Company visit 3 - Kerry Logistic

About Kerry Logistic:

Kerry logistic is a Integrated Logistic provider in Hong Kong. It is a Asia Based Company and their service provide worldwide over 70 countries in the world  Their Head office - Kerry Cargo Center,is located at Kwai Chung which is in Hong Kong. Kerry logistic is also one of the Fortune 500 companies. In worldwide, they have over 600+ offices and business centers and they also hire more than 19000 employees in the world.

Their Mission:

*Home base in Asia

*Strong focus on China

*Provide best logistics to make customers successful

*Create Value of VOICE:

V- Value creation  O- Openness I- Integrity

C- Commitment  E- Excellence

Let see where Kerry Logistic have working at :

1. In 2013-2014 HK financial budget, there are some lands reserved for logistics sector in Tsing Yi and Tuen Mun West for the development of logistics facilities. What will the plans and actions be taken so as to gain the greatest competitive advantages?

Accroding to speaker's response It still need to wait the Final decision on the usage of land. There is a Possibility to change the land use now. The land use may change to Residential land use. (Due to the little land supply in Hong Kong and High revenue by expanding real estate)

Also, they should Expand high value-added logistic service. From financial budget plan 2013 – 2014, the industry is moving towards the provision of high value-added logistics services. Hong Kong is developing into a regional distribution centre for high-value goods, which differs from its conventional role.Just like the example of Canon that mention by Speaker

Rental ability is one another point. As this action can shorten operating time and reduce logistics and inventory costs, After considering the cost and profit factor, As this is the new Land launch by government , Kerry Logistics should increase the possible rental capital in order to strive  for a admission.

Kerry Logistic also need to act promptly. To compete with the other companies apply to this item, Kerry Logistic must act prompt to confer with the government.Also, there will  be a better communication in prompt act also.

Q2. How can Kerry Logistics balance the operational efficiency and cost in door-to-door line haul trucking and LTL service?

Answer is to use hub-to-hub delivery network, operation center is located in major cities in China and Taiwan.

Kerry Logistics owns and manages a fleet of 20-ft and 40-ft container trucks that provide efficient, cost-effective and on-time deliveries to customers.

Also,GPS systems enabling Kerry logistics to track and monitor shipments 24-7 from origin to destination.

For LTL ( Less-than-Truck-Load),Direct collection and delivery, regular departures, high flexibility, reliable lead time, high capacity and freight management are the factors.

Run regular LTL services along multiple lanes in major cities around the world. Also,highly experienced team, well-trained experts — many with local and multilingual capabilities — provide customers with smart, proactive solutions, including design, planning and execution that achieves maximum results.

Q3. If the warehouse inventory was damaged or lost due to some accidents incurred, What policies do Kerry Logistics provide to protect your clients’ interests?

There is a Insurance Brokerage cover any unfortunate circumstance during transportation ,which is specially customized to meet insurance requirements.

Customers can report instantly through online incident report system and obtain the first available advice from the claim handling team.

Also, The licensed brokerage consultant team of Kerry Logistics is capable of customizing an insurance program in any context to obtain optimum compensation.

Q4. How does Kerry Logistics Virtual Buying Office operate and help to enhance the efficiency for inventory management?

This is Similar to SAP .It can help customers better connect with the logistics process. It can increase overall efficiency and reduce the inventory risk.

It is a Advance IT system,strong team of IT technician .VBO is to meet the unique requirements of each and every customer.

VBO functions:

PO management, sourcing spread control, vendor management, vendor performance management, production status tracking and quality control.

Q5.What are your competitive advantages compared to other competitors such as HIT or DHL?

HIT is  container port operator which is focus on transit delivery service.

But Kerry Logistic focus on 3P warehouse logistics . So, they are not direct competitor.

If Compared to DHL,the greatest advantage is that Kerry logistics is an asset based company,more lands is mean that Kerry can provide more flexible service.

After the visit, we got a clearer picture of the Hong Kong logistic industry. Also we think that, I.T. has really changed the definition of logistics.

Besides,we familiar that Logistics is one of the four key industries supporting Hong Kong’s economy and quality manpower is so Important to maintain competitive advantage.

Case study 3 - FedEx

1. How has IT changed the definition of “logistics”?

Old meaning:

Up until, 1980s, logistics was only the handling, warehousing and transportation of goods.

New meaning:

• Combining the functions of materials management and physical distribution
• Concerned with inbound and outbound material flow (within companies and movement of finished goods from dock-to-dock)
• Physical transportation as well as the coordination and control of storage and movement of parts and finished goods.
• Include value-added activities (e.g. order processing, distribution centre operations, inventory control, purchasing, production, customer and sales services)
• Aggregation of

-          physical delivery of parcels

-          management and utilization of the flow of information pertaining to the physical delivery (control over the movement of goods)

• the ability to share information between operations or departments within a company and between organizations to generate operational efficiencies, reduce costs and improve customer services
• To enable businesses to redefine themselves and to re-engineer their selling and supply-chains
• Information came to replace inventory
• Just-in-time inventory management helped to reduce costs and improve efficiency.

2. List the benefits of a virtual supply chain.
1. Build one-to-one relationships with their customers

·         Emergence of electronic data interchange (EDI) and the Internet

·         can match supply to demand without wastage

-          To track back along the supply chain to the point of raw materials

-          To identify points along the supply chain where they could provide management services (e.g. transportation, order processing and related distribution centre operations, fulfillment, inventory control, purchasing, production, customer service, sales services)

·         To interconnect and distribute information to all the players in a supply chain

·         To squeezing time and inventory out of the system

·         By helping customers to redefine sources and procurement strategies so as to link in with other parties in the supply chain (e.g. raw materials suppliers) to increase profitability and reduce costs

·         By integrating services within the supply chain of customers to generate increases in customer loyalty and customers’ switching costs, thus raise the barriers to entry for competitors effectively

2. Keep tracking on the packages

1.      COSMOS (Trigger alert when scheduled events, such as the arrival of a package, did not occur.)

·         All related files and databases were automatically updated

·         Customers can get the information of pickup and delivery of the order

·         The network computers linked over a global Internet Protocol network

·         FedEx employees at any location at any time could track a package through the various steps in the FedEx chain.

3. Improving efficiency and control

·         PowerShip system

·         To provide the most active customers with proprietary on-line services

·         To store frequently used addresses, label printing, online package pick-up requests, package tracking

·         Provide efficient gathering and dissemination of real-time data (Global Operations Command Centre)

·         Online service saved FedEx the cost of  200,000 customer service employees

3. Discuss the role of IT in FedEx’s Business Strategy.

Internal efficiency

·         Able to share information to increate operational efficiencies and reduce costs

·         PowerShip programme improved efficiency and control

·         COSMOS allows automatic updates of all relates files and databases thus route planning and other processes can be speed up

·         Electronic data interchange (EDI) and the Internet

·         Match supply to demand without wastage

·         Track back along the supply-chain to the point of raw materials

·         To interconnect and distribute information to all the players in supply chain

·         Including storing of frequently used addresses, label printing, on-line package pick-up requests, package tracking.

·         All related files and databases were automatically updated.

Global market

·         Able to share information between operations/ departments within a company and between organizations

·         External webpage in Cisco website increase customers’ switching costs and thus raise the barriers to entry for competitors

External customer services

·         Able to share information to improve customer services

-          Provided additional services to the customer

-          Whenever new information was entered into the system by FedEx or by customers through the Internet

·         First to issue hand-held scanners to drivers that alerted customers of when packages were picked or delivered

·         COSMOS allowed customer to keep track of all packages handled by the company

-          Placing barcode on each parcel at the point of pickup

-          Scanning the barcode at each stage of the delivery

·         PowerShip systems provided additional services to the customer

-          Storing of frequently used addresses

-          Label printing

-          Online package pickup requests

-          Package tracking

·         Helps build One-to-one relationships with customers to increase loyalty

4. Discuss the virtual integration of supply chains without ownership.

     Virtual integration is a new form of value chain management. Under such a system, the links of the value chain are brought together by informal arrangements among suppliers and customers. Shipments of the components that your firm needs can be easily arranged through the Internet or a networked computer system. The same type of arrangement allows you to fully serve your customers in ordering, services, or any other needs.

Eliminating inter-company boundaries, replacing physical asset by information flow and integrating suppliers with customers among the value chain by using information technology

In FedEx’s case

Gave away more than 100000 sets of PCs loaded with FedEx software

-          To link and log customers into FedEx’s ordering and tracking systems

Parts Bank

-          Built a small warehouse on the end of its sorting facilities

-          multiple-client warehouse

-          holding parts of some small companies with warehousing problems

-          picked up the parts when the customers call up and order the dispatch of parts

Cisco

-          developed an extranet that allowed its customers to order FedEx services without leaving its website

COSMOS

-          centralized computer system

-          keep track of all packages handled by FedEx

-          data on package movement, pickup, invoicing and delivery

EDI (electronic data interchange)

-          interconnect and distribute information to all the players in a supply-chain

-          help redefine sources and procurement strategies and link with other parties in the supply chain

-          Just-In-Time inventory management

-          Reduce costs and improve efficiency

PowerShip systems

-          storing of frequently used addresses

-          label printing

-          online package pickup requests

-          package tracking

Advantages of the virtual integration of supply chains without ownership

1.       More efficient and easier to control the movement of goods:

2.       Global Operations Command Centre systems-real time data sharing for different parties within supply chain (customer, distributors), trigger alerts for non-event tracking

3.       Accurate

4.       Raise entry barriers

5.       Updated Information

6.       Reduce cost through outsourcing non-core activities

7.       Allow organization to focus on their core competencies of product design, marketing and other advanced Technology

8.       Reduce cost: Reduce administrative costs, payroll costs

5. What are the factors that put pressure on FedEx to consolidate its operations, while remaining customer-focused?

1.       competition

-          all  major transportation and delivery companies invested a lot in technology

-          UPS

-          Invested US$9 billion on IT

-          Formed 5 alliances to disseminate the logistics software

-          DHL

-          Invest in handling systems, automation. Facilities and computer technology

-          Dominated the UK market

-          TNT

-          Launched the world’s first global price checker service on its website that allowed customers to calculate the price of sending a consignment from one place to another anywhere in the world

-          QuickShipper, online access to TNT’s range of distribution services from pricing to delivery

2.       internet market

-          the internet changed the basis for competition for most businesses

-          low cost and diversity of applications made it appealing and accessible

3.       e-tailing

-          The express transportation needs associated with the growth in e-tailing (expected to reach US$7 billion in 2000) and business-to-business EC (expected to reach US$327 billion by 2002) presented enormous opportunities for companies

4.       rising fuel price

-          erode operating income

5.       Demand for quality service by customers

-          Customers always want more convenient service

-          High quality with low costs is the best in their preference