2.
In 1996 a literal translation for the word “logistics” did not exist in the Chinese Language
Today there are more than 50,000 registered businesses in China using “logistics” in their nameA New World
3. logīstics, n.pl. “The organisation and control of the movement of materials, goods and information from point of origin to the point of delivery”The Supply Chain TransportationSupplier- Raw MaterialsBaseComponentsRans ManufacturerDistributionCentreRetailer /Point of SaleEndUser Transportation Transportation Transportation
4.
Changes and Trends in Chinese Logistics
How Leading Companies Will Achieve Competitiveness
Finding A Way ForwardAgenda
5.
Changes and Trends in Chinese Logistics
How Leading Companies Will Achieve Competitiveness
Finding A Way ForwardAgenda
6. Growth in China - GDP (Billion USD)*JapanUSAChinaGermany
7. JapanUSAChinaGermanyAverage Rate of GDP Growth in China*%%%%%%
8. “Within 20 years China will account for 10% of world trade and rival the USA and the European Union in size”Billion USD96979899949392919500(est)*Source: China Statistical YearbookForeign Trade Growth in China*
9. More than 50% of MNC distribute to > 20 provinces*
More than 50% of MNC distribute to > 50 cities*
Accelerating growth
outside traditional
coastal areas
Central and West
are 50% of GNP
and 62% of population*US China Business CouncilThe Pattern of Trade is Changing
10.
Retail Sales + 6.8% but Chain Store Growth + 27%
Chain Stores have now risen to 20% of total
One example :
We will see bigger companies operating across regions
And centralising facilities in different regions to lower cost*China Chain Store and Franchise AssociationWith Growth comes Consolidation
11.
General tariff reduction to average of 9.4% by 2005 (IT to zero)
Import quota removal by 2005
Full trading and distribution rights to foreign firms within 3 years
Relaxation of ownership restrictions
Restrictions on own provision of services being phased out including Warehousing, Freight Forwarding, Transport, Express Delivery and Air Courier etc
Relaxation of protocol provisions and better services
Leading to an increase in Chinese Global competitiveness and local adoption of World’s Best Practice (eg J.I.T)
Aspects of China’s Entry to the WTO
12.
Increasing viability of rail transportation to Hub (+1500 kms)
Supplemented by Road to customer (+3000 kms)
Increasing opportunity for
Major Distribution and
Logistics facilities
“More than 55% of foreign companies rate Logistics and Distribution as their single greatest challenge”Development of Transport Infrastructure*Singapore University Research Study
13.
Growth in China
Consolidation and Centralisation
Changes in the Pattern of Trade
WTO and Global Competitiveness
Continued Improvements in Infrastructure “Only the most competitive companies that can provide a fast
and reliable Logistics service, at the lowest cost, will survive”Summary - Key Changes and Trends
14.
Changes and Trends in Chinese Logistics
How Leading Companies Will Achieve Competitiveness
Finding A Way ForwardAgenda
15. And Minimum Handling - Quality
- Error reductionAchieving Competitiveness The Lowest Delivered Cost - Efficient Network Design
- Space Efficiency
- Productivity
- Accuracy and Control The Fastest Response - High Throughput
- E-Business
16. Case Study - Accuracy and Control Container Ports - Radio Frequency
17. Case Study - High Throughput Retail Industry - Cross-Docking
18.
Removes Primary Warehouses from the Supply Chain
And Yet 50% of all Web retailers lose money on every order shipped
Distribution cost is double conventional Supply Chain
Because more smaller orders delivered more often
E-Business Systems need
*Source: US Forrester ResearchCase Study - E-Business- Speed
- Accuracy
- Modularity
19.
Changes and Trends in Chinese Logistics
How Leading Companies Will Achieve Competitiveness
Finding A Way ForwardAgenda
20. Finding a Way Forward
21. ManufacturingEngineeringEvaluationInstallationLogistics
Systems
IntegrationFinding a Way Forward
22.
The right answer in China will be different
Economics
Market Conditions
“In China we need to combine an understanding of
World’s best practise with local knowledge”
- Cost of land
- Cost of labour - Distances and Time to market
- A greater need for FlexibilityApplying World’s Best Practice in China