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Freeborders (Anteil von Internet Capital = 48%) die momentan am schnellsten wachsende Beteiligung unter vielen schnell wachsenden Beteiligungen von Internet Capital ist. Freeborders ist ein Provider, der das Outsourcing von IT-Dienstleistungen organisiert und überwacht. Man hat inzwischen 400 Beschäftigten in den USA und China, bewegt sich aber bis zum Jahresende auf 1000 Beschäftigte zu, denn man stellt momentan in China 10 bis 15 neue IT-Spezialisten pro Woche ein.
The Logistics of Sourcing In China
Is There a Knot In the New Silk Road?
May, 2005
By Robert J. Bowman
Low-cost labor is driving the stampede of manufacturers to China, but they must also consider the logistics implications of a longer supply chain and under-developed local infrastructure.
Tella bs Inc. was ready to hop aboard the China bandwagon. The $1.2bn maker of communications equipment had an aggressive schedule for shifting part of its manufacturing from Guadalajara, Mexico to China, where production was significantly cheaper. But there were certain factors that the company hadn't considered.
Start with the time required for setup. Tellabs thought it could be up and running quickly, making a fiber product for a crucial subassembly which would end up in finished equipment for big telecommunications customers like Verizon, SBC and BellSouth. Shipping dates were set, based on that expectation. Then came the bad news: Tellabs would need three to six weeks to get the necessary plant fixtures to the contract manufacturer in China.
China's customs procedures appeared to account for much of the delay, says Ben Fabin, the FTTP (fiber to the premises) supply operations manager for Tellabs. Whatever the reason, the company quickly realized that it needed to look more closely at the logistics requirements for setting up manufacturing in China.
For many manufacturers, distributors and retailers, the pull of China is strong. They see a chance to slash overhead, at a time when operating margins are perilously thin. For Tellabs, the need to cut costs was especially compelling. The Naperville, Ill.-based supplier lost $29.8m last year, mostly due to acquisitions and other charges. (Minus those charges, the company earned $160m.) According to Fabin, Tellabs wanted to mesh subassembly in China with final packaging in Mexico, a strategy that could save the company money while retaining its ability to react to last-minute changes in the U.S. market.
But, as Tellabs learned, manufacturing doesn't exist in a vacuum. Companies must pay equal attention to the problem of logistics. While the notion of producing in China might be sound, one must account for the extra time and complexity involved in getting finished goods to the end customer in North America, Europe or even other parts of Asia.
The most obvious consideration—yet one that many companies don't fully address—is transit time across the ocean. The vast majority of goods travel by water, usually in containers. That means placing large amounts of inventory in transit for five to six weeks, Fabin says.
Tellabs knew it couldn't keep finished product in stasis for that long. It receives two to three engineering change orders a day. In the past, that might mean ripping apart finished assemblies to meet shifting customer requirements, even when production was in North America. In line with the move to China, the company would adopt a postponement strategy, whereby orders could be designed and configured at the last possible moment in Mexico.
“Before you consider outsourcing to China,” Fabin says, “you might want to consider which aspects of production it makes sense to outsource. You need a clear picture of your total supply chain cost.”
All well and good. Except that the China strategy had other complications as well. Localization of raw materials sourcing seemed like a good idea, for reasons of cost and proximity. But Tellabs's contract manufacturer would have to ship China-made parts to Hong Kong, then bring them back to the mainland, in order to avoid a 17-percent value-added tax, Fabin says.
Traffic Jam
Then there's the problem of congestion in the trans-Pacific trades. In the past two years, companies have found it increasingly tough to get their Asian-sourced goods into North America during peak shipping seasons, due to a recovering U.S. economy, capacity restrictions at ports and inland points, and the growing popularity of China as a site for manufacturing. The Tellabs logistics team has had to work closely with inventory planners to cope with the situation.
In fact, good cross-functional communications are at the heart of any successful strategy for outsourcing to China, Fabin says. Historically, supply chain management has been treated as a function within operations, one that isn't fully integrated with production-line management. In implementing its China plan, Tellabs has worked hard to bring together managers from sales, sourcing, manufacturing, inventory planning and transportation.
Any workable strategy for sourcing in China will combine good timing and deep analysis of total landed costs, says Bijan Dastmalchi, principal of Symphony Consulting in Sunnyvale, Calif. Poor planning can add greatly to the cost of moving product over the ocean. Experienced importers make peak-season arrangements with ocean carriers early in the year, Dastmalchi says. Stragglers who enter the trans-Pacific market in the third or fourth quarter are unlikely to find sufficient ship space at any price.
Airfreight isn't necessarily an option, especially for lower-valued goods. One Symphony client, a shipper of pizza boxes, found that flying just 10 percent of its quarterly volumes would wipe out its savings from producing in China.
For shippers of higher-value goods, ocean might be an unacceptable option, at least without proper planning. Inventory- carrying expense, including the cost of capital, obsolescence and storage, approaches 18 percent of total costs for a typical high- tech company, Dastmalchi says. Moving goods by ocean can add 1.5 percent per month to that amount. Such a consideration must be part of any plan to source production in China.
