Importance of Supply Chain
Visibility – the Next Generation
Supply Chain
Anna Lin
- Chief Executive, GS1 Hong Kong
- Shepherd of e-logistics Project Group,
LOGSCOUNCIL
Nov 25, 2011
www.gs1hk.org
Trading & Logistics Industry
Largest contribution to GDP among 4 Pillar Industries
HK’s robust re-export growth led by China’s strong export
performance in 2010.
25%
24.1%
Percentage Contribution to GDP
20%
15%
15.2%
13.1%
10%
Re-export growth 123% in
the past 10 years.
70% of the throughput
handled in HK is related to
South China Region,
approx. 20% related to
transshipment
Transshipments cargo rose
by an annual 15%
5%
Each Week: 400 liner
services to 480
destinations
3.3%
0%
Trading &
Logistics
Financial
Services
Tourism
(Source: Census and Statistics Department)
Professional
Services
6,000 flights to 1600
locations worldwide
(Source: TDC statistics, HKIA )
Hong Kong – a Global Supply Chain Manager
Guangdong:
Manufacturing base
with concentration of
contract
manufacturers
Hong Kong:
Gateway to backend
manufacturing cities
with high
concentration of
buying/managemen
t offices for
sourcing & logistics
support
Located at the centre of a
global and multi-modal
network of cargo and
transport routes by land,
sea and air, Hong Kong
offers maximum choice,
flexibility and efficiency
in supply chain
management.
100,000 HK-invested
enterprises in Guangdong
( 2009 yr-end )
50% outward processing
operations
© 2011 GS1 Hong Kong
Emerging Trend for Global Logistics
Supply Chain
Over 50% of the responding companies agreed on
the importance of supply chain visibility and had
supply chain visibility initiative over a year……
Increasing visibility is a critical strategy to
dramatically reduce cost and improve supply chain
operation performance in the global economy.
 End-to-end Visibility is at the heart of the next-generation
supply chain
(Source: Supply Chain Visibility Excellence Research Preview, Aberdeen Group, October 2009)
APEC Supply Chain Visibility
In 2010, APEC has proposed a Supply Chain Visibility
initiative to facilitate trade and create values for supply
chain stakeholders amongst APEC economies.
Values
The establishment of a visibility platform to share
cargo movement information will
Reduce consolidated stocks
・lead-time to be reduced by 1.1 days on average
・consolidated stocks to be reduced by 1.6 days’
worth of stock on average
Reduce workload
・exporting workloads to be reduced by 9%~30%
・importing workloads to be reduced by 10%~25%
Recommendations
 Standardization of systems
interfacing (EPCIS) of cross-border
cargo movement
 APEC Guideline on Supply Chain
Visibility implementation
 Cross-border pilot projects amongst
APEC economies
Supply Chain Visibility
Value to Hong Kong Logistics Industry
1. Provide real time and reliable logistics information
to facilitate cross border trade
2. Strengthen Guangdong - Hong Kong collaboration
and integration
3. Enable logistics operation to provide value-added
services for greater customer satisfaction
4. Enhance the competitiveness of Hong Kong’s
logistics industry
1. Provide Real-time Logistics Info to
Facilitate Cross-border Trade
In 2011, LOGSCOUNCIL embarked on an e-Logistics supply chain
initiative (“Supply Chain Visibility Feasibility Study”) to
Investigate the business values of cross-border visibility
Implement a feasibility study on economic, technology and operation
Conduct pilots: Trade route – Guangdong  HK Asia
Hong Kong Logistics
Information Platform
China Logistics
Information Platform
Location, Seal Status,
Container Number
1st Pilot
DongGuang
Factory
2nd Pilot:
Trucking
Asia Logistics Information
Platform
Location, Seal Status, Container
number, Cargo Info
Hong Kong
Customs Clearance
Customs Clearance
Hong Kong
Asia Countries
Ocean
Guangdong West
Guangdong West Port
Feeder
Location, Seal Status, Container
number, Cargo Info
Buyer
Asia Countries
Ocean
Buyer
2. Strengthen Guangdong - Hong Kong
Collaboration and Integration
Road Cargo System (ROCAS)
 Everyday, an average of around 44,000 vehicles cross the land
border between Hong Kong and the Mainland.
 In an attempt to facilitate customs clearance, Hong Kong Customs
and Excise Department launched the Road Cargo System
(ROCAS) in 2010, providing the necessary infrastructure for
electronic Customs clearance of road cargoes.
 The System has been fully implemented in November 2011.
3. Enable Logistics Operation to Provide
Value- added Services for Greater Customer
Satisfaction
Enabling Source-to-store Supply Chain Visibility
 A group of leading apparel retailers and brand manufacturers, in US
including Walmart, Macys, Jones Apparel, JC Penney, VF, Levi's
have formed a consortium to facilitate the wider adoption of RFID
item-level tagging for apparel goods within the retail environment.




Significant benefits of item-level tagging have been seen for the
industry, including
95%+ accuracy ( industry average 62%) Bringing huge improvement in
inventory accuracy,
50% drops in Out-of-stock
Reduced time spent receiving goods at the store
Reduced time required to perform cycle counts
(Source: University of Arkansas)
 To enable the industry to reap the full benefits of item-level tagging,
the consortium is now pushing the tagging process back to the
source of manufacture, realizing source-to-store supply chain visibility.
Enabling Source-to-store Supply Chain Visibility
Retailers in US
Manufacturers in China
Deploying RFID tags at the source, from
fabric, parts, garments
Visualize the whole process on a real time basis via
EPCIS standard based network
4. Bringing Logistics Quality to a New Level
Hong Kong - A Leading Wine Hub
 With the announcement of duties exemption on wine in 2008,
Hong Kong has become the first free wine port among major
economies and the world’s second largest wine auction centre.
 To ensure better quality control of wine, especially real-time
temperature monitor, three wine traceability projects,
involving tagging of wines (bottles, boxes and pallet levels)
at the origin vineyard warehouse, shipped from Italy to
Hong Kong’s importers and retailers.
 Product traceability information and temperature are real-time
captured on a common visibility platform, monitoring wine
quality along the entire supply chain.
RFID tagging-enabled EPC Data Interchange
Implementation of Global Wine Supply Chain
Visibility Project
EPC Data Interchange /
Event Query
Italy EPCIS
( RFID tags installed )
Tag 4
Event
Event
Event
Event
Event
Upload
Upload
Upload
Upload
Upload
Tag 3
Tag 1
Storage
1) Install a
sensor-based
EPC/RFID tag
at warehouse
Hong Kong EPCIS
Tag 2
Pack
1) Install
Enough stock
EPC/RFID
to fulfill the tag
-order
bottles,
cases and
 Stocking
pallet
takinglevels
How long
2) Install
sensor How
basedmany
people
EPC/RFID
 How
tag –accuracy
pallet
level
Dispatch
Container Port
Warehouse
Hong Kong
Port
Warehouse
1)
Read will
andthe
 When
1)
 Read
When the
the
When
the
wine  Inventory
1) Read
the
1) Read level
the
associate
the
wine
be shipped?
EPC/RFID
tag is arrived

Out
of stock tag
wine
is loaded
to
EPC/RFID tag
EPC/RFID
EPC/RFID
tag
 Does
shipment
- pallet
level
stocking
on
the ship?
Hong
Kong?
- pallet
level  Over
- cases
level
- bottles,
contain
thecases
right
upload
 and
Shrinkage
and upload  Stock
and upload
and pallet
products
onto EPCIS
replenishment
detection
onto EPCIS
onto EPCIS
levels and
 Human
error
 When
2) Read
 Isupload
the onto
 How
manythe
sensor-based
EPCIS
environment
fine?
 Room availability
EPC/RFID tag
for stock
and upload
 When
onto EPCIS
Wine Retail
Read the
1)
Backroom
EPC/RFID
inventory
level tag
(
cases
level
bottles of wine)
and upload
 Shelf
onto EPCIS
replenishment
2)
When
Read the
Howsensor-based
many
EPC/RFID tag
and upload
onto EPCIS
Summary
End-to-end visibility is the key enabler to achieve greater efficiency and
quality in logistics. Supply chain visibility coupled with e-logistics
connectivity, will help Hong Kong better integrate with China and the
global marketplace to facilitate cross-border trade and further
strengthen its position as the regional logistics hub and global supply chain
manager.
Visibility
Collaboration Enhancing Hong Kong’s logistics
industry’s Competitiveness
Value
Quality
Technology
Environmental
Sustainability
Contact Details
Anna Lin
Chief Executive Officer
GS1 Hong Kong
Email: [email protected]
GS1 Hong Kong Office
22/F, OTB Building,
160 Gloucester Road,
Wanchai, Hong Kong
T (852) 2861-2819
F (852) 2861-2423
W www.gs1hk.org