Career Path

Logistics: Think outside the box!

by Andrea Zavadszky

Eric Lo
General Manager
Logistics Link

According to a recent survey, more students are now planning to study logistics in Hong Kong than any other subject. What are the attractions?

Logistics is not a new field, but it has come to prominence lately. Due to the economic downturn, companies have looked into new ways of cost cutting and realized the advantages logistics has to offer.

"Logistics is customer driven, cost conscious, saves indirect costs and allows the company to concentrate on its core strength," says Eric Lo, General Manager of Logistics Link, a recently set up subsidiary of world-leader CMA-CGM, the French shipping company.

Fast-track career

With just ten years in logistics, Mr. Lo has already set up two logistics companies. He started out with Swire Shipping as a Marketing Executive and quickly rose through the ranks to the position of Manager, assigned to setting up Oceanlink Ltd., the in-house logistics company of P&O Containers, at the time represented by Swire in Hong Kong.

At the age of 31, he was already General Manager with P&O Containers Ltd. and two years later he was transferred to P&O Nedloyd Global Logistics, also in the position of General Manager.

From there, he was poached by the French shipping giant CMA CGM to set up its full subsidiary logistics company for Asia which now has 26 offices in the region and a regional head office in Hong Kong.

"You can go as far as your imagination takes you. In the process of moving goods between manufacturing and the customer, there are many more opportunities than you can initially think of"

According to Mr. Lo, it is not necessary to start off with a logistics company to be successful in the field. "I had studied for a general MBA in the UK and started off in marketing," he says. But, he emphasizes that a good general knowledge of many different industries is a prerequisite, because each of them has different requirements. "Working in a shipping company may be a good start, to see many different companies," he says.

Solid language skills and a good attitude being ready to learn and improvise are also basic requirements to excel in this field. Other important prerequisites are to be good at getting to the core of a problem, thinking outside the box and understanding the client thoroughly. "We are like company doctors," he explains.

The big picture

"Logistics does not equal transportation, it is a much bigger concept," says Mr. Lo. "It encompasses the supply chain from production all the way until the goods are delivered to the consumer. We source the right supplier and monitor the manufacturing process. It even includes consultancy."

Transportation only makes up 13 per cent of the total expenses of a trading company, with 65 per cent spent on manufacturing and 22 per cent on indirect logistic fees, such as monitoring, storage costs for early delivery, losses due to late shipment and redistribution. Logistics companies look at the whole cost structure and focus efforts on saving indirect logistics costs.

Money savers

Using a logistics company allows the client to deal with calculated indirect costs rather than variables, since the logistics company is responsible for the whole "Vendor Management" process. The client can follow the process up to the second by viewing the back-up system on the Internet.

Another money-saving system logistics offers is the "DB Bypass Model," consolidating all goods in a relatively inexpensive central location in Asia where picking and packing is done to the particular orders of individual retail outlets, saving warehousing and redistribution costs at the final destination.

Limitless opportunities

Mr. Lo is confident of the logistics industry's future and encourages Hong Kong students to join. "You can go as far as your imagination takes you. In the process of moving goods between manufacturing and the customer, there are many more opportunities than you can initially think of," he says.

China Opportunities

China is still concentrating on the aspects of physical handling, such as transportation, warehousing, and distribution. With double-digit growth in port throughout, it will overtake Hong Kong very soon. However, the basics of logistics, such as DC Bypass, Vendor Management are still missing. Therefore, in logistics, there is still much room to compete both for Hong Kong as a territory and Hong Kong people looking for employment in China. One important competitive edge that Hong Kong employees have is the language skills, but Mr. Lo warns: "Language still gives Hong Kong a competitive edge, but Hong Kong is fast losing its lead."

Figures for reference only   K='000

Taken from Career Times 17 May 2002, p. 32
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