Date post: | 11-Nov-2014 |
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INTEGRATED DISTRIBUTION SERVICES GROUP (IDS)
Redefining the Asia Distribution Landscape
THE ASIAN MARKETAn Overview
Opportunities in Asia
• Fastest-growing consumer market in the world
• Mosaic of Nationalities, languages, and cultures
• Provided the greatest long-term market potential
Challenges in Asia’s Supply Chain System
• Complex supply chain system• Difficulty in getting access to the final consumers• Freight cost = 8-12% of total product price
Background on the Asia Supply chain landscape
• Most brand owners generally used local Asian distributors to import goods
• Pre-1990’s :generally lacking in high quality consumer goods
• Local demand generally exceeded supply of imported goods
• Mark-ups of 20-30%
Background on the Asian Supply Chain Landscape
• Change around late 1980s• Global companies started to set up operation in Asia
(Wal-Mart, Carrefour)• Consumers had more product choices• Both Asian and Western brand owners started to
develop new products to capture growing consumer demand
• Consumers became more demanding (low prices)
• Traditional distributors started to feel the squeeze from both directions
• Brand principals no longer wanted to give distributors the lucrative margins
• Supply chain issues:
Logistics & Client Account
Warehousing Management
Background on the Asian Supply Chain Landscape
INTEGRATED DISTRIBUTION SERVICES GROUP (IDS)
Redefining the Asia Distribution Landscape
IDS Overview and Historical Context
• Challenges in Asia distribution landscape
• Li & Fung Group (LFG) over 100 years experience in Asia-West distribution
• IDS as a result of “reversing” LFG’s trading model
• Acquisition of Inchchape Marketing Services (IMS)
A New Business Model
Make use of old assets + Think of a Better Business Model = Value-Chain Logistics
Logistics as a fundamental enabler to drive maximum efficiency
Position logistics as the main front-end business connecting traditional distribution service and manufacturing
It now calls itself an Integrated Distribution Service Provider
STRATEGIC PLANS (1999-2001, 2002-2004)Reorganization and a Menu of Services
1999–2001, 2002-2004Challenges
Manage
change
Create a new
culture
How?
Allow customization.
Prioritize logistics, followed by technology.
Reorganize as a regional company with 3 business streams and key support functions across Asia.
Do away with country-based structures.
Business Streams
Logistics Distribution Manufacturing
Logistics
Ship
Store
Deliver
Distribution
Promote Sell Bill Collect
Manufacturing
Make Test Package
STRATEGIC PLAN FOR 2005-2007Rewarded in the Capital Market
Expansion
China
Malaysia
Singapore
United Kingdom
Taiwan
Philippines
USA
Customer Experience
Global brands as its key clients!
VSOperating the specific
functions internally Outsourcing
Global brands as its key clients!
IDS’ value proposition is “compelling”• Allowed the brand
owners to focus on their core competencies (e.g. marketing or product design)
Differentiator: China Advantage
• Invested significantly in operations in China• Built a national distribution network
• In 2004, IDS received a nationwide license• Expanded further
• Held first mover advantage!• Helped drive brand owners’ growth in China
Unique China Advantageover 100 years of China supply chain experience
acquisition of Inchcape assets and investments in various Asian countries
optimal supply chain serving this
region.
Challenges
Talent Management
Organizational Agility
Client Complexity
Competition• NO competitors in Asia that offered this type of complete
pan-Asia end-to-end array of services. • A pioneer of the ‘Value-Chain Logistics’ concept
• Only have competitors of varying sizes and capabilities in EACH of its menu service offerings
Growth and Aspiration
Organization Restructuring
Account-Focused Model for Revenue
Management
Redefining Value-Add The Three
Growth Drivers
Global Ambitions
I won’t call it a revolution; I think it’s been an aggressive
evolution.
Where is IDS heading?
IDS wants to be able to design comprehensive global supply chain solutions that are truly end-to-end: from the sourcing of the raw materials to the delivery of goods
to consumers anywhere in the world.
THANK YOU!
A Global Premium Beverage Alcohol Company
Each country’s market in Asia independently fed it’s respective demand forecast
Problems: high inventory build-up, slow response to market change, etc.
IDS asked to deliver a “regional hubbing solution”
Identify Optimal Geographic Location, Optimize tariff, Packaging Solutions
Location Selection
Customized Warehousing Solution
Value Added Services
Competitors