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INTEGRATED DISTRIBUTIONSERVICES GROUP (IDS)Redefining the Asia Distribution Landscape
THE ASIAN MARKETAn Overview
Opportunities in Asia• Fastest-growing consumer market  in the world• Mosaic of Nationalities,  languages, and cultures• P...
Challenges in Asia‟s Supply ChainSystem• Complex supply chain system• Difficulty in getting access to the final consumers•...
Background on the Asia Supply chain landscape• Most brand owners generally used  local Asian distributors to import  goods...
Background on the Asian Supply ChainLandscape• Change around late 1980s  • Global companies started to set up operation in...
Background on the Asian Supply ChainLandscape• Traditional distributors started to feel the squeeze from  both directions•...
INTEGRATED DISTRIBUTIONSERVICES GROUP (IDS)Redefining the Asia Distribution Landscape
IDS Overview and            Historical Context• Challenges in Asia distribution landscape• Li & Fung Group (LFG) over 100 ...
A New Business ModelMake use of old assets + Think of a BetterBusiness Model = Value-Chain Logistics     Logistics as a fu...
STRATEGIC PLANS(1999-2001, 2002-2004)Reorganization and a Menu of Services
1999–2001, 2002-2004Challenges    Manage         Create a    change        new culture
How?           Do away with country-based structures.Reorganize as a regional company with 3 business streams and         ...
Business Streams  Logistics   Distribution   Manufacturing
Logistics            Deliver                      Store             Ship
DistributionPromote        Sell   Bill   Collect
Integrated Distribution Services Group (IDS): GS-59                                                              p. 23    ...
Manufacturing Make           Test   Package
Demand forecasting and inventory                                                                                        pl...
STRATEGIC PLAN FOR2005-2007Rewarded in the Capital Market
Expansion                 Malaysia             Singapore            United Kingdom            Taiwan   China     Philippin...
Customer Experience
Global brands as its key clients! Operating the specific  functions internally    VS   Outsourcing
Global brands as its key clients!                  IDS‟ value proposition                  is “compelling”                ...
Differentiator: China Advantage     • Invested significantly in operations in China     • Built a national distribution ne...
Unique China Advantage                         over 100 years of                         China supply chain               ...
ChallengesTalent Management  Organizational Agility     Client Complexity
Competition• NO competitors in Asia that offered this type of complete    pan-Asia end-to-end array of services.    • A pi...
Growth and Aspiration                Redefining                Value-Add                                             The T...
Global Ambitions         I won’t call it a      revolution; I think it’s       been an aggressive            evolution.
Where is IDS heading?        IDS wants to be able to designcomprehensive global supply chain solutions that are truly end-...
THANK YOU!
A Global Premium BeverageAlcohol Company   Each country‟s market in Asia independently fed it‟s respective demand         ...
Location Selection  Customized  Warehousing   Solution  Value Added    Services
Competitors
Integrated Distribution Services: The Asian Context
Integrated Distribution Services: The Asian Context
Integrated Distribution Services: The Asian Context
Integrated Distribution Services: The Asian Context
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Integrated Distribution Services: The Asian Context

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Integrated Distribution Services: The Asian Context

  1. 1. INTEGRATED DISTRIBUTIONSERVICES GROUP (IDS)Redefining the Asia Distribution Landscape
  2. 2. THE ASIAN MARKETAn Overview
  3. 3. Opportunities in Asia• Fastest-growing consumer market in the world• Mosaic of Nationalities, languages, and cultures• Provided the greatest long-term market potential
  4. 4. Challenges in Asia‟s Supply ChainSystem• Complex supply chain system• Difficulty in getting access to the final consumers• Freight cost = 8-12% of total product price
  5. 5. Background on the Asia Supply chain landscape• Most brand owners generally used local Asian distributors to import goods• Pre-1990‟s :generally lacking in high quality consumer goods• Local demand generally exceeded supply of imported goods• Mark-ups of 20-30%
  6. 6. Background on the Asian Supply ChainLandscape• Change around late 1980s • Global companies started to set up operation in Asia (Wal-Mart, Carrefour) • Consumers had more product choices • Both Asian and Western brand owners started to develop new products to capture growing consumer demand • Consumers became more demanding (low prices)
  7. 7. Background on the Asian Supply ChainLandscape• Traditional distributors started to feel the squeeze from both directions• Brand principals no longer wanted to give distributors the lucrative margins• Supply chain issues: Logistics & Client Account Warehousing Management
  8. 8. INTEGRATED DISTRIBUTIONSERVICES GROUP (IDS)Redefining the Asia Distribution Landscape
  9. 9. IDS Overview and Historical Context• Challenges in Asia distribution landscape• Li & Fung Group (LFG) over 100 years experience in Asia-West distribution• IDS as a result of “reversing” LFG‟s trading model• Acquisition of Inchchape Marketing Services (IMS)
  10. 10. A New Business ModelMake use of old assets + Think of a BetterBusiness Model = Value-Chain Logistics Logistics as a fundamental enabler to drive maximum efficiency Position logistics as the main front-end business connecting traditional distribution service and manufacturing It now calls itself an Integrated Distribution Service Provider
  11. 11. STRATEGIC PLANS(1999-2001, 2002-2004)Reorganization and a Menu of Services
  12. 12. 1999–2001, 2002-2004Challenges Manage Create a change new culture
  13. 13. How? Do away with country-based structures.Reorganize as a regional company with 3 business streams and key support functions across Asia. Prioritize logistics, followed by technology. Allow customization.
  14. 14. Business Streams Logistics Distribution Manufacturing
  15. 15. Logistics Deliver Store Ship
  16. 16. DistributionPromote Sell Bill Collect
  17. 17. Integrated Distribution Services Group (IDS): GS-59 p. 23 Exhibit 5 Menu of Services – Distribution 1 2 3 Credit and Selling Marketing Cash Management Selling and demand creation Marketing services Order management and credit Merchandising support Trade marketing management control Key account management Advertising and consumer Billing and collection promotion Claims and returns Wholesale and sub-distributor Relationship management Sales analysis and market planning Customer Services Market intelligence 4 5 6 Inventory Mgmt and Logistics Value- Value-Added Services Working Capital Solutions Comprehensive logistics Inventory management Product registration support (provided by IDS Working capital solutions Category management Logistics streams or another vendor) Vendor financing Tracing and tracking Co-packing After-sales services Demand forecasting and inventory planningSource: Information provided by IDS Group Exhibit 6 Menu of Services - Manufacturing
  18. 18. Manufacturing Make Test Package
  19. 19. Demand forecasting and inventory planningSource: Information provided by IDS Group Exhibit 6 Menu of Services - Manufacturing 1 2 Contract Manufacturing Compounding and Mixing First-party – also responsible for procurement of Based on formulation and procedure provided by raw materials clients Third party– raw materials provided by clients 3 4 5 Filling and Packing Value- Value Added Services Logistics Services Wide range of packing solutions Product registration Comprehensive logistics support Handle pack sizes of various sizes Laboratory testing Quality assuranceSource: Information provided by IDS Group
  20. 20. STRATEGIC PLAN FOR2005-2007Rewarded in the Capital Market
  21. 21. Expansion Malaysia Singapore United Kingdom Taiwan China Philippines USA
  22. 22. Customer Experience
  23. 23. Global brands as its key clients! Operating the specific functions internally VS Outsourcing
  24. 24. Global brands as its key clients! IDS‟ value proposition is “compelling” • Allowed the brand owners to focus on their core competencies (e.g. marketing or product design)
  25. 25. Differentiator: China Advantage • Invested significantly in operations in China • Built a national distribution network • In 2004, IDS received a nationwide license • Expanded further • Held first mover advantage! • Helped drive brand owners‟ growth in China
  26. 26. Unique China Advantage over 100 years of China supply chain experience acquisition of Inchcape assets and investments in various Asian countries optimal supply chain serving this region.
  27. 27. ChallengesTalent Management Organizational Agility Client Complexity
  28. 28. Competition• NO competitors in Asia that offered this type of complete pan-Asia end-to-end array of services. • A pioneer of the „Value-Chain Logistics‟ concept• Only have competitors of varying sizes and capabilities in EACH of its menu service offerings
  29. 29. Growth and Aspiration Redefining Value-Add The Three Growth Account- Focused Drivers Model for Revenue Management Organization Restructuring
  30. 30. Global Ambitions I won’t call it a revolution; I think it’s been an aggressive evolution.
  31. 31. Where is IDS heading? IDS wants to be able to designcomprehensive global supply chain solutions that are truly end-to-end: from the sourcingof the raw materials to the delivery of goods to consumers anywhere in the world.
  32. 32. THANK YOU!
  33. 33. A Global Premium BeverageAlcohol Company Each country‟s market in Asia independently fed it‟s respective demand forecast Problems: high inventory build-up, slow response to market change, etc. IDS asked to deliver a “regional hubbing solution” Identify Optimal Geographic Location, Optimize tariff, Packaging Solutions
  34. 34. Location Selection Customized Warehousing Solution Value Added Services
  35. 35. Competitors

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