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Avnet Logistics gains stronger foothold in Asia

Posted: 03 Dec 2007 ?? ?Print Version ?Bookmark and Share

Keywords:logistics services? China? logistics award? supply chain management?

Smith: Everything we do in logistics starts with education and training.

Moving beyond traditional services and revitalizing its workforce made for a winning strategy for Avnet Logistics to secure a foothold in the global supply chain market. In recognition of this, the Avnet Electronics Inc. spin-off has bagged this year's Hong Kong Logistics Award for Medium-sized Enterprise, underscoring its delivery of value-added supply chain services to Asia. The award was among the eight citations given by the Hong Kong Trade Development Council to honor companies and individuals who manage overall logistics operation to better serve customers and promote Hong Kong as a logistics hub in Asia.

"We won the award because of our people development strategy and our operational excellence concept," said Louis Lam, VP of operations at Avnet Asia Pacific. "How did we differentiate ourselves from other candidates for the award? We give our team members more training and development opportunities to strengthen their mindset for total quality management and end-to-end process to design concept."

While keeping its workforce machinery well-oiled assures Avnet Logistics more market inroads, another key factor driving its success is the mandate toward green, which complements the company's strategy to deliver better supply chain solutions. But how does green fit in the logistics equation?

"Green logistics is all about efficiencywe can move our product with less effort, less resources and less energy," explained Jim Smith, president of Avnet Logistics.

Quite simple? Yes, but not without a challenge.

On a yearly basis, the company averages about 6 million orders and ships 7 million boxes. "We have 1,600 people in logistics worldwide. A challenge is how to get 1,600 people to react and care about green. Hence, our corporate strategy includes removing steps in the process, leading to efficiency and utilizing less resources, which leads to less energy," Smith said.

Continuous improvement
A pillar in Avnet Logistics' system is its operational excellence concept composed of principles and initiatives aimed at delivering better logistics services to customers. Central to this concept is the company's people development approach.

"Everything that we do in logistics starts with education and training," said Smith. "We have very robust and in-company training programs for our constituents."

Explaining from the Asian operations perspective, Lam said, "At Avnet, we look at logistics as end-to-end process from an outside-in perspective. We look at our process from the eyes of our customers and suppliers, then we design our logistics-related process to serve them well."

For example, in order procurement, Avnet Logistics is driven by the goal of a perfect order: "to get everything done the first time, absolutely perfect." To achieve this, the company forms a global team composed of the best from its offices in Asia, Europe and the United States to form a toolset for its customers. A large section of the staffing during the company's annual global meeting is tasked to handle the operational excellence process for order procurement.

To further fortify the methodology, different process redesign teams, composed of small group of individuals, are deployed in different logistics operations to focus on process improvement projects.

Lam: We look at Logistics as end-to-end process, from the eyes of our customers and suppliers.

Avnet also encourages its team members to participate in improving their daily operation procedures. The company believes that this promotes better awareness about the logistics process and allows team members to move forward with a shared direction, mindset and strategy.

Recapping the importance of their workforce development approach, Smith noted: "Logistics, at the end of the day, is talking about people. We need to depend on our people to carry the process and serve our customers and clients well. The ideal case is to have average people manage a brilliant process to render very good results. Now, if we can further train our people for better performance, then you can imagine the effect it will have on results."

Quest for dominance
Logistics services are essential to survival in the electronics industry, especially in China's booming market. With its strategically positioned warehouse in Hong Kong, Avnet Logistics gains a natural advantage to deliver its services in the region. Three months ago, the company completed expansion of its Hong Kong logistics center, bringing its capacity to 200,000 square feet. This capacity increase is also critical as Avnet Logistics aims to capture $16 billion from the segment's revenue pie.

The company's plans to tap its Hong Kong center to not only provide logistics services between Hong Kong and mainland China OEMs and customers, but also to bring Asia to the world.

Over the past three years, Avnet Logistics has been acting as a supply chain manager for a few customers from Europe and the U.S. to move their materials and their production into China or anywhere in Asia. With its recent expansion in Hong Kong, Avnet Logistics is confident that it can provide safe migration paths to its customers from Europe and North America who want to come to Asia.

"It turns out that both Europe and the Americas are looking towards Asiathey just don't know where," Smith explained. "With Hong Kong in our strategy, we now have the ability to go to these customers that are trying to make the decision to come to Asia. We can offer them a methodology that is speedy and scalable and that can support their outstanding businessit's a safe haven."

Lam noted that despite their huge number of customers based in China, most are looking at Hong Kong as the home for shipment consolidation in the region. "In the coming three to five years, the importance of Hong Kong as the gateway into mainland China and to other Asian cities will remain. It would be interrelated with how far mainland China will open the country, and that is something highly interesting in the future importance of Hong Kong as a logistics hub in Asia."

Moving forward on its quest for a stronger foothold in the logistics arena, Smith concluded, "Five years from now, we know that the market will be bigger, but we just don't know how much bigger. Thus, we plan to look at our capacity and planning more regularly so that we will always be in sync with the growth."

- Anna Valmero, Selena Salang
EE Times-Asia

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