'All major companies, for example, have moved a percentage of their manufacturing to China in the past few years or have plans to do so in the future.'

Companies are also setting up in the mainland and Hong Kong to take advantage of China's burgeoning consumer market - as the country opens its markets in line with World Trade Organisation stipulations.

'This is going to happen more and more,' says Ms Lin.

There are problems in the way individual companies deal with these outside influences, and how they deal with supply chain issues, she says. 'They have to consider what is happening in the global supply chain to see how they can fit into it.'

The big issue nowadays is how to compress the supply chain to improve its efficiency and responsiveness to market change.

'Consumers change their mobile phones every few months to take advantage of new technology, making it essential for companies to be quick to market with their latest models. If they are not, they will suffer with excess, and sometimes obsolete, inventory,' says Ms Lin.

Another important factor is the need to minimise inventory. No one wants to hold excess levels of inventory because of what it does to a company's cash flow, she says.

With these factors playing an increasingly important role, Ms Lin says companies on the mainland and Hong Kong need to pay more attention to the flow of information and the processes along their supply chains.

'It is not enough for companies to continue with the typical trading or manufacturing role. There is a need to manage information and add value to processes in order to reduce cycle times, to support techniques such as just-in-time [the supply of raw materials to manufacturers as they are about to use them, rather than them holding inventory] and to improve the speed to market,' she says.

At present, there is a reactive culture whereby companies will implement certain supply chain measures, such as the bar-coding of products, because they are being asked to by customers.

Companies could use the information that exists in the bar code in their internal information technology systems or to automate their warehousing. It would then be a simple step to manipulate that data to analyse supply chain performance, for forecast and production planning, and to improve the supply of information to suppliers and service providers.

'Companies see e-business as a component of cost when they could be using it to collaborate with supply chain partners to drive efficiency improvements,' she says.

Wal-Mart Stores and a few other companies on the cutting edge of supply-chain management will show their first-tier suppliers what is leaving their shelves. This allows suppliers to prepare for future orders and to communicate these up the supply chain.

'It is not just automation that drives efficiency improvements. The data must be able to be used by both companies' IT systems. If one has to convert the data, mistakes are made and the data becomes less useful,' says Ms Lin.

'It is also about getting rid of unnecessary or costly layers and processes, duplication and complexity - just as Wal-Mart has done. It is about compressing supply chain processes.'