The Current State of DC Technology in China

A team from Tompkins International was just at the CeMAT Asia event in Shanghai to talk with people who lead material handling operations and technology for companies in China. The show was a big success, and the team did a great job!

Denny McKnight, a partner with Tompkins International, shared some thoughts in this interview from the show, and you can also see some photos taken at CeMA.


Denny presented some valuable information to attendees on the topic of order fulfillment technologies in China for expanding markets. And because the China market is exploding these days, I thought others might also find this information to be beneficial.

First off, do you know what DC technology is available in China and how is it used? There are four categories you should be familiar with:

Information Technology Systems:
For the most part, legacy or Enterprise Resource Planning (ERP) systems are prevalent in the warehouse and distribution centers of China. However, work goals and tasks are not always managed as efficiently as they could be, and manual entry of data is typical.

Storage Systems:
A wide range of technology is at work here, and typically the right technology is being used for the right operation; however, logistics can be an issue as there is a mis-match between storage capacity and the use of industrial trucks and their capacities.

Order Fulfillment:
This represents a major area for great improvement, and ultimately the cost savings that come with these improvements. There are too many product touches during fulfillment operations in China, and paper-based picking is widely used.

3PL Usage:
Contracts with 3PLs in China are for short durations, and the use of higher technology solutions for 3PLs is too expensive for most to take advantage of as yet.

So, there's certainly a lot of opportunity for companies moving operations into China as DC technology throughout supply chains becomes further established there. More useful information about China can be found in this PDF of the presentation from the event.

Does your company have a China strategy? What information can you add to what we know about DC operations in China?

Jim
Tompkins Associates