YMC Journal. issue no.1. July Young Members Committee Journal. The Chartered Institute of Logistics & Transport. Hong Kong

Transcription

1 Young Members Committee Journal issue no.1 July 2007 The Chartered Institute of Logistics & Transport Hong Kong

2 MCCONTENTS Journal Foreword by Mr. Anthony Lau 02 Foreword by Professor S.C. Wong 03 Foreword by Mr. Paul Tsui 04 Foreword by Dr. Simon Yuen 05 Foreword by Ms Alice Yip 06 Foreword by Mr. Jason Ho 07 Introduction to Young Members Committee 08 Mission of YMC 08 YMC Committee Members ( ) 09 YMC Committee Members ( ) 09 YMC events ( ) 10 Inauguration Ceremony 10 Annual Dinner 10 Mentorship Programme 11 Visits to Tertiary Institutes 12 Company Visits 12 Seminars 14 YMC forthcoming events ( ) 15 Professional Training Scheme 15 Student Scholarship CILT International Young Members Day 15 Annual Dinner 15 Quarterly Seminar 15 Company Visit 15 Mentorship Programme 15 Articles from YMC members 16 Article 1: The role of warehouse operation in the 16 local furniture industry, as illustrated by the Case of IKEA (HK) Ltd. Article2: KCRC West Rail 20 Article 3: Development of RFID for Logistics 23 Acknowledgements 26 Editorial Board 27

3 Foreword Foreword by Mr. Anthony Lau I am pleased to have witnessed the growth of the CILTHK s Young Members Committee (YMC) since its establishment in Over the years, the Institute has been committed to meeting the needs of the community by grooming professional manpower whereas young members are the future of the profession. The establishment of YMC is aiming to promote the active participation of young members and providing a platform for their involvement in the Institute s affairs. I am so glad to see the young members are innovative and energetic. This inaugural issue of records the variety of activities organized by the YMC in the past two years. The success of each event relied on the entire YMC family as well as the active supports tendered by the supporting organisations. Please allow me to take this opportunity to thank you all the mentors in the last session s Mentorship Programme. The programme provides the link between senior members and young members; so that the latter can learn from the senior s social and work experience, especially on how to apply knowledge in different job situations and career paths. My dear fellow young members, your participations in various activities, taking up more responsibilities, step by step, I can assure you your effort and time spent on the YMC will benefit not only the others but also furnishing your life and experience. Best regards, Anthony Lau President, CILTHK ( ) 02

4 Foreword Foreword by Professor S.C. Wong Young Members Committee (YMC) is one of the committees of the Chartered Institute of Logistics and Transport in Hong Kong (CILTHK). YMC aims to provide a channel to foster the communication and connection among the young members of CILTHK as well as the students in the educational institutions. This Journal, which is a publication prepared by the YMC, consists of timely articles on the logistics and transport issues from the perspective of young members. With the hard work of the Editorial Board of YMC, I am sure that readers will find this Journal both interesting and informative. Best regards, S.C. Wong Vice President, CILTHK ( ), Chairman of Young Members Committee, CILTHK ( ), Advisor of Young Members Committee, CILTHK ( ) 03

5 Foreword Foreword by Mr. Paul Tsui Young Members Committee (YMC) aims to provide a platform for our young members to participate in activities organized by The Chartered Institute of Transport & Logistics in Hong Kong (CILTHK). It also provides members with an opportunity to meet with other fellow members enabling them to gain a better understanding on the practicality issue relating to the Transport & Logistics field. is a bi-yearly publication that aims to communicate and share information with members. Topics covered in the publication are of interest to members and they include activities that took place in the immediate past term, transport & logistics issues contributed by committee members, latest news and information on activities organized by the Committee. The publication serves as a channel to communicate with our members. I wish the editorial board every success with the. Best Regards, Paul Tsui Chairman of Young Members Committee, CILTHK ( ), Advisor of Young Members Committee, CILTHK ( ), Council Member, CILTHK ( ) 04

6 Foreword Foreword by Dr. Simon Yuen Young reflects a lot of dynamic and innovative nature of the publication produced by a group of committee members in YMC, CILTHK. contains interesting articles to disseminate the latest information about transport, logistics and supply chain management in Hong Kong and PRD. As Hong Kong is now a supporting centre for manufacturing, commercial and logistics activities in South China, effective and efficient management of the supply chain are important to industries within the region. YMC Journal acts as a media for exchange of knowledge and ideas in both transport and logistics to all members. With the hard work of members of the editorial board, I am sure that this issue of will be of good standard, and readers will find its contents interesting, useful and informative. I wish the editorial board every success with the Journal. Best Regards, Simon Yuen Advisor of Young Members Committee, CILTHK ( ) 05

7 Foreword Foreword by Ms Alice Yip Thanks to the support from tertiary institutes and supporting organizations in the logistics and transport industries, Young Members Committee successfully held numerous events such as company visits, annual dinner and mentorship programme in the past few years. By sharing the aims of enhancing members knowledge of the transport and logistics industries, fostering the relationship between members, building a close connection with educational institutes, industries and related organizations, Young Members Committee visualizes the greatest values to be brought to CILTHK young members in each event. As one of the communication channels of Young Members Committee, YMC Journal covers several interesting topics related to the transport and logistics industries. Also, there is a review on events held by YMC during the past few years. We hope readers will gain a deeper understanding on our committee as well as the transport and logistics industries after reading this Journal. I wish Young Members Committee every success in the coming events and another fruitful year for our members. Best regards, Alice Yip Executive Chair of Young Members Committee, CILTHK ( ), Committee Member of Young Members Committee, CILTHK ( ) 06

8 Foreword Foreword by Mr. Jason Ho First of all, thanks for the first YMC fellows efforts in the past In the coming , it is my great honor to be elected as the Executive Chair of the second YMC. The 2nd YMC is a group of students from different institutes who have passion to be a bridge between predecessors in different logistics sectors and students in logistics and transport field. Our passion is to help our student members to be a preferred student in different logistics sectors. I hope that our student members cannot only learn in lecture hall, but also board their views from the real world and build up close relationship and communication with transport and logistics industry. Therefore, we will organize various activities, seminars and site visits so that our student members are able to benefit from those activities. In order to achieve our passion, our committee team has started to plan and negotiate the coming academic and professional activities with different related companies and organizations. In the coming days, we are also designing an award system to encourage student members involving different activities actively. Your assistance and participation are encouraging us to do our best. Representing the 2nd YMC, I wish all of you success in everywhere. We promise that we will do our best to provide an unforgettable and joyful year for all young members. Best Regards, Jason Ho Executive Chair of Young Members Committee, CILTHK ( ) 07

9 Introduction of Young Members Committee Introduction to Young Members Committee The Young Members Committee (YMC), one of the committees in The Chartered Institute of Logistics and Transport in Hong Kong, was formally established in October Mission of YMC To promote CILTHK and the logistics and transport industries to people who are aged 30 or below, and includes, but is not limited to, students and young players/ participants in the logistics and transport industries and other interested parties. Aims To enhance knowledge in the transport, logistics and supply chain; To build close communication and connections with educational institutes, industries and related organizations, such as students unions and interested groups; To provide welfare and privileges to young members; To strengthen the network among senior members, young members and industry experts. YMC Members All CILT members of all grades aged 30 or below are YMC members. They can participate in all YMC events. 08

10 Introduction of Young Members Committee YMC Committee Members ( ) Professor SC Wong (Chairman) Mr. Alfred KC Ng (Advisor) Dr. Simon Yuen (Advisor) Dr. Venus Lun (Advisor) Mr. Lam Chi Kin (Advisor) Mr. Paul Tsui (Advisor) Ms Alice Yip (Executive Chair) Mr. Terry Cheung (Vice-Chair) Mr. Ralph Tong (General Secretary) Mr. Raymond Wu (Financial Secretary) Ms Ally Lee Ms Christie Lau Ms Iris Cheung Ms Jenny Sin Mr. Kenneth Yu Ms Man Pui Ling Mr. Mark Kwok Ms Phoenix Yuen Ms Polly Hui Ms Rain Lau Mr. Ray Yau Mr. Sam Wong Mr. Toby To YMC Committee Members ( ) Mr. Paul Tsui (Chairman) Prof. Sze-chun Wong (Advisor) Dr. Fugee Tsung (Advisor) Dr. Jeff Yeung (Advisor) Dr. Philip Chan (Advisor) Dr. Simon Yuen (Advisor) Dr. Venus Lun (Advisor) Mr. Alfred Ng (Advisor) Mr. Chi-kin Lam (Advisor) Mr. Stephen Ching (Advisor) Ms. Iris Cheung (Advisor) Mr. Jason Ho (Executive Chair) Mr. Mathew Tang(Vice-Executive Chair) Mr. Leo Cha (General Secretary) Mr. Harold Li (Financial Secretary) Ms. Tracy Chan (Marketing Secretary) Ms. Adele Hung Ms. Alice Yip Ms. Ally Lee Mr. Alvin Yu Mr. Ben Li Ms. Cherry Chau Mr. Chin-wa Cheung Ms. Christie Lau Mr. Chun-keung Leung Mr. Clement Chow Mr. Edwin Yeung Ms. Fanta Zhou Mr. Gary Ho Mr. Horn Lam Mr. Jason Tong Ms. Jenny Sin Mr. Joseph Lau Mr. Justin Ng Mr. Kenneth Law Mr. Kevin Leung Ms. Lottie Chan Ms. Polly Hui Mr. Ray Ho Mr. Raymond Wu Mr. Sin-shing Fong Mr. Tin-fu Law Mr. William Cheung 09

11 YMC events ( ) YMC events ( ) In the past few years, the Young Members Committee (YMC) held numerous activities for young members in CILTHK to let them have a better understanding of the logistics and transport industries. Below is the summary of the events: Inauguration Ceremony The official inauguration ceremony of the YMC was held on 18 October 2004 at the CILTHK office. Thanks to the support of the CILTHK Council and our honorable guests from the tertiary institutions, this ceremony signified the kick off of the YMC functions. Left: Venus, Alice, KY Leung, SC Wong, KF NG and XP Shi Left: Venus, Alice, Phoenix, Ling, Ray, Kenneth, Sam, Mark and Raymond Annual Dinner The first YMC Annual Dinner was held at Joseph s at the Graduate House, the University of Hong Kong on 1 March Around 90 participants and guests from tertiary institutions and CILTHK attended the Annual Dinner. The second YMC Annual Dinner was held at Kowloon Cricket Club on 23rd June About 35 members, students and guests joined the pool-side barbecue in the evening. Left Back: Mark, KY Leung, Venus, Terry, SC Wong, Ray, Ralph, Raymond and Sam; Left front: Alice, Phoenix, Ling and Kenneth Left: Alfred, Paul, KY Leung, Alice and SC Wong YMC 2nd Annual Dinner- A pool-side barbecue at Kowloon Cricket Club Left: Professor SC Wong, YMC Chairman ( ), presented a lucky draw present to Alfred Ng 10

12 YMC events ( ) Mentorship Programme The YMC Mentorship Programme aims at facilitating communications and experience-sharing between senior and young members within the Institute. Senior executives from the transport and logistics industry are invited to be mentors to provide support and guidance to YMC members (mentees) on their professional development. 1st Mentorship Programme ( ) 15 mentors and 29 mentees participated in the first Mentorship Programme. A welcome party was held on 30 March 2005 to indicate the start of the programme, and a Thank you party was held on 17 February 2006 to wrap up the programme. 2nd Mentorship Programme ( ) 7 mentors and 14 mentees participated in the second Mentorship Programme. There were four gatherings during the year. As the first gathering in the programme, YMC Mentorship Welcome Party was jointly held at the YMC Annual Dinner on 23rd June Another two gatherings were held on 11 August 2006 and 7 December 2006, and a Thank You Party was held on 27 March During the above gatherings, mentors and mentees had a onehour sharing session in the CILTHK office. Through the small group sharing sessions, mentees gained valuable insights from their mentors on different areas, including further studies and the working environment of the logistics industry. They found this kind of gathering is very meaningful to their studies and career life. Left: Peter Ng, mentor and his mentees Left 2: WT Hung, mentor and his mentees Mentee s feelings Ms Jenny Sin (mentee): The time for the lessons is a little bit rushed, which means we can only listen to the speakers. This Mentorship Programme offered me a chance to talk with experienced professionals. It is really helpful for us to practice the things learned from school. Through this programme, we made a lot of new friends. As they came from different schools, we could know more about the differences in different logistics courses. Ms Eliza Tao (mentee): It is a valuable experience to be a mentee in the programme. We have chances to meet other members in the programme. Further, it is a good time for mentors and mentees to share their opinions. Also, there should be more activities, such as gatherings, visits and workshops for the mentors and mentees. I believe it would be more entertaining. Mr. Simon Chan (mentee): Having met with Mr. Leung, I find that obtaining both work and life experience is useful to my personal and career growth. This programme provided me with an opportunity to enhance my knowledge and experience of the logistics industry in Hong Kong and the Mainland. I really appreciate the committee members of YMC who had organized a meaningful and fruitful programme for our young members. 11

13 YMC events ( ) Visits to Tertiary Institutes YMC Committee gave introductory talk to tertiary students To foster the linkage between CILTHK and students in the territory, committee members of YMC visited various tertiary institutions during the past few years, including The City University of Hong Kong, The Hong Kong Polytechnic University, Hong Kong Baptist University, the Hong Kong Institute of Vocational Education- Tsing Yi, SPACE of the University of Hong Kong and Lingnan University. During the visits, introductory talks about CILTHK and YMC were given to students, which enable students to recognize the professional status of CILTHK. Besides, by getting active feedback from students, YMC would hold customized events according to their interests and needs. Company Visits Through the visits to local companies in the transport and logistics industry, YMC members gain an exposure to the real practice of the company in the ever-changing business environment. Four company visits were held in the past few years. Company Visit 1: MTR Operation Control Center Thirty five participants joined the visit to the MTR Operation Control Center in Tsing Yi on 15 October The group was briefly introduced to the operations of the control center and the simulation system of MTR. YMC members found this visit very meaningful as they gained a deeper understanding on the operations of the most popular transportation mean in Hong Kong. Left: Alice Yip, YMC Executive Chair ( ), presented a souvenir to the MTR YMC visiting group watching the introductory video in MTR visit YMC visiting group Park N Shop representatives gave the briefing to YMC visiting group Company Visit 2: Fresh Food Distribution Center of Park N Shop On 13 November 2004, forty participants gathered at Sheung Shui to visit the Park N Shop Fresh Food Distribution Centre. The group visited the center and briefings were given on various operation units. It was a good opportunity to learn about the logistics system for the fresh food retail industry. 12

14 YMC events ( ) Company visit 3: Supply Chain & Logistics Technology Limited A group of twenty five participants visited the technology provider in the Science Park on 16 April This visit enabled participants to gain a better understanding on the applications of RFID technology in warehousing and retailing sectors. Left: Simon Yuen, YMC advisor, presents souvenir to SCL representative SCL representatives demonstrated RFID technology applications to YMC visiting group YMC visiting group YMC visiting group Company visit 4: DHL Asia Central Hub This visit was held on 18th October Due to the quota limitation, 15 members joined this visit. The group was given briefings of the Express operations process and facilities. The future direction and development plan was also shared by DHL to our young members. Students found this visit very interesting and they were very impressed by the wellestablished facilities of this well-known company in the express industry. YMC visiting group listened to the presentation given by DHL representative 13

15 YMC events ( ) Seminars In YMC Seminars, honourable guests from the transport and logistics industries as well as the tertiary institutes are invited to share their fruitful experience and knowledge to YMC members. Topics of the seminars focus on the interest of young members, such as further studies and career plans. Three seminars were held in the past few years. Seminar 1: What will you be after 10 years? Over 30 participants attended the first seminar of YMC on 26 October Active responses showed the interesting speech given by the speaker, Mr. C.K. Lam, the advisor of YMC. Young members found this seminar very meaningful to the development of their career and personal plans. Seminar 2: An overview of the Logistics Industry and Manpower in Hong Kong Simon Yuen, YMC advisor, gave the speech to YMC members The seminar was delivered by Dr. Simon Yuen, the advisor of YMC, on 17 January Over thirty participants were impressed by the informative speech on the present situation in the logistics industry. Recent manpower and recruitment market conditions were shared by Dr. Yuen with young members. Students commented that this seminar enable them to have a good preparation on job-seeking before their graduation. Seminar 3: Further study opportunities in Logistics and Supply Chain Management An informative speech on further study opportunities were given by Dr. Der-horng Lee from the National University of Singapore on 22 February Students who attended this seminar found this speech very useful for their future study plan. 14

16 YMC forthcoming events ( ) YMC forthcoming events ( ) Professional Training Scheme The Professional Training Scheme offers students an opportunity to apply their theories and concepts in the real working environment through the internship programme. Supporting companies like Schenker Limited (previously namely as Bax Global Limited), Kerry Logistics Network, Kowloon-Canton Railway Corporation, The Hong Kong and China Gas Company Limited, SDV Hong Kong Ltd and Western Harbour Tunnel Co., Ltd. already joined this programme. There will be more companies joining this programme in the future. Student Scholarship 2007 The CILTHK YMC Scholarship will be awarded to three students with each receiving a HK$10,000 individual scholarship award. The judging panel, which consists of CILTHK Council members, the YMC committee and the sponsors will select three qualified candidates according to the assessment criteria. All CILTHK members who are the full-time students studying in the tertiary institutes in Hong Kong are qualified to apply for the Scholarship programme. CILT International Young Members Day A one day programme will be held during the CILT International Council Meeting (2008) in Hong Kong. This full-day programme provides a valuable opportunity for YMC members to meet CILT young members from other countries. There will be group discussion to exchange views and ideas between the participants during the day. Annual Dinner This annual event brings all YMC members together for a sumptuous dinner and meets people of the transport and logistics industry. The run-down programme of Annual Dinner includes speeches from distinguished speakers, games and shows. Quarterly Seminar Honourable guests will be invited to share their views and experience on selected topics, such as recruitment preparation and MOCK examinations. Company visit Through visits to local or regional transport and logistics companies, YMC members would gain additional exposure to the logistics business and public transport in a real life environment. Mentorship Programme The YMC Mentorship Programme provides a platform for senior members and young members to communicate and gather within CILTHK. A mentor will be assigned to a pair of mentees to form a small group for experience sharing, guidance and support. 15

17 Articles from YMC members Articles from YMC members This session aims to share the articles prepared by YMC members on various topics in the transport and logistics industries. Three articles were written by five YMC members during their tertiary studies. Simple researching methods, including face-to-face interviews, data gathering from internet websites and magazine articles were adopted during the preparation of the articles. Article 1: The role of warehouse operation in the local furniture industry, as illustrated by the Case of IKEA (HK) Ltd. by Mr. Ray Yau, YMC Committee Member ( ) On the 8th July 2005, CILTHK YMC has conducted an interview with the IKEA Warehouse and Distribution Manager-Mr. Wilson Au in an IKEA warehouse in Sheung Shui. In this interview, we have put our focus on the warehouse operation of IKEA in the local furniture industry. Introduction IKEA is a well-known home furnishing company and it has lots of branches all over the world. There are a grand total of 216 IKEA stores in 33 countries or territories. The IKEA Group itself owns 192 stores in 24 countries and the other 23 stores are owned and run by franchisees outside the IKEA Group in 14 countries/ territories. IKEA is divided into three groups, which include the blue group, green group and red group. The blue group and green group are operated by the founder of this company (for example Sweden) and the son s of the founder (e.g. Malaysia) respectively. For red group, such as the Hong Kong and Taiwan branches, it is franchised to the Jardine Matheson Group. For the market share of IKEA, Europe is the greatest market, which accounts for over 80% of their sales. The second largest market is North America (16%) and Asia and Australia accounts for the remaining 3%. The role of the warehouse As Mr. Au said, the function of a warehouse will not only be confined to its traditional function of storage, lots of value-added service like packing, repacking and labeling are provided in the IKEA warehouse. In the IKEA warehouse, 60% of their products are furniture and 40% are home accessories. Basic warehouse operations The IKEA warehouse operations are divided into two major parts-warehouse and distribution. For warehouse, it is responsible for receiving, put away and storage. At the receiving operation, the IKEA shipping and quality claim departments are responsible for scheduling carriers, arranging the unloading of vehicle and inspecting for damage. However, the devanning of vehicles is outsourced to an independent contractor. After that, the put-away operation will physically moves the items from the receiving dock to the storage area of the warehouse and this process involves identifying the product, its location, moving it to a proper location and lastly, updating the inventory records to reflect the receipt of the item and its location. For storage, it is another major warehouse operation. The duration of storage varies from weeks to month for different products, which depends on the nature of the products (fast-moving or slow-moving products). 16

18 Articles from YMC members Also, in order to increase the efficiency of order-picking, IKEA will locate their stock based on popularity i.e. locating popular items near the marshalling area and unpopular items away from it. Then, the time required for order-picking can be reduced. For distribution, it is responsible for the outbound side of the warehouse and these includes store replenishment and home delivery services. The order-picking process requires IKEA warehouse personnel to select the items from the storage area, based on the information on a pick slip/pick list. When the order arrives at the shipping preparation area, items are placed on a pallet with proper package and shipping labels indicating the ship-to person and address which is attached to the package. Lastly, the items are loaded into the transport vehicles and the warehouse information system is updated to reflect the removal of items from the warehouse inventory and shipment of the goods to customers. Warehouse location and size In the past, the IKEA warehouse was located in Shatin and it was only for temporary storage. However, as the number of stores in Hong Kong increased, the size of the Shatin warehouse could no longer satisfy their demands, therefore, a new warehouse was needed. Reasons for the present location- Sheung Shui It is a difficult decision to determine the location of a warehouse. In fact, IKEA has faced the same problem when they found that the warehouse in Shatin could no longer satisfy their needs. For the present IKEA warehouse in Sheung Shui, it has two-floors area of square feet. Several loading bays are available on each floor, thus, vanning and devanning can be undertaken at the same time. Beside Sheung Shui, IKEA has considered several other locations for their warehouse and these include the Kwai Chung Terminal, the Tai Po Industrial Estate and the Yuen Long Industrial Estate. Kwai Chung Terminal The Kwai Chung Terminal has its geographical advantage. However, it needs to face the problem of serious traffic congestion and heavy rent in the terminal. Also, the multi-storey building in the Terminal is not suitable for a warehouse as this will complicate the internal transportation, thus, increasing the transportation time and cost. Tai Po and Yuen Long Industrial Estate The development of Tai Po and Yuen Long Industrial Estates focused on hi-tech industries. The operation of a large warehouse did not correspond to the government policies to develop a hi-tech industrial center, so, it was not encouraged by the government at that time. High stock turnover warehouse management Warehouse and inventory management are important to all warehouse operations and it is important to maintain a balance between the cost of lost sales and inventory carrying cost. If a product is overstocked, then, it will increase the inventory carrying cost. For stock-out, the company will suffer from lost sales, thus affecting customer satisfaction levels. 17

19 Articles from YMC members For the IKEA warehouse, they will have a regular review on different kinds of products on a regular basis in order to keep a safety stock level. Review on fast moving products and slow moving products will be conducted on a monthly basis and quarter-yearly basis respectively. For those dead moving products, they will be scarped or donated to charity organizations. Besides, in order to increase the accuracy of stock, cycle count and stock-take (annually or half-yearly) will be undertaken. Cycle count is responsible by a cycle count team who will check the items by ad-hoc such as last five or last three or based on item range. An auditor will manage the cycle count process. For stock-take, it will be done by all the warehouse staff. Fleet management (outbound logistics) Transportation is an important part of the outbound logistics as it helps deliver the products to customers. For IKEA, transportation plays the role of stores replenishment and direct delivery of products to customers. In fact, IKEA has outsourced their transportation team to nine contractors, however, the fleet management including the route planning and scheduling, are still managed by the IKEA warehouse. The number of contractors As Mr. Au said, using several contractors are more flexible and stable to IKEA. Even though one of the contractors may have problems on their transportation teams, IKEA can still rely on the remaining contractors. In addition, in peak seasons, IKEA s demand on the number of vehicles will increase dramatically and it is more flexible and easy for nine contractors to increase one or two vehicles in a short period of time. During off-peak seasons, demand on vehicles will decrease and it is easier for IKEA to reduce the number of vehicles for each contractor evenly. Secondly, using several contractors will maintain a competition among service providers. Once there is competition, contractors will have the incentive to provide a better service. More importantly, as there are several contractors, IKEA will have a stronger bargaining power when dealing with them. If the service does not meet the standard, their contract would be terminated. Although the transportation service of IKEA is outsourced to independent contractors, in order to protect the image of IKEA, all these vehicles are printed in yellow colors with the IKEA logo. Human resource management The management of people is an important part in the IKEA warehouse. In the IKEA warehouse, there are totally seventy-five staff (excluding independent contractors) and their principle of human resource management is focusing on communication. In order to maintain a good relationship between the staff in the company, they have provided lots of channels and contact windows for the staff to reflect their opinion and express their feelings. For examples, regular meetings between departmental supervisors and front line staff, and performance appraisal is carried out regularly. Also, in order to ensure the service level of IKEA staff, on-the-job training and off-the-job training will be provided to them. For examples, in IKEA, as the staff in the customer service center needs to receive phone call and handle customers complaints, they will take some training courses on communication skills and telephone manners. Besides providing training to IKEA staff, the staff of independent contractors will be trained too. For examples, as the IKEA home delivery service includes furniture assembly, training on furniture assembly and wall mounting would be provided to them. In addition, in order to increase the efficiency of the warehouse, IKEA has designed a set of indicators to measure productivity of the process, and work in the warehouse, such as time and labor spent on vanning and devanning, put-away and order-picking etc. 18

20 Articles from YMC members Views on using Bar-code system and Radio Frequency Identification The trend of applying IT systems into a business has become much more common in Hong Kong such as the use of bar-code systems or even RFID. In IKEA, their inbound and outbound logistics process still relies on manual records. As Mr. Au said, lots of companies including IKEA understand that an IT system has the advantages of reducing human errors and increase efficiency. However, companies cannot neglect the heavy initial investment cost. Therefore, a company should make a balance between the cost and benefit. The application of IT system in warehouse In October 2004, IKEA implemented a new ERP system and at that time, IKEA encountered lots of problems. Mr. Au pointed out that applying a new technology or system into a company needs to deal with lots of problems and the key to deal with these problems is communication. I.e. The reasons for change as well as the advantages of a new technology or system should be communicated to the staff. Only with communication and understanding, can team spirit be created. After that, training courses on the new system should be provided to the staff and last, corresponding tests are given to the staff to test their knowledge on the new system. The future of IKEA warehouse In the future development, IKEA has considered building a distribution center by joint venture with some companies in Mainland China and relocating their present warehouse to Mainland China where the rent is relatively lower. More importantly, the rental price of the present warehouse in Sheung Shui has an upward pressure of 3 to 4%, thus, in long run, IKEA will consider moving their warehouse to China. However, in moving their warehouse to China, IKEA will face lots of difficulties. Firstly, it is long border-crossing time. As the store replenishment of IKEA relies on the warehouse in Sheung Shui, the unstable border-crossing time will make the management of store replenishment difficult. Second, home delivery service is an important part of IKEA business. In peak Alice Yip, YMC Executive Chair ( ), presented souvenir to Wilson Au, Ikea s warehouse manager seasons, more than forty 5.5 tonnage medium goods vehicles will be deployed for providing home delivery service. Therefore, the long border-crossing time will directly affect IKEA customer service level and its business. Special thanks: Mr. Wilson Au (IKEA) Reference: IKEA Hong Kong IKEA warehouse in Sheung Shui 19

21 Articles from YMC members Article2: KCRC West Rail by Ms Man Pui Ling, YMC Committee Member ( ) & Ms Phoenix Sin, YMC Committee Member ( ) Introduction As a result of the rapid increase in population, the Government has, for the past decade, developed a number of sub-urban areas in the Northwest New Territories, with an aim of shifting the population away from the densely populated city centers. Alongside this development, an efficient railway network is essential to connect these outlying areas with the city centers in order to sustain this development in the long term. The KCRC West Rail In 20 December 2003, the establishment of Kowloon-Canton Railway Corporation s West Rail Project aimed to get improvement in the transportation of the outlying areas. This 30.5 kilometer West Rail aims to provide a fast, comfortable, reliable and environmentally friendly transport link from Kowloon downtown to the Northwest New Territories - or vice versa - in 30 minutes. The West Rail has nine stations, running through Nam Cheong in Sham Shui Po, Kwai Tsing, Tsuen Wan, Yuen Long and Tuen Mun, embodying the longest tunnel link (5.5 km) and viaduct (13 km) and making it the largest infrastructure project in Hong Kong in recent years. The KCRC is also investing HK$4.044 billion (US$519 million) in 322 new train cars developed with the environment in mind. The trains energy-saving braking system cuts power consumption by 25 per cent, while carriage design and noise absorption materials can reduce noise inside and out. Benefit of West Rail West Rail provides residents with the best possible range of transportation choices and levels of service instead of bus only because West Rail is under the Public Transport Plan for the Northwest New Territories area, carried out after extensive local consultation. Large volume of community Each West Rail train is made up of seven cars initially and will be increased to nine cars as rideship grows. 20 trains are operated per hour per direction at 3-minute intervals during peak hours initially while trains are running at intervals of five to twelve minutes during off-peak hours. Service frequency can be increased to 33 trains per hour or at 105-second intervals, carrying a maximum of 100,000 passengers per hour per direction. By this information, we can know how many communities can use West Rail as another choice of transportation. Fast track and Easy Access Moreover, once the West Rail became operational, it provides convenient services to passengers travelling between the Northwest New Territories and urban Kowloon. West Rail is a 30.5km twin-track passenger railway with nine stations, linking up Sham Shui Po in West Kowloon and Tuen Mun in the Northwest New 20

22 Articles from YMC members Territories. A journey from Tuen Mun to Nam Cheong on West Rail will take only 30 minutes. The maximum train speed is 130 km per hour, average speed is 60 km per hour (including dwell time. Hence it is a shorter transit time compared with road transport, so that it is good facility for residents. Wide Network For the West Rail network, which encourages passengers to walk to West Rail station, it is well designed for pedestrian facilities. For residents outside a walking distance to WR stations, good feeder services are required. Feeder services include new feeder bus routes, and modifying existing bus and green minibus (GMB) routes to various railway stations. The feeder service, which is under the Public Transport Plan, will be phased gradually. Major changes such as cancellation of bus routes will only be introduced after passenger travelling patterns have been carefully monitored and assessed. The KCR Corporation has also formulated a plan to modify its Light Rail Transit (LRT) network in the North West New Territories gradually after the commissioning of the LRT Tin Shui Wai Extensions and West Rail. Job creation Furthermore the West Rail created about 13,000 jobs within a few years of construction. As it needed much labor for building construction and maintaining the quality of service provided by West Rail, everything being equal, priorities will be given to local workers in accordance with government policy. Therefore the demand of labor is improved while improving the unemployment rate. For example the work related to the Tai Lam Tunnel and Kwai Tsing Tunnel sections allowed 14 main civil construction contracts to be awarded. Property Market In addition to the meeting transport needs and providing immediate employment opportunities, the West Rail will also enhance the development potential of the vast rural area of the North West New Territories, which is one of the strategic growth areas in terms of housing in the next 20 years. It can be illustrated with a comment by Mr. Louis Chan, Director of Centaline s New Territories district, which indicated that the residential department in the New Territories has had a satisfactory performance. According to these sources, commission income was highest in the Northern district, at $16.03 million; and there were 432 brokered transactions. Hence we can appreciate how West Rail affects the housing performance. Other impacts of the KCRC West Rail Despite all the benefits of speed and convenience for residents to travel between Kowloon and Northwest New Territories, there are also other impacts caused by the KCRC West Rail. Competition Firstly, the other modes of transportation, especially the franchised buses, will be affected by the establishment of West Rail. Whereas people can now have more choices of transportation, the competition between the franchised buses and the West Rail becomes apparent. The determining factors to secure the market share lie in the companies ability to meet people s expectation in terms of comfort, speed, effectiveness and price. 21

23 Articles from YMC members Environment The other impact brought about by the West Rail is the effect on the environment. Although the West Rail operation is designed to be environmental friendly, the construction itself had created a devastating effect on the environment. Much of the wet lands along the railway lines were destroyed during the construction stage of the railway. Although KCRC had promised to limit the impact on the environment, the adverse outcomes were still beyond people s expectation. In addition to the damage in the natural environment, noise pollution is another problem created by the West Rail operations. Residents who live near the stations and along the railway lines are constantly disturbed by the noises created by the running trains. Therefore, the KCRC West Rail service is indeed not as environmental friendly as the company had claimed. Conclusion On the whole, all mentioned arguments as above have their points and grounds. WR is actually caught in a dilemma in reconciliating these two completely different viewpoints. However, a new infrastructure is certainly giving society more opportunity for development. Shall we hope that West Rail gives us more benefit than others and we can utilize it as much as possible? Reference: KCRC 22

24 Articles from YMC members Article 3: Development of RFID for Logistics by Mr. Ralph Tong, YMC Committee Member ( ) & Mr. Raymond Wu, YMC Financial Secretary ( ) Introduction We were pleased to have a visit about Radio Frequency Identification (RFID) on April Through the introduction and demonstration on the application of RFID for warehousing and retailing, we enrich our knowledge on RFID. RFID concept RFID is a kind of technology using radio frequency transmission to identify people or objects automatically. In recent years, RFID has been a widely used technology in the logistics and supply chain industry in enhancing efficiencies across the warehouse management and the supply chain network. RFID history RFID is not a new technology. It is generally said that the origin of RFID can be traced back to the Second World War, in which radio signals are used to identify whether the returned aircraft are German ones or Allied ones (Passive RFID system). The boom of RFID development started in the 1970s. The date 23 January, 1973 could be regarded as the start of the introduction of RFID when Mario W. Cardullo claims to have received the first U.S. patent for an active RFID tag with rewritable memory. After that RFID technology developed rapidly and used widely in the warehouse and supply chain industry. Infrastructure of an RFID System RFID consists of several components: antenna, transceiver and transponder. RFID tags (transponders) are small, film-like smart labels embedded with silicon chips. They can be attached to many kinds of item, like goods and pallets. The antenna is used to receive the radio frequency transmitted by the tag. RFID works when the tag is activated and transmits data back to the antenna. Such data is used to notify a programmemable logic controller that an action should occur. RF tags can be programmemable or permanently coded and can be read from up to 70 feet away. Surface acoustical wave (SAW) tags are permanently coded and can be read only within a 10-foot range. RFID could be classified into Low-frequency RFID systems and High-frequency RFID systems according to the transmission ranges. For low-frequency RFID systems, it has short transmission ranges (generally less than 6 feet), while the high-frequency RFID systems offer longer transmission ranges. RFID VS Barcode There have been some discussions that RFID could become an alternative to the bar code. RFID significantly smoothes the information flow through its ability to receive data from a wider range. Different from the 23

25 Articles from YMC members barcode system, RFID does not require line-of-sight. As radio waves are penetrable and can pass through a wider range, better data transmission could be achieved when compared with using line-of-sight. Besides, RFID could receive data regardless of the surface of the items being attached. The tags could be placed on a round surface but barcode systems cannot. RFID tags can function properly in problematic environments, such as extreme temperatures, high moisture levels, and with rough physical handling. These environments are unfavorable to barcode labels. The comparison between Bar Codes and RIFD can be summarized by the following table. RFID Advantages over Bar code: Facilitates out-of-sight data read Cannot be photocopied works on round surface more automated, less human intervention multiple-object identification carries much more data RFID Tags can be attached to: Jewelries, watches and other luxuries Company assets, documents and personnel Apparel, luggage, cars People, livestock, pets Cartons, pallets RFID Bar Code Reading Method Wireless - without sighting Sighted by CCD or Laser scanner every product Speed Multiple tags in a single pass Single label per scan Cost Around US$0.25 to $0.5 per tag Less than US$0.01 per label (in 2005) (in 2005) Storage of Information Several thousand chars / Several 1D bar code: 20 chars kilobytes 2D bar code: 2000 chars Update Information Wireless update the information Replace another new bar code label in the tag Durability More durable than bar code Easy to be damaged RFID s applications It is true that Hong Kong people would not know RFID technology, however Octopus, the automatic system of tunnel tolls and staff identification cards are also the examples of application on RFID. It is obviously useful in enhancing the efficiency of crowd and traffic flow. RFID is suitable for the use in reading data at a short distance. Since RFID can save much more time to access many data at one time, it must replace the bar code system in the future. However, RFID is a still very immature technology. Therefore, we need some world-class companies to implement this technology first. Wal-Mart, which is one of the biggest retailers in the World, requests about a hundred of its suppliers to use RFID in the warehouse. It can chase the goods and reduce the amount of excess inventory and mega sales. 24

26 Articles from YMC members RFID s weakness As said before, RFID is still not a mature technology in the industry, so there is still a lot of room for improvement. First, the accuracy of RFID is one of the concerns when we are using it. In a pilot test at the Hong Kong International Airport (HKIA), it is still no more than 70% accurate for reading the tag attached to the baggage. The result tells us that it is still not reliable. Second, the cost of manufacturing tags is also one of the concerns. Now, the technology is still developing, so the cost would be reduced in the future, i.e. HK $1 for each now. For using the tag in high-valued goods, $ 1 represents a small proportion of the whole cost. How is it used in low value goods? For example, snacks and chewing gum. We assume that the cost of chewing gum is $ 2, and then it would be increased by 50% ($1) if we attach the tag on the chewing gum. So RFID can just be tested for the high-valued goods currently. Third, the coverage of readers is the most important factor for using RFID. For the passive tag, the reader just can read within 10 meters. If we have to check a cubic size of goods on a pallet, we need to set the readers to circumvent the pallet. RFID s opportunity For retail, RFID can improve the customer relationship management. By analysis of the customers consumption patterns, retailers can get a larger profit from the promotion. For retail operation of the retails, RFID can determine whether the inventories had been taken out. Now, inventory control is an important part of retail. Since RFID can prevent stock out, so it can enhance the productivity efficiency in retailing. Conclusion RFID can give us a lot of benefits in daily life. Therefore, it would be useful and become popular in the future. However, this technique is still not in a mature stage. It needs to be further developed, and then the cost of using the tag would be lowered. In fact, RFID can be an important position in the market if users start to use it. One of the methods for confirming the usefulness in the supply chain is standardization, which can enhance the users confidence for using RFID. Also, it can make all enterprises use this technique, without consideration on the high cost. So, the application of RFID would have a deep impact on international trade, manufacturing and the operation of the supply chain. References: Hong Kong RFID SCL Metro Group The RFID Knowledge RFID technology & its application 25

27 Acknowledgements On behalf of the editorial board, we would like thank all who had participated in this publication; all your valuable views and ideas are important to us. Besides, we would like to express our heartfelt appreciation to CILTHK Council & committees and the supporting organizations below. Thanks to your kind support, YMC events had been successfully held in the past few years. We herein wish you would continue with your generous support to YMC, and we will continue to hold numerous interesting events for young members. Supporting organizations: DHL Express (Hong Kong) Limited Hong Kong Baptist University Hong Kong Institute of Vocational Education (Tsing Yi & Morison Hill) IKEA Kerry Logistics Network Kowloon-Canton Railway Corporation Lingnan University Park N' Shop Schenker Limited (previously name as Bax Global Limited) SDV Hong Kong Ltd SPACE of the University of Hong Kong Supply Chain & Logistics Technology Limited The City University of Hong Kong The Hong Kong and China Gas Company Limited The Hong Kong Polytechnic University Western Harbour Tunnel Co., Ltd 26

28 Editorial Board Mr. Paul Tsui, Chariman of YMC ( ) & Advisor of YMC ( ) Dr. Simon Yuen, Advisor of YMC ( ) Ms Alice Yip, Executive Chair of YMC ( ) & Committee Member of YMC ( ) Mr. Raymond Wu, Financial Secretary of YMC ( ) & Committee Member of YMC ( ) Ms Man Pui Ling, Committee Member of YMC ( ) Ms Phoenix Yuen, Committee Member of YMC ( ) Mr. Ray Yau, Committee Member of YMC ( ) Mr. Ralph Tong, Committee Member of YMC ( )