• 1. Logistics In China
    • 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
    • 23. Logistics in China
    • 24. Thank you!