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Copyrights @ 2008. All Rights Reserved. Arshiya International Ltd

New Supply Chain Models Evolving in AsiaNew Supply Chain Models Evolving in Asia


A LEADING INTERNATIONAL COMPANY PROVIDINGA LEADING INTERNATIONAL COMPANY PROVIDINGINTEGRATED SUPPLY CHAIN MANAGEMENT SERVICESINTEGRATED SUPPLY CHAIN MANAGEMENT SERVICESUSING INNOVATIVE TECHNOLOGY SOLUTIONS ANDUSING INNOVATIVE TECHNOLOGY SOLUTIONS ANDINFRASTRUCTUREINFRASTRUCTURE


• Ghengis Khan

• Alexander the Great

• The Russian Campaigns ofNapoleon and Hitler

• The First Gulf War

The Concept of Logistics Evolved as a VitalThe Concept of Logistics Evolved as a VitalMilitary ToolMilitary Tool


The Army Logistics System ofthe Past

Velocity Management as aNew Strategy

Military LogisticsMilitary Logistics

• Massive• Unresponsive• Unreliable• Inefficient

Warehouses

Repair

Warehouses

RepairWarehouses

Repair

Warehouses

Repair

Warehouses

Repair

Non-value-adding activities areeliminated and value-adding ones

are continuously improved

• Improvedeployability

• Save $$

Materiel and informationare moved faster

and more accurately

Managed velocity reducesneed for massive resources

• Improve missionreadiness


Evolutionary Path of the IndustryEvolutionary Path of the Industry


From: OneDimensionalManufacturingModel

To: EstablishingStrategicManufacturingFacilitiesClusters ofManufacturingPlants in keyMarkets toMeet In-countryConsumerdemand

To:ManufacturingCenters ofExcellenceRegional HubManufacturingStrategy

To: VirtualManufacturingDynamicGlobalManufacturingNetworks

Evolutionary Path of ManufacturingEvolutionary Path of Manufacturing


Global / LocalGlobal / LocalSourcingSourcing

ExecuteExecutePurchase OrderPurchase Order

TrackTrackMovement ofMovement ofProductProduct

Consolidate /Consolidate /Value AddedValue AddedServiceService

Custom Clearance /Custom Clearance /Govt. DocumentationGovt. Documentation

Determine OptimalDetermine OptimalDelivery RunsDelivery Runs

ConsumerConsumerSatisfactionSatisfaction

ManageManageTransportTransportfrom Originfrom Originto Hubto Hub

VISIBILITY PIPELINEInformation FlowInformation Flow

Integrated Product Flow (Shipping)Integrated Product Flow (Shipping)

InventoryInventory

Financial FlowFinancial Flow} Integration

Consumer DemandConsumer Demand

Bonded RegionalBonded RegionalHubbingHubbing

Retail StoreRetail StoreDeliveryDelivery

Distribution CentersDistribution Centers

CustomerCustomer--drivendrivenDemand ChainDemand Chain

Enhancing the Demand ChainEnhancing the Demand ChainEnhancing the Demand Chain


China : Challenges & OpportunitiesChina : Challenges & Opportunities

China is becoming the Manufacturing Center of the

World

China will become the Largest Consumer Market of

the 21st Century (in stages)

This will require radical changes in global business

strategy


Li & Fung Group

Case Study: “Virtual Manufacturing”


Global sourcing network of 68 offices in 40 countries

Li &Li & FungFung TradingTrading

Europe & TheMediterraneanAmsterdamCairoDenizliFlorenceIstanbulIzmirLeedsManchesterOportoRomaniaTunisTurin

BeijingDalianDongguanGuangzhouHepuHong KongHuizhouLiuyangLonghuaMacauNanjing

NingboQingdaoSeoulShanghaiShantouShenzhenTaipeiTokyoZhanjiangZhongshan

North Asia

South AsiaBahrainBangaloreChennaiColomboDhakaJordanKarachiKathmanduLahoreMumbaiNew DehliSharjah

BangkokHo Chi Minh CityJakartaJohor BahruManilaPhnom PenhSaipanSingaporeYangon

SouthEast Asia

The AmericasBostonDominican RepublicFloridaGuadalajaraGuatemalaHondurasMontrealNew YorkNicaraguaUruguayVancouver

DurbanMadagazcarMauritius

South Africa


CUSTOMERCUSTOMER

Li & Fung does the High Value-Added Front-and-Back End activities in Asia

Raw Materialand Component Sourcing

Raw Materialand Component Sourcing Managing Production

Managing Production

Organises the lower-value-added middlestages through its network of worldwide suppliers and factories

TextilesTextiles

ZippersZippers ButtonsButtons

YarnsYarns

Fashion Wear Supply Chain NetworkFashion Wear Supply Chain Network

FRONT ENDDesign

EngineeringProduction Planning

FRONT ENDDesign

EngineeringProduction Planning

BACK ENDQuality Control + Testing

Quota ManagementLogistics

BACK ENDQuality Control + Testing

Quota ManagementLogistics


Thailand(Cutting, Making &

Trimming)

United States(Fashion Wear)

Korea(Yarn)

Taiwan(Dying & Weaving)

Example of Fashion Wear Supply Chain NetworkExample of Fashion Wear Supply Chain Network

AsiaAsia--wide Virtual Manufacturing Networkwide Virtual Manufacturing Network

10.000 shirts

6 factories

3 countries

Europe(Fashion Wear)


IDS Logistics Distribution Network within AsiaIDS Logistics Distribution Network within Asia

Regional Hubs

Distribution Centers

Regional Hubs strategically located inChina and Singapore

42 Distribution Centers across Asia withmultiple sub-depot networks

An extensive in-country MicroDistribution Delivery capability

Panyu

SingaporeMalaysia

Thailand

Hong Kong

Taiwan

Philippines

Shanghai

Indonesia

Vietnam

Urumqi

Wuhan

Xian

Nanjing

Zhengzhou

Tianjing

Zhuhai

Chengdu

Brunei


Singapore Regional SCM HubSingapore Regional SCM Hub


Case Study: “Regional SCM Hubbing”


Impact of Regional SCM HubbingImpact of Regional SCM Hubbing


Australia China Philippines Thailand Malaysia IndonesiaEuropeU.S.

Example of an Inefficient Supply ChainExample of an Inefficient Supply Chain


Regional SCMRegional SCM HubbingHubbing Supply Chain EfficienciesSupply Chain Efficiencies

Australia China Philippines Thailand Malaysia IndonesiaEuropeU.S.

4PL Supply Chain Integrator


Service Offerings and Market SegmentsService Offerings and Market Segments

ShippingCoordinationwith Vendors

ConsolidationTrucking

ExFty FOB

Supply Chain Services

Shipping DistributionCentres Retail

Stores

Integrated Flow ServicesInventory

Management

FreightForwarding

CustomClearance

CIFLDP

Hubbing

Integrated Flow ServicesInventory

ManagementServices

Solution

Optimized ShippingServices

IntegratedFlow Services

InventoryManagement Services

Buy Shipping, Transport, and clearance on an aggregated basis. Basic Online Tracking ofshipments. Single Billing either as principal or service fee model

OSS + Redefining the Supply Chain including KPI measurement of ServiceProviders. Transparency of rates through neutral benchmarking. Costcomponent analysisCreate P.O. & Define Optimal Order Quantity. Provide InventoryVisibility across the supply chain and implement KPI performancemeasures

HUB


Original Logistics ChainOriginal Logistics Chain

Europe

China

Taiwan

Hong Kong

Japan

Philippines

Malaysia

SingaporeIndonesia

Thailand

India


Europe

Supply Chain Model

China

Taiwan

Hong Kong

Japan

Philippines

Indonesia

Thailand

India

Australia

(Aggregation of Orders Across all Markets)

FIRST PHASEFIRST PHASE

• Coordinating shipmentof finished productsfrom manufacturingplants in Europe

• Consolidating sub-components to savelogistics costs and extramarkup by themanufacturing plants

SECOND PHASESECOND PHASE• Sub-component

assembly• Re-packaging• Labeling• Sorting & Packing• Order Processing

Singapore Regional SCMHub

THIRD PHASETHIRD PHASE

• Average transit timeto markets reducedfrom 90 to 5 days

• Create “VirtualWarehouse” with noMOQ restrictions

• Create dynamicsales distributiondelivery network


Europe18DCs in 11Asian Markets

Consolidation

• Coordinating finishedproducts frommanufacturing plants

• Consolidating sub-components to savelogistics costs

• Sub-componentassembly (126 SKUs)

• Re-packaging• Labeling• Sorting & Packing• Inventory

Management

Sub-componentSuppliers

Freight

LocalDelivery

ManufacturingPlants

FreightRegional Hub

Asian HUB

• Average transit time tomarkets reduced from 30to 5 days

• First year savings ofUS$356,000 throughbenchmarking of freightand local delivery fees,etc.

CaseCase Study:Study:

““Regional Supply Chain HubRegional Supply Chain Hub”” (Year One)(Year One)


Increased Sales• Sales of hubbed

product hasincreased by 300%

Lower Cost• Savings of over

20% on productvalue, andexpansion toaggregate othercommodities viathe SCM Hub

• Savings fromsub-componentassembly &sourcing in lowercost locations

Lower Lead Time• Improved lead time

from an average of 90to 5 days

• Gained a competitive

advantage for orderlead time over theirmain Asiancompetitors

• Eliminate risk of lostsales

Case Study:Case Study:Impact on the Supply Chain (Year One)Impact on the Supply Chain (Year One)


India: Future OpportunitiesIndia: Future Opportunities

India has become the Leading Outsourcing Services Center of

the World (I.T Development, Customer Service Support,

Financial Analysis, Medical Diagnostic Support, Legal Analysis,

Pharmaceutical and Biotechnology Development etc.)

India will become the 3rd largest Consumer market in the

world within the next 10 years.

India will eventually become a Leading Secondary

Manufacturing Center as Infrastructure further Improves.

The Consumer Market will Dramatically Grow with a Rising

Middle Class.


Case Study: “The Indian Value Chain”


INDIAINDIA


CyberlogCyberlog: Supply Chain IT Systems: Supply Chain IT Systems


Global Demand Chain ProcessesGlobal Demand Chain ProcessesGlobal Demand Chain Processes


CyberlogCyberlog: SCM Dashboard Visibility: SCM Dashboard Visibility

Copyrights @ 2008. All Rights Reserved. Arshiya International Ltd.


CyberlogCyberlog: SCM Dashboard Business Insight: SCM Dashboard Business Insight


Singapore GovernmentSingapore Government’’ss TradeXchangeTradeXchange


Shipment Tracking ScreenShipment Tracking Screen


Single Integrated FlowSingle Integrated Flow


Typical MultiTypical Multi--location Distribution Networklocation Distribution Network


Streamlined Distribution NetworkStreamlined Distribution Network


GencoGenco India: Value PropositionIndia: Value Proposition


INDIA HUBBINGINDIA HUBBING


Retail DistributionRetail Distribution


ArshiyaArshiya’’ss Project DiamondProject Diamond

FTWZ Hubs

Sub Hubs

Rail Network


ArshiyaArshiya’’ss Project DiamondProject Diamond

Sub Hubs

FTWZ Hubs

Rail Network

Virtual DistributionNetwork


ArshiyaArshiya’’ss Project Diamond & Project EmeraldProject Diamond & Project Emerald

Sub Hubs

FTWZ Hubs

Rail Network


Industry RecognitionIndustry Recognition


Pearl River Delta

United StatesEurope

Asia

China Shanghai

SingaporeYantianNansha

Huangpu1

Shekou

Lianhuashan

Zhongshan

Hong Kong

MacauZhuhai

SingaporeSingapore HubbingHubbing:: EntrepotEntrepot betweenbetweenChina/Asia and the WorldChina/Asia and the World


Singapore as a Pivot Point LeveragingSingapore as a Pivot Point Leveragingthethe ““Reverse LReverse L”” for Strategic Advantagefor Strategic Advantage

Asia Supply Chain Control Center

(Linked to China and India)

Coordination Point for futureVirtual Manufacturing

(Linked to China & Asean)

Financial Transaction Center

High End Technology DevelopmentCenter

(Linked to India)

Bio Medical Design & RegionalPharmaceutical Hub

(Linked to India)

ASEANINDIA

CHINA

Copyrights @ 2008. All Rights Reserved. Arshiya International LtdCopyrights @ 2008. All Rights Reserved. Arshiya International Ltd.

THE RISE OF ASIA WILL LEAD TO NEW MODELSOF SUPPLY AND DEMAND CHAIN MANAGEMENT

DRIVING NEW INNOVATIONS GLOBALLY

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