Workshop Program Evaluation & IT Application Situation for Hong Kong Enterprises Hong Kong Productivity Council 1
Research Objectives • Investigate the current situation of IT and technology applications in logistics, manufacturing and trading sectors • Investigate how the training programs “Use of IT & Automation Techniques in Logistics Services” held in 2006/07 help the participants to adopt IT applications for the enhancement of their operational efficiency; and • Identify the critical factors affecting a broader adoption of IT applications 2
Research Methodology • Random sampling on the participant list of the training programs “Use of IT & Automation Techniques in Logistics Services” • 20 in-depth interviews • Discussion guide covers the following major areas: – Workshop Evaluation and Suggestions – Current IT Application Situation – Challenges in Business – Future Plan on IT Application 3
Research Findings Research Findings 4
General Situation of IT Application • Logistics industry applied quite a wide spread of IT solution ranged from EDI / Bar Coding System to ERP / Freight Management System • Manufacturing sector mostly used IT applications in relative focus areas in ERP and Bar Coding System • Logistics industry, as compared with manufacturing, used mostly tailor-made IT solutions 5
General Situation of IT Application ERP CRM EDI ACT WMS DMS BCS FMS GPS TMS 5 2 1 2 --- --- 3 --- --- --- Manufacturing Trading 4 2 2 2 1 1 3 --- --- --- Logistics 1 1 3 3 2 --- 2 3 2 --- Warehousing 1 --- --- 3 1 1 2 --- --- 3 ERP = Enterprise Resource Planning DMS = Document Management System CRM = Customer Relationship Management BCS = Barcode System EDI = Electronic Data Interchange FMS = Freight Management System ACT = Accounting & Finance GPS = Global Positioning System WMS = Warehouse Management System TMS = Truck Management System 6
General Situation of IT Application Standard Modified Tailor-Made Lease 1 7 5 --- Manufacturing Trading 1 4 7 3 Logistics 2 3 10 2 Warehousing 2 2 7 --- • As compared with manufacturing sector, logistics and warehousing sectors seem to prefer tailor-made solution to standard one with minor modification 7
General Situation of IT Application Selection Criteria on I.T. Solution and/or Solution Provider Selection Criteria on I.T. Solution and/or Solution Provider A v e r a g e R a n k o n S e l e c t i o n C r i t e r i a 8 7 . 1 7 A = Functions & Features 5 . 6 5 . 5 6 4 . 9 4 . 9 B = Reliability 5 C = Technical Capability 3 . 4 4 3 . 1 D = Price 3 1 . 7 E = After-Sales Services 2 F = Value-added Services 1 0 G = Flexibility A B C D E F G H H = Brand Note : Rank 1 is the most important and 8 is the least. • Function and reliability are two most important selection criteria when local enterprises select I.T. solution. • Value-added services and brand are not too concerned as per respondent’s comments. 8
Business Challenges Manufacturing Manufacturing Trading Trading • Short lead time • Short lead time • Supply chain transparency • Supply chain transparency • Quick response to customer and • Demand on VMI vs Inventory Turn market • Trend on EDI / System Integration • Trend on EDI / System Integration • High product variety but small • High product variety but small order order quantity quantity • Supply chain integration • Comprehensive QC • Pressure on cost reduction • Supply chain transparency • Growth of SKUs & repacking requirements • Supply chain security • Supply chain transparency • Quick response to logistics requirements • Quick response to logistics requirements • Trend on EDI / System Integration • Inefficient data capturing method • Integrated supply chain services such as VMI • Trend on EDI / system integration • Dilemma on technology application • VMI, JIT requirements Logistics Warehousing Logistics Warehousing 9
Trend on System Integration and Data Interchange • Logistics service providers used ERP in their warehousing operations in order to establish a better external system integration with their manufacturing customers and support some value-added service activities such as VMI • EDI application for order and shipment instruction processing was on demand, but less DTTN application because of: – Price issue – Insufficient business partners with DTTN applications – Overseas clients not using DTTN • Internal system integration was also popular and the most common system integrations were accounting and business operating systems 10
Difficulties and Concerns on IT Application • Difficult to know what kind of technologies they needed and which IT service provider was the most appropriate one for their business operations • High risk to apply IT solution • Product brand was not the most important selection criteria but functions and features. The next in priority were reliability and price. 11
Future Plan on IT Application Manufacturing Manufacturing Trading Trading • Empower WMS functions • Strengthen EDI capability and consider DTTN • Strengthen data capturing capability for stock in/out • Explore Net-Meeting solution • Strengthen MIS function with their • Strengthen WMS solution for an ERP system effective SKU management • Strengthen EDI capability • Explore Knowledge Management solution for merchandising • Market intelligence • Explore integrated solution for WMS / • Strengthen data capturing capability FMS / TMS for stock in/out • Strengthen WMS functions • Apply ERP for WMS / VMI purposes • Automate data capturing process for • Enable information accessibility for stock in/out customers • Strengthen EDI capability • Explore TMS and optimal routes determination solution for fleet management Logistics Warehousing Logistics Warehousing 12
Workshop Evaluation and Suggestions • Helpful in keeping participants abreast with the new technology development trend; • Good in knowledge and experience sharing; • Helpful in strengthening confidence in using new IT solutions and sharing of the IT market information with others 13
Impact of Workshops on Participants • 55% of samples studied were reported to initiate new IT solution implementation after joining the workshop program. Respondents were to: – Consider DTTN connectivity with ERP solutions; – Consider DTTN applications for EDI; – Consider On-Board Trucking Information System (OBTIS) applications for fleet management; – Plan to conduct feasibility studies on RFID application and replace the existing bar coding system; – Strengthen their confidence to apply WMS in the coming year; – Help to select a new ERP solution and fit for participant’s business operations. 14
Recommendations • Areas of improvement for workshops if this program was to be conducted again in future: – Segmentation of participants – A specific topic for a specific industry sector – Analytic elements in workshop – More experience sharing sessions – Experiences on IT applications for China market development • Develop an Logistics IT solution directory on fact-based information about the various logistics IT solutions in order to reduce IT application risks and encourage more companies to adopt IT solutions. 15
Recommendations • An Industry-wide User Requirement Study be carried out to determine actual user requirements for dissemination so that all solution providers could design their IT products best fit for most end-user’s operation needs. 16
Thank You Thank You 17
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