purchasing, supply chain readiness, and supplier quality performance of Dell’s notebook and desktop products. Prior to joining Dell, Mr. Miears worked at IBM serving in various roles within the manufacturing operations.
Steven Hsieh
Director, Supply Management-Asia, JOHN DEERE Steven is responsible for direct material purchasing, indirect material & services purchasing, logistics, IPO, supplier development, cost management, and strategic planning for China, India and SE Asia.
Nis-Peter Iwersen, Vice President Purchasing Asia Pacific
SCHAEFFLER For the last 15 years succesful Asia experience of setting up two industrial green field companies in China and since 2004 head of Danfoss China purchasing. Form 2008 as VP Purchasing Asia leading the Schaeffler Groups Asia purchasing to a higher performance level to deliver or exceeding the results.
Marc Magistrali, Senior VP Sourcing (CPO)
KONE CORPORATION Marc Magistrali has been working as a Senior VP Sourcing (CPO) for Kone Corporation since 2005. Prior to joining Kone Corporation, Marc was the EMEA Procurement Director for Avery Dennison Corporation.
Brian K. Johnson, Director Global Procurement
MERCK Brian K. Johnson iscurrently the Director of Greater China and Emerging Markets Leader for Merck & Co. Inc. in the Global Procurement department. He is responsible for all aspects of local procurement and above country strategy development and execution.
Kenith Poon, Director, Purchasing & SCM, Asia
JOHNSON CONTROLS Mr. Poon is leading the manufacturing supply chain, indirect/project procurement, and logistics teams responsible for strategic sourcing, procurement operations and logistics. Prior to joining Johnson Controls, he has been working in the fields of procurement, product & business development and finance with NVIDIA, BT, Nortel and P&G.
Patrick Westkamp, Purchasing Logistics Asia Pacific
HENKEL In 2007 he joined Henkel, a FMCG and industrial adhesives company in Germany to enforce the global organization of purchasing logistics. Since beginning of 2009 he is based in Shanghai as “Head of purchasing logistics APAC” being responsible for the strategic sourcing of all logistics categories within the Henkel group in Asia.
Carlos Vazquez, Distribution & Sales Operations Manager
MICHELIN Carlos Vazquez is the Distribution & Sales Operations Manager for Michelin. He also lead projects aiming at designing and implementing new processes and organizations including governance design, decision-making and metrics, cross-enterprise process harmonization, resource capacity management and commercial distribution strategies.
Michael Huang, General Manager, International Procurement Office
38
LG ELECTRONICS There are issues in China for Procurement encountering in 2011 and will be extended to 2012 which include 1) Labor cost increase 2) Labor shortage 3) High inflation 4) Stability of Power supply 5) Supplier finance risk 6) RMB inflation. What are the options and counter measures? For more speakers, please visit www.supplychains.com/chaina11-speakers/
Winning the logistics game for B2C eCommerce
As China’s eCommerce market continues its rapid growth, logistics remains a major challenge for e-commerce players big and small as they attempt to reach more customers over wider geographic regions while improving the quality of customer experience. Distribution has gained importance and will be a differentiator as the market heats up. This stream will look explore the growth and trends in China’s eCommerce market, the logistics challenge, and keys to success. Chaired by Karen Chen, AT Kearney Invited speakers: Amazon, DangDang, Vancl, 360Buy
Retail Facilities Management & Risk Prevention in China
Retailers face growing pressure in the extremely competitive Chinese market. Facilities Management (FM) quickly becomes a key issue, with incidents sometimes having a major impact on operations and further exposing retailers to risks. Usually managed by a separate department, Risk Prevention (RP) covers not only technical risk but also other risks such as internal fraud, product safety, and social unrest. Chaired by Bruno Lhopiteau, General Manager, Siveco China Invited Speakers: Carrefour, IKEA, Auchan, Beijing Oriental Plaza, local retailer.
Tracks The Human Resource Supply Chain in China
The supply chain management and logistics sectors in China are challenged with rising demand and insufficient supply of talent. What are the latest employment market trends in China and across Asia? How can companies attract the right talent, whilst managing salary expectations and controlling costs? What strategies are companies adopting to increase retention and reduce turnover? How should expectations be managed? What are best practices in on-boarding new employees? How can local and global requirements be balanced best within the local market? How can we increase the overall talent pool by attracting more people into the supply chain and logistics sectors? Chaired by Mark Millar, Managing Director, M Power Associates Invited speakers: Dell, Wal-Mart, Li&Fung, Nike, Logistics Executive, Metro, GPC Electronics, Toll, William Sonoma
Emerging Supply Chain Trends and Technologies
The session will focus on managed services (SaaS) trends in China. The market starts to see a rapid adoption of managed services as a low cost way for Chinese companies to leap frog to world class Supply Chain Management standards and practices. The use of SCM solutions, Internet EDI, e-Logistics capabilities for ASN’s, VMI, POS based inventory management are taking off in China. Chaired by James Hatcher, Managing Director AP, Seeburger Invited speakers: senior executives from global retailers, research company
China’s structural shift in global supply chains
China’s competitiveness on specific product categories is changing over time as China moves up the value chain. How fast Chinese suppliers are catching up with their western counterparts in the heavy equipment, engineering and hi-tech sectors and what does it mean for global supply chain organisations with a China agenda? Chaired by Lilian Luca, COO, Betman Beijing Axis Global Invited Speakers: Xstrata, Exxaro, TWP, WorleyParsons.
Supplier Development in China
The stream will cover various topics including Selection of Suppliers for Development Projects; Scope of Supplier Development; Target Level of Supplier Development; Effort invested in Supplier Development; Success rate and success factors and Cost savings made possible by Supplier Development. Chaired by Thomas Wenner, VP Supplier Development at IMIG Invited speakers: procurement and supplier development managers from manufacturing companies.
Sustainable Supply Chain
In addition to rising costs across the board, China supply chains face a number of challenges to their future continuity, including: Tightening labor laws and more activist workers; water scarcity; energy scarcity and bottlenecks; fire and explosion risks; worker exposure to toxic chemicals; community and on-line media opposition to polluting factories. This session will present case studies and best practices to refresh attendee understanding of how these risks are currently or are expected to impact supply chain continuity, as well as some approaches to reducing sustainability risk without impacting costs. Chaired by Chris Hazen, Director (Asia), WSP Environment & Energy Invited speakers: senior executives from adidas, Levi Strauss, Marks & Spencer, HP, Verite
Warehouse Automation in China: The Way Forward
This session will focus on business cases for warehouse automation in China, including concept design and procuring automated material handling equipment. The stream will also cover topics such as the challenges of managing the interface with the building design and construction, and dealing with processes, planning, manual operation culture, etc. in automated warehouse operations. Chaired by Laurent Cochet, Principal Consultant, Capgemini Consulting Invited speakers: Nike 39
For more tracks, please visit www.supplychains.com/chaina11-speakers/
Content
►
行业短讯/40
Distribution News /40 ►An Alternate Approach/42 ► The Imitators/44 为超市服务/42
山寨概念店/44
Distribution
Nokia Falls Hard
Nokia’s shipments of mobile phones in Greater China have fallen 52% in the past year according to their Q2 earnings report. Researchers have estimated that this has resulted in a decline of 4.4% market share, to 19.1% overall in China. Nokia has responded by shuffling their senior management, appointing Colin Giles to take charge of the salvage operation for the time being. “As dire as those reports sound, the situation in China is actually even worse for Nokia because competitors like Apple are moving quickly to shore up market share in the world’s largest mobile phone market,” according to Shaun Rein, Founder and MD of China Market Research Group. According to Rein’s research, a mobile phone is the third most prized status symbol for the Chinese, after a house and a car. Nokia made
a tactical error by focusing their product lines to the low-end market, and are now feeling the effects.
Costa Coffee Making Moves
Costa Coffee is pushing to expand its presence in mainland China. After opening its 100th location at Beijing Capital International Airport (a spot that became available after Starbucks moved out), Costa Coffee announced plans to open 100 new locations in the next year. The company forecasts that by 2018, China will host more than 2500 coffee houses, and its goal is to have a third of them. The company faces stiff competition, as Starbucks currently has more than 800 stores in China, and is also looking to expand.
Sanyo’s White Goods Sold to Haier
Haier, which ranked first in the 2010 global refrigerator market and second in the washing machine market, will further expand their shares after acquiring Sanyo’s white goods business for roughly US$130 million. Haier will take over operations along with 2000 employees. Sanyo has now completely pulled out of the Japanese and South East Asian white goods market to focus on its battery business.
E-Pharmacies Expand
Pharmacies across China are looking online to expand their presence, as well as raise profits, through a growing number of B2C
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DISTRIBUTION websites. ForME Drugstore, the largest pharmaceutical chain in Shanghai, has enjoyed large order sales of its products after setting up a store on Taobao Mall (tmall.com). Taobao has since opened a new online pharmacy channel, which has been joined by several Chinese pharmaceutical companies including Golden Elephant Medicine , Jiuzhou Drugstore, and Kaixinren.
plans to move its strategic center to north-western China in an effort to tap into China’s developing regions. E-Mart hopes to have 45 stores in China by 2015. As for the 10 stores it’s selling, Wal-Mart is currently the leading bidder to acquire them.
after their probation periods were completed. A report by Money Week has stated that over 5000 Groupon clones are in China; very few of them actually making money.
Gaopeng continues layoffs in China
Tommy Hilfiger CEO Fred Gehring has announced that the company has assumed control of its brand in China after working with Dickson Concepts and Licensing for close to 15 years. The company will take control of roughly 80 points of sale across China, a region that currently accounts for 10% of its global revenue. Tommy Hilfiger’s goal for China to account for one-third of its global revenue.
E-Mart Switches China Strategy
E-Mart, the South Korean retailer, has decided to sell 10 of its 27 stores on the East Coast of China, to focus on developing its presence in China’s lower tier cities. The company has
Gaopeng, Groupon’s JV with Tencent has continued to lay off people from every section of the company, according to an anonymous employee. The source told media outlets that staff were being cut
Tommy Hilfiger takes control in China
Aviation Supply Chain Forum Sept 23, Shanghai
The Aviation Supply Chain Forum will bring together senior supply chain, logistics and supplier management executives to discuss best practices that will lead to process improvements and reduced costs in their operations in Asia. For more information, please visit: cha.in/aviationscm11 41 www.supplychains.com
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An Alternate Approach Haibin Tang, Logistics Manager at SPAR, talks logistics strategies in China. Tell me a little bit about SPAR’s presence in China and your role. Spar entered the China market in 2007. Headquartered in Shanghai, we have 125 hypermarkets across the country. My responsibilities include DC project implementation, logistics performance improvement and process analysis of Warehouse Management Systems. I’ve been working closely with SPAR partners in China to set up new DCs and achieve more efficient logistics performance in the warehouse, as well as in the entire supply chain. What’s Spar’s strategy for the China retail market? As an international brand, we entered China through partnering with strong local players. We have 7 local partners in different regions. After they joined SPAR, their names were changed and their stores were redesigned. For partnership selection, we are looking for 2 things. First: the size of the company. We are looking for a company that has substantial presence in the local market, like Jiajiayue Group. Second, we are looking for partners that operate independently, so we prefer to partner with private companies. How is Spar positioning itself to compete in China? Most Spar’s stores size ranged from 800 sqm to 40,000 sqm, so we have a variety of store sizes to suit different locations. In Shandong, Guangdong, Shanxi, Beijing and Hunan, Spar has a relatively higher presence in comparison to its business in the rest of China. We focus on consolidating our own position in the market, and to streamline communication between different departments. Why has Spar chosen to position its locations in Shandong, Guangdong, Shanxi and Beijing? When we entered the market we chose to team up with Shandong Jiajiayue Group, a retailer that has presence mostly in Shandong. So, we chose these locations because they had suitable local partner for us to work with. What’s your main concern for the operation? My biggest concern is for management issues in our warehouses. How can we reduce lead times, and how can we make prompt deliveries to our retail stores. We’re not doing too badly on those aspects, but of course there is always room to improve.
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DISTRIBUTION What are you current lead times and how do you manage them? Different commodities have different requirement for lead time. In general, ambient goods are required to reach stores within 36 hours. For low temperature goods and fresh agriculture products, our commitment is delivery within 18 to 24 hours. Spar stores that are over 1,000 sqm have a storage facility on site for inventory, while stores that are less than 1,000 sqm do not. So comparatively, larger stores are more flexible on delivery times than our smaller locations. Since our trucking fleet is limited, we prioritize the delivery to smaller locations first.
$
125
Stores in China (by the end of 2010)
US$ 575 Mn
Retail Sales in China
7
Store partners nationwide
4
DCs: 3 in use, 1 in construction
80
40 in Guangdong/Shandong from 3PLs 40 Spar-owned in Shanxi
How do your logistic needs differ from your peers? We didn’t enter the market as early as Wal-Mart and Carrefour did, but from the beginning, our logistics operations were designed at high standards. When we set up the DC, we brought designers from Europe to design it. We use high level rack pallet and order picking forklift trucks, so we can fully utilize the indoor space of the warehouse and operate efficiently in the warehouse. For management software, as I said before, we applied a WMS. Our warehouses utilize real-time wireless transmission technology to achieve real-time management and monitoring in receiving, shelving, sorting, collection and shipment of the goods. In addition, we use hand-held terminals and voice technology which has enabled us to achieve a paperless operating process.
为超市服务 唐海滨谈SPAR在华物流运营 能简要谈谈Spar在中国的情况吗,您又是负责哪一块的？ Spar于2007年进入中国市场，公司在华运营总部设在上海，目前 在SPAR在中国拥有150多家门店，我主要负责公司与物流相关的工 作，包括实施和管理新的配送中心项目，提升仓库物流性能，以及 仓库管理系统（WMS）的流程定义等。
公司在供应零售商上有什么策略？ 做为一家国际化的公司，在中国我们在不同的地区有7家合作伙 伴。在加盟Spar之后，他们的名字变了，门店也重新设计了。我们 在建造物流中心的时候，设计人员是从欧洲请来的。目前来看我 们的物流中心只为Spar自己的超市服务。 公司在中国市场上的竞争是如何定位的？ Spar在中国的主营业态为800到40,000平方米之间。目前从公司 在华市场的层面上来看，山东，广东，山西，北京和湖南排在公司 在华市场的前列。至于竞争，我想我们还是会以自己为中心，在物 流的流通及各个部门的衔接上做好工作。 Spar为什么选择山东，广东，山西及北京来发展在华经营的？ 一开始我们选择合作伙伴上有自己的标准，一开始进入山东市场 的时候我们选择了山东家家悦集团做为合作伙伴，在选择合作伙 伴上我们看重两点，一是公司的规模，我们希望能够找到在当地有 一定门店数量的企业。二是看合作伙伴是否是独立自主经营，我们 会更倾向于和私营企业合作。 目前在工作上您最关心的是什么？ 我个人所关心的当然还是仓库内的管理。如何更好的仓储上的周 转时间，即时为分销渠道调货，发货，这是我所关心的。 那在减小仓库周转时间及保证准时发货上你是怎么做到的呢？ 对于常温产品我们的要求是36小时配送，对于面积大的超市，他们 有一定的存货能力，但对于超市面积不足1,000平方米的店面我们要 优先考虑他们的周转时间。物流资源，像车队，是有限的，所以我们 要合理利用资源。对于低温产品，我们遵循的配送时间是在18到24 小时之内，在配送上，我们遵循的是成本第二，信誉第一。 SPAR在物流上与同行业其他竞争者有什么不同？ 的确我们进入市场的可能没有沃尔玛，家乐福早，但我们的物流 在进入市场的一开始就以高标准来设计规划的，拿SPAR的配送 中心来说，我们采用的是高层托盘货架和高位叉车，这样可以实 现空间的充分利用及高效的库内作业。软件方面，我们采用了像我 刚才所提到的仓储管理系统（WMS）。同样，仓库通过无线实时 传输技术，实现了收货、上架、拣选、集货和出货的全程实时管理 和监控；而手持终端和语音终端的引入更帮助实现了主要流程的 无纸化作业。 43
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The Imitators China’s knock-off artists reach a whole new level Copying has long been a major issue concerning foreign brands in China. Known for its fake bags, watches, and DVDs, China has built a reputation for faking some of the most popular goods in the world. Recently, China’s knockoff-artists took things to the next level after being exposed for copying entire store concepts and thus, the customer experience that goes along with it. Given how lucrative the China market is to retailers, the idea of designing a concept store has taken off. Several brands like Nike, Starbucks, Apple and Ikea have brought their uniquely designed stores to the Mainland. These stores enhance the customer experience, provide more than just a place to buy the product, and inform customers of extra services they can receive by shopping there. With Apple’s fake store in Kunming making headlines across the world, journalists in China soon began a witch hunt for other copies. The internet is now fraught with stories of major brands having their retail designs faked all across China. The Imitators • The Kunming Apple Store The world was stunned when they viewed the uploaded pictures on the knock-off Apple Store in Kunming. The wooden demo tables, white store décor, staff uniforms and promotional posters, made the store look identical to the four authentic locations in Beijing and Shanghai. The Apple store was so thoroughly copied, that employees of the store in Kunming believed they were truly working for Apple Inc. Since the discovery, the Kunming authorities have identified another 22 fake Apple Stores in the city.
everything from the blue and yellow colors, to room displays, and even had a cafeteria which was remarkably similar to Ikea, minus the meatballs and smoked salmon.
• Shanghai Xingbake Another high profile case back in 2006, Starbucks won a legal battle against a company called Shanghai Xingbake. The Chinese company had set up 38 locations in Shanghai which featured a logo and store design remarkably similar to Starbucks. Starbucks won the case and was awarded US$62,000 in damages. • Dairy Fairy After a first glimpse at Dairy Fairy’s website, you can easily mistake the deep blue and orange background for that of Dairy Queen’s. And their copycatting doesn’t hold back on any front. From the store designs, to “Ice Storms” served upside-down and the blueberry sundaes, products offered at Dairy Fairy feature all the classic flavors from Dairy Queen. Customers have such a hard time differentiating the brands that Dairy Fairy accepts DQ coupons from confused customers. What’s shocking
• 11 Furniture Ikea was the second victim of China’s copycats to make recent international headlines. Again, located in Kunming, the store was called 11 Furniture. It mimicked 44 September/October 2011
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“ Customers have told me we look like Ikea. Things like copyrights, that is for the big bosses to manage.!” ---11 Furniture Employee is that Dairy Fairy has more than 2000 locations in smaller Chinese cities, compared to Dairy Queens 360 franchised locations. It’s remarkable that this hasn’t received more attention from the media. Raising the Stakes Few people would disagree that copycatting is a chronic problem in China, but the boundaries of copying are being pushed. “Typically there are a lot of fake products,” said Adam Xu of Booz&Co. “Now we see more fakes in the service aspect in terms of (faking) the retail formats.” It seems as if the targets of the copycats have shifted to the layouts and concepts of stores, rather than the products. By stealing the customer experience rather than copying the product, knock-off artists are able to benefit from the millions of dollars that international brands are spending to market their products to Chinese consumers. The question is: who should be responsible for protecting this type of intellectual property in China? The Government Naturally, several professionals and groups are calling on the government to take stiffer actions. “The China government plays a critical role in this case,” said Leo Kao, Senior Business Consulting Manager at QAD. “As an arbiter, the government can confirm these actions are illegal, and also take action to punish the copy cats.” Government intervention has long been called on by several multinational companies that have had major issues with copying in Mainland China. While rules are in place, Greg Poulos, President at Bluefin Productions points out, “IP Copyright, while protected, is not enforced. IP protection only covers certain types of products, not the design, logo, etc.” In other words, copying a store design will probably go unpunished, unless it garners worldwide attention on the internet. Beijing has pushed innovation as a major goal in the next five years, however still very little is being done to protect those attempting to be creative and unique in China. “Once business builders start to innovate and create their own brands of value, the Chinese government will start to crack down on copyright infringement,” said Peter, CEO at Citrus Inc. “Today, the government has bigger issues like pollution, an aging population, inflation and income disparity.” Consumers While Beijing focuses on dealing with other major issues in China, many professionals believe it’s up to the consumers to challenge fake retailers. “It all depend customers’ judgment!” said Leo Kao. “If they don’t care about authorization, then they can’t help with this issue.” With fake stores making headlines all over China,
it’s unlikely that consumers are unaware that they’re shopping at unauthorized retailers. “The overall desire to have the product far outlasts any misgivings one might have about obtaining it through dubious means,” said James Cranford, International Sourcing and Procurement Manager at PMG.
Knock-off Fun Facts
360 Dairy Queen franchise stores in China +2,000 Dairy Fairy stores in China 38 Shanghai Xingbake locations (by 2006) 71 Starbucks in Shanghai (by 2006) 10,000 SQM – size of Kunming’s 11 Furniture (Fake Ikea) 49,400 SQM – size of Ikea’s newest store in Pudong
500,000 Visits to Kunming’s fake Apple Store in 48 hours 22 Additional fake Apple Stores found
The Brands in Kunming So if the government has bigger issues to deal with and the consumers don’t mind where they get their products from, then it ultimately leaves the brands to shoulder the responsibility. The brands that have established a major presence in China have been able to minimize copies of their offerings. “If you look at a company like Starbucks or McDonalds which both have a very large foot print in China, you will see that very few people are copying their outlets (anymore),” said James Cranford. For physical goods brands, this is a trickier issue. While most customers will be able to taste the difference between a fake McDonald’s hamburger or a Starbucks coffee, buying a legitimate iPad from an unauthorized dealer yields no difference. “If the products are genuine then the ends result is the products were obtained originally through one of the brand outlets,” continued James Cranford, as was the case at the Kunming store. The big difference will be in the quality of the service they receive, but if a consumer has never visited a real Apple Store or Ikea, what do they have to compare it to? Ultimately, brands need to be more careful in selecting who they authorize to manufacture or distribute their products in China. But until the government intervenes, the brands will continue to fight a very tough battle. “No good actions or results have been seen since the first fake product case appeared and it is getting worse,” said Tony Li, Warehouse and Transportation Senior Manager at Amway. “We protect ourselves by taking legal action when we found fake product producing locations.” Conclusion At this point, IP infringement will remain a part of doing business in Chain. It’s widely known that factories that receive orders usually make extras to sell through their own channels, and distributors will sell to whoever wants to buy. Ultimately, it’s up to the brands to crack down on this issue. China’s consumers will get the products they want, by any means necessary.
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The China Dream
The struggles of American 3PLs in China’s challenging market
► Edward Antczak Kevin Foehner
S
purred by their boards of directors and global RFQs, American third party logistics (3PL) companies entered China in the 2000s with ideas of conquest over a highly lucrative market with seemingly unsophisticated competitors. “We need to be in China, it’s a big market,” said Jess Goldberg, Menlo’s previous VP of North Asia, over the mentality of American players. “We’ll get our footprint by buying a company.” As Mr. Goldberg pointed out, the preferred method of entry was to acquire a local company, establish a footprint, and then quickly take charge of the market. Menlo, Schneider, YRC, Penske, and other chose acquisitions to establish a quick foothold. However, one by one, each player started to realize how complex the market really was, and how little they actually understood of it. Several American 3PLs are working to rebuild their businesses. Overall, their clumsy entrances have resulted in the American 3PLs struggling to find their place in the Chinese market. Entry by Acquisition Schneider acquired BaoYun in September 2007, to expand from supply chain consulting into transportation and logistics services in China. Also in September 2007, Menlo acquired Chic Logistics for US $60 million in order to gain physical presence inside the country. The following year, YRC Logistics took controlling interest from Jiayu Logistics for US $44.7 million. Penske entered earlier, in 2005, by acquiring majority shares of an undisclosed local logistics company. For the most part,
the acquisitions were made hastily and resulted in loss of clients, employees, and required a longer timeframe to become established. At present, acquisitions in China are a demanding and tricky process for foreign companies. “Acquisition of a 3PL is fraught with potential hidden costs and risks, stated Jess Goldberg (Ex-Menlo). Most Chinese professionals would not refute this claim. “Basically in China, businesses always have 2 books,” said the exSchneider employee. “One book is for auditing, the other book is for the actual business.” Research from Technomics Asia furthers the theory that mergers and acquisitions in China are extremely risky. “The rules of the game are not well defined. For example, valuation, approvals, and due diligence process,” says Steven Ganster, MD of Technomics Asia. “As a result, deal failure is high. We roughly estimate that 60-70% of deals fail after LOI (letter of intent).” With almost all the American 3PLs choosing this method to enter, it becomes clearer as to why they have struggled thus far.
5 critical failure points in China M&A: 1. Choosing the wrong target for the wrong reasons 2. Failure to connect with target shareholders and stakeholders 3. Inability to bridge valuation gap between sellers and buyer Steve Ganster, MD Technomic Asia 4. Target fails to meet due diligence expectations on documentation of financial and operating performance 5. Corporate management worried about post-deal performance
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FEATURE Current Status Most of the American 3PLs talk about their operations in China with a sense of hope for the future. Their public relations teams have shielded them well, and as a result, information on the current status of American 3PL inside China is not readily accessible. However, former employees and industry professionals have offered their opinions. “It’s really hard to find a very successful example in this market,” said Bryan Yan, Director of Business Development for Hercules Logistics, and exMenlo employee. “Their performance is not as good as their European competitors.” Sarah Sun, a previous YRC employee, and now a Major Account Manager at TNT stated “All the big names are European.” CHaINA asked Perry Chen, ex-Werner employee and current Regional Sales Manager at Fiege Int., if his former company was a competitor to European 3PLs in China. “Um, I don’t think so,” he responded, pointing out that Werner lacks presence in China as well as local relationships. Angela Yang, Penske Logistics’ Managing Director, Asia-Pacific Region, commented, “The margin for logistics service providers is getting thinner and thinner. Many of the American 3PLs are not making money yet.” Issues After the acquisitions were in place, the next step to begin operations proved to be quite difficult as well. “The biggest problem is actually the integration of the team,” said the anonymous ex-Schneider employee. Integration issues that related to culture, management practices, and models that were applied to the market proved to be difficult to overcome. After the acquisition was completed, these issues all attributed to the same results: loss of contracts and a longer rebuilding phase. The general consensus about the American management was that they were unprepared and unfamiliar with the challenges of the China market. “It surprised me that they wanted very quick success, they wanted to build their China operation overnight,” says an ex-Schneider employee. “Nearly every day my boss would ask me questions about how to grow quicker and how to quickly take over the China market.” Business Models Finding the right model to use for the China market has been a difficult task for foreign companies entering in several industries. What has been agreed upon is that a model that works in the West, will probably not work in China. This proved to be the case for many of the American 3PLs entering China. Several American 3PLs approached the Chinese market with a trucking mentality, because it was what they excelled at in their own country. “They wanted to duplicate the US business model in China,” said the anonymous ex-Schneider source. “I’m convinced that the top management from Schneider underestimated the complexities of China’s market.”
Bryan Yan revealed a similar take on the situation for Menlo, saying “they tried to Americanize the company.” Sarah Sun (ex-YRC) suggested that her former employer only brought the systems to China, but did not adapt them to fit the marketplace. Penske’s Angela Yang also suggested that there were issues with the business model. “What makes us successful in US is hard to be leveraged in China market,” said Angela. “We have not had much success in working with local companies.” Werner chose a completely different model according to Perry Chen. “They outsource all the service to their service counterparts in China like the warehouse, trucking, and customer brokerage,” he said. When asked if he thought the model worked, he responded “I don’t think so because they cannot control all the processes. They just relay the service to the customer but they cannot control anything.” Loss of Accounts During the integration process, issues began to arise with the local accounts as well. “Immediately after the acquisition was complete, some customers left,” according to the anonymous ex-Schneider source. Reports suggest the same can be said for Menlo and YRC. “I don’t think they found the right approach to manage the acquired companies, so they lost some key clients,” says Bryan Yan (ex-Menlo). The presence of foreign management and their lack of knowledge with local business practices deterred the local customers from continuing to do business. In particular, the oversight of the significance of local relationships was a major factor contributing the loss of local business. “In China they are quite new,” said Perry Chen (ex-Werner). “The companies in Shanghai don’t have connections with their customers, so in reality they cannot compete with local players.” This is a very common problem for foreign companies that try to compete in the domestic market in China. The Successful Model The foreign companies that have been successful in China’s 3PLs is largely due to the dramatically different model they have chosen. Rather than focusing on domestic transport, these companies have used freight forwarding to find success. “UTi, Expeditors, Schenker, K&N, and others have successful models but you don’t hear much about in the domestic 3PL pure play market” said Jess Goldberg (ex-Menlo). “The differentiator is they have an established forwarding businesses.” According to Jess, the freight forwarding business creates great value because forwarding relationships are usually held longer and are more loyal. Angela Yang (Penske), agrees that a freight forwarding model is preferable, especially during the entry phase. “Freight forwarders tend to have more leverage on their global customer base,” said Angela. This model gives the company time to learn the 47
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market and understand strategies to succeed. After the company is more familiar with local players they then begin to work in the domestic 3PL segment. “They can be very selective in what clients they go after, so their growth is more profitably opportunistic than it is going in blindly thinking you can just enter this market,” commented Jess Goldberg. By using a freight forwarding model first, companies are able to use their existing relationships to test the domestic market, learn which segments are worth chasing, and then slowly enter the domestic transport battle. China Based Employees on LinkedIn 10 Schneider 9 Werner 9 YRC 10 Penske 33 Menlo 269 DB Schenker
China Entry Strategy entry 2007 2006 2008 2005 1999 1981
Acquired BaoYun WOFE Acquired JiaYu Acquisition(undisclosed) Acquired Chic Guangzhou Rep Office
Conclusion Switching the business models from a domestic transportation to a freight forwarding model is a significant task that will slow their business development for several years. For now, to continue competing in China, these companies need to conduct extensive research to focus their business. “They need to know what the licensing issues are for different types of supply chain activities,” stated Jess Goldberg. “What are the profitable markets and what segments of those markets are profitable.” Two significant areas that American 3PLs, and all foreign businesses in China really, are facing are talent and investment. Entering a market the size of China due to pressure from global customers is simply not a sustainable model “If these companies want to operate in the longterm in China, they need to have investments in place,” said the anonymous ex-Schneider source. “They need to have networks and they need to use the local people”. By creating better networks and using local talent, these companies will position themselves to gain local contracts. “Here you hire the local people to do the service for the local customers,” says Sarah Sun (Ex-YRC). Local customers prefer to do business with local people. However, this seems to be easier said than done. “Supply Chain management is still new in China, it’s hard to find qualified senior professionals,” said Angle Yang (Penske). “It is getting better in operation arena, but not for sales functions.”
There is no doubt that the China market is fragmented, and with intense price-based competition and business partnerships based on local relationships. The shaky acquisitions, followed by difficult integrations have slowed these American 3PLs down, but in the end, all signs point to their business models for being the root cause of their struggles. By choosing to bring a domestic transport model into Mainland China, these companies have chosen to compete head to head with thousands of local 3PLs that operate on razor thin margins. For now, the Americans have rushed into the market, are in the middle of a price war, and have little recognition from the market. Their struggles will continue until significant changes are made, or they’ll eventually be forced to back out altogether.
他们的中国梦 美国三方物流公司在华面临挑战 受董事会及在国际市场上的低廉收购报价的刺激，带着征服 这块看似没有真正对手的市场的信心，美国的三方物流公司于 2000年前后进入了中国。“我们需要进入中国这个大市场，” 万络物流的前任北亚业务副主席Jess Goldberg道出了众多美国 三方物流公司的想法。“我们希望通过兼并涉足中国市场。” 就像他所说，以并购在华本土企业做为渗入的第一步，然后快 速控制市场。万络，世能达，YRC，潘世奇，以及其他几家公 司都是通过上述途径试图在中国立足。然而，一个接一个，他 们很快就认识到了自己对中国市场的复杂性知之甚少。多家美 国三方物流公司正在改变他们的在华战略。总之，也正是他们 一开始的冒失让他们需要重新定位在中国市场的位置。 兼并为入 世能达于 2007 年 9 月试图通过兼并天津宝运物流把其原先的 供应链咨询业务拓展到在华提供运输及物流服务。同时，万络 以六千万美元的价格并购了熙可控股公司，自此进入了中国市 场。在接下来的一年里，YRC在花费四千四百七十万美元控股 上海佳宇物流。而潘世奇在早些时候于2005年购得了一家未公 开名字的本土公司的大部分股权。总体上来讲，兼并进行的非 常迅速，造成了很多公司在兼并后人才流失，客户减少，这使 得他们需要花费更多的时间来重建他们的在华业务。 目前，对很多外国公司来说，在华兼并充满了不确定 性。Jess Goldberg在采访中谈到：“对3PL的兼并充满了潜在 的成本和风险。”多数国内的物流人也不会表示异议。一位原 先在世能达工作的中国员工称：“国内公司都是有两本帐，一 个是给审计局看的，另一个是做生意用的。”
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FEATURE 据Technomics Asia 的研究结果也支持了在华并购极具风 险的理论。“首先游戏规则就没确定。比方说，在做价，审 查，以及质检上中国的规定都不完善。”Technomics Asia的 营销总监Steven Ganster在采访中说到，“所以，交易失败的 机率很大。我们粗略的估计了一下，60-70%的交易在签署并 购意向书后宣告失败。”在多数公司都以并购做为进入市场 落脚点的情况下，美国公司如此挣扎的原因也越来越明朗。
现状 在谈及各自在华运营情况，美国公司都对未来抱以乐观态 度。公关部门的成功掩护使得美国3PL公司在中国的现状很 难被外界知晓。但公司里的前任员工和业内人士则给出了他 们的看法。曾就职于万络的Bryan Yan目前是Hercules物流公 司的商务拓展总监，在采访中他说道:“目前很难在市场中找 到一个成功案例。”TNT的大客户经理Sarah Sun原先就职于 YRC，她认为：“美国公司的经营并不像欧洲的竞争对手那 样成功，那些响亮的品牌都来自于欧洲。” CHaINA同样询 问了Fiege Int.的区域销售经理 Perry Chen ( 曾就职于沃纳)， 他的前任公司是否对在中国的欧洲三方物流公司构成竞争威 胁。“我想不会，”他指出，沃纳在中国存在着缺乏市场份 额及人脉的问题。Angela Yang是潘世奇在亚太区的运营主 管，她评论说：“物流服务行业的利润越来越少，很多美国 3PL公司还没真正挣到钱。” 存在的问题 心态问题 在兼并完成后，他们所迈出的第一步同样艰难。“最大的 问题是团队整合。”一位曾就职于世能达的员工说道。团队 整合涉及到文化差异，应用到市场的管理操作和模式等难以 克服的问题。这些问题在兼并完成后催生了一个共同的结 果：合同的减少和重组时间的增长。 关于美国公司管理方式所达成的一致看法是他们准备不足 并且不熟悉中国市场的挑战。“他们在中国市场如此急于求 成，这让我有些吃惊，几乎每天我的老板都会问我怎样能尽 快取得增长并控制中国市场。”一位前世能达的员工说道。 商业模式 对于试图进入各个领域的外国公司，如何选择恰当的模式 来适应中国市场是很困难的。他们也普遍同意在西方取得成 功的模式未必能在中国行的通。这已经成了很多美国三方物 流公司进入中国面临的问题。“他们试图在中国复制在美国 的成功经验，我觉得公司的管理高层低估了中国市场的复杂 性。”一位不愿透露姓名的前世能达员工在采访中谈到。关 于万络，Bryan Yan也提出了相同的观点，“他们试图将公司 美国化。” Sarah Sun(前YRC员工) 认为她的前任公司仅仅将一套系统
带到中国，但并没有真正将其适应中国的市场。潘世奇的 Yang同样认为商业模式上存在问题。“我们在美国 的成功不能作为在中国市场成功的依据，在与本土企业合作 上，我们没有获得任何成功。” 根据Perry Chen的描述，沃纳则选择了一套完全不同的模 式。“他们把像仓储，货运及报关这样的业务都外包给当地 企业。”问及是否觉得这种模式很成功时，他说道：“我不 觉得，他们无法控制所有环节，他们仅仅是把服务像接力棒 一样传给了客户。”
Angela
客户流失 在整合的过程中，客户流失的现象也开始出现。世能达前 任员工说道：“在兼并一完成后，一些原有的客户就选择了 离开。”一些报告也证实同样的情况在万络和 YRC 也发生 了。“我不认为美国公司找到了管理被兼并公司的有效途 径，这也导致了他们一些关键客户的流失。”Bryan Yan （前 万络员工）谈到。特别是对本土人脉重要性的疏忽也是他们 失去本地客户的主要原因。“在中国他们还是新面孔，在上 海的公司与他们的客户没有多少联系，所以实质上他们和本 土企业无法竞争。” Perry Chen 在采访中提到。 成功模式 成功的案例多数是那些在中国市场大胆改变策略的公司。 与其集中精力在国内运输上，他们选择用货运代理取得成 功。Jess Goldberg 说到：“UTi, Expeditors, Schenker, K&N, 以及其他几家公司都有着较为成功的模式，但很少是完全在 国内三方物流市场上取得的。成败的关键在于这些公司都有 完善的货代服务。”Jess提到货代能创造很大的价值因为货代 关系是一种更长久和忠诚的关系。Angela Yang同样认为在初 步进入市场的阶段选用货代是最理想的，她说：“货代公司 对于他们在全球的客户更有把握。”这种模式给公司更多时 间了解市场并学习取得成功的战略。 在公司逐渐适应了中国市场后他们可以和国内三方物流公 司进行合作。在初期使用货代模式，公司可以利用既有关系 来试验本土市场，这样他们能更好的找到自己的定位和适合 的客户，然后再慢慢进入国内的运输竞争。 结论 从单做国内货运到用货代，这个转型可能会让公司在华发 展速度减慢好多年。目前来看，对于这些美国公司，如果希 望继续在中国参与竞争，他们需要做更深入的市场研究。 一位前世能达职员在采访中说到：“他们投资需要到位来 扩建网络，并且找到适合的本地人才。” 通过建设物流网络以及搜寻人才，这些公司能更好的定位 自己而获得国内市场的订单。Sarah Sun 在采访中说到：“要 想赢得本地市场，美国公司还是需要找到一些对市场熟悉的 本地人。”与此同时Angela Yang也指出：“供应链管理对中 国来讲还是一项新鲜事物，找到高水平的内行还是很困难， 在实际操作上可能好一些，但市场销售的专业人士太少。” 不可否认，中国市场分化还很严重，市场竞争也仅仅是低 廉价格，地方裙带关系层面的竞争。时机不成熟的兼并以及 其对业务整合带来的困难将减缓美国三方物流公司在华发 展。当下，美国公司正挤进了一个有上千本地竞争对手的低 利润市场，他们本身对这个市场并不是太了解，这也决定了 他们注定还要付出更大的努力来改变局面，否则的话，必然 要被市场淘汰。
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FEATURE
A Tough Nut to Crack ChinA’S Domestic Express Woes
Carmen Ren
I
ndustry research forecasts China’s express delivery market to reach the same size of the current US market by 2020, valued at US$86 billion. In 2009, DHL-Sinotrans International, the 50-50 joint venture spent US$47 million acquiring A Plus Express, which set up Sinotrans-Apex. DHL had entered what seemed to be a very lucrative market. Fast forward two years, and DHL has sold its entire domestic delivery business to a small Chinese company called Uni-top for a US$16 million. DHL’s decision to pull out of the domestic express business in China has sparked considerable debate among industry professionals as to whether foreign companies have any reason to be in the express market at present. The Chinese domestic express market is deeply fragmented, but can be divided into three large segments, the smallest being the three (after DHL’s exit) foreign companies attempting to compete. The first major obstacle in the market are the state-owned enterprises like EMS, China Air Express and China Railway Express. These gi-
ants are protected by government policy and laws, possess unmatchable networks and financial backing. The second is the massive pool of local delivery companies who operate on extremely low margins with cut throat pricing. Although these companies seem unsophisticated, they present a tremendous challenge and contributed significantly to the demise of DHL. With DHL, arguably the strongest positioned player, now gone; can the remaining international companies survive in China’s current domestic express market? Contributing factors to DHL’s downfall DHL-Sinotrans domestic delivery arm lost US$15 million by the end of 2010 and showed no signs of improving. DHL blamed “overly fierce competition in the domestic courier service sector” for the poor financial performance of the venture and subsequent pull-out, adding “foreign companies lack cost advantage”. The following are the other major aspects which contributed to the downfall of DHL.
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FEATURE “Not only are exclusively foreign-owned enterprises forbidden to engage in domestic express, but joint ventures are excluded as well,-Jerry Hsu, DHL Express’ Greater China president.
“A lot of players have had difficulties in the Air Express market.”- Michael Drake, MD of China for TNT Express. Unfavorable regulations Before doing battle with the local competitors, foreign express companies first have to deal with local regulations which force them out of parts of the market. Two laws in particular are the Postal Law of People’s Republic of China implemented in October 2009, and the Management Methods of License of Express Business. These laws deny foreign players from engaging in the domestic letter and document delivery segment. “Not only are exclusively foreign-owned enterprises forbidden to engage in domestic express, but joint ventures are excluded as well,” said Jerry Hsu, DHL Express’ Greater China president. When DHL-Sinotrans bought A-Plus logistics in 2009, these laws were set to be passed, which inevitably took away a large part of the business that A-Plus was involved in. China’s letter and document delivery market now ranks third in the world, with 10 million domestic deliveries per day, behind the US at 30 million, followed by Japan with 13 million. However, only local companies are allowed to engage in this segment of the market, leaving DHL, UPS, FedEx and TNT to do battle with thousands of locals couriers in the parcel delivery market. Competing with the Locals By 2008, 5000 locals express companies were registered in China, with an estimated 10,000 actually in operation. These local companies compete primarily on price, charging just US$1.50 to ship a package from Shanghai to Beijing in three days, compared to roughly US$4 charged by foreign companies. “There is no doubt a large segment, particularly in the domestic market, which is especially price conscious and may always go for the lowest price vendor,” according to Joe Valentine, CEO of X-Wire technology. The gap in price prevented DHL, and all the foreign players, from gaining a sizeable piece of the market to make their respective business profitable. DHL sighted lacking cost advantages in the express market as a major reason behind their retreat from the market. “Cost of foreign express providers cannot be
as low as local private couriers, including cost of management, operating cost, and labor cost,” says Samuel Liu, Supply Chain Director at Maxxium. Their operating models further inflate their prices beyond that of local competitions. Foreign companies dress their delivery people in uniforms and provide company vans and hand-held devices, all of which drive their operating costs up. Their expat upper-management expecting foreign salaries also pushes their cost up beyond their competitors. “Profit margins on the low end domestic express business is already very low,” continued Samuel Liu. By comparison, most Chinese companies do not wear uniforms, make deliveries via scooters, bicycles and other small vehicles, scribble receipts on paper, and negotiate the price with customers face-to-face; All of which keep operating costs low. Regardless of the poor service levels, most Chinese customers would still prefer to give business to the locals due to the tremendous savings. “Preference is one important thing that is quite hard to change in China, said Steven Seah, Operations Manager at Acumen Engineering. “They prefer their own brands.” Behind the Scenes According to a report in Caixin Century, China Post is not only involved in the market competition through EMS, but also is in charge of the market inspection. From time to time China Post checks if any local or foreign express companies are following the postal laws and regulations. There’s an unwritten rule for domestic express companies to help EMS under China Post deliver items for free in order to maintain a good relationship with the
Shanghai- Beijing
22.5
35
26
20
12
Shanghai- Guangzhou
20.5
35
26
20
12
Shanghai- Chengdu
20.5
35
29
20
12
Shanghai- Hongkong
163.33
217.40
120
30
30
Price comparisom(RMB)of package delivery ( weight<1kg)
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FEATURE
Express Market Breakdown by Segment
38.1% International delivery
7.2% Inter-city delivery
54.7% City-city delivery
“The cost is too high to use FedEx.”Xiu.com
Source: China Post
state-owned local post offices. China Post’s inspection are quite lax for cooperating local couriers. DHL was not familiar with this ‘secret rule’ and therefore was repeatedly troubled by inspections. What’s more, a ‘trading chain’ was formed in DHL’s domestic delivery unit where delivery operators in several segments colluded to take orders privately. The income from the orders was taken under other small companies registered in secret while items would still be delivered by DHL utilizing its vehicles and resources, which resulted in DHL bearing the cost with no trace of the income. Service Quality Since foreign players entered China, they have always differentiated themselves based on the quality of service, which justified their higher prices. Xiu.com, an online retailer dealing with imported luxury brands, used to exclusively deliver their products with FedEx. But recently they started phasing out FedEx in favor of a local companies. “Right now, we are working with Stars Express and SF, and are trying to build a partnership with one,” commented Vicky Hou, Supervisor of Business Development from Xiu.com. “The cost is too high to use FedEx. Besides, they cannot cover as many small places like local couriers whose workers can reach any corner on a scooter.” With the service levels of several local companies rising faster than the price they charge, it put a strain on DHL’s competitiveness, which eventually lead to their exit. The Remaining Few With DHL decision to withdraw from China’s domestic express market, FedEX, TNT and UPS are now the only foreign competitors that remain. There are several indications that these foreign players will soon follow DHL and leave the domestic market altogether. FedEx was the first company to make serious moves in the Chinese market. Between October 2007 and August
2008, FedEx China slashed its prices for domestic delivery service by 70% to a level comparable to its domestic counterparts. At that time, the Economic Observer reported that FedEx’s market share quadrupled to 4.8% in the month following the price cuts, however it came at a loss of roughly US$7.3 million. At that time, FedEX’s US headquarters said it would allow the China Express segment of the business to lose money for three years, to gain presence in the lucrative market. “FedEx will not last either,” said Mark van der Hoek, in Technology Development Engineer at Clearwire. TNT has also faced its fair share of struggles in China. Despite owning the largest domestic firm in China, TNT does not expect to make any money in their domestic business until at least 2013. In an interview with China Daily, Marie-Christine Lombard, CEO of TNT Express, made the distinction that DHL was doing express delivery by air, whereas TNT was focused on ground based delivery – a less expensive but slower form of delivery. “We are not trying to compete in that area of delivery of documents,” says Michael Drake, MD of China for TNT Express. “We are more focused on the road freight, day definite business. So we have chosen not to have competed where some of our international competitors are competing.” In late 2010, UPS entered the market after encouragement from its international clients. “In Amazon’s case they are using 500 carriers in China to deliver their packages and they are saying this is insane. So the market is just ripe for consolidation,” said Dan Brutto, President of UPS international in an interview with the Financial Times. Like DHL, UPS is operating mainly in the Air Express market. “A lot of players have had difficulties in the Air Express market,” commented Michael Drake. “We had a look at it and we did find it very difficult because you are excluded from some areas of the business and competing with the local players is tough.” UPS declined to comment on their progress in the market.
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FEATURE China’s Express Market Share breakdown
60% of City-city : taken by EMS, CAE, CRE 国内快递60%由EMS、CAE和CRE占领
70% of Intercity: taken by local express couriers 同城快递70%由本地各快递公司占领
90% of International: taken by DHL, FedEx, TNT and UPS
国际快递90%由DHL、联邦、TNT和UPS四大外国公司占领
“The market is just ripe for consolidation,”Dan Brutto, President of UPS international Final Observations While tempting, the Chinese domestic express market in its current form has proven to be a foreign killer. So what does the future hold for these foreign competitors in China? For most professionals, it seems like they either need to make some serious changes, or eventually be forced out of the market. “FedEx, TNT can, and even DHL could have sustained their business. However, they should not try to conquer the local market,” warns Tim Burghout, Assistant Controller at Metro Cash&Carry. “Focus on non-Chinese companies that are used to and need the services for which they rather trust the name FedEx, TNT etc.” Some suggest that the local competition is just too much. “Compete with whom? EMS? Possibly. Private couriers? No,” says Samuel Liu. While others suggest further research to find a suitable niche of the market that is winnable. “There are other segments, perhaps smaller ones that value other parameters highly such as reliability, traceability, delivery time, accountability etc.,” says Joe Valentine, CEO of X-Wire Technology. “It would be appropriate to do a market study and identify the different segments and calculate the market size for each segment as well as identify the locations/cities.” One such area is the international express portion, in which these four giants occupy close to 90% in China, which is good for a total of US$5 billion dollars. At the moment, foreign players do not stand a chance in China’s domestic express market. They lack domestic networks, costs advantage, they’re unable to compete in lucrative segments, and rules are setup against them. Moreover, domestic business are quickly catching up in terms of service quality while keeping their prices considerably lower. At this point in time, it would be wise to stick to international express.
US$9 Bn Value of China’s Express Market 中国快递市场2010年总销售额90亿美金
中国国内快递业之殇
行业研究报告预测中国的快递市场到2020年将达到美国市场 的现有规模，价值将增至860亿美元。2009年，合资企业中外 运敦豪用4700万美元收购了全一快递，建立起中外运全一快 递，由此DHL似乎进入了一个获利空间极大的市场。仅仅两年 后，DHL却以1600万美元的价格将整个国内快递业务卖给了友 和道通。 DHL退出国内快递市场的决定在业内人士中引发了外国公司 是否有任何理由留在国内快递市场的激烈争论。 中国国内快递市场分化严重，大致由三股力量组成，最小的是 （DHL退出后）剩下的三大外国公司试图参与竞争。市场中 最大的障碍是诸如EMS、中国航空快运和中国铁路快运这样的 国有企业。这些行业巨头有政府政策和法律保护，拥有难以相 匹的运输网络和财政支持。第二个障碍是数量庞大的本土小快 递公司，以极低的利润大打价格战，尽管这些公司并不复杂精 密，却带来了巨大的挑战并对DHL的失败起到了不可忽视的影 响。 DHL，曾经被称为最有力的竞争者，现在已然退出；剩下的 这些外国公司还能否在目前的国内快递市场中存活呢？ DHL倒下的背后 截至2010年底，中外运敦豪的国内快递业务已经损失了1500万 美元并且没有好转的迹象。DHL将财政损失和紧接着的退出归 咎于“国内快递业过于激烈的竞争”并指出“外国公司缺少成 本优势”。下面要讨论的是致使DHL倒下的其他主要因素。 政策不利 在和本土对手争夺市场之前，外国快递公司首先要面对的是迫 使他们退出部分市场的相关政策法规，特别是2009年10月实施 的《中华人名共和国邮政法》和《快递业务经营许可管理办 法》。这些法规禁止外国公司经营国内信件和文件类快递业 务。DHL大中华区域总裁许克威指出：“不仅是国外企业不 得参与这类业务，就连合资企业也被禁止了。”中外运敦豪在 2009年买下全一物流时，这些规定已经起草有待通过，不可避 免的削减掉全一快递既有业务的一大部分。中国的信件和文件 类快递市场现在以1000万份的数量排名世界第三位，紧随美国 的3000万份和日本的1300万份。然而，只有国内本土公司被允 许参与到这部分市场，意味着DHL、UPS、联邦快递和TNT必 须在包裹递送市场和成千上万的本土公司竞争。 53
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FEATURE 本地竞争 直至2008年，在中国注册的快递公司有5000多家，实际经 营的多达一万家。这些本土公司主要依靠价格进行竞争，比 如从上海到北京三日内到达的包裹只收取1.5美元，而使用 国外公司则大约需要4美元。X-Wire科技公司CEO乔•瓦伦丁 说：“特别是在国内市场，毫无疑问很大一部分客户对价格 非常敏感他们总是会选择出价最低的公司。”价格差异使 DHL和其他外国公司无法夺取大量市场份额而获利。 DHL认为缺少成本优势是他们退出的主要原因。Maxxium 公司供应链总监萨缪尔•刘认为：“外国公司的价格不可能 和本土公司一样低，包括管理费用、经营成本和劳务费。” 他们的经营模式把他们的价格抬高到本地竞争之上。外国公 司给快递员发放制服并提供公司货车和各种装置，这些都增 加了运营成本。公司高层中的外籍员工薪酬参照的是国外标 准，这也使得他们的开销要高于中国本土竞争对手。萨缪尔• 刘继续说到：“国内地段快递市场的利润率其实已经非常低 了。” 相比之下，大部分国内公司的快递员不穿制服，用电动 车、自行车和其他小型车辆送快递，在纸上草草一写就是收 据，还可以和顾客面谈价格，这些都降低了他们的运作成 本。尽管他们服务水平低，大部分中国顾客还是会因为省钱 而把生意给他们做。佑珉国际运营经理史蒂文•希亚指出：“ 在中国，喜好是一件很重要但是很难改变的事，他们更偏爱 自己的品牌。” 幕后 据财新传媒《新世纪》周刊的一篇文章报道，中国邮政不 仅通过EMS参与市场竞争还负责市场稽查，中国邮政时不时 抽查本土公司或外国公司是否按邮政法相关规定经营。为了 搞好和地方邮政办公室的关系，国内快递公司都会免费帮中 国邮政旗下的EMS免费走货，这样中国邮政在检查这些公司 时不会那么严格。而DHL完全不熟悉这套潜规则，也就经常 被稽查找麻烦。 不仅如此，在DHL的国内业务部门存在一条秘密贸易链， 几个环节的业务员串通私接订单。订单的收入被转到私下注 册的小公司名下，而递送仍然使用DHL的车辆和资源，这就 造成了DHL承担运营成本却不见收入的局面。 服务质量 外国公司从进入中国市场起就打着高质量服务的旗号，使 其相对较高的价格合理化。走秀网，一家网上进口奢侈品牌 代理商，曾经只用联邦快递给客户寄送他们的产品。但最近 他们开始停用联邦快递而启用一些本土快递公司，商务拓展 主管侯玮表示：“我们现在正和星辰快递和顺丰快递合作， 想和他们其中一家建立长期伙伴关系。使用联邦快递太贵， 另外，他们不像本地快递公司的快递员那样能用电动车覆盖 一个地区的每个角落。” 随着几家本土公司快速提升的服务水平和保持低价路线的战 略，DHL的竞争优势受到冲击，最终不得不撤出。 其他外国公司 DHL退出之后，剩下的外国公司是联邦快递、TNT和 UPS。有不少征兆已经暗示着这几家公司有可能步DHL的后 尘离开国内市场。 联邦快递是第一个在中国市场有所举动的外国快递公司。 在2007年10月和2008年8月间，联邦快递国内业务降价70%以 和国内公司竞争。那时候，《经济观察》报道联邦快递在降
价后的一个月内市场份额飞涨四倍到4.8%，代价是730万美 元的损失。联邦快递美国总部声明他们将为了站稳脚跟放任 中国市场部亏本三年。Clearwire的技术研发工程师马克•范德 霍克评论道：“联邦快递也撑不了多久。” TNT在中国也面临着同样的困境。尽管在中国有着最大的 国内子公司，TNT在2013年之前都不指望盈利。在《中国日 报》的采访中，TNT快运总裁玛丽-克里斯汀•隆巴德女士指 出DHL是以空运作为其快递方式，而TNT则专注于地面运 输—一种较便宜也较慢的运输方式。TNT快运中国区营销总 监迈克尔•德雷克说：“我们不准备在文件快递领域竞争，我 们的重心在公路运输和定日达服务。所以我们已经决定不在 其他国际对手参与的领域竞争。” 2010年末，UPS在其国际客户的鼓励下进入中国市场。UPS 国际市场总裁丹•布鲁托先生在接受《金融时报》的采访时 说道：“亚马逊在中国使用500家快递公司寄送包裹，他们 认为这太疯狂了，所以市场整合的时机已经成熟。”正如 DHL，UPS也是主打航空快运市场的。迈克尔•德雷克评价 道：“在航空快运市场很多参与者都遇到了难处，我们也研 究过但是觉得很不容易，因为在很多领域你都被排除在外而 且和本土公司的竞争太激烈了。”UPS则拒绝评论其在中国 市场的进展。 最终观察 尽管充满了诱惑力，目前的中国国内快递市场已经成为了 外国公司的伤痛，对于他们来说未来又意味着什么呢？看来 他们要么需要做出重大的改变要么就会被逐出市场。麦德 龙现购自运有限公司财务助理主管做出了警告：“联邦快 递、TNT甚至DHL都可以生存下来，但是他们不应试图攻克 本土市场。专注于那些非中国公司，他们习惯于并且需要值 得信赖的品牌为他们服务，如联邦快递和TNT等等。”还有 一部分业内人士则认为本土竞争过激，萨缪尔•刘说道：“和 谁竞争？EMS？也许吧，本地快递公司？没门。” 还有一些人指出可以通过进一步的研究找到市场利基。XWire科技公司CEO乔•瓦伦丁认为：“市场里还有其他部分， 也许规模小，但他们更重视其他因素比如可信度、可查询 度、寄送时间等等。应该进行一个市场调查找出不同的部分 并计算出每个部分的大小还有他们所在的位置/城市。”国 际快递就是这样一个部分，四大外国公司瓜分了90%的市场 份额，价值达到50亿美元。 在现阶段，外国公司在中国国内快递市场机会渺茫，他们 缺少国内关系网络和成本优势，政策法规又对其不利。不仅 如此，国内公司在服务质量方面正在快速赶上，并仍然确保 价格的优势。或许对于外国快递巨头们来说坚守国际快递市 场才是明智之选吧。
54 September/October 2011
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FEATURE
Unravelling the corporate connections to toxic water pollution in China
C
hina has some of the worst water pollution in the world, with as much as 70% of its rivers, lakes and reservoirs being affected. China’s existing water shortage problem is worsening due to spiralling demand and the growing effects of climate change. Water pollution is further exacerbating the situation, with a quarter of the country’s population having no access to clean drinking water. Severe water shortfalls are predicted for many regions across China if no action is taken to tackle the problem. According to a nationwide survey, industry accounted for nearly 20% of organic pollutants (expressed as Chemical Oxygen Demand) discharged into water in 2007. In many cases, the factories polluting critical water sources are producing goods for the US and European markets, with research indicating that about 20% to 30% of China’s water pollution comes from manufacturing goods for export. Industrial discharge of hazardous substances shows no sign of abating, despite the fact that water pollution is recognised by the Chinese authorities as a cause for serious concern. While water pollution has severe impacts on the environment, it also has direct economic consequences
for industry itself. The nationwide annual cost to industry of using polluted water was estimated in a 2007 SEPA/ World Bank report at 50bn Yuan (US$7.5bn). According to the same source, the use of polluted water for agricultural irrigation in designated wastewater irrigation zones has an impact on yields and product quality that was estimated at 7bn Yuan (US$1bn) in 2003. The produce in these zones is likely to contain heavy metals such as mercury, cadmium, lead, copper, chromium and arsenic. In 2010 and 2011, Greenpeace International undertook an investigation to assess whether hazardous chemicals were present in wastewaters discharged from two textile manufacturing facilities in China, and to provide an indication of the types of chemicals currently being used and released by such facilities. The first facility, the Youngor Textile Complex, is located on – and discharges wastewaters into – the Yangtze River Delta, while the second facility, Well Dyeing Factory Limited, is located on – and discharges wastewaters into – a tributary of the Pearl River Delta. Youngor Textile Complex Youngor Group Co Ltd is China’s largest integrated textile company, with world-scale fabric manufacturing, garment making and retailing capabilities. Established in 55
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FEATURE 1979, it is based in the city of Ningbo near Shanghai, in the eastern province of Zhejiang. As well as manufacturing fabrics and clothing for multiple international brands, Youngor has its own product lines that include shirts, suits, trousers, casual jackets, ties and T-shirts, all officially recognised as leading national brands. In 2003, Youngor Group Co Ltd invested 1bn yuan ($147m US dollars) to build the Youngor Textile Complex in Ningbo, which includes “a large-scale production facility for items such as high-quality dyed yarn cloth, wool fabric, printed fabric, dyed fabric and knitwear”. It is now one of the major production facilities in China for high-end clothing and textiles. The company’s headquarters at the complex has a research centre, a warehouse and a showroom in addition to the production facility. The Youngor Textile Complex houses a number of individual manufacturing plants, including those of the subsidiaries Youngor Sunrise Textile Dyeing & Finishing Co, Ltd (yarn dyeing, weaving, printing and finishing), Youngor Textile Ningbo Youngor Pants Co, Ltd (main product lines are casual and formal trousers and sportswear), Ningbo Youngor Fashion Co, Ltd (five product lines, the most important of which is casual sportswear) and Ningbo Youngor Worsted Spinning, Weaving & Dyeing Co, Ltd (dyeing, Sampling Waste Water in China spinning, weaving and finishing of worsted wool fabric), as well as a wastewater treatment plant (WWTP). Youngor Group Co Ltd states that it spent 3m yuan ($441,176) “to purchase a sewage treatment system from Japan which uses advanced processing technology to reduce emissions to safe levels, recycle water, and conserve resources.”
Connections to multinational and domestic brands The international clothing brands Adidas, Bauer Hockey, Calvin Klein, Converse, Cortefiel, H&M, Lacoste, Nike, Phillips Van Heusen Corporation (PVH Corp) and Puma confirmed to Greenpeace that they have an ongoing or recent business relationship with the Youngor Group (including subsidiaries) based in Ningbo, China. Greenpeace also has evidence that the major brands Blazek, Nautica, Macy’s, the Oxford Apparel Groupand Ralph Lauren have had a business relationship with the Youngor Group Co Ltd in the recent past, but these companies did not respond to a request for comment. Peerless Clothing confirmed a recent business relationship that it indicates has now ended. The Youngor Textile Complex also supplies the company’s own brand, Youngor. Our analysis found that this very same complex was discharging toxic chemicals into the Fenghua River on the sampling dates between June 2010 and March 2011. When confirming their commercial relationship with the Youngor Group, Bauer Hockey, Converse, Cortefiel, H&M, Nike and Puma informed Greenpeace that they make no use of the wet processes of the Youngor Group for the production of their garments. However, none of the brands found to have commercial links with these two facilities have in place comprehensive chemicals management policies that would allow them to have a complete overview of the hazardous chemicals used and released across their entire supply chain, and to act on this information. Well Dyeing Factory Limited Hazardous chemicals have also been found in the wastewater released from the discharge pipe of Well Dyeing Factory Limited. The complex of Well Dyeing Factory Limited is located in the Gao Ping Industry District, Sanjiao, in the city of Zhongshan in Guangdong province. It is situated on tributaries of the Pearl River Delta. The complex is one of many dyeing facilities located within the Gao Ping Industry District. It is a large complex
“I worked for a Chinese manufacturer for a few years. I was involved in the construction
of two new facilities with the company. One hosiery mill was on hold for about a year with machines in place because of the delay of a water treatment center in the industrial park.”
Fanny Cheng, Sourcing Director at Walmart
“The brands have considerable influence over what their
suppliers do. If they are not conducting regular audits of the sites or are not conducting sufficiently robust such audits, these things will be missed. The brands need to make examples of offending OEMs, pure and simple.” Ed Han, Chair, Executive Committee at PSG of Mercer County
“We can achieve a zero liquid discharge (0 ppm) of
waste water, but at which price and who will bear the costs? How about the consumers in EU and US: how much are they willing to pay for their T-Shirts, denim jeans, sweaters and jackets? Rightly so, we are stuck here.”
Gery Emonds, Head of Operations, Production & Sourcing India at SODIREP TEXTILES
56 56 September/October 2011
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FEATURE including various production plants and a wastewater treatment plant, as well as a power generation plant, workers’ dormitories and administration buildings. It manufactures a wide variety of textiles including knitted fabrics, velour, fleece and spandex. Other processes carried out include the pre-production treatment of fibres, bleaching, dyeing and textile finishing. Discharge water was sampled at a time when there was no rain (or standing surface water) for several hours preceding the sampling. This pipe discharges wastewater sporadically into the small channel, and was only observed to be discharging during the night. Our investigations indicate the discharge source of this pipe is exclusive to the Well Dyeing facility. Connections to multinational and domestic brands The major brands Abercrombie & Fitch, Meters/ bonwe, Phillips-Van Heusen Corporation (PVH Corp) and Chinese sportswear brand Li Ning confirmed to Greenpeace that they have an ongoing or recent business relationship with Well Dyeing Factory Limited in Zhongshan, China. Our analysis found that this facility was discharging toxic chemicals into the Shiji River in June 2010. Greenpeace also has evidence that the major brands Carter’s, JC Penny, Kohls, Semir and Yishion have recently been supplied by the same complex, but these companies did not respond to a request for comment. American Eagle, GAP and Uniqlo have confirmed a recent business relationship that they indicate has ended. Conclusion The textile industry is playing an important role in the industrialisation and development of many countries in the Global South, China in particular. Major brands with supply chains in these countries are in a unique position to work with their commercial partners to reduce the environmental impacts of textile manufacturing, and in the process help lead the shift away from hazardous and environmentally damaging chemicals, which needs to happen across all industries.
Brands have a pivotal role to play when tackling the use and release of hazardous chemicals. Their influence extends beyond the direct use of hazardous chemicals in their products to their use and discharge in production processes, including the various stages of their supply chain. In other words, brands have the means to act immediately to eliminate the release of hazardous chemicals by working together with their suppliers and requiring that their long-term commercial partners are leading the shift from hazardous to non-hazardous chemicals.
See page 14
“Detox” Action in Beijing
To this end, Greenpeace is calling on the brands and the suppliers identified in this investigation to become champions for a toxic-free future, by eliminating all releases and uses of hazardous 10 Ways to cut pollution in textile mills chemicals from across their 1. Leak detection and preventive maintenance, supply chains and products. improved cleaning Specifically, this entails 2. Re-use of non-contact cooling water establishing clear company and 3. Re-use of steam condensate supplier policies that commit 4. Re-use water from pre-treatment processes their entire supply chain to 5. Recover heat from hot rinse water shift from hazardous to safer 6. Pre-screen coal chemicals, accompanied by a 7. Maintain steam traps plan of action that is matched 8. Insulate pipes, valves, and flanges with clear and realistic timelines. 9. Recover heat from smokestacks
10. Optimise compressed air system
Source: Just-Style.com – Leonie Barrie
“Based on the information which has been shared to date, we understand that the wastewater
treatment system at Youngor complies with local regulations, and none of the certified dye stuffs (supplied by major chemical companies) contains the hazardous and persistent chemicals that Greenpeace has detected, at low concentrations, in the discharges.” William Anderson, Head of Social & Environmental Affairs, APAC at Adidas
“We are equally as concerned about the report and take the
matter very seriously. Abercrombie & Fitch is a member of the Apparel, Mills and Sundries program through Business for Social Responsibility (BSR). As an update to the note, the factory has agreed to join the BSR program.”
Eric M. Cerny, Investor Relations – Abercrombie & Fitch
“- Develop requirements for each contract manufacture - Strict penalties should be stipulated in the contract for suppliers found to be in violation - Ensure that all requirements are followed before the start of production - Periodical audits of suppliers - Promptly advise supplier of environmental requirement changes.”
Arkadiy Atmachyan, Warehouse Senior Specialist at Foxconn
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Content
►
Back home silk road /58 ►The Sweet Spot/59 ►Going Green/60 ►LinkedIn Question/65
中国式的发展/58
甜点 /59
走向环保/60
采购人士的报告/65
THE LINKS
Back Home Silk Road
The third instalment on Ambroise Baz’s incredible journey from Shanghai to Lyon, France. Ambroise’s amazing trek across China and Central Asia has almost come to an end. When we last caught up with Ambroise, he was in Turkey resting before the final stretch into Europe, and back to Lyon. Ambroise offered insights into what he has seen on his travels in terms of logistical developments. Here’s a few points about what to expect from each respective country he’s passed through: Tajikistan:
Georgia:
Turkmenistan:
- The Pamir highway is an ex soviet era leftover and is amazing, running at 4,000 meters altitude. No rail network. - Some bonded Chinese trucks carrying goods towards Dushambe. Dushambe is under restoration via many Chinese building companies. - Kamaz Russian trucks are everywhere especially on bad mountain trail roads where no other heavy truck brand can compete to make it up.
- Ok asphalt roads, much poorer country, not so much transit through Georgia since its borders are pretty much locked up with Russia, Armenia and little business with Azerbaijan. Turkey is next to it and accounts for most of the truck traffic visible on its roads and Georgian trucks.
- Very bad asphalt roads, worse than Uzbekistan but better than Tajikistan. Ashgabat, the capital city, has very modern roads (within the city) as good as in France. - A crossing country for many Kazak, Russian, Uzbek, Iranian and Turkish trucks. It has a ferry connection with Azerbaijan through the Caspian Sea.
Azerbaijan:
Uzbekistan:
Turkey:
- Rich oil country, good asphalt roads all over the country, nice capital city (Baku) with good infrastructure.
- Bad asphalt roads, crossing country for many Turkish, Iranian, Russian and Kazak trucks. - Ok rail network but very limited. Kamaz trucks as well everywhere. Tashkent, the capital city, has good roads within the city.
Similar level as France. Excellent highways, national road and provincial roads. Trucks are as modern as most of Europe. However, it has little rail network.
There are no highways in these countries except for Turkey. At best the major roads are comparable to the national roads in China. If you’re interested in finding out more about Ambroise’s fantastic journey, visit: www.ambroise-baz.com 58 58
THE LINKS
The Sweet Spot Where to place your APAC Headquarters from an SC point of view
A
ccording to recent research conducted by Roland Which is the best city to manage regional supply chain, Berger and Eurocham, 15 cities across Asia were procurement and logistic operations in Asia? identified as the top choices to place an APAC 4(13%) headquarters. According to the survey results, Shanghai proximity to clients and markets is the most 8(27%) Hongkong important criterion, followed very closely by a favorable legal and regulatory environment. The research ranked Singapore, Singapore 16(53%) Hong Kong and Shanghai respectively as the consensus top Guangzhou 1(3%) three cities to place an APAC headquarters. Further research conducted by CHaINA Magazine asked Tokyo 1(3%) the same question, but from a supply chain perspective. “It quite depends on the two most important points, which are the supply points and the selling points,” commented Kevin Wang, Asst. Manager at Ascendas Hangzhou. “Apart from that, we also need to think about the related factors like human resource, import & export accessibility/efficiency, and cost of warehousing.” The results were similar, ranking Singapore as the most desirable location for a headquarters. However, comments were also received introducing other cities into the equation and giving interesting reasoning behind what they have to offer.
Singapore “The central location, infrastructure and efficiency as well as ease to set up in Singapore would make this the top choice. While cost of doing business is lower elsewhere for a new entry into Asia, I would recommend selecting a place where it’s easier to set up an office. The pro business culture and openness to investments are unique. – Thomas Zimmerman, Project Director at CEL Consulting “I am now realizing that to have and HQ in China is not such a great idea unless you have a very mature China and India business that require as little effort to maintain as perhaps Australia, SEA, Korea and Japan might. I am therefore leaning towards breaking out China and India and having a dedicated GM there reporting to Global HQ and have a Singapore office managing the rest of the region.” – Martin Toomey, General Manager at Eaton Vehicle Group “As a main shipping point and part of the ASEAN, Singapore has some highly qualified staff and expertise in the area to help get a distribution and supply chain hub off the ground rather quickly. Also, they are comfortable with English as well as Mandarin and Cantonese. This allows for easy transitions into other areas.” – Tom Larkin, CEO / Owner at Soláthair Management Consulting
Other Areas “If all of the companies’ customers are in PRC, then the headquarters should be in Shanghai or Beijing. If the CEO only wants a convenient airport to fly to other countries, like India and Australia, then pick Singapore. If the company is based in the UK, pick Hong Kong.” – David Reeck, China Electrification Strategy Manager “Philippines- easier access to other locations, trained workforce, good English language skills, good work life balance.” – Senior Strategic Sourcing Specialist at FedEx Express Whether we like to accept it or not, the majority of consumer products are still manufactured or assembled in South China, therefore the Hong Kong(HK)/Shenzhen(SZ) twin city “HUB” is and will continue to be the most logical place to set up a regional office. A not so well known fact is that the Chinese government wants to fully utilize the infrastructure of HK and SZ ports and is “encouraging” importers into China to use HK as the preferred destination for incoming goods. – John A. Benito de Valle, GM Overseas Dept. at Hercules Logistics and Forwarding Ltd. “If you want to set up an office, and you come from a western culture, in my opinion, the best option is Shanghai. It is more “foreign-friendly” for doing business. “ – Jose Carlos De la Pena, Procurement Manager at Grupo Link
* Do you have any comments or suggestions for the placement of an APAC headquarters? Send your thoughts to editor@supplychain.cn. 59 www.supplychains.com
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THE links
Going green ►Dave Meyer
Nothing Says “Green Supply Chain” Like Innovative, Sustainable Packaging
T
he pea pod is possibly the greatest sustainable packaging design nature can provide. It packs a lot in a small space, efficiently uses the minimum amount of resources, and best of all its compostable. Packaging and repackaging is ubiquitous along every step of the chain, from product design, prototyping, procurement production, distribution, consumer end use and post consumer end-oflife management. And the more parts that are in use in making of a product, and steps along the way to deliver the parts, the greater the packaging (and hence environmental footprint) involved along that chain. And for every packaged part that comes from someplace else to make a product, a similar carbon, energy and resource use can be measured. That’s why sustainable practices in packaging are so important in driving supply chain efficiency, and why innovation in the ‘green’ packaging sector has been “white hot” the past several years. A study by Accenture found that retailers can realize a 3 to 5 percent supply chain cost savings via green packaging initiatives. So if you extrapolate that type of savings out across multiple tiers of supply chain activity, where packaging is the common denominator, the efficiencies and savings can rack up quickly. A new report from research organization Visiongain finds that because of a variety of drivers such as carbon emissions, extended producer responsibility and waste reduction targets plus advanced packaging
technologies, the sustainable and green packaging market’s worth is expected to reach $107.7 billion in 2011. What’s striking is that the growth trend is weathering the slumping global economy and higher production costs. Sustainable Packaging 101 Sustainable packaging solutions deliver around two colors according to the Accenture report: black (deliver reduced costs) and green (reduce environmental impacts). Sustainable packaging relies on best engineering, energy management, materials science and life cycle thinking to minimize the environmental impact of a product through its lifecycle. Given the past decade or so of science and engineering work around sustainable packaging, there are some discovered and tested attributes, such as: Reducing packaging and maximizing the use of renewable or reusable materials Using lighter weight, less toxic or other materials which reduce negative end-of-life impacts Using materials which are from
Sustainable Packaging Forecasts, World Markets: 2009-2014 2009 2010 2011 2012 2013 2014
($ Billlions)
$ $100 $200 $300 $400 $500 $600 Total Packaging Market
Sustainable Packaging
certified, responsibly managed forests Reducing the flow of solid waste to landfill Reducing the costs associated with packaging (i.e., logistics, storage, disposal, etc.) Reducing CO2 emissions through reduced shipping loads Best in Class Examples In the fast moving consumer goods category Coca Cola’s packaging efficiency efforts just in 2009 avoided the use of approximately 85,000 metric tons of primary packaging, resulting in an estimated cost savings of more than $100 million. The company rolled out of short-height bottle closures, reducing material use, implemented traditional packaging material light weighting; and used more recycled materials in packaging production. At the end consumer point, the company has also supported the direct recovery of 36% of the bottles and cans placed into the market by the Coca-Cola system and continues to work with distributors on increasing recovery efforts. Perhaps most significantly, WalMart took a huge step in 2007 to seek supplier conformance around packaging. Since then, despite the initial uproar, there has been an uptick in design and innovative product activity by thousands of key suppliers in response to the megaretailers challenge. By reducing packaging in the Wal-Mart supply chain by just five percent by 2013, that would 1) prevent
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HP Messenger bag – Non-traditional laptop packaging reduced waste by 97%
660,000 tons of carbon dioxide from entering the atmosphere, keeping 200,000 trucks off the road every year and save the company more than $3.4 billion. Walmart’s bottom line was to put more products on its shelves in the same space, and also recognized the sustainability attributes that change would make. They also knew that most consumers just despise excess packaging. General Mills: They straightened its Hamburger Helper noodles, meaning the product could lie flatter in the box. This, in turn, allowed General Mills to reduce the size of those boxes. According to the company, that effort saved nearly 900,000 pounds of paper fiber annually. The company effort also managed to reduce greenhouse gas emissions by 11 percent, took 500 trucks off the road and increased the amount of product Wal-Mart shelves by 20 percent.
THE LINKS Leverage the Supply Chain High performing manufacturing companies are clearly using sustainable packaging design and manufacturing as a way to lever efficiencies through the product value chain. Companies are finding that using less complex packaging helps cut sourcing, energy production and distribution and fuel costs across the supply chain. The glory days of corrugated packaging as the one stop solution are being replaced with reusable packaging options. Also, reducing the consumption of raw materials, carbon emissions and waste
generation reduces manufacturing costs. Since disposal by consumers is one of the largest waste streams in the supply chain, using less packaging of direct-to-consumer shipments also offers great opportunities for supply chain optimization. The previously mentioned Accenture report recommends that through route planning and sourcing software, “collaboration across the companies in the supply chain is necessary to maximize freight utilization. In particular, retailers need to proactively encourage vendors to provide pallet or “trailer feet” specifications for collecting shipments… retailer’s planners can determine the optimum transportation mode and look for multi-stop opportunities.”
Dave Meyer- Principal and Founder of ValueStream Perfomance Advisors & Principal at Newport Consulting Group
Supply Chain Times delivers the latest and most critical insights affecting all aspects of your Asia supply chain.
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CLASSIFIED Listings
LOGISTICS SERVICES
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
DHL 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
ARJ Commercial Leasing Limited 1500 Lianhua South Road Max-Mall Office Tower Block 8-9 Unit 810, Shanghai 201100 中国上海市闵行区莲花南路1500弄 梅陇镇新都会,商务中心8-9号楼810室 邮编：201100 +86 (21) 3358 2270 www.arjchina.com
DSV Air & Sea Logistics DSV Logistics 38/F, 1 Grand Gateway, 1 Hongqiao Road, Shanghai 200030 +86 (21) 5406 9800 www.dsv.com www.dsv.com/cn
Arvato Services 3203, Changping Commercial Building, Futian Bonded Zone, Futian District, Shenzhen, P.R.C. 深圳福田区福田保税区长平商务大厦3203室 +86 (755) 3386 1666 www.arvatoservices.com.cn A.S.I Logistic Room 1703,Hitime International Tower No888 North Sichuan Road, Shanghai, 200080 上海市虹口区四川北路888号海泰国际大厦 1703室，邮编：200080 +86 (21) 5187 2772 www.asilogistic.com
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 Elee Logistics 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
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 Best Logistics Technology Bidg 11 West, 1F West Lake Soyea Software Park 176 Tianmushan Road, Hangzhou, Zhejiang, 310013 浙江省杭州市天目山路176号西湖数源软件 园11号楼1层西2201-03室 +86 (571) 8899 5656 +86 (571) 8827 0027 www.800best.com cargo-partner Logistics 6F, Building A, Sun Young Center, No. 398 Jiangsu Road, Chang Ning District, Shanghai 200050 上海市长宁区江苏路398号舜元企业发展大 厦A栋6楼,邮编：200050 +86 (21) 6195 3800 www.cargo-partner.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 Dajin Logistics 3000 South Lianhua Road, Prologis Logistics Park, Minhang, Shanghai 201109 莲花南路3000号，普洛斯闵行物流园区内， 邮编：201109 +86 (21) 3430 7666 www.dajin.com.cn Deret Logistics Asie 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.deret-asie.com.cn
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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
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 HYT Logistics HYT Logistics Center, Shiwei Road, Fuyong, Bao’an, Shenzhen 518103 深圳市宝安区福永街道十围路 鸿益达物流中心 +86 (755) 2998 7168 www.hyt-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
September/October 2011
LOGISTICS SERVICES
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 邮编：201103 +86 (512) 8889 8666 www.fmlogistic.com www.fmlogistic.cn IDS Logistics 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, +86 (21) 5046 1666 www.linkstarlogistics.com 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 1025 www.logisfashion.com Logwin Air+Ocean China 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 +86 (21) 2326 2000 www.logwin-logistics.com Menlo 13/F Tower A, 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 邮编：200135 +86 (21) 6160 1198 www.menlochina.com
LOGISTICS SERVICES MYS Global Supply Chain 51 Floor, 4068 Excellence Times Plaza, Yi Tian Road, Futian District, Shenzhen 518048 +86 (755) 8288 2131 www.mys-global.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 +86 (21) 6227 8566 www.penskelogistics.com Schneider Logistics 1001-1004, 10th Floor, MAIGO International Building, #11 Nan Ma Road, Heping District, Tianjin 天津市和平区南马路11号麦购国际大厦10层 1001-1004,邮编：300022 +86 (22) 2622 8888 www.schneider.com SDV International Freight Forwarding 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.sdv.com Sinotrans Guangdong 16/F, 97 Haiyuan Road, Huangpu, Guangzhou, China 510700 广州市黄埔区海员路97号外运大楼16楼， +86 (20) 8710 2800 gd.sinotrans.com Sinolog Logistics No.446, Fu Te Dong Yi Road, Waigaoqiao Free Trade Zone, Shanghai 200131 上海外高桥保税区富特东一路446号 邮编：200131 + 86 (21) 5866 6988 www.sinolog163.com SunJet Logitics 299 Huaxiang Road, Shanghai 上海华翔路299号 +86 (21) 6127 2637 www.sunjex.com
113 Eunos Avenue Gordon Industrial Building #02-12, Singapore 409838
+65 6748 4484 www.swisspost.com Toll Global Logistics No. 388, Tieli Road, Yanghang Town, Baoshan District, Shanghai, P.R. China 201900 中国上海市宝山区杨行镇铁力路388号 +86 (21) 3379 3366 www.tollgroup.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
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CLASSIFIED Listings
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， +86 (21) 2305 3333 www.accenture.cn AsiaInspection 2201-03, Guidu Building, 3007 Chun Feng Road, Luo Hu DistricUnit 810, Shenzhen 深圳市罗湖区春风路3007号， 桂都大厦2201-03室 +86 (755) 8231 6796 www.asiainspection.com Baker & McKenzie Suite 3401 China World Tower 2 China World Trade Center, 1 Jianguomenwai Dajie, Beijing 100004 +86 (10) 6535 3800 www.bakernet.com BBK Consulting 1812 Shui On Plaza, 333 Huaihai Middle Road, Shanghai 200021 上海市淮海中路333号瑞安广场1812室 +86 (21) 6137 3052 www.e-bbk.com Booz & Company Suite 2511, One Corporate Ave. No. 222 Hu Bin Road, Shanghai 200021 上海市湖滨路222号企业天地1号楼2511室 +86 (21) 2327 9800 www.booz.com/cn BPS Global Group Unit 3104, Tower 1, Kerry Everbright City, 218 West Tianmu Road, Zhabei District, Shanghai, China 200070 中国上海市闸北区天目西路218号嘉里不夜 城第一座3104室, 邮编:200070 +86 (21) 6317 8830 www.bps-group.net Control Risks Suite 1001 East Tower China Merchants Plaza, 333 North Chengdu Road, Shanghai 200041 上海市成都北路333号招商局广场东楼 1001室， 邮编：200041 +86 (21) 5298 1800 www.control-risks.com Demand Solutions PO Box 6180, Norwest Business Park, Baulkham Hills BC NSW 2153 +612 9659 4555 www.demandmgmt.com 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 6141 3955 www.dragonsourcing.com Elemica 300 Beach Road #13-06 The Concourse Singapore 199555 +65 6327 6143 www.elemica.com InnoCSR Room 17-16, Yu An Building, 738 Dongfang Rd, Pudong New Area, Shanghai, China 200122 中国上海市浦东新区东方路738号 裕安大厦17楼16室，邮编：200122 +86 (21) 5237 7387 www.innocsr.com
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PROFESSIONAL SERVICES
PROFESSIONAL SERVICES
iiAPS 27/F, Room 02 418-428 Jiang Ning Road 200041 Shanghai, China 上海市江宁路418号-428号，27楼02室 邮编：200041 + 86 (21) 6217 0253 www.iiaps.org
ThreeSixty Sourcing 5/F, 686 Jiujiang Building, No 686 Jiujiang Road, Shanghai 上海市黄浦区九江路686号宝龙大厦5楼 邮编：200001 +86 (21) 6322 5000 www.threesixtysourcing.com
Kinaxis Level 19, Two International Finance Centre, 8 Finance Street, Central, Hong Kong 19层,国际金融中心2座金融街8号,中环, 香港中国 +852 2251 1859 www.kinaxis.com
Tompkins International 58 Mao Ming Road (South) Room 502, Jin Tai Building Shanghai 200020, China 上海市茂名南路58号锦泰办公楼502室， 邮编：200020 +86 (21) 6473 2588 www.tompkinsinc.com
Lloyd’s Register Asia 20/F Ocean Towers, 550 East Yan’an Road, Shanghai 200001 上海市延安东路550号海洋大厦20楼， 邮编：2000012 +86 (21) 5158 5700 www.lr.org www.lloydsregisterasia.com Logistics Executive Suite 13G, Shanghai Ind’l Investment Bldg. 18 North Caoxi Road, Shanghai 200030 上海市徐汇区漕溪北路18号， 上海实业大厦13楼G座，邮编：200030 +86 (21) 6427 6697 www.logisticsrecruitment.com.cn 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 MKT China Jiedi Building, Unit 1102, 2790 Zhongshan North Road, Putuo District, Shanghai 200063 上海市普陀区中山北路2790号杰地大厦 1102室,邮编：200063 +86 (21) 6095 5225 www.mkt-china.com
11/F, PricewaterhouseCoopers Center, 202 Hubin Road Shanghai 200021
上海湖滨路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 上海市卢湾区淮海中路222号力宝广场 2705-06室 +86 (21) 6386 8700 www.resourcesglobal.com
REAL ESTATE SERVICES
REAL ESTATE SERVICES
25/F, Tower 2 Plaza 66, 1366 West Nanjing Road, Shanghai 200040
中国上海市南京西路1366 号恒隆广场2座25楼 邮编：200040 +86 (21) 6393 3333
www.joneslanglasalle.com.cn Blogis International Logistics +86 (755) 2669 4211 www.blogis.com.cn BlueScope Steel 12F HSBC Tower, 1000 Lujiazui Ring Road, Shanghai 200120 上海陆家嘴环路1000号汇丰大厦12楼, 邮编：200120 +86 (21) 6841 1898 +86 (21) 6841 2340 www.bluescopesteel.com CB Richard Ellis 11th Floor Shanghai Wheelock Square 1717 Nanjing West Road Shanghai 上海市南京西路1717号会德丰广场11楼 邮编：200040 +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 Room 805, Kerry Centre, No 1515 Nanjing Road (W), Shanghai 上海南京西路1515号嘉里中心805室 +86 (21) 5298 6622 www.gazeley.com Global Logistic Properties Room 2708 Azia Center, 1233 Lujiazui Ring Road, Shanghai 200120 上海市陆家嘴环路1233号 汇亚大厦2708室， 邮编200120 +86 (21) 6105 3999 www.GLProp.com Goodman Group 2107 - 2109, Shui On Plaza, 333 Middle Huaihai 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 +86 (21) 6386 2386 www.goodman.com GSE China 27C Industry Building, 18 North Caoxi 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.cn
Lingang Free Trade Port Economic Development 6/F, 188 Yesheng Road, Pudong, Shanghai 201308 上海市浦东新区业盛路188号6楼, 邮编：201308 +86 (21) 2095 0600 +86 (21) 2095 0604 www.linganglogistics.com 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.mapletreelogisticstrust.com www.mapletree.com.sg Nanjing ZAL Management Office 18 B Deji Mansion, 188 Changjiang Rd. Nanjing 210018 南京市长江路188号德基大厦18楼B座， 邮编:210018 +86 (25) 8572 6079 info@nzmcl.com
Prologis Plaza 66 II ,Suite 2908 1366 Nanjing Road West 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.prologis.com Vailog Room 3102-3104, City Gateway, 398 North Caoxi Road, Shanghai 200030 上海市漕溪北路398号汇智大厦3102-3104 室，邮编：200030 +86 (21) 6090 5292 www.vailog.com Volume Industrial Park Zhuhai Gaolan Container Port Zone, Zhuhai, Guangdong 广东省珠海市平沙镇丰收路36号 +86 (756) 772 7118 www.volumeip.com SEPTEMBER/OCTOBER
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CLASSIFIED Listings
REAL ESTATE SERVICES Yupei Group No. 2500 Jinchang Road, Shanghai 200331 上海市普陀区金昌路2500号， 邮编：200331 +86 (21) 6627 7577 www.yupeigroup.com
IT & SOFTWARE SOLUTIONS Barloworld Supply Chain Software 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：100022 +86 (10) 8523 3103 www.barloworldscs.com BravoSolution 13F-01, Tian’an Center 338 West Nanjing Road, Shanghai 上海市黄埔区南京西路338号天安中心1301室 +86 (21) 6145 8500 www.bravosolution.cn
IT & SOFTWARE SOLUTIONS PowerE2E 20A, Tower 3, No.600 Tian Shan Rd, Shanghai China 上海天山路600弄3号20A(近芙蓉江路) +86 (21) 6274 9608 www.powere2e.com Schmidt Room 2406 Huashen Mansion, 398 Hankou Road, Shanghai 200001 上海市黄浦区汉口路398号华盛大厦2406室 邮编：200001 +86 (21) 6133 9708 +86 (21) 6133 9718 www.schmidthk.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
Emptoris Unit 01, Floor 7, 1 Grand Gateway 1 Hong Qiao Road, Shanghai 200030 虹桥路1号港汇中心1座701单元， 邮编：200030 +86 (21) 6447 6600 www.emptorischina.com
SupplyOn Suite 1501, Silver Centre, 1388 North Shanxi Road, Putuo District, Shanghai 200060 上海普陀区陕西北路1388号银座中心 1501室，邮编：200060 +86 (21) 6149 8042 www.supplyon.com
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
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
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
Vocollect Unit 3, 29/F, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong 香港铜锣湾告士打道255-257号信和广场3单 元29楼 +852 3915 7000 www.vocollect.com
JDA Software Unit 06, 29/F, Raffles City, 268 Xizang Middle Road, Shanghai, 200001 上海市西藏中路268号,来福士广场2906室， 邮编:200001 +86 (21) 2327 9400 +86 (21) 2327 9401 www.jda.com Kewill Room D, 9F Baoding Building No.550 Xu Jia Hui Road, Luwan District Shanghai 200025 上海市徐家汇路550号宝鼎大厦9楼D座 邮编：200025 +86 (21) 6466 3030 www.kewill.com Lawson Software Room 2H, Apollo Building, Yan Zhong Lu 1440, Shanghai 上海延安中路1440号阿波罗大厦2H +86 (21) 6248 5853 www.lawson.com 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) 6057 3500 www.manh.com
5th INDIRECT PROCUREMENT
CHINA FORUM
第五届中国间接采购论坛 Shanghai，Sept 8，2011
EQUIPMENT PROVIDERS CHEP 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 Room 1102, Block A, Phase 1 Zhang Jiang Riverfront Harbour, 3000 Longdong Avenue, Pudong New Area, Shanghai, 201203 上海市浦东新区龙东大道3000号张江集电 港第一期A楼1102室，邮编：201203 +86 (21) 6879 4413 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 5080 www.schoellerarcasystems.comApprise
64 September/October 2011
www.supplychains.com
THE LINKS
The Characteristics of Personality and behaviours of Successful Personality and behaviours of Successful Procurement Professionals
Teck Soon Ong Chairman & CEO - SESAMi
In my opinion, the few most distinctive characteristics for a Procurement Professional to succeed in looking after their companyâ&#x20AC;&#x2122;s supply chain is having high integrity, thinking win-win, and being strategically aligned with their core business objectives.
Janis Ĺ elegovskis Purchasing & Logistics manager ESP European Steel Production
In my opinion a good procurement professional has to be analytical with good communication skills. In Latvia and probably other soviet countries personal relations with suppliers are essential, because planning is week in our countries. Sometimes the only way to get a good deal, or to get the job done in time, is to rely on personal relations.
Keith Rodgers Buyer/ expediter - Krupp Canada
Soft skills have to be highly tuned - listening, analysis, strategy development, being able to work with people, internal customers, external suppliers. Prioritization of tasks, understanding supply chain dynamics, assessing risks and making judgement calls.
Michael Scott Senior Consultant - Procurement and Supply Chain at Macildowie
In my experience, the best Procurement professionals have the ability to communicate on all levels. Everyone says that they have excellent communication skills, but few can actually build long term relationships and influence key stakeholders.
Eteesh Raturi Senior Manager - Sourcing & Procurement at Steria
One of the top characteristics is treating vendors/suppliers /service providers as your business partner and giving them equal opportunities with fair play.
Adele Xu eSourcing Specialist Armstrong World Industries.
Communication skills is one of the most important characteristics, you need to cooperate well with vendors and also the internal co-workers.
Naresh Gupta Senior Manager - Procurement at Altisource Business Solutions Pvt.
The person who takes care of total cost of ownership besides long term association with the supplier makes a better procurement professional.
John Stephens Indirect Procurement - Kraft Foods
It may purely be a coincidence, but I have found that the best procurement professionals, mostly Interim Managers, I have ever worked with, were all avid chess players.
Miles Ferrante Purchasing Manager - Plastic Engineering
With there being so many problems surrounding the market these days such as material shortages, price increases etc, purchasing managers need historical experience of what actually works to help their problem solving abilities.
Source: 65 www.supplychains.com
SEPTEMBER/OCTOBER
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