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How Logistics and Supply Chain Management Help
Improve EfficiencyPresented by : Lawrence Yip
Profile of Lawrence Yip MBA
Lawrence is a renowned and active practitioner in the resources and commodities global trade, supply chain management and logistics services in Asia-Pacific region, especially in Hong Kong and Mainland China markets.
– Prorsum Group Holdings LimitedManaging Director
– Chamber of Hong Kong Logistics Industry (CHKLI)Executive Vice Chairman
– Hong Kong Logistics Development Council (LOGSCOUNCIL)Council Member
– Hong Kong Trade Development Council (HKTDC)Advisory Committee Member
– "Young Logistician of the Year Award" Logistics Award Hong Kong 2005
•Introduction•Development Trends•Competitive Advantages•Positioning and Functions•Case References •Q & A
Discussion Topics
Age of Supply Chain60’s
70’s
80’s
90’s
00’s
Sourcing
Supply Chain Management
DomesticManufacturing
DomesticDistribution
DomesticMarket
DomesticManufacturingOutsource
DomesticDistribution
DomesticMarket
OffshoreOutsourceManufacturing
DomesticDistribution
InternationalMarket
InternationalFreight to Destination DC
OffshoreOutsourceManufacturing
Multi-modalInternationalFreight/Express
InternationalTiered Market
DistributedOffshoreDistribution
NETWORK SPECIALIZATION INTEGRATION INFORMATION
Basic Level
Provision of basic operation according to demand• time, place, Item,
quantity, price, channel
Achievement of basic operation• in time, accuracy,
safety, economic, stable, controllable
Middle Level
Optimization of logistics network• Transport network opt.:
comp. trans., multimodal
• Inv. ntwk opt., inv. control
Logistics operation synchronization• Special. and int.• Log. Ope. Syn.• Log. Res. sharing
High Level
SC integration• SC resource utilization
opt.• SC total cost
minimization• SC effectiveness
maximization
SC operation synchronization• SC specialization and
int.• SC operation syn.• SC resource sharing
Operational
Main functions• Warehousing
(warehousing, inventory control), transport ( 5 modes)
Auxiliary functions• Loading/unloading,
material handling, packaging, processing, logistics information
Tactical
Value-added services•Purchasing, assembling, manufacturing, sorting, delivering, selling, financing, consulting
Logistics network opt.•Trans.+ invent. Network design and opt.
•Design and opt. of log. infras.
Logistics operation mgmt• Evaluation and monitoring
Strategical
SC logistics integration• Integration of logistics systems of different companies
SC integration•Overall integration of different companies
SC operation•Utilization of logistics resource •Logistics service and logistics cost control
Our Competitive AdvantagesPeople。Network。Technology 。Innovation。Value
Excellent Geographical Location
Hong Kong’s Competitive Advantages• Strategic location• Level playing field for local and international
enterprises• Superior infrastructure• Multi-modal connectivity• Free port• Efficient customs• A simple tax system and low tax rate• Free flow of capital and information• Rule of law and independent judiciary• Rapid growth of PRC’s economy
Our Positioning:Regional Supply Chain Centre
& Logistics Hub
• The strategic role of Hong Kong logistics industry inglobal supply chain management in Asia region
• Expand cargo hinterland so as to remain as the regionaltransport and logistics hub
• Be the regional transshipment centre
• Move towards higher value-added services (e.g. supplychain management) and provides service for high-valueproducts (e.g. wine, pharmaceuticals)
• Use of information technology to enhance efficiency
Asia’s SCM & Logistics Hub
Freight Forwarder / Carrier
Request for QuoteQuotation
Purchase OrderDelivery Forecast
Commercial InvoiceSupplier
ShippingInstruction/
Shipping OrderBills ofLading /
Airway billsBank / Insurance
Customs
Policy /Certificate /
Cover Note /Declaration
TradeDeclaration
Packing ListBuyer
Offshore Trade & Logistics Controlling Centre
Bank & Insurance
Integrated SCM & Logistics Platform
Global Supply Chain Management Center
Integrated SCM & Logistics Platform
Buyers
Place one order
Consolidate orders
HK SCM OFFICE
Send production orders
Suppliers in various origins
UpdateOrder & shipment status, inventory visibility
Drayage in various origins
Consolidation Centers in various origins
Custom Declaration
Drayage in various destinations De-Consolidation
Hub at destinations
Destination DCs
Shipping
Custom Clearance
Accounting receive a single
invoice
Management and Buyers receive
reportsTransaction platform, product catalogue,
suppliers, procedures, self-help manual, query, reports, customer service
supply chain analysis, inventory management
e-Logistics & ICT Capacities
In order to compete onservice quality, we widelyadopt e-Logistics andInformation CommunicationTechnology (ICT) solutionsto enhance our operationefficiency and productivity,which greatly increasesupply chain visibility byfacilitating trading partnersto exchange trade andshipments data flow in asecure and seamlessmanner.
Database ConnectionEngine (DCE)
Application Framework
ODBC
Database
Workstation Workstation
Auto Fax
Printer
Web Server
Auto emailSending
Browser XML EDI
FTP ServerXML
EDIOCC
Ocean & Air Freight Management System• Customers Profile• Tariff & Quotation
Management• Export Operations
– Sailing Schedule– Booking (FCL & LCL)– Consolidation (Vanning)– Master B/L, House
Airway Bill– Invoicing– Profit Share– Job Costing
• Import Operations– Master & House Airway
Bill– Invoicing
• Enquiries & Reports
Cargo Consolidation Permission to Ship
Global Supply Chain Visibility
Case References
Total Logistics Services Ocean Freight Forwarding Air Freight Forwarding Land Transport (Domestic Container Trucking) Door-to-Door Multi-modal Transportation Cargo Consolidation (LCL) Warehouse and Distribution Inventory Control, Pick & Pack, Labeling and Repackaging P.O. Management, Shipment Track & Trace, EDI, ASN, AMS Customs Declaration and Clearance Cargo Insurance Brokerage Cargo Inspection and Quarantine
23
Land Transport 1 Land Transport 2
Asia U.S.
Inventory status for Item No.69A7(Meg Hard Drive) are as follows;Waiting Dispatch Advice 25,551/ Just Completed loading 20,000/ On board 875/ Processing Customs Clearance 1,000/ Land Transport for Distribution Center(L.T.1) 125/ Distribution Center 500/ Land Transport for Customers(L.T.2) 1,000
Dispatch Loading On Board C.P L.T.1 D.C. L.T.2
25,551 20,000 875 1,000 125 500 1,000
Item No.69A7,Description;400 Meg Hard Drive
Source) Professor S.J.Won Stanford University
CustomsLogistics Center Consignee
Consignor
Providing inventory information through intermodal transport between Asia and North America
Tracking and Tracing System with Global Logistics
AsianCountries
24
No Inventory – Assembling and Deliverysystem based upon Orders
Extreme Reduction of Lead time with Direct logistics model
or
FedEｘ佐川急便
中国東方航空
リードタイムの大幅な縮小リードタイムの大幅な縮小最短最短44日で納品可能に日で納品可能に
厦門工場から日本の物流拠点まで29のチェックポイントで製品をトレーシング＝「オーダーステータス」システム「オーダーステータス」システム
Xiamen Factory Xiamen Airport
Chubu Airport
or KansaiAirport
Kansai DistributionCenter
Customers
AirTransport
CustomsClearance
Airlines
l provided the Government with one year production plan and Transportation plan. Dell requested to increase frequency of direct air transport Service to Japan. Since March 2001, 6 flights( to 3 kansai and3 Chubu )a week transport the cargoes To Japan.
Large Lead time reduction
Minimum case is only 4 days for delivery
Tracking and Tracing with 29 Check points between Xiamen Factory and Distribution Center in Japan
Order Status System
Realizing low cost and short lead time logistics operation with direct flight between Xiamen and Japan
CustomsClearance
25
Buyer’s Consolidation
EDIほかシステムプラットフォーム
【【青島・上海センターの拡充】青島・上海センターの拡充】青島センター300万枚→600万枚上海センター180万枚→400万枚
在庫流通加工
（検針、検査、アソート）
バンニング通関など
中国 日本
B港
通関在庫
仕分け流通加工など
Customer’s DistributionCenter
荷主ごとにコンテナ化荷主ごとにコンテナ化最大最大30%30%～～40%40%のの
大幅な物流コストの削減大幅な物流コストの削減
【アパレル業者のニーズ】リードタイムの短縮化ロジスティクスコスト低減良品のみの決済
EDI Platform
ConsolidationService
Qingdao Center 3million→6millionShanghai Center 1.8million→4million
Processing and Distribution CenterQingdao, Shanghai
Apparel FactoryLogisticsCenter
InventoryVanningCustoms clearance
China JUSAPort
B港
Customs ClearanceInventoryDividingProcessing
Containerizing by ShippersMaximum Cost Reduction by 30%-40%
【Requirement from Customer】 Reduction of lead time Reduction of cost Payment for only inspected items Tracking for cargo
Enhancing apparel department in China for mega-retailers Starting Buyers Consolidation Business with use of licenses with total logistics
business in China
ConsolidationService
Capacity Expansion with Qintao and Shanhai Distribution Centers
Port
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VMI Logistics Expanding its logistics system by using specialty with logistics for only electronic part,
that request specific knowledge and know-how
【【VMIVMI倉庫の機能】倉庫の機能】部品ベンダーに代わって部品在庫を管理し、組立て
メーカーから指定された場所に JITで配送
ユーザーである組み立てメーカーから出荷指示を受けた後、 48時間以内に中国各地の生産拠点に納品
システムプラットフォーム
VMI Warehouse
在庫通関
ピッキング
払出
日本
中国
Function of VMI warehouse- controls inventory and delivery of parts for
designated places by assemblers on behalf of suppliers- 48 hours delivery system to customers with instruction
of assemblers
System Platform
（Tianjin、Dalian、Shanghai etc.）
Parts suppliers
InventoryCustoms clearancePickingPackaging
OverseasAssemblers
【Requirement of Electronic parts suppliers】
Cost reduction of investment for logistics centerCost reduction for logistics operation
Out sourcing
Lead time reduction
China
China
China
Developed system by herself, providing customers with both system itself and logistics operationIt is not easy for Customers to change Alpus logistics to other logistics provider
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Just In Time logistics with end to end Just In Time(JIT) Transport to Total Logistics service provider through Intermodal
Transport Diversifying customer with obtaining management ability of Total Value Chain
Previous profit generator but nowfacing heavy competition
日本郵船の強みの集大成
内陸輸配送
内陸輸配送
外航海運（定期航路、小型船 3～４隻）
内航海運（対日本・タイ、小型船 1隻）ング
トータルな顧客価値の実現トータルな顧客価値の実現
郵船航空サービス（航空貨物サービス）
COSCOの持つ経営資源
New Profit Source
Collecting and providing competitivenessHigh Value added
Logistics Service
LandTransport
Domestic Shipping line : 1 Small vessel
TerminalOperation
Realizing total value for customers
Air Transport for air cargo
Alliance with Other Ocean Carrier
- Just in Time delivery service for automotive manufacturers in Guangzhou and Shanghai- New profit sources with Customs clearance service and terminal operating- Providing Modal diversity with International, Domestic, Air etc… for consumers- Promoting as a Provider of total logistics solution for automotive manufacturers
International Shipping line( liner service) : 3-4 Small vessels Terminal
OperationLandTransport
New Profit Source
Customer involvement
• Manufacturers are trying to reduce lead time and inventory. • Manufacturing automation ( Transparent) + Logistics to delivery (Black
box)• If in case of recall, VISIBILITY into supply chains is necessary
In order to have VISIBILITY, it is essential to have……
The main issue is enhancing Global Supply Chain Visibility
Sorting
Aggregation
Re-sorting
Sorting by Store
Consumer
Recycling
China Cities and Ports Clusters
Buyer
Bonded Logistics Center
Vendor B
Worldwide
China
Goods Flow
Document Flow
Capital FlowVendor A Vendor C
Buyer’s Off-shore Distribution Center
Bonded & Export Supervised Warehouse / Logistics Center
Vendors in China
Overseas Suppliers
Customers in China
Overseas Buyers
Worldwide
China
Int’l Trade (Imp & Exp) Bonded and Export Supervised
Warehouse in China
We delivery what we committed ! Products in excellent quality and correct specification Extremely competitive pricing Reliable services & professional people Quick delivery time with huge production capacities Wide variety of items selection (specifications,
standards /grades, sizes, materials and finishes) Value-added solutions (customized packaging in
plastic bags or carton boxes or pallets, kitting, stock keeping & controlling, auto-replenishment, vendor managed inventory, just-in-time delivery)
Sourcing the hardest to find items, tailor-making, samples & prototypes, OEM / ODM
Global logistics & distribution solution (Door-to-Door, Port-to-Port in Full-Container-Loaded / Less-Than-Container-Loaded)
Buyer cargo consolidation with multi-vendors’ commodities from multi-locations
Flexible trade terms (FOB, CFR, or landed cost with customs clearance and duty & tax paid)
ISO-9002 systems and quality assurance in place from ordering to prodcuing to delivering.
