Various factors still affect the determination of technology companies to outsource logistics, but this practice has begun to rise in China.
In DHL’s 4,000-square-meter spacious cargo area in Shanghai, piles of shipments with the “Siemens” logo are particularly conspicuous. Last year, Siemens (China) Co., Ltd. Automation and Drives Group signed an indefinite cooperation agreement with DHL Dansha Sea Air Transport Co., Ltd., with the latter fully responsible for its import sea transportation, air transportation and customs clearance procedures from the German factory to Shanghai. Currently, the inventory of Siemens shipments in DHL's Shanghai cargo area is higher than 2,500 units at any time. Through road, rail and domestic air transportation, DHL is responsible for door-to-door delivery of approximately 2,000 orders per month. All orders are processed through the electronic data exchange system connected to Siemens, allowing the warehouse management systems of Siemens and DHL to communicate with each other to achieve a fully automated warehousing management process.
Technology companies face a relatively complex logistics environment due to their rapid product updates, high unit prices of raw materials and products, high degree of globalization, and heavy after-sales spare parts processing tasks. In order to gain a larger market, global logistics companies are constantly launching new logistics and supply chain services. Like Siemens, it is becoming a trend for technology companies to outsource their logistics systems to third-party logistics companies.
Integrated global logistics
The cross-border procurement and sales of technology companies have extended their supply chains to the world, including long-distance transportation such as sea and air transportation, as well as door-to-door delivery, and also require Therefore, establishing an integrated global logistics system, unifying resource planning, reducing costs, and improving efficiency have become one of the means for technology companies to cope with fierce competition. Before cooperating with DHL, Siemens' warehousing, inventory and delivery were all managed internally by the company. Each of its production plants needed to set up small product storage warehouses, which were manually managed by employees. After DHL took over and introduced the electronic data interchange system (EDI), the logistics management work that was originally completed by 19 Siemens employees can now be completed by 8 DHL employees based in Shanghai. Thomas Fichtenmeier, head of procurement and logistics services at Siemens China, said: "DHL's services integrate sea freight, air freight and logistics services to achieve an end-to-end logistics system."
< p> This kind of cooperation between technology companies and third-party logistics companies is gradually becoming more popular in the Asia-Pacific region. Lucent Technologies (Lucent) cooperates with United Parcel Service (UPS), another global logistics company, for logistics management. A special working group has been established by the relevant business departments of UPS to manage the operation of all air and land freight operations, cross-port warehousing operations and logistics systems of Lucent Technologies. Jim Johnson, vice president of supply chain network department of Lucent Technologies, believes: "This logistics management solution will supervise the operation of the logistics network at the entire level, including how to manage delivery truck drivers and shorten the time between various logistics links. gap, improve the transparency of the entire logistics system operation, etc.” It can be seen that the intervention of third-party logistics companies can make the connection between various logistics links of technology companies smoother.Chen Fenzhen, deputy general manager of Sinotrans-DHL International Air Express Co., Ltd., revealed: In the next five years, DHL plans to invest US$270 million in China to improve infrastructure, including ports and service centers. In March this year, UPS established three warehouses and distribution centers in Shanghai, Suzhou and Futian. These three business bases are adjacent to important technology manufacturing centers. UPS plans to establish 20 more such business bases in major cities in China this year and next, increasing the number of warehouses in China to 60, of which 10 business bases will be completed in 2005.
Leveraging on Spare Parts Logistics
Another characteristic of technology companies is the high level of after-sales service, which often requires repairs, replacements and other services for sold goods. For technology companies, after-sales service management mainly involves the logistics management of spare parts. It is difficult for any technology product to completely eliminate hardware failures. Once a failure occurs, finding the required spare parts in a timely manner becomes the key to measuring service quality. This kind of spare parts logistics is also called "reverse logistics". As the name suggests, it is in the opposite direction to normal logistics, and it is unpredictable and difficult. The traditional method is for companies to build their own spare parts centers, which requires a lot of initial investment. Many companies are also trying to outsource spare parts logistics.
HP's GSO (HP Global Service Organization) department has cooperated with DHL on spare parts logistics, using DHL's global spare parts logistics center for reverse logistics, including recycling parts borrowed by engineers and sales channels. Recycling, sending for repair, returning defective parts to the warehouse, and returning defective parts to the supplier form a complete reverse logistics chain from the user to the supplier. For logistics companies like DHL, the so-called forward and reverse logistics are both components of their logistics services, and there are many overlaps. For technology companies, this reduces the work of rebuilding a spare parts logistics system. Improved efficiency.
Although spare parts logistics is not yet popular in China, major logistics companies around the world have begun to deploy in China. Since the 1990s, DHL has entered the field of spare parts logistics. Currently, DHL has 330 warehouses and 10 distribution centers globally, as well as 3 regional call centers in Asia, Europe, and North America, and 16 spare parts logistics centers in China.
UPS's air transshipment center in Shanghai will also be completed before 2007. One of the functions of its transshipment center is to provide after-sales maintenance services to enterprises. "Currently, the global spare parts logistics market is expected to reach US$65 billion, growing at an annual rate of 4%, making it the fastest growing market in the global logistics field." John Farley, Director of Spare Parts Logistics, DHL Asia Pacific So predicted John Farrell.
Personalized needs have yet to be broken through
Logistics outsourcing of technology companies needs to be greatly developed, but it still faces some obstacles. How to meet the personalized needs of technology companies is the most important point. Sim Kian Peng, Sales Director of the Electronic Components Department of DHL Global Customer Solutions Asia Pacific, said: "The requirements for shipping a box of chips are certainly different from shipping a box of clothes. We need to provide the necessary measures to ensure the safety of the goods according to the needs of the customer. "For example, when DHL cooperates with the imaging company Agfa, it must provide a special environment for Agfa's imaging products, such as strict control of temperature and humidity, and setting up a dedicated workshop in the warehouse. Used for instrument calibration, etc. In the 18,000-square-meter warehouse of DHL Shanghai Regional Transshipment Center, there are more than 500 Agfa-specific inventory units permanently installed, occupying one-sixth of the entire logistics center.
The demand for personalization obviously brings about an increase in costs. For example, a logistics company provides special services for high-value chips and other products, using measures such as global positioning, special bodyguards, and armored trucks. Such services are expensive.
Although infrastructure limitations and management system constraints still affect the determination of technology companies to outsource logistics, technology companies’ outsourcing logistics has begun to rise in China. Chen Fenzhen, deputy general manager of Sinotrans-DHL International Air Express Co., Ltd., said: "Currently, in this field, the proportion of outsourcing in developed countries is 45%-50%, and in China it is 20%-24%. There is still a lot of room for growth. .
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