John Gattorna

153734 Resource 94086 93210 94146 1166685800541 1201208923737 Controlled China 3pl Supplier Segmentation

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. 9 application/xml false china 3pl china 4pl china logistics china logistics procurement china logistics sourcing china procurement china supply chain china transportation china transportation procurement demand chain John Gattorna Author of 'Living Supply Chains' and originator of dynamic aligment concept http://www.johngattorna.com Shanghai ChengXie Logistics Distribution Co., Ltd Chinese 3pl Specializing in Retail Distribution in China http://www.chengxie.com/ China Transportation Procurement Supplier Behavior and Multiple Supply Chain Alignment http://supplychain.establishinc.com/public/item/153371 Mozilla/5.0 (Windows; U; Windows NT 6.0; en-US; rv:1.8.1.11) Gecko/20071127 Firefox/2.0.0.11 127.0.0.1 127.0.0.1 Establish 208.105.4.154 false true false false true 187565 false false true false false false true 94086 blog blogsite/ChinaSupplyChain/web