The study was done by Kurt Salmon Associates. It identified problems and illustrated the benefits of adopting supply chain management techniques and aimed to assist exporters of apparel, footwear, toys and consumer electronics, although the inherent advice was meant for all businesses. The US-based Supply Chain Council, once defined SCM simply as 'management of all internal and external processes or functions necessary to satisfy a customer's order'.

HKANA cites a definition that says, 'supply chain management is an industry strategy where business partners jointly commit to work together to bring greater value to the consumer and their customers for the least possible overall supply chain cost'.

While reminding exporters that embracing new techniques could save them billions overall, they were urged to exploit available technologies to their advantage.

Having analysed a variety of issues, taking into account the strategic importance of supply chain to exporters, the study recommended several initiatives including pilot projects on practices such as speed-sourcing (last-minute ordering), replenishment, sourcing and distribution and product development.

Pilot projects and the results they achieved helped inflame interest in the supply chain practices, according to the HKANA, so much so that an executive certificate programme on the subject continues to be oversubscribed. (See story Page 5) One pilot project brought together a retailer and a manufacturer, Park'N Shop and Johnson & Johnson, and tested the concepts of forecasting demand and continuous replenishment. Some important lessons were learnt in terms of the trading environment, organising the whole process and implementation. Another project brought together two leading consumer product companies, Hong Kong Convenience Stores, which runs the 7-Eleven chain, and Swire Coca-Cola Hong Kong. These enterprises focused on the management of various product categories, which included establishing strategy and capabilities, managing assortments, promotions and introduction of new products. There were several other studies involving Wellcome, Mannings, Wing On Department Stores and Sims Trading, and these enterprises tested many different supply chain practices.

Another initiative involving the consumer products industry as well as apparel and general merchandise retailing in department stores, aimed to analyse various other issues and make recommendations. The study showed retailers are ahead of manufacturers in supply chain practices, but both are below the world average in how well prepared they were.

Once again, businesses were reminded that use of supply chain ideas 'is still relatively immature in Hong Kong' and that much needs to be done.