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Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements.
Source: Council of Supply Chain Management Professionalshttp://www.cscmp.org
What is Logistics
Evolutionary Timeline of logistics
1958 2012
Forrester (1958, 61)* Physical distribution
Bowersox (1969)* Integrated logistics
Haulihan (1985)* Supply chain mgt.
Zin & Bowerson (1988)* Concept of postponement
Lee et al. (1997)* Bullwhip effect
Bloemhof-Ruwarrd (1995)* Green supply chain
SC sustainabilityTop 3 SC challenges in the next 10 years as described by managers:Sustainability & CSRRisk management in global
logisticsEmerging markets
Modern Logistics in China
Concept of “Wu Liu”
Modern Logistics Industry Started from late 1990’s China’s logistics industry experienced rapid growth since
China’s opening up and reform in 1978. In 2007, the nation’s total social logistics value reached
RMB 74.8 trillion, up 25.5% over 2006 (mainly boosted by the logistics demand of industrial goods, imports and exports).
Modern Logistics in China
Understanding of modern Logistics by people Still a lot think logistics is transportation & warehousing
Logistics Human Resource By 2010, market demand for logistics professionals with
education of diploma or above: 300,000-400,000. People working in the industry that need training: >1 million Logisticians have been listed as among 12 professionals that are
in high shortage in China In Shanghai itself, there has been a shortage of Logistics
professionals as large as 500,000.
History
1949-1979 Planned Economy Period Transport and warehousing were mainly done by wholesalers
and merchant transport & warehousing companies, among which wholesalers totaled 80% of market share.
1980-Mid 1990’s Innovation Period Manufacturers and retailers started to build their own
warehouses and fleets. Transport & warehousing companies began to provide
services directly to manufacturers. Government started experiment of logistics parks.
Chinese Logistics Industry-History and Structure
History (continued)
Mid 1990’s-Now Modern Logistics With foreign investment coming into China who also
brought in modern logistics principles and network systems and increased market competition, more and more manufacturing companies realized the importance of logistics.
At the same time, more and more joint venture 3PL companies and private logistics companies appeared in the market.
Some manufacturing and merchant enterprises started to turn towards logistics outsourcing. This has implied the start of modern logistics industry in China.
Chinese Logistics Industry-History and Structure
Structure
GovernorsMinistry of Commerce Ministry of RailwayMinistry of CommunicationCivil Aviation AdministrationCustoms General Administration State Administration of TaxationThe Ministry of Public SecurityState Administration for Industry and Commerce
Chinese Logistics Industry-History and Structure
Now combined as Ministry ofTransportation (rail, water, road)
Structure (continued)
Companies in itThird-party Logistics Companies In-house Logistics Division in Manufacturing or Merchant
CompaniesLogistics Education and Research OrganizationsLogistics Equipment and Facility CompaniesLogistics Information Service and Consulting CompaniesLogistics Real Estate Investors
Chinese Logistics Industry-History and Structure
Central Policies
Current Policies Transport Related Policies Distribution Related Policies Foreign Investment Policies Taxation Policies Import & Export Policies Custom’s Regulations Inspection Regulations, etc.
Chinese Logistics Industry-Policies
Central Policies
Nine ministries jointly announced <recommendations on promoting the development of Chinese Logistics Industry>(2004).
It says government will improve logistics development environment from three areas: administration, taxation and regulation of market system. It also announced 7 measures to be executed. National Development & Reform Commission, 13 government ministries,
2 associations: Ministerial Associate Meeting System (2005).
Logistics has been set to be one of the 10 strategic industries that need to be greatly developed (2009).
Chinese Logistics Industry-Policies
Municipal Policies
Shang Hai: 10th. 5-year Plan (first of the kind) Logistics being one of the four strategic industries Three areas of logistics development:
• Port Logistics (airport, deep seaport) • Distribution Logistics• E-commerce Logistics
Three Logistics Parks• Pu Tuo Logistics Park • Pu Dong Airport Logistics Park• Waigaoqiao Bonded Zone
Chinese Logistics Industry-Policies
Shanghai, Shenzhen, Qingdao, Tianjin, Guangzhou, Xiamen, Ningbo and Dalian are listed among the worlds top 50 container ports.
Shanghai Port: freight volume in 2005 reached 443 million tons, exceeded Singapore Port for the first time.
Shanghai and the port
A 20-year, US $14.5 billion project that aims to build 52 berths along
13-km waterfront
with a draught of at least 15 meters
at the Yangshan Deepwater Port
Shanghai and the port-Yang’shan Port
First Stage Completed on Dec. 10, 20051.6-km total length along seashore5 container berthsTotal investment 6 billion RMB 32.2 km sea bridge with 4 driveways
http://www.yangshanterminal.com/ysportal_english/index.htm
Shanghai and the port-Yang’shan Port
WTO Commitment
From 2005, areas include road freight transport, leasing, wholesaling and retailing of general products and their distribution, import & export truck transportation, etc. have been opened to overseas investors.
Chinese Logistics Industry-Market Openness
The Impact of Economic Crisis
The total value of social logistics achieved a fast growth of 26.7% in the first three quarters of 2008.
Impacted by the global financial crisis, China's logistics industry had dropped since Sep, 2008, especially the sharp growth drop of port cargo turnover.
The Impact of Economic Crisis
With the further influences of global economic crisis, China’s logistics industry will step in the period of slow growth and structural adjustment, which will also create new development opportunities for some 3PLs.