China looks to Europe for supply chain improvements

Representatives from China have toured European facilities of leading food retailers, manufacturers, supply chain solution providers and industry groups to see fresh and ambient supply chains in action.

The tour program sought to explore elements of the European supply chain that could be applied in the Chinese context in order to streamline the supply chain and lower logistics costs. Of particular focus were: dedicated loading bays and standardised pallets, container management systems and trucks.

European hosts and participants include: retailers ASDA, Carrefour, SPAR and Waitrose; manufacturers Nestlé, Coca-Cola, P&G and L’Oreal; and services providers CHEP, IFCO, DHL, IGD and the Lean Enterprise Institute.

Arriving from China were representatives of China’s Ministry of Commerce (MOFCOM) and its research institute the Chinese Academy of International Trade & Economic Cooperation (CAITEC). The delegation was led by Mr Gu Xueming, president of CAITEC.

“We are very pleased to have this opportunity to meet with European industry leaders and see first-hand successful practices that we could apply in China. This business tour will further drive the collaboration between China and these multinational companies as well as their long-term development in China since many of these companies are also well established in China,” said Mr Gu.

The grocery supply chain in China faces barriers to efficiency improvement, including fragmented logistics, rising labour costs and a lack of consistent enabling infrastructure and standards. Vehicles are underutilised, trailers are manually loaded with limited palletisation and packaging; and loading/unloading times are unpredictable.

China’s strong growth and status as one of the world’s two largest economies means that significant benefits will come from any improvements in supply chain efficiency.

The European participants in the tour highlighted critical supply chain components including: the standardisation of platforms, trucks and equipment; investments in forecasting and ordering systems; and lean inventory management.