The WMS industry comes to China

Chinese 3PL Hongxun is adding warehouse management technology for supply chain visibility.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 9/27/2007

Lately, I’ve been thinking about China and the future of warehousing. I’m sure I’m not alone.

I recently spent a morning in Jersey City with Bardwil Industries, a leading producer of fine table linens for major retailers like Macy’s, JCPenney and Linens ‘n Things. In the space where Bardwil once manufactured its linens, it now receives and processes about 300 shipping containers a year from low-cost countries like China, Vietnam and India.

Off-shore manufacturing is hardly news, especially in the textile industry. But even with manufacturing moving off shore, distribution processes and value-added services are still being done here in the United States, where automated materials handling and warehouse management systems have trumped low-cost labor.

But is that enough? And will those advantages last forever?

Consider Bardwil’s value-added processes area. In a work area set up just for value-added services, workers were adding price tickets to products, then sending them back to the picking area to be packed and shipped. Today, about 10% of Bardwil’s orders require value added services, Ed Bracconeri, Jr., vice president of domestic operations, told me. “But it used to be more,” he added. “Now that’s all done before we receive it.”

Beijing’s Hongxun invests in a WMS
The day after I visited Bardwil, I received a news release from HighJump Sofware, announcing that Hongxun Logistics, a third party logistics (3PL) provider based in Beijing, had just selected HighJump to implement a WMS. Hongxun manages more than 30 warehouses in China, offering logistics services to mobile communications manufacturers in China, including some of the best-known names in the cell phone business.

Why is Hongxun interested in WMS technology? The move is “driven by the need to provide supply chain visibility to our customers and our management,” says Simon Sun, Hongxun’s logistics manager.

According to Sun, Hongxun is implementing the WMS along with wireless communications and RF-based bar code scanning to capture and communicate tracking and tracing information, to manage warehouse operations, and to manage the transfer of goods between warehouses. The system will be up and running in 2008.

What’s the biggest benefit Hongxun expects from implementing WMS technology? “To provide a high level of service for our customers,” Sun says.

More action in China
The day before I visited Bardwil, I spoke to Larry Ravinett of third party logistics (3PL) provider National Retail Systems. Along with a Chinese partner, NRS is launching SinoNRS to build and operate highly-automated western-style distribution centers to do value-added services and direct-to-store delivery from China to retail stores in the United States.

And back in August, a senior executive from Catalyst told us about the company’s plans to market WMS systems in China after noticing high volumes of Chinese traffic on its website. A few weeks later, Catalyst was acquired by CDC Software, a subsidiary of CDC Corporation, a Chinese-owned provider of enterprise software solutions.

Value-added services, automated warehouses and WMS systems in China: It’s all anecdotal at this point, but it suggests to me that some of the work we take for granted now may shift geographies in the future.