Logistics In China -- Missing Standards And Lack Of Service

While Chinese customer requirements closely mirror western standards, delivery of these requirements is not being met, according a study by DHL Logistics, the China Supply Chain Council and Barkawi, a consulting firm.

Over 180 companies were evaluated for the survey which took into account topics such as efficiency of infrastructure, logistical services, outsourcing, IT systems and data management in service logistics from the high-tech, electronics, medical engineering and automotive industries.

The need for high-quality services like short-term part deliveries within two to four hours, competent call centers, general tracking and tracing, complete stock visibility, multi-vendor stock management as well as third party repair is comparable to western countries.

However even in cities such as Shanghai, Beijing and Shenzhen service is lacking.

Geographic diversity is one factor affecting service levels. The study reported that 60% of the companies use multi-level distribution channels to reach their customers. For this reason, appropriately higher stock costs must be absorbed.

Additionally, Chinese companies look to low prices as their first priority when it comes to outsourcing; the result being that outsourcing partners are selected "less for the scope and level of their service than for cost reasons."

In the field of transportation, where DHL, Exel, EMS and UPS are among the leading service providers, outsourcing potential is almost fully tapped (up to 95%). Warehouse outsourcing is likewise well developed but still has a potential for development left according to the survey.

With regard to IT systems, Chinese companies tend to use "home-grown" solutions for CRM (Customer Relationship Management) and APS (Advanced Planning Systems) tools.

China Supply Chain Council


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