2009.05.05

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Best Logistics Technology Ltd. is an innovative and comprehensive logistics service provider co-founded by professionals from the fields of information technology and supply-chain management. According to varying customer demands, Best provides all-in-one logistics products and services with information systems at their core.

Currently, Best provides comprehensive logistics delivery service for many well-known clothing brands such as Linin, G2000, ZARA, and INTHEF. With
a multi- level delivery, distribution and warehousing network and a powerful operational management platform, Best wins approval from customers and was awarded "Best Operational Quality" as Linin's partner in 2008.

Yongjun Wang, vice-president of R&D for Best Logistics Technology Ltd., hosts supply-chain-related work of software design and development, including supply-chain management, e-business, software as a service (SaaS), positioning service and hand-held terminal applications.

Journalist: What does Best think of the characteristics of clothing logistics? What do these characteristics require from a third-party logistics provider?
Wang: Clothes are seasonal products that need to be produced and circulated in a short time. Throughout the process, there are frequent and complicated operations such as forward, backward, transferring, and exchanging. The characteristics of clothing logistics are generally frequent changes, multiple batches and small lots. Meanwhile, judging from the status quo in the Chinese clothing sales market, there are many marketing channels. So, the support of
a diversified logistics service is needed. These characteristics demand that
a third-party service of clothing logistics be punctual and, accurate and minimize the delivery cycle. Through its powerful logistics network and timely transportation and delivery, Best is able to provide strong support for company packaging.

Journalist: What kind of services and solutions does Best provide for customers in the clothing industry?
Wang: After its founding, Best quickly expanded its fourth domestic delivery system to meet clothing-industry customers' delivery demands of multiple batches and small lots. Specific contents of our service include purchasing logistics, distribution and warehousing, delivery, value-added processing, integration of information systems, and e-business integration. Also, regarding diversified sales means of the clothing industry, Best tries to use various means of transportation by integrating artery transportation, sporadic freight transportation and express distribution, and to achieve a seamless connection among them; in regard to the need of real-time allocation during sales process, Best has developed its own warehousing, transportation and vehicle management system. This realizes a transparent and complete management for transportation, warehousing, and delivery, and allows us to respond quickly to customer requests. For instance, one of our customers from Shanghai manufactures in Qingdao. So, we transport goods in batches to Shanghai with artery, provide warehousing and value-added service, then deliver them to customers in small batches.

Journalist: How does Best achieve the transportation means of combining artery, partial load and delivery? What are the specific manifestations for using value of operation models in clothes logistics?
Wang: Transportation demands in the clothing industry are multi-level, and
a logistics agency should do a better job of reallocating resources and providing comprehensive services. Especially with the growing domestic demands and delivery requirements for mainstream clothing brand (especially private clothing enterprises) in tier three and four cities, logistics companies are supposed to have a rapid network establishing capacity and to guarantee standard quality control. Best adopts the model of establishing a network via the collaboration of our business development, partner development, and operational management departments. We set up branches in cities of different tiers and combine logistics resources by category. These resources have all undergone certification and quality testing by teams of professionals. We divide resources into warehousing, artery, regional delivery, same-city delivery, express mail, air freight, and railway, and gradually form
a complete database of resources. Our company's 24-7 hours and one-stop service center combine with the system to judge and dispatch order attributes and allocate resources, thus ensuring that users can respond quickly and receive high-quality services.

SA model such as Best's can help clothing companies to realize the delivery capability of multiple batches and small lots in tier three and four cities, improve the response speed of its market, reduce dead inventory and avoid the "whiplash effect"; Through networking control of customers' terminal deliveries, we guarantee efficiency and safety and improve customers' satisfaction.

Journalist: What are the difficulties and obstacles for third-party logistics service in the clothing industry? What kinds of efforts has Best made to overcome them?
Wang: In the control of the supply chain, logistics is the last executing sector, passive and subject to the control of information flow, which is particularly important in cross-organization and multi-party collaborations. Therefore, difficulties and obstacles of third-party logistics service related to supply-chain management can be summarized as follows: logistics informationization in the clothing industry with innovative business models and advanced management philosophy.

Regarding characteristics of demand in clothes industry, Best has carried out a series of work including self-developing several subsystems such as GeniMax, integrated WMS、TMS and GPS/GIS; unified transportation management, warehousing, value added and delivery; carrying out strategic cooperation with software providers in the clothing industry to ensure transparent management of the complete supply chain, especially terminal changes. Detail management, including solving order type-in, tracking in transit, and timely allocation response, helps clothing companies to manage their goods more transparently.

Journalist: Would you please tell us some innovations Best has made and lessons it has learned during its time in the clothing logistics business?
Wang: Clothes have significant seasonal requirements. Backlogs of slow-selling products and growing overstock will tie up funds. So, Best tries to improve its service level, and to help customers to increase inventory turnover and management level. Starting from management methods of inventory locations, Best strictly adheres to the practice of providing customers with details of slow-selling inventory and reminding them of corresponding measures that can be taken.

Cooperation is also a process of mutual learning. Best proactively helps customers to make improvements and offers value-added services, rather than simply going through the motions. Before accepting clothing logistics assignments, we will study and analyze the existing logistics model of
a customer. Regarding weaknesses of existing models, we provide elaborate solutions by combining Best's stengths in networking, system and management philosophy. For instance, before providing logistics services for Linin Co., we visited different dealers and receivers and carefully studied their needs. We then improved our original logistics operational models and re-planned every aspect of allocation and transportation in order to ensure controllability of receiving goods and to satify customers' requirements to the largest extent.

Journalist: Can you tell us some remarkable technologies and management tendencies in clothes logistics?
Wang: In accordance with the ever-changing requirements of our customers in the clothing industry, logistics companies use new technologies and methods to solve practical problems and achieve better management. Some remarkable tendencies include collaborative information system platform of cross-organization and multiple entities. The total logistics operation places high demands on information systems such as cross-regional and cross-shop allocation; goods tracking technologies such as barcode scanning and RFID, integrated management of warehousing and delivery for sagging clothes, integrated delivery system (risk pooling), detailed delivery networking of multiple batches and small lots, inventory management and cost accounting. In addition, Best has always been devoted to improving efficiency with technology, reducing cost with innovation, and creating new values with progress in our customer service.

Journalist: How does Best view the potential for development of the third-party logistics market in the clothing industry? What are Best's plans and ambitions regarding your participation in supply-chain management for clothing companies?
Wang: Clothes are consumer-packaged goods, and it's a substantial industry, both in sales volume and gross profit. In 2008, the volume of business transactions approached 17.2 billion yuan in domestic clothing e-business alone,and the number is much larger in the market as a whole. In less than two years, Best has won many customers in the clothing industry, which demonstrates that our ideas have been embraced by the market. So, we believe that the third-party logistics market in the clothing industry has great potential.

Best maintains the clothing industry as its priority. Every customer in this industry has its own unique management characteristics and requirements. So, we hope to find some ways of reducing our overall operating cost, which
I believe is also Best's strength. Next, we will strategically connect with the network of companies we have built. Best will exert more effort in business consolidation in the clothing industry and research of service products. Specific ideas and plans include expanding distribution and warehousing investment of networking in the clothing industry, solving delivery of the last kilometer, and further popularizing our information systems. These will bring values such as improved management and reduced cost to the clothing industry. For example, the optimized supply chain plan we provide for a provincial dealer of Linin is able to help the dealer increase merchandise turnover from 5-8 days to 3-4 days, reduce cost by a third, and reduce losses resulting from supply shortage. By adopting all aspects of warehousing and delivery in logistics information system management and changing traditional manual operation, we have greatly improved intermal management competence of dealers and provided stronger competitiveness for companies' development.

excerpt from "logistics technology and its application", fifth edition, 2009