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Study Shows Chinese Attitudes Open to Help on Logistics (Touchpoints by Andrew Jensen)

By Andrew Jensen
5/5/2008 12:00:00 AM
Consumer goods producers around the world are falling all over themselves to enter the Chinese market, and no longer just to take advantage of its cheap labor pool.

A growing middle class brought on by the newly minted economic superpower’s astonishing growth rates during the past decade is widely seen — along with other emerging markets — as a hedge against the receding consumer spending here in the U.S.

Rapid growth has meant a rapid pace for infrastructure improvements in China both at its coastal ports and in its rural core as increasing affluence in economic hubs forces more factories inland and begins to erode China’s edge of a low-priced workforce.

Moving materials inland and finished products back to the coast has exposed China’s lack of experience in logistics while opening a door for Western expertise.

That observation was backed up with a noteworthy statistic revealed at the Sixth Annual Shipper Symposium hosted April 22-24 in Rogers by Transplace, a third-party logistics provider based in Plano, Texas, and with offices in Lowell.

Auburn University professor Joe Hanna, Ph.D. and chair of the department of aviation and supply chain management, discussed the findings of the 12th annual “State of Logistics Outsourcing” study.

While just 61 percent of Asia-Pacific region companies valued “personal relationships on operational level” as a factor in judging the benefits of using 3PLs (the lowest of any region), Hanna pointed out that 55 percent of Asian-Pacific region companies said they valued “capability of the 3PL to proactively provide extra advice on supply chain improvements.”

The responses to the latter question were much lower for North America (34 percent), Europe (28 percent) and Latin America (38 percent).

“The growth is so rampant right now, they’ve got some serious challenges to get the infrastructure in place quick enough,” Hanna said after his presentation. “There is a ton of opportunity for U.S. expertise to sort of assist and infiltrate the Chinese market and enhance their ability to practice logistics effectively.”

Hanna acknowledged political barriers to foreign entry in traditionally tight markets like China, but said the study results show logistics is at least one realm the Chinese would welcome more Western influence.

“They are very open for the most part to outside assistance and outside intellectual capital as much as anything,” he said. “They’re interested in building academic partnerships, in building business partnerships … you’re seeing a lot of openness to opportunities in that area.”

Shiloh Partners With Teradata

Shiloh Technologies of Bentonville has announced a partnership with Teradata Corp., a publicly-traded company based in Miamisburg, Ohio, with operations in more than 60 countries.

Teradata and Shiloh will combine to provide an additional platform for Shiloh’s enterprise demand signal repository solution for consumer packaged goods.

According to Shiloh, the partnership, “gives consumer products manufacturers the decision support platform needed to analyze point-of-sale data from any retailer and reveal previously unknown patterns in consumer demand data.”

Keith Henry, Teradata vice president for manufacturing global industry solutions, said that, “with knowledge of a product’s true demand, a company’s supply chain can be transformed into a demand-driven supply network and address the concurrent longstanding challenges of out-of-stock situations and excess inventory.”

Shiloh CEO Lisa Bohn, whose software program is now used by more Wal-Mart suppliers than any other third-party program, said suppliers must meet the needs of retailers demanding ever more detailed customer analysis.

“We are particularly excited about the partnership with Teradata,” she said, “due to our shared philosophy on keeping data at the item/store/day level … empowering the end user with maximum flexibility in how to look at the data.”

Annual Vendor Golf Tourney Set for July

The 12th Vendors FORE Education four-man scramble is set for July 18 at Stonebridge Country Club in Fayetteville.

The registration deadline is June 15 and spots for only 30 teams are available.

Cost per team is $1,000 and the tournament goal is to raise $20,000 for scholarships for students at the Walton College of Business Center for Retailing Excellence at the University of Arkansas (registration info is available on the CRE Web site).

In its first 11 years, the tourney has raised around $100,000.

Prizes will be awarded to the top teams and to individuals for closest to the pin, longest drive, straightest drive, etc.

Other activities include a prize raffle and an opportunity for John Daly wannabes to try and outdrive members of the UA Lady Razorbacks golf team.

“Last year we handed out 53 pink golf balls to guys that couldn’t outdrive them,” said tournament organizer Erik Wolff. “The Lady’Backs loved it.”

Sponsorships are still available, Wolff said, ranging from $500 for tee box signage to $2,000 for “premium” sponsorships. So far, Hunter & Michael, Bayer Healthcare and Vision Graphics & Sharp Signs are on board.