Teaming up expertise and technology to advance supply chain management

CityU’s Enterprise Knowledge Integration and Transfer (E-KIT) Laboratory in the Department of Manufacturing Engineering and Engineering Management is also making a significant contribution to strengthening Hong Kong’s role as a logistics hub. Focusing on the concept of a “value-chain” (the manufacturing cycle from conception, product development, production process planning, and coordination of procurement and supply activities to distribution, after-sale services and recycling/disposal of the product), the laboratory aims to develop manufacturing methodologies and techniques to help Hong Kong’s SMEs operate more effectively.

In the area of supply chain management, E-KIT recently collaborated with Microsoft Hong Kong in a project to help local manufacturers to compete more effectively by automating their supply chain and streamlining logistics. The move will promote the use of IT among local SMEs and support the Logistics Hong Kong initiative.

Combining expertise with technology

CityU will provide the expertise in logistics and Microsoft will provide the technology—such as the BizTalk Server 2002—to assist local firms to develop the necessary software systems for order fulfilment and information sharing across the supply chain between customers and suppliers.

Dr Richard Fung, Director of the E-KIT Laboratory and Associate Professor in the Department, said, "This type of collaboration between educational institutions and business is an effective process to ensure the future competitiveness of local companies in the world market."

Under the plan, local firms interested in upgrading their supply chain management will be offered a three-day feasibility service. Microsoft will donate the relevant software and provide technical support to CityU. Local industry associations will support and contribute to the project. Students in the Department also stand to benefit: both full-time undergraduate and part-time postgraduate students will assist in the feasibility studies undertaken for local SMEs. The experience will provide them with case studies for their final year projects and dissertations.
"Here at E-KIT we are committed to the development and sustainability of Hong Kong business," Dr Fung said. "The resources and expertise we have developed at CityU through research and academic programmes will be complemented by the advanced technology provided by Microsoft."

Local company to test prototype portal

The first company to participate in the programme is Honeywell Consumer Products (HK) Ltd, a leader in diversified technology and manufacturing. The E-KIT Lab is developing a prototype procurement portal using a BizTalk solution for Honeywell to evaluate.

The portal will not only allow Honeywell to post its requests for materials and parts so its suppliers can place their bids, but will also enable its customers to place orders. In addition, BizTalk Server can be used to communicate with suppliers for exchanging documents, such as purchase orders and invoices. Mr Victor Lo, Vice-President of Honeywell (HK), said he was very impressed with the way the software facilitated faster business processes and response to customers. "With the help from the E-KIT Laboratory and Microsoft, integrating applications, companies or business processes no longer needs to involve spending millions of dollars on complex software and pricey consultants in the journey towards implementing B2B e-commerce."

Promoting sustainability in supply chain management

Dr Fung also assists local companies to move towards green manufacturing and the rejuvenation and recycling of used products. A recent research project, between the Department and the Centre for Research on Organizations, Management and Technical Change at the University of Manchester Institute of Science and Technology, has revealed that regulations, legislation and social pressure have made companies more proactive in promoting better purchasing practice in line with conserving the environment. "If they choose their materials and sources of supply with this in mind, they can greatly reduce the environmental impact," Dr Fung said. "A lot of big companies are already using their market power to influence their suppliers to produce goods that are more sustainable and which produce less waste."

On the international scene, many global companies in the automotive, retail and service sectors actively promote the idea of environmental protection in their supply chains. If all else fails, they can use the extent of their market power to persuade their suppliers to produce sustainable goods; indeed, some suppliers regard gaining a reputation as a green supplier a means to improve market penetration and coporate reputation, Dr Fung said.

Industries committed to green supply chains

In the automotive industry, the pressure on vendors to demonstrate their commitment to environmental improvement has been obvious for some time. Ford and General Motors, for example, which have implemented the international voluntary environmental management systems standard ISO 14001 in their own assembly parts, have told their 10,000 manufacturing suppliers to instigate environmental management systems by the end of 2002 if they want to continue as suppliers. "In the retail sector in the UK, some companies are very proactive in expecting their suppliers to provide them with environmentally sustainable goods," Dr Fung said. Marks & Spencer, for instance, have an in-company environmental assessment system, which they have extended worldwide.

As far as the electronics industry is concerned, Dr Fung believes it is particularly active in the field of environmental protection. "This may be due to European environmental regulations on waste electronic and electrical equipment - packaging has to be recyclable and the producer is responsible for the disposal of used products." This has resulted in companies such as Motorola, Kodak and Xerox adopting a life-cycle approach to promote environmental protection.
In the utility sector, a range of companies, such as British Telecom, have encouraged their suppliers to adopt their own environmental assessment systems. Some organizations also ask their suppliers to obtain certification in an environmental management system.

Governments resource environmentally friendly goods

Various different countries are promoting the resourcing of environmentally sustainable goods. For instance, the Canadian government has issued guidelines, the European Union actively highlights the crucial role played by the public sector in purchasing sustainable goods and services, and the Danish government has, since 1995, required all government institutions and departments to include environmental criteria on equal terms with price, quality and delivery when they are assessing tenders.

In Hong Kong, the Environmental Protection Department is committed to environmentally responsible purchasing and encourages both the public and private sectors to buy products with recyclable contents, or with less packaging material. In 2000, it issued a consultancy report on environmentally responsible product specifications for government procurement items. Dr Fung has organized a number of seminars and workshops for industry on green supply chains, at which speakers included professionals from the government and the private sector. "The key to effective green procurement is to start with something simple, where improvements are quickly visible—people will be motivated to do even better," he said. "We will gradually improve our surroundings and the environment in which we live, if we remember that green procurement is a journey, not a destination."