CASE TWO: Asia Supply Chain Reengineering

Since 2002, Oriental Logistics has provided logistics services to an American manufacturer of home and mobile audio equipment. The customer’s product offerings range from speakers, subwoofers and amplifiers for home, automotive and marine applications as well as satellite radio, HD Radio and iPod compatible audio products. The customer has set up its manufacturing plants in China and Vietnam for Asia-Pacific sales distribution. In order to exert high control over its value chain by minimizing the total logistics costs within the supply chain, they required a logistics provider able to manage the communications along its vertical supply chain and distributor network.

Oriental Logistics became the 3PL provider for the customer’s Asia-Pacific region in 2002. Oriental performs the functions of the logistics hub in the Asia region and operates that manages the import/export shipments. With its expertise in combining logistics with information technology, Oriental helps to coordinate with the customer’s tiers of manufacturers for the storage of import shipment and forwarder networks for handling export order fulfillment. It has been able to provide instant inventory visibility and fast track of shipment status by offering its online platform: WIS (Web Information System), allowing the customer to run logistics operation in the Asia-pacific region without setting up any local branch in Hong Kong.

Apart from general warehouse operations, Oriental also provides various kinds of value-added services customized for the customer. With the help of Oriental, the customer is able to concentrate on its core competencies of sales and product development and plan ahead for the inventory forecast. As a result, there are 5.8 times more in sales items with only 50 percent increase in inventory. In addition, Oriental helps to reduce replenishment time and improve the warehouse throughput, which contributes to the dramatic increase in stock turnover.

Oriental Logistics Holdings (OLH) has witnessed dramatic changes in the global marketplace, particularly in the Greater China region. Fierce competition and the adoption of advanced supply chain management models have resulted in global firms upgrading logistics service standards for their buyers and at the same time requiring 3PL providers to support these challenging initiatives with innovative solutions.

The Customer Partnership Mechanism is the centerpiece of OLH’s innovations in supply chain management. We are always refining the process of obtaining customer feedback to provide continuous service improvements with new service offerings and quality enhancements. The product of our innovation is by our e-platform tool, which gives all logistics related data and information on the web for reporting, or a direct enterprise resource planning (ERP) system linkage as an option for real time information exchange. The evolution of the supply chain partnership model allows OLH to implement many supply chain innovations to face up to the challenges of continuing stringent customer requirements.

Our case studies demonstrate how the continuous customer services improvements in the customer-centric supply chain partnership model achieved measurable results. OLH customers are experiencing significant business growth in the region, with more variety of stocks to supply and more efficient and effective delivery to buyers. As a result, OLH customers can focus on their core specialties with the knowledge that their every logistical need has been taken care of by Oriental Logistics.