Excerpt from: China Supply Chain and Logistics Strategy
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| December 21, 2006 | | Comparing Potential 3pl Procurement Approaches in China | In the previous post I segmented the 3pl supplier market in China according to the following categories: Risky mom & pop ops, Rising stars, National stabilizers, and
Multi-national collaborators.
The following are some examples of logistics service providers operating in China as well as an explanation as to why they could be placed into the following procurement categories. Please note that the actual segmentation of 3pls for a particular company depends on their unique marketplace, organizational culture, and most importantly their customers in China. Each company will exhibit slightly different results when segmenting their potential 3pl supplier base.
Risky mom & pop ops
Example: DLD Logistics
URL: http://www.dld56.com/main/main.asp
Description: A Chinese 3pl with an entrepreneurial culture offering innovative solutions. They gave an interesting presentation at a recent China Supply Chain Council event in Shanghai which demonstrated their entrepreneurial and innovative approach.
Procurement Strategy: Dominant behavior is focused on innovation and flexibility, suitable for companies requiring speed in new and unstable markets. Service may be unreliable due to newness of operations.
Rising stars
Example: Shanghai ChengXie Logistics Distribution Co., Ltd
URL: http://www.chengxie.com/
Description: A Chinese 3pl offering a low priced basic service that meets the client’s minimum distribution requirements. Company has multinational clients selling cell phones, electronics, and shoes to major retailers in China.
Procurement Strategy: Their dominant behavior is focused on action and speed, suitable for companies requiring a 3pl that has local industry experience, competitive prices, and can deliver according to the requirements of Chinese retailers. Requires active management approach in order to ensure reliability of service.
National stabilizers
Example: Cosco Maoming Logistics
URL: www.penavicomm.com.cn
Description: A regional Chinese 3pl with a national network through their mother company Cosco Logistics, offering transportation services in southern China, particularly in the Maoming area. Typically serves clients shipping bulk commodities in stable markets. Companies using their service may have high price sensitivity and place an emphasis on precedents and systems.
Procurement Strategy: Dominant behavior is focused on stability, efficiency, and processes. Need to emphasize streamlined procurement processes for low cost and high reliability. Suitable for companies selling in stable markets with established patterns.
Multi-National Collaborators
Example: UPS SCS China
URL: www.ups.com
Description: A global 3pl offering nation-wide integrated logistics and supply chain services, mostly through local subcontractors.
Procurement Strategy: Dominant behavior tends to exhibit relatively high collaborative qualities. Need to emphasize working closely with supplier, as the nature of the relationship is trust based. The outsourcing scope is large and complex. Suitable for companies selling in markets where loyalty and relationships are valued and where growth is made through extra valued added services. There is an emphasis on quality and the ability to develop long-term, dependent customer relationships. | | |
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