Ocean Furniture Program
DB Schenker's Furniture Program for Ocean customers
Tackling the challenge of Asian market logistics.
In the drive to maintain a competitive edge and increase their margins, furniture manufacturers are becoming increasingly interested in sourcing materials from growing markets in China and other Asian countries. While the available resources of fabrics and finished goods is both plentiful and inexpensive in these regions, the complexity and cost of bringing raw materials to Canada have often outweighed the lower materials costs.
There are a number of unique issues that manufacturers need to understand when dealing in Asian markets. One key area of differentiation from local suppliers is the longer order cycle times. Whereas North American orders can reach a destination in a matter of days, it can easily take four weeks or more for materials from Shanghai to ship and clear customs. Among other considerations, this requires a considerable “re-thinking” of how one manages lead times and production cycles.
While the challenges can appear overwhelming for those that are new to Asian market logistics, there is a wealth of means available to bring product into this country efficiently and cost-effectively. Typically, this requires a relationship with companies that have the infrastructure, resources and experience to navigate these complex and highly competitive supply chain waters.
However, when looking for a logistics partner, manufacturers need to understand that bargain shopping for the lowest price shipper will not necessarily yield profitable results. Many simply do not have the infrastructure or the market “clout” to be granted container space on demand. In addition, they may not manage sufficient volumes to provide the most timely delivery response, or have the technology in place to provide ongoing visibility into order status.
For years, DB Schenker Logistics has been managing shipments from the Far East, and has developed proven processes that ensure reliable supply and delivery of materials. In fact, DB Schenker is the number one importer of ocean product into the Canadian market.
Over the decades, DB Schenker has established strong relationships with a network of air and ocean freight carriers which guarantee space allocations on container shipments. The company has also developed a highly efficient infrastructure to manage the added complexities of receiving and customs.
In addition, an extensive presence in Asian markets means that Schenker has been able to achieve the economies of scale required to derive the greatest value from shipping dollars. Because DB Schenker is one of the few operations that schedule weekly shipments from Asia to Canada, the company can easily consolidate multiple orders and reduce costs and wait times for its customers. DB Schenker also have the expertise to work with customers to advise them on cycle and production modifications, and how to adapt activities to derive maximum value from the Asian supply chain.
Many OFMA members are already familiar with DB Schenker’s furniture/fabric program (see LTL Furniture Program section) that has been used for many years to reduce costs for shipment of raw materials from suppliers in the Carolinas. The same expertise and processes have been applied to coordinating shipments from hundreds of fabric mills operating in Asia.
There is no question that sourcing from international suppliers is much more complex than simply finding a cheaper supplier and hoping for the best. Even where one has allowed for longer order cycle times, there are many links in the process that can fail – from lack of container space leading to extensive delays, to costly penalties and surcharges for single shipments.
With the right resources and processes in place however, the Asian supply can be as easily, efficiently and cost-effectively managed as any other distribution channel.
Last modified: 13.08.2014