NIU Xiaohan (12746231)
Applied Business Project Proposal
( Logistics industry in Hong Kong )
Table of Contents
1 Background of the Industry 2
1.1 Logistics industry in Hong Kong 2
2. Managerial Problem 2
2.1 SWOT Analysis 3
2.2 The Problem 4
2.3 Importance of the problem 5
3. Objectives 6
4. schedule 9
1 Background of the Industry
1.1 Logistics industry in Hong Kong
Hong Kong ranks among the countries with high transport and logistics activity (Rashidi & Cullinane, 2019). Some of the factors giving the country such status include strategic location and availability of ports. The former and the latter have seen an increase in commercial activity. During 2012-2016, the industry suffered a downward trend due to the growth of China’s mainland logistic infrastructure and the relaxation of trade restrictions. Container throughput, for example, has dropped between the years 2012 and 2016. However, the last two years have seen the shipping industry experience increased demand. For instance, the container service of the country experienced an increase between the years 2016 and 2017. Furthermore, the transport and shipping industry receives a high rating concerning value-added and employment rates. The sector greatly contributes to the country’s economic pillar.
With its efforts and incentives, Hong Kong’s government has made a major in warehousing and storage (Xiao et al., 2021). The country primarily deals with international shipments and activities, exposing shipping companies to taxation challenges. However, the government promises to solve the problem to attract global investors and promote industry operations. Other government efforts since 2016 saw an increase in commercial activity and an increase in businesses.
These companies operate in many areas such as finance, creativity, technology, distribution and others. The government expects the companies to create thousands of new jobs in Hong Kong and generate billions of dollars of cash in total within the first two years of operation or growth. A high job creation potential will significantly contribute to the country’s economic growth.
Logistics statistics reveal that the high number of logistics in the industry intensifies competition and small firms face supply chain visibility risks. (Hanet al, 2018). Big differences depend on the region. According to the International Monetary Fund (IMF), the country has excellent infrastructure functions, with the highest expected annual growth rate. However, intensifying industry rivalry increases the threat of supply chain invisibility among growing logistics and transportation companies.
2. Managerial Problem
2.1 SWOT Analysis
In terms of infrastructure and regulation, Hong Kong is doing well. For instance, the public sector, state-owned firms, government organizations, etc. Hong Kong also has 3PL and 4PL firms, freight carriers, courier companies, shipping companies and intermediaries, terminal operators, air transport companies, private warehouses, financiers, insurers, information technology providers and consultants. Customs, regulatory agencies, financial, educational, scientific, and other contexts, and cargo owners are all customers.
Complicated and complex regulations, particularly in government, make meeting duty requirements difficult. It’s tough to provide market-driven solutions for bureaucratic state-owned firms. Major gateways (such as ports) must be privatized and updated in the infrastructure environment. They also face operational issues that ports and customs procedures cannot address. Progress is scarce. The logistics organizations require advanced logistics and quantitative capabilities.
The logistics sector in Hong Kong provides national development potential and provides opportunities at region and continent levels. As the country’s industry tackles global logistical challenges, it has a chance to produce solutions that can market globally. The country requires the development of stable and healthy supply chain solutions. Such will promote the visibility of industry firms.
Trade associations are well-integrated in this industry and serve as ideal entrance points for collaboration. The Hong Kong government’s current focus on infrastructure upgrades, particularly ports, presents collaboration and innovation opportunities.
The country’s logistics enterprises suffer investment risk, but SMEs in nearby countries face lower-risk options. They also incur currency concerns, as they prefer to conduct transportation-related purchases in US dollars rather than local currencies.
Mature markets, a worsening recession, intense rivalry, and variable operating expenses are other logistics companies’ problems. Unfavourable government regulations, seasonal swings, demographic/sociological issues, recessions that affect consumer purchasing, and, of course, the exact location, as includes the rise of new competitors in are some of the other hazards that arise.
2.2 The Problem
Transportation and logistics are the backbones of all economies and the driving force behind all industries, including agriculture, manufacturing, and services (Wang, 2021). However, as with all businesses, we are currently undergoing significant changes due to technological advancements, changing consumer expectations, and stringent laws. The worldwide prognosis for the industry is positive and expected to grow shortly. In the logistics industry, small firms are particularly optimistic. The road ahead is treacherous—SMBs (small and medium-sized businesses). The challenge of supply chain visibility is not a new one. Many other countries have been scored low on metrics such as cross-border clearance processes, trade quality, infrastructure, inconsistent tax regimes, and consignment track and trace methods by the World Bank’s global Logistics score Index for numerous years (Blakstad & Allen, 2018).
Due to diversified supplier networks, globally scattered clients, varying regulatory requirements, and shipping issues, today’s supply chains are complicated and wide. When the present crisis crested, 75 per cent of enterprises reported supply chain interruptions, according to a 2020 poll. About 44% of them didn’t have a plan to deal with it. It’s critical to understand what’s going on in the supply chain, especially during and aftermarket volatility. Managers must weigh the costs and benefits between demand and service levels to make accurate judgments and adjust to unforeseen changes. And supply chain visibility (SCV) is crucial in this regard.
According to a Gartner survey, more than half of firms have yet to begin actively establishing a digital transformation strategy for their supply chains (Blakstad & Allen, 2018). It’s critical to have a well-rounded view of the supply chain system. The supply chain could be disruptive, costly, and inefficient without them. Consider monitoring materials, components, assemblies, and finished goods from suppliers to manufacturers to customers. Multiple parties, technology, logistics service providers, and various procedures are usually involved throughout the entire process. In their supply chain networks, businesses face a lack of comprehensive transparency.
Poor supply chain planning, integration, and execution are all common issues (Yadav et al., 2020) that arise due to this. Data organization, processing, and management inefficiencies. Due to technical limitations, the availability of useful knowledge is limited. There are no synergies between automated and manual processes. Incapable of anticipating and preparing for danger. Misalignment of data flow between parties. There is no unified data model for merging critical data from various planning and execution systems.
Limit empty runs by adapting driver availability to the needs of freight companies. This is important to keep logistics costs low. According to data from logistics consultant Armstrong & Associates, this is important because the country accounts for almost twice as much logistics cost as North America. The country’s smallest logistics companies are not visible, which is one of the reasons why consumers do not have access to them.
2.3 Importance of the problem
Supply chain transparency plays a significant role in company competitiveness. Proper alignment of the company along supply chain parameters assures clients concerning effectiveness of engaging it in business. Supply chain transparency helps manufacturers plan their production processes and expand their capacity (Zhu et al., 2018). Real-time visibility gives manufacturers great insights into production volumes, inefficiencies in manufacturing, and raw material procurement or sourcing important order backlog information. Real-time updates can assist suppliers in developing plans and optimizing their inventory management operations. Transparency in logistics implies having timely and proper access to current loading, shipping, and order delivery information. They will be able to better manage their day-to-day operations and track product movements due to this.
It gives end-users information about the entire cycle and aids in keeping shipment and shipping status up to date. Transparency in real-time keeps you informed and improves your client experience. It’s critical to have complete visibility into the supply chain, from source to destination, to guarantee that everything runs smoothly. Supply chain visibility enhances planning the production process, fulfilling orders, and integrating the supply network.
Logistics companies must maintain complete transparency across their distribution network to remain competitive (Sunny et al., 2020). This is beneficial to all parties concerned. Enterprises can plan and execute their goals more efficiently with real-time updates at all stages of the supply network. Real-time visibility into the supply chain enables businesses to deliver and maintain outstanding customer service. It is important to identify and fix problems in real-time to minimize inefficiencies and overcome potential obstacles. Supply chain transparency enables executives to make data-driven decisions, leading to intelligent planning, agile processes, and future-oriented initiatives. Access real-time data and insights at different phases to save money and increase sales or profits.
3. Objectives of the applied business project
3.1 Enhance company supply chain visibility
Logistics companies should work towards supply chain visibility. Such visibility ensures high company accessibility and increases business probability. Greater visibility entails capturing all data, analyzing it rapidly, and presenting timely relevant information. As a result, stakeholders may make better decisions and control each supply chain activity. An integrated system for data management plays a crucial role in the transparency of logistics and supply chains. Data models are the foundation for creating control towers on supply networks and enable automation, predictive analytics, and new business models. Consider using complete supply chain management software if having an end-to-end picture of your supply chain is an issue. Complex supply and demand networks require real-time transparency, uniformity, and fluctuating market dynamics.
3.2 Consolidation of data platforms
It’s ideal to use a single platform that consolidates data and transforms it into useful information. By predicting future events and providing suitable action plans, AI-powered technology improves supply chain planning, cooperation, and execution. Customers today expect more from businesses in every manner. Companies can give a wonderful customer experience by considering payments, tracking, shipping, fulfilment, and other factors, enhancing customer retention, loyalty and overall company competitiveness.
3.3 Encourage employees to adapt to new systems
To keep up with the current trends in the field, train other business organizations, employees, and others to visualize data and other supporting technologies. It is crucial. Supply chain visibility is more likely to be tracked by teams able and willing to adapt to new technologies, leverage cloud-based tools, and build effective workflow procedures.
To get the most out of the company budget, identify essential supply chain demands and apply the optimal combination of technology. To produce tangible value, convert data into great supply chain opportunities, reduce cycle times and improve automation. They should make an effort to eliminate manual labour, shorten lead times, improve decision-making, and boost income.
3.4 Promote Investment in Virtual technologies
Invest in virtual technology, automation and predictive analytics. Reorganizing the supply chain seems almost impossible, but you can consciously revive the system: robotic process automation, the Internet of Things, machine learning, and artificial intelligence. Algorithms have opened up new possibilities for what data can do. For logistics organizations, introducing new and creative technological solutions is critical. As labour shortages worsen, the competition heats up, and customer demands rise, technological advancements can boost productivity while reducing time, cost, and error. Thanks to automated technologies and data-driven software solutions, pre-package labelling and warehousing have become time-consuming processes.
3.5 Enhance monitoring of logistics activities
Companies can monitor goods full-time, manage messages, and create custom reports with the cargo monitoring system. Data analysis aids in enhancing customer service, operational efficiency, and security. Many of the world’s largest logistics corporations use robotics and autonomous gear. These might assist you to save a lot of time when it comes to processing and delivering your order. IoTs have the potential to reduce risk and ensure the safe delivery of goods. The best fleet management system integrates with specific sensors of the current truck generation. With this software, you can monitor the truck in real-time and onboard cargo and important vehicle data while the truck is in motion.
3.6 Promote real-time tracking
Real-time supply chain transparency is extremely useful since it allows logistics organizations to track their current operations and allows them to plan for the future with foresight. Supply chain disruptions are exacerbated by trends such as automation, data-driven planning and forecasting, and real-time crisis management. Adding value to a company’s supply chain by boosting real-time transparency is a primary focus for forward-thinking businesses looking to streamline processes, save money, and emerge victorious from the trenches.
3.7 Efficient Decision Making
Logistics companies should strive for efficient decision making. As soon as they find opportunities for improvement, they need to address those needs. Now that the management knows where everything is in the supply chain, they can run proper solutions solution. The frequency and size of data exchanges are increasing rapidly and dramatically. The ability to use this data in real-time is essential. The key factor is understanding the most important data to solve a critical business problem, what it means, and what to do if an exception occurs.
Exam Weeks+ Term Break
Tabling before board
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NIU Xiaohan (12746231)