Operational - HKTDC World SME Expo

How Logistics and Supply
Chain Management Help
Improve Efficiency
Presented 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 Limited
Managing 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

Discussion Topics
•Introduction
•Development Trends
•Competitive Advantages
•Positioning and Functions
•Case References
•Q & A

Domestic
Manufacturing
Domestic
Manufacturing
Outsource
Offshore
Outsource
Manufacturing
Offshore
Outsource
Manufacturing
Sourcing
Age of Supply Chain
International
Freight to
Destination DC
Distributed
Offshore
Distribution
Domestic
Distribution
Domestic
Distribution
Domestic
Distribution
Multi-modal
International
Freight/Express
Supply Chain Management
Domestic
Market
Domestic
Market
International
Market
International
Tiered Market
60’s
70’s
80’s
90’s
00’s

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 Advantages
People。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

Asia’s SCM & Logistics Hub
• The strategic role of Hong Kong logistics industry in
global supply chain management in Asia region
• Expand cargo hinterland so as to remain as the regional
transport and logistics hub
• Be the regional transshipment centre
• Move towards higher value-added services (e.g. supply
chain management) and provides service for high-value
products (e.g. wine, pharmaceuticals)
• Use of information technology to enhance efficiency

Offshore Trade & Logistics Controlling Centre
Policy /
Certificate /
Cover Note /
Declaration
Bank / Insurance
Bank & Insurance
Supplier
Trade
Declaration
Customs
Bills of
Lading /
Airway bills
Request for Quote
Quotation
Purchase Order
Delivery Forecast
Packing List
Commercial Invoice
Shipping
Instruction/
Shipping Order
Buyer
Freight Forwarder / Carrier

Integrated SCM & Logistics Platform
HK SCM
OFFICE
Consolidate
orders
Place one
order
Buyers
Send production
orders
Suppliers in various
origins
Update
Order &
shipment
status,
inventory
visibility
Drayage in various
origins
Consolidation Centers
in various origins
Custom
Declaration
Integrated SCM & Logistics Platform
Global Supply Chain
Management Center
Shipping
Transaction platform, product catalogue,
suppliers, procedures, self-help manual, query,
reports, customer service
supply chain analysis, inventory
management
Custom
Clearance
Drayage in various
destinations
Accounting
receive a single
invoice
De-Consolidation
Hub at
destinations
Destination DCs
Management and
Buyers receive
reports

e-Logistics & ICT Capacities
In order to compete on
service quality, we widely
adopt e-Logistics and
Information Communication
Technology (ICT) solutions
to enhance our operation
efficiency and productivity,
which greatly increase
supply chain visibility by
facilitating trading partners
to exchange trade and
shipments data flow in a
secure and seamless
manner.
Workstation Workstation
Web Server
Browser XML EDI
Application Framework
Database Connection
Engine (DCE)
ODBC
Database
FTP Server
OCC
XML
EDI
Auto email
Sending
Auto Fax
Printer

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

Tracking and Tracing System with Global
Logistics
Consignor
Asian
Countries
Providing inventory information through intermodal transport
between Asia and North America
Customs
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
Item No.69A7,Description;400 Meg Hard Drive
Dispatch Loading On Board C.P L.T.1 D.C. L.T.2
Source) Professor S.J.Won Stanford University
25,551 20,000 875 1,000 125 500 1,000
Logistics Center Consignee
23

No Inventory – Assembling and Delivery
system based upon Orders
Extreme Reduction of Lead time with Direct logistics model
Customs
Clearance
Xiamen Factory Xiamen Airport
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 and
3 Chubu )a week transport the cargoes To Japan.
Order Status System
Tracking
厦門工場から日本の物流拠点まで29の
and Tracing with 29 Check
チェックポイントで製品をトレーシング
points between Xiamen Factory and
=「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
Distribution Center in Japan
Chubu
Airport
or Kansai
Airport
Large Lead time reduction
リードタイムの大幅な縮小
Minimum 最短4日で納品可能に
最短 case is 日で納品可能に
only 4 days for delivery
Customs
Clearance
Airlines 中国東方航空
AirFedEx
Transport 佐川急便
Kansai Distribution
Center
Realizing low cost and short lead time logistics operation with direct flight between Xiamen and Japan
24
Customers

Apparel Factory
中国 China
【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
Qingdao Center 3million→6million
上海センター180万枚→400万枚
Shanghai Center 1.8million→4million
Buyer’s Consolidation
Enhancing apparel department in China for mega-retailers
Starting Buyers Consolidation Business with use of licenses with total logistics
business in China
在庫
Inventory 流通加工
(検針、検査、アソート)
Vanning
Customs バンニング clearance
通関など
Consolidation
Service
Port
Containerizing 荷主ごとにコンテナ化 by Shippers
Maximum 最大 最大30% 30%~40% Cost 40%の Reduction by
30%-40% 大幅な物流コストの削減
Processing and Distribution Center
Port
B港 B港
Qingdao, Shanghai
Consolidation
Service
Capacity Expansion with Qintao and Shanhai Distribution Centers
EDI Platform
Logistics
Center
Customs 通関 Clearance
Inventory在庫
Dividing仕分け
Processing 流通加工など
EDIほかシステムプラットフォーム
JUSA 日本
Customer’s Distribution
Center
【Requirement from Customer】
【アパレル業者のニーズ】
リードタイムの短縮化 Reduction of lead time
ロジスティクスコスト低減 Reduction 25 of cost
良品のみの決済 Payment for only inspected items
Tracking for cargo

VMI Logistics
Expanding its logistics system by using specialty with logistics for only electronic part,
that request specific knowledge and know-how
Parts suppliers
Overseas 日本
China
Out sourcing
【Requirement of Electronic parts suppliers】
Cost reduction of investment for logistics center
Cost reduction for logistics operation
China 中国
在庫
Inventory
通関
Customs clearance
ピッキング
Picking
払出
Packaging
VMI Warehouse
(Tianjin、Dalian、Shanghai etc.)
システムプラットフォーム
System Platform
China
Lead time reduction
Developed system by herself, providing customers with both system itself and logistics operation
It is not easy for Customers to change Alpus logistics to other logistics provider
Function of VMI warehouse
【VMI VMI 倉庫の機能】
Assemblers
- controls inventory and delivery of parts for
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
designated places by assemblers
JITで配送
on behalf of suppliers
ユーザーである組み立てメーカーから出荷指示を受
- 48 hours
delivery system to customers with instruction
26
of けた後、 assemblers 時間以内に中国各地の生産拠点に納品
48

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
Land
内陸
Transport 輸配送
Terminal
Operation
ング
New Profit Source
High Value added
Logistics Service
Alliance with COSCO の持つ経営資源
Other Ocean Carrier
外航海運(定期航路、小型船 3~4隻)
International Shipping line( liner service) : 3-4 Small
vessels Terminal
内航海運(対日本・タイ、小型船 1隻)
Domestic Shipping line : 1 Small vessel
Air Transport 郵船航空サービス for air cargo
(航空貨物サービス)
Previous profit generator but now
facing heavy competition
Realizing トータルな顧客価値の実現
total value for customers
Collecting and providing
competitiveness
日本郵船の強みの集大成
Operation
- 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
27
- Promoting as a Provider of total logistics solution for automotive manufacturers
Land 内陸
輸配送 Transport
New Profit Source
Customer
involvement

The main issue is enhancing Global Supply Chain Visibility
• 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
Sortin
g
Aggregation
Re-sorting
Sorting by Store
Consume
r
In order to have VISIBILITY, it is essential to have……
Recycling

China Cities and Ports Clusters

Buyer’s Off-shore Distribution
Center
Buyer
Bonded Logistics Center
Vendor A Vendor B Vendor C
Worldwide
China
Goods Flow
Document Flow
Capital Flow

Vendors in China
Overseas Suppliers
Int’l Trade (Imp & Exp)
Bonded and Export Supervised
Warehouse in China
China
Bonded & Export Supervised
Warehouse / Logistics Center
Worldwide
Customers in China
Overseas Buyers

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.

Hong Kong : Your Premier
Inter-modal Logistics Hub
Thank You!
Lawrence@ProrsumGroup.com