This document discusses opportunities for supply chain strategies in Asia. It provides an overview of economies in China, India, and ASEAN countries. It then discusses opportunities for sourcing in China, including direct materials, assembly/sub-assembly, merchandized goods, and more. The document introduces the company presenting and describes their services as a virtual International Purchase Office to help clients source products and lower costs in Asia. It outlines both the advantages ("AWE") and disadvantages ("ILL") of operating in China, and how the company can help prevent issues for clients. The benefits to clients are then listed as having a virtual office in Asia to gain competitive advantages at lower costs.

1. Supply Chain Strategies
in Asia
Calipe Chong
Managing Director

2. Agenda
 Why supply chain
 Asia economics
 Opportunities in China
 Who we are
 The AWE of China
 The ILL of China
 We can prevent the ills for you
 What are your benefits

3. Why Supply Chain
In the 1980’s, material cost is about 60~70%
of product cost
Now in 2000’s, material cost has shot up to
70~85% of product cost
Engineering achieves 2~5% cost saving
through design change, productivity gain,
yield improvement, and reduction on
waste

4. An effective supply chain strategy could
achieve 20~40% cost saving and high
inventory turns

5. In this competitive environment, the net
profit is usually 5% of the sales
revenue.
Hence a $1 million saving in direct
material purchase, is equivalent in
getting $20 million sales.
Many companies had committed much
resources in promoting sales but
insufficient resources and commitment
in optimizing supply chain.

6. “In this world, a smart and fast
global supply chain is becoming
one of the most important ways for
a company to distinguish itself from
its competitors. ”
Thomas L Friedman
“The World is Flat ” – Supply chaining

7. China Economy (2007)
 Third largest in the world in nominal GDP
GDP is US$3.42 trillion with an average growth rate of
9.9% since 1978
Export and import is US$1,216 billion and US$954 billion
respectively
“World Factory” for merchandized goods, consumer
electronics & electrical, industrial products & parts,
automotive parts, Mold & Die, etc.
 It has helped Wal-mart, Motorola, Dell, Sony, IBM, HP,
etc to gain their global dominance
Source - http://en.wikipedia.org/wiki/Economy_of_the_People's_Republic_of_China

8. India Economy (2007)
 Twelfth largest in the world in nominal GDP
 GDP close to US$1 trillion with a growth rate of 9.1%
Export and import (FY 2006/7) is US$125 billion
(excluding revenue on outsourcing services) and US$188
billion respectively
Main exports - textiles, chemicals, food processing,
steel, transportation equipment, cement, mining,
petroleum, machinery, software, services
Source - http://en.wikipedia.org/wiki/Economy_of_India

9. ASEAN Economy (2007)
 Countries consist of Singapore, Malaysia, Thailand,
Indonesia, Philippines, Brunei, Vietnam, Cambodia,
Laos, Myanmar
 Combined GDP in 2007 is US$1,282 billion
 Average per capita income is US$2,227
 Total land area covers 4.5 mil sq Km (1.76 mil sq
miles) with total population of 576 mil
 It has abundant natural resources, manpower and
industrial opportunities
Source - http://en.wikipedia.org/wiki/ASEAN_Economic_Community

10. Opportunities in China
 Direct Materials (Industrial parts)
 Assembly / Sub-assembly parts
 Merchandized goods
 Indirect Materials
 Injection Molds, Dies & Tooling
 After service parts
 Distribution & Retail
 Financial & Marketing services
 Inroad for well known branded products
 Tapping the vast growth of consumerism in China

11. Who we are
We are not a trading or consulting company
We are a virtual International Purchase Office (IPO)
running the works for you in Asia with the mission
of being your long term partner.
 You place PO and make payment directly with the
suppliers
 There is no markup on the PO price by us
 You pay us service fees which is dependent on
amount and type of work rendered
All payments made to the suppliers and us are
transparent and no hidden cost

12. Who we are
We can do a better job because:-
 We are Asian and we have the astute knowledge on
the culture, language, business practices and
customs
 We have 29 working years with American companies
and we have good understanding of their
expectations and goals
 We have more than 18 years of experience in supply
chain management
 We are here to work and monitor the suppliers
 We are the link between the East and West; and also
between you and the suppliers

13. Vision
To be a renowned supply chain service provider which
allow our clients to profit from the economic and competitive
advantages in Asia and act as a bridge between East and
West.

14. Mission
We want a long term partner relationship with our clients and help to lower
their operating cost, enhance their operation efficiency and expansion of
their market or manufacturing operation through:
Sourcing appropriate, quality and cost effective products and services in
Asia
Incorporating cost effective and efficient logistics management
Meeting delivery schedules and requirements
Providing all relevant integrated supply chain solutions and operations
Set up new factories, representative offices and joint ventures
Marketing or establishing distribution for their products in Asia
In addition, we also want to be an establishment which we are proud of
and envied by clients, peers and competitors for our integrity, ethics,
professionalism, efficiency, innovative ideas and high esteem.

15. The AWE of China
 Its incredible workforce
 Its potential
 Its perseverance
Its formidable combative
awakening
 Its authoritative government
Its humongous market size

16. The ILL of China
 Its rampant corruption
Its hidden/secretive actual
operation
Its complexity in business and
governmental procedures
Commitments are not honored or
follow through
 “Cutting corners”
 Violation of IPR
“China cracks down on shoddy toys”

17. We can prevent the ills for you
 Source reliable and appropriate suppliers
 Conduct supplier assessment and plant audits
 Coordinate and lead product test approval and acceptance process
 Expedite delivery orders – monitor their materials delivery,
production status, yields, inventory and logistics arrangement
 Monitoring corrective actions and timely response from suppliers
 Conduct quarterly/annual supplier performance & quality review and
assessment
 Source and/or pre-shipment inspection
 Liaison to prevent misunderstanding/misinterpretation on
specification, quality and performance requirements

18. What are your benefits?
 You have a virtual office in China (Asia)
 We are your outsourced Materials Department in Asia
to allow you to establish competitive advantages over
your competitors at a lower cost outlay and
expenditures
 Win back the loss business
 Avoidance of cost and resources to set up office in
China
 Avoidance of assigning expatriates and exorbitant
cost
 Avoidance of dealing the confusing, nitty-gritty &
compelling situations with suppliers and government
officials

19. What are your benefits?
 Direct and prompt monitoring on quality and
corrective actions issues and activities at suppliers’
location
 Immediate feedback & follow up activities with
suppliers on PO, delivery, engineering, samples,
testing, etc
 Stay ahead in your competition
 Pass on your cost benefits to your valued customers
 Staying abreast with the “Big Boys” in supply chain
leverage
 Ready pool of reliable and cost-effective suppliers
for most commodities

20. Let us help you to enhance your supply
chain and improve your productivity,
competency and profit
We look forward to be your reliable
partner and supporting you to achieve
your goals!
Thank You