Logistics all the way

by John Cremer

Raymond Fan, secretary, the Hong Kong Logistics Development Council

The sector holds the key to Hong Kong's economic fortunes as it continues to expand rapidly. More training is now being put in place to provide quality staff so that logistics would meet its challenges ahead

There is no doubt that the basic facts are impressive. Hong Kong can boast the world's top container port in 10 of the last 11 years, the busiest airport for international cargoes and a proud position as the world's tenth largest trading economy.

The bald statistics for 2002 will show over 19 million TEUs (twenty foot equivalent unit) of containers shipped, more than two million tonnes of airfreight dispatched and a total merchandise trade performance of above US$400 billion. But what they do not always reveal is the central role played by the logistics industry in propelling the economy forward.

Raymond Fan, deputy secretary for economic development and labour, who also serves as secretary of the Hong Kong Logistics Development Council, confirms that the logistics sector fully merits its selection since 2001, along with financial services, tourism and professional services, as one of the "four pillars" of the local economy.

Citing the example of someone buying goods via the Internet, Mr Fan states, "From the moment you click to confirm a purchase to the moment the goods arrive at your door, it's all logistics, all the way. You trigger the logistics process, which is linked to inventory control, and that starts the whole chain from factory to truck, port, ship, warehouse and final delivery."

Complete cycle

However, it is not simply the transport of finished products that matters. With China now acknowledged as the "factory of the world", the whole cycle can begin with the import of raw materials for factories via Hong Kong and, before that, merchandise planning and procurement. As Mr Fan explains, "Logistics is often thought of as being a chain but, more realistically, the activities are like a web or matrix as many events are designed to take place simultaneously. Many phases are involved and, these days, even if you work in insurance, quality control, labelling or packaging you can think of yourself as working in logistics."

Using this broader definition, the Government estimates that about 200,000 people or 6.3 percent of the workforce are now employed in the sector and all the signs are that these numbers will rise. Air transport alone already accounts for close to 25,000 workers with seafreight not far behind with around 20,000. And as the scope of logistics companies expands to absorb functions such as cargo tracking, purchasing and materials management, major international retailers are increasingly outsourcing which increases demand for new talent.

Providers need a full range of expertise

Gearing up

Several initiatives have already been taken to promote the industry and train qualified staff. The H-logistics Project Group, overseen by the Logistics Development Council, deals with human resources issues and has a mandate to look at educational requirements and courses and then establish a framework of professional qualifications.

"We are reaching out to institutes at all levels," says Mr Fan, "training councils and secondary schools included. Previously, logistics has not been well understood by the community but providers need a full range of expertise from labourers to IT specialists, inventory managers and finance planners."

Roadshows conducted by industry leaders are already visiting secondary schools to spread the word and the Education and Manpower Bureau is preparing a module introducing logistics concepts to be taught in schools. The Hong Kong Productivity Council and the Hong Kong Polytechnic University are collaborating with the S-logistics Project Group which supports with the development of small- and middle-sized enterprises, to set up pilot 10-week training courses, starting in November, for both frontline service staff and senior managers. And the Hong Kong Logistics Association provides details on its website of upcoming courses on offer.

It is widely expected that infrastructure projects like the Hong Kong-Shenzhen Western Corridor and the Hong Kong - Macau - Zhuhai bridge moving to streamline procedures for cross-border cargo transport and CEPA, with its assistance and concessions for Hong Kong investors in China, will all have a knock-on benefit for the logistics business.

Not surprisingly, the message from Mr Fan about job opportunities is decidedly upbeat. "Logistics needs graduates from many different disciplines. Because of the globalisation of trade, logistics is already a big business and will be even more important in future."

Supply chain courses in demand

By the latest reckoning, close to 130 logistics-related courses are now being run by various college-level institutions and professional bodies in Hong Kong. This reflects a need to formalise qualifications and experience in a fast-changing industry at the forefront of globalisation and IT innovation. Logistics now goes beyond transport to embrace procurement, quality control, systems and finance, and on-going education is essential to keep pace with developments.

Currently, one of the best-regarded courses is the graduate diploma in e-supply chain and logistics leadership offered by the Poon Kam Kai Institute of Management (PKKI) at the University of Hong Kong. Programme director, Dr Stephen Ng, emphasises that the rapid evolution of supply chain study has been a feature of the last decade bringing a need for new approaches and a re-evaluation of management techniques. He believes that the growth of e-commerce will only accelerate this process.

"Logistics activities involving cargo tracking and the physical transportation of goods are a major portion of total supply chain management (SCM)," says Dr Ng, "but the add-on parts we cover focus more on strategy, networking, collaboration and leadership. Ultimately, these are issues which will affect every business."

PKKI's course is designed for executives who hold a university-level degree and have at least three years' postgraduate work experience in the logistics field. The seven-month diploma entails four compulsory modules - SCM, e-commerce, logistics management and developing leadership in a changing environment. These are given equal weight and are inter-related to provide continuity and topicality. Case studies draw on local and international examples and faculty staff are supplemented by guest lecturers from major corporations and professional institutes.

With a present intake of around 100 students per year, Dr Ng is already planning to introduce a master's level degree in late 2004. This would comprise 12 or 16 modules and be the next step from the current diploma course. An increased focus on logistics development in mainland China would inevitably be included.

Tuition fees of HK$35,000 for the diploma programme can be offset by assistance from the government's education fund for those who qualify. - JC

Taken from Career Times 31 October 2003
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