Kerry Logistics Company Visit

Kerry Logistics Company

Background

VISION

To be the leading Asia based logistics service provider.

MISSION

With home base in Asia and a strong focus on China, we deliver the best logistics solutions to make our customers successful.

Global Head Office - Kerry Cargo Centre in Kwai Chung Hong Kong

Includes over 400 service locations

More than 19,000 employees worldwide

Agenda

When we arrived Kerry Logistics Company in Kwai Chung, we were arranged to the theater first. Two management trainees introduced the background of Kerry in the theater. As a result, we could fully understand how Kerry operated, the extent of its business over the world and also handling the large amount of customers. Then we asked the presenters for further information to answer our doubts. After knowing the operation of Kerry, we had a tour of one warehouse leading by professional managers. The warehouse fully utilizes the space and makes sure the cargoes are properly treated.

Q & A

1. What has Kerry logistics done for corporate social responsibility?

Good corporate citizenship

1)      Community-side

Kerry performs voluntary work by period. Those charity events include green power hike, Standard chartered Hong Kong Marathon and providing Charity fund.

2)      Internal

For internal employees, Kerry will promote work-life balance providing cooking class and holding outdoor sport events

Environmental protection

EMS(environmental management system)

For existing building, Kerry improves staff’s awareness on the energy saving and cost efficiency. It reduces 5% energy usage in 2012 in the head-quarter by adapting EMS.

BEAM(Building environment assessment method)

For new buildings, they have the green concept on building facilities such as material used and drainage system.

2. Kerry logistics was the pioneer of using RFID, which can help saving cost effectively. What other methods or technologies that Kerry logistics is using for cost saving?

Kerry would recruit part time employee and temporary contract employee to release the stress of contract employees and reduce the cost.

3. Kerry Logistics will collaborate with ASOS and provide more than 6,300 square meters of warehousing services for ASOS such as providing import agency services, managing import customs brokerage and providing domestic e-fulfillment. Facing this heavy workload, how do Kerry logistics maintain its stable services and efficiency?

ASOS is not really bringing heavy workload to Kerry Logistics in contrast to other customers. Kerry uses the self-developed Warehouse management system to record every single movement of item inside the warehouse including the inbound, outbound, purchase order and sale order.

4. How does Kerry Logistics maintain and gain competitive advantage with KerrierVISION? Will Kerry further develop it? If yes, what will be your plan?

KerrierVISION improves visibility, connectivity and accessibility. It will give confident to customers.

5. Standard system is hard to fulfill all different kinds of customers’ needs

What is the most important factor that make Kerry logistic achieve great success in logistics industry?

IT system, refer to problem 4

6. What policies does Kerry Logistics provide to protect your clients’ interests if the warehouse inventory was damaged or lost due to some accidents incurred?

Kerry sets up standard operation procedure before the project and the customer is agreed with it. It can avoid the misunderstanding of how to deal with the items. If the damage is caused by Kerry Logistics due to its fault, compensation will be pay to clients. Kerry can also help clients to buy insurance when the cargoes are expensive and easily broken.

HIT Company Visit

Company Visit @ HIT

Company Background
Hong Kong International Terminals Limited (HIT) is a member of HPH Trust, the world's first container port business trust listed in Singapore. HIT is also a part of Hutchison Port Holdings Limited's (HPH) global network of port and logistics operations, and continues to have access to services and resources enjoyed by companies within the HPH Group.

HIT operates twelve berths at Terminals 4, 6, 7 and 9. Established in 1969, HIT has continuously set industry benchmarks for productivity, efficiency and value-added services. Using modern management techniques, state-of-the-art computer systems and award winning IT applications, HIT has become a pinnacle of industry excellence.

Ports around the World

• Africa
• America
• Asia
• Australia
• Europe
• Middle-East

Company Facilities

• Terminal 4, 6, 7 and 9
• Terminal 8 (East & West) - Asia Container Terminals (ACT) & COSCO-HIT Terminals (CHT)

Total Logistic Management Service

(1) Planning Before Operation

Electronic Data Interchange (EDI)

• Speeding up communication by allowing electrical data transfer
• Reduce paperwork
• Information transfer online including:
• Export booking data
• Stowage instructions and stowage plans
• Loading/discharging container data
• Gate movement logs
• Tractor pre-advice notices & appointments
• Empty delivery & collection notices
• Terminal receipts
• Invoice

Customer Plus

• Online customers service system
• Catering special request
• Collecting feedbacks
• Follow up customer requests
• Build up long-term, trusting, harmonious relationship

(2)Gate Operation

Tracking Identity Card

• Shippers can call-in their tractor information to ensure rapid turnaround
• Drivers can make appointments up to three days in advance
• Drivers use a Common Tractor Identity Card to enter and leave the terminal

Mobile Terminal Message System

• Drivers get instructions via their mobile phones on pick-up and grounding locations
• Further upgrade from message system to voicemail system, with 3 languages available (Cantonese, English and Mandarin), allowing seamless delivery process
• Smart Dual Move System enables drivers to deliver and collect, avoiding empty runs
• Increase efficiency
• Increase quality of customer service

(3)Yard Operation

Operations Monitoring System (OMS)

• Coordinate from Control Tower
• Real time container movement and inventory information exchange between nGen and crane operation
• Helps operators to visualize terminal operations and container stacking information

CCTV and Trunk Radio System

• Graph overview on yard operation
• Predict yard congestion so that operators can take pre-emptive action

(4)Quayside Operation


Ship Planning System (Guider)

• Optimal sequence for discharging and loading of vessels
• Ensure stability and efficient operations

(5)Barge Operation

Barge Centre

• Provides a convenient one-stop service

Barge Identity Card System

• Strengthens terminal security
• Provides a barge platform for extending Electronic Data Interchange(EDI) links

Next Generation Terminal Management System (nGen)

• Controls the entire scope of operations at HIT
• Ship and yard planning
• Entry/Exit gate monitoring
• Equipment utilization
• Productivity and cost optimization

HIT Management System Overview

• Next Generation Terminal Management System (nGen)
• Gate Automation
• Yard Automation
• Operations Monitoring System (OMS)
• Barge Identity Card System
• Ship Planning System (Guider)
• Computer Simulation
• Radio Data System (RDS)
• Anti-Truck Lifting Protection System
• Wi-Fi Paging
• RFID
• Electronic Data Interchange and Customer Plus
• Mobile Terminal Message System
• Tractor Appointment System
• e-Billing

Agenda

The whole visit was solely guided by a staff of HIT. We were first shown with a model of the terminal. At the same time, the staff started to brief us the background and developing history of HIT. From this we learned that which terminals are owned by HIT and their correspondent capacities. The staff also shared some of the strategies that HIT is applying on operating the business. For example, to utilize the limited terminals and maximize the capacity, their strategy is to build higher containers.

After the briefing at the terminal model, the staff showed us some standing boards about Hutchison Port Holdings (HPH). We learned that HPH owned 52 ports in 26 countries. At this section, the staff mainly introduced the ports and the services provided in Hong Kong and Mainland China. He also answered most of our questions here. He made use the pictures of the standing boards to answer our questions to enhance our understanding. For example, when asking of how HIT handles dangerous goods, he immediately point to the terminal 9 of the Kwai Tsing Container Port.

The next place we visited is the control center of HIT. It is an office for monitoring the operating process of HIT. In the office, we saw a CCTV there and the staff show us what can they see and how do they use their system to control the daily operation by a video. The technology they are applying is called the Operations Monitoring System (OMS), which provides a detailed overview of terminal operations, together with the CCTV and trunk radio systems.

Lastly, we got on a tour bus and moved around the terminals. So after one hour of lecturing, we finally had a chance of site visit. Inside the bus, we saw most of the equipment and facilities that are required for the daily operation such as different kinds of cranes, the berths, the frontloaders, etc.

Q&A

1. It is important for company to be sustainable. How do you handle the policy of CSR to create a sustainable business?

A: HIT pursued an environmental program to create a sustainable business. Previously cranes were powered by diesel fuel and use up 190,000 liters diesel fuel per year. In the past 9 years, HIT converted the diesel-fuel powered cranes to be powered by electricity. HIT also develops the battery with local manufacturer to recycle energy.

Also, HIT pick school in the community that they operate usually underprivileged school, book their classrooms to have lectures.

2. How do you expand your scale of business when there are limited spaces in KWAI CHUNG? Will there be saturated one day for HIT to handle the cargo?

A: What HIT do to expand its business is using technology to speed up port’s operation, i.e. stacking of the cranes. 20 years ago, HIT have stacked the containers of 3 height, and then 4 height, Now is 6 height. So, there is more space. The extra time to consolidate the containers means HIT need a more efficient system to handle that.

In new system, HIT have developed nGen to handle the placement of containers. It ensures containers are efficiently stacked in the yard and allows us to have greater yard capacity to stack more containers.

To choose placement of containers is based on how it is going to work collectively to try making sure the least number of truck and craning movements.

There is Asian port service, which is a mid-stream operation, developed in HK to allow it to increase throughput. When smaller vessel arrives, instead of dock here, HIT can anchor them in the harbor, and small barge will come and take the containers. Over here, HIT handle barges which coming down from Pearl River Delta China, so the whole port get around 20,000 ocean-gong vessels and 65,000 barges a year. With increasing river trade of the terminals, HIT can consolidate the barges traffic before bringing here. It means HIT handle less barges and have more containers in each barges, and in the end, HIT can move more containers through the port.

3. How would you adapt or utilize the new infrastructure of the government, Hong Kong–Zhuhai–Macau Bridge?

A: HIT directly utilize it and that might bring more traffic into Hong Kong and make changes. Basically our direct customers are shipping lines and the traffic coming into Hong Kong over the boarder by the trucks in 1997 is dropped down. So HIT get a lot more coming products by bunch and that is how HIT utilize the facilities.

4. How would you settle the industrial relation issues, have you found out any better methods after the terminal strike last year?

A: The labour strike is about HIT’s contract labours, but unfortunately the speaker at the day of visit is not at the position that can make a comment about the strike.

5. How do you avoid errors when handling that massive amount of containers everyday?

A: The whole thing HIT do is basically moving containers to a place. Although there are human errors, the whole system is based on making sure HIT know what they are, where the things are. They are backed up in the software system. It ensures HIT don’t move the containers to a wrong place.

6. What are the contingency procedures in case of natural disaster such as adverse weather condition?

A: HIT will be shut down when there is typhoon, and also tie down the containers and key cranes

7. As there are some rumours and scandals of HIT being explosive of labours, what will HIT do to improve images and motivate the workers?

A: Refer to Q4

8. How do you enhance its competitiveness among those strong local players, e.g Shanghai, Singapore?

A: In terms of fastness and more efficient, it will be the simple answer. Hong Kong is in naturally advantage, it keeps busy such as the fact of capitaltial in China. In China, only a Chinese flag ship can move cargo from one port to another port in China. Hong Kong is one part of China and is exempted from that. The foreign ships cannot ship the cargo from Shenzhen and drop the containers in Shanghai. They need to drop off the containers in Hong Kong and pick up again in order to ship to Shanghai. Free port is another advantage of Hong Kong. Hong Kong is duty free from everything except from a small group of products such as oils, fuels and perfume. The main advantage of Hong Kong is that the terminal is very fast and efficient. The shipping line is fall behind the schedule and China can know the time. We employ more cranes and manpower to make up the loss time.

9.  How do you track the cargoes to see whether there is any dangerous or illegal goods?

A: The way of tracking the cargoes to see if there are any dangerous or illegal goods was not mentioned, however they mentioned the way they handle dangerous goods. HIT assigned terminal 9 for handling dangerous cargoes and offer refrigerator container for cargoes that require temperature control.

Yakult Company Visit

Company Background

Yakult is a probiotic dairy product made by fermenting a mixture of skimmed milk with a special strain of the bacterium Lactobacillus casei Shirota. It was created by Japanese scientist Minoru Shirota, who graduated from the Medical School of Kyoto University in 1930. In 1935, he started manufacturing and selling Yakult.

After its introduction in Japan and Taiwan, Yakult was first sold in Brazil in 1966 due to the large number of Japanese immigrants in the country, before it was marketed elsewhere. Today, Yakult is sold in 31 countries, although its bacteria cultures are provided from a mother strain from Japan regardless of production location.

Yakult is marketed in different sizes. In Australia and New Zealand, Europe, India, Indonesia, and Vietnam Yakult comes in 65mL bottles. In the Americas (including Mexico, one of Yakult's largest selling markets), Japan, Philippines, Thailand and South Korea, 80 ml bottles are available. It is also available in Singapore, Hong Kong, Taiwan and mainland China where Yakult comes in 100 ml bottles.

Packaging
Glass Yakult bottles used before 1968.

Thai Yakult

Yakult 65 ml in Vietnam

Q&A
1: Yakult produces only one kind of drink with one flavor in Hong Kong. However, referring to Yakult’s Japanese website, it also produces other kinds of healthy drinks. Regarding to the product diversity, why do Yakult not try to expand its product line with more flavor or different drinks in Hong Kong?

A: Nowadays, there are two drinks introduced in the Hong Kong. One is the simple Yakult live lactobacillus drink, another one is Fanshuanglicha (蕃爽麗茶) which is good for lower the blood sugar level. The biggest challenge to launch more products to Hong Kong market is that there is lacking space of the production plant. Furthermore, each procedure follows the standard operating procedure of the Japan headquarter production manual. Hong Kong production plant is not suitable to produce other products that fulfill the requirements of the Japanese standards.

2: Because of the relaxation travel permit rules for mainland people, it is not uncommon to see that they buy lots of Yakult drinks back to mainland. How do you forecast the daily demand of your products?

3: Actually the demand can’t be predicted. The daily production of the plant is targeting to fulfill the Hong Kong citizens’ demand but not for the mainland visitors. Because there are production plants located at Shenzhen and Canton. They can buy Yakult drinks in mainland too.

4: Besides the direct competition of other Probiotic Drinks, there are lots of other healthy drinks in the market. Do you think they are also your competitors?

A: That’s true. There are many healthy drinks existing in the market. However, the only truly helpful and successful Probiotic Drinks is provided by Yakult. The probiotics are slightly different among the competitors and Yakult. Yakult’s probiotic is discovered by Shirota Minoru. The probiotic is named as Lactobacillus casei strain Shirota which is registered for the patent. Others cannot use it.

5: Since the size and container shape of Yakult’s beverages is obviously different from other companies, what are the benefits for Yakult to apply this design?

A: The design is convenient for the customers that one bottle of the drink is enough for the body health. Also, the special shape of the container can impress the customers and easily recall their memory when they tell about this.

6: Hong Kong people are getting more concern about the sugar contains in Yakult milk and its calories. Although it has launched a low-sugar version of Yakult milk, will Yakult keep on implement a healthier one, like a further less-sugar with lower calories to cater the healthy lifestyle of Hong Kong people?

A: Actually the Lactobacillus casei strain Shirota need sugar to stay alive. If there is too less sugar, the probiotic will be inactive and may die in some situations. To prevent this, Yakult need to keep the sugar at a standard level. Maybe the researcher of Yakult is trying to discover a new way to keep the probiotic alive with a lower sugar level in the future.

Hactl Company Visit

During the course, we had an opportunity to visit Hong Kong Air Cargo Terminals Limited (Hactl). Hactl is one of the leading air cargo terminal company in the world because of its specialized cargo handling facilities, a comprehensive range of services, and innovative technology. It aims at providing the highest standard of air cargo delivery services, and the most efficient trucking and logistics supports for cargo as well. 

Company Background
Hactl was founded in 1971 and is located at Hong Kong International Airport, which has been the world's busiest cargo airport in 2010. In order to become the market leader of logistics industry, Hactl strives to deliver consistent and high quality services to over hundreds airline companies and freight forwarders, e.g. DHL Express. It offers a full range of value-added services including pre-arrival customs clearance, import scheduled collection, and schedule empty unit release, to satisfy customers’ needs. 
Due to tons of data transaction need to be processed, Hactl mainly invests a lot in innovating technology for smoothing information and logistics process. Airline customers can check status of cargo when simply using cargo tracking services through the internet and apps. And secure storage and world-class facilities improve efficiency for all cargo types, from refrigerated to valuable goods, and sizes. Moreover, it partners with HACTL Solutions Limited (HSL), its wholly-owned subsidiary, to provide an integrated supply chain management solutions to strengthen the logistics connectivity. 

Visit Agenda
When we arrived the company, it first introduced its company background, business and services through a video. After finishing the Q&A session, they provided us a tour at the Superterminal 1, which is the single largest multi-level air cargo terminal in the world. We can walk around the terminals to be nearer to cargos and freights. The ramp handling, where Hactl crew members did the loading and breakdown cargo processes, passed besides us. Furthermore, we saw the eco-car, an environmentally friendly vehicle for transporting documents or crew members.


Q & A

1.   In case of facing extreme weather problem, what is the contingency plan of Hactl?

A: If typhoon signal no.8 or above is hoisted, people are prohibited to work at aircraft parking apron. Due to the inclement weather, flight schedules would continue to change, and then the cargo would be hoarded up. In order to ease the cargo bottleneck, Hactl works closely together with airlines to help handling cargo process. When the typhoon signal is cancelled, more frontline staff would be mobilized to help with the resumption of orderly and efficient operation in the apron.

2.   Nowadays, the global warming is a hot issue. What is Hactl doing to reduce its carbon footprint?

A: There are several ways to reduce, the first one is by recycling the plastic wrapping used in packing cargo. When the cargo is ready to load up, the plastic can be put in the collection bins, and then collected to be recycled. Second, Hactl introduces the biofuel for forklift trucks using less gas and produces cleaner and fewer emissions. Also, electrically-power cars (E-car) are available for transporting documents or small cargo. To power these vehicles, charging stations have to be set up. Lastly, Hactl has also coordinated with customers if they hoped to use e-flights to reduce the use of paper documents. It is called E-freight scheme.

3.   Hactl had no competitor in the past. How has Hactl formulated its strategy as they are no longer the monopoly to the market?

A: In the past, there were few competitors; the largest one was Asia Airfreight Terminal, which took about 20% of the market share. So, Hactl domained the market and took around 80% of market share. After Cathay Pacific, which was the main customer of Hactl, constructed and operated its own terminal- Cathay Pacific Cargo Terminal, cargo volume have dropped by about 30%. Then, Hactl had do lots of preparation about this dramatically big change. In fact, this terminal was not suddenly announced to be built, Hactl knew Cathy Pacific will build its own terminal long time ago. So, its team had enough time to do a contingency plan. In the past, there were tons of air cargo shipped into Superteminal1 every day. During the peak season, there was not enough space to receive other cargos from new airline customers, so lots of businesses have been rejected. And because of a plenty of and bulk Cathay Pacific cargo demand, there was little resources to provide premium customer services. However, now, it can absorb new or small-scaled airline companies with more manpower and capacity available. The excess resource can also help to diversify its business to a one-stop logistics service. Hacis, its subsidiary, provides transportation services. That means, customers can not only enjoy storage services, but also the logistics services for helping shipment into Southern China.

4.   One of the core values of Hactl is the logistic support between Hong Kong and mainland china. What is the logistic support of Hactl right now and how will they continuing improve this core value?
A: Hactl basically has one major logistics supports for the mainland. Its subsidiary- Hacis provides SuperLink China Direct service, a customized solutions to meet the increasing demands of cargo connection between Hong Kong and the Pearl River Delta Region (PRD). Some goods arrive in Hong Kong and then need to be transported to southern China, e.g. Shenzhen, Xiamen and Fuzhou. Then, its self-owned truck teams can provide efficient and logistics support to those customers. Besides, she stressed that Hactl has professional truck teams to help transport special goods. Take drugs as an example. They are regarded as temperature-sensitive goods, so some trucks are designed with a temperature-controlled environment to transport drugs.

5.   As the infrastructure and carrier are getting depreciated, is the cost of maintenance a heavy burden for your company?

A: Maintenance is very important since all facilities and systems are fully automated. And Hactl’s facilities are very famous in the world, many worldwide terminal company visit Hactl for reference. If the facilities are broken down and the power is short supply, engineering department would repair them. And facilities keep maintenance regularly to ensure they can be 24-hour operated. Maintenance is regarded as an investment rather than a burden.

6.   Training is important in the cargo industry as mistake is unacceptable, what major practices did you provide to your workers?

A: As Hactl believes that employees are company’s greatest assets, it puts more resources into recruiting, training and retaining qualified employees. They can learn how to store basic cargo, and how to handle dangerous goods by IATA DG Training so as to reduce probability of accidents happen. Then, Hactl’s team can be more knowledgeable and professional to help Hactl become more competitive with the market’s need. Apart from its own employees, Hactl also provides training to competitors’ employees as long as they pay fee.

7.   Commitment on service standards is increasingly important for the air cargo industry, especially security issues, which refers to the safety of the goods in transit, since it affects the inventory level and stockout costs. How do Hactl improve the service performance with safety measure?

Scenarios such as:

• Airport security and threat of terrorism

A: In Hactl, there is no passenger; only cargo there. Some cargo may be cash or valuable goods. To keep safety environment, 1000 24-hour of CCTVs have been set-up to monitor activities inside and outside the buildings. Hactl has also outsourced 2 specialized security companies, which are Avseco and G4S, to carry out regular patrols

• Airspace congestion (collision)

A: This is not Hactl’s responsibility, but is Civil Aviation Department’s.

• Cargo mishandling cases, e.g. unmanifested, shortshipped, unlocated

A: To deal with these cases, Hactl relies on CCTV. If the cargo are mishandled, Hactl can trace the point of departure. And COSAC-Plus has developed superb performances for customers to monitor status of their cargo.

• Special arrangement for bad weather condition

A: This refers to question 1.

8.   Hong Kong government has made continuous investments in terminals and operating infrastructure in order to boost the handling capacity of HKIA. How do Hactl catch this kind of business opportunities to generate more revenue on air cargo terminal operations?

A: After building the third runway at the Airport and Hong Kong Zhuhai Macao Bridge, there would be more traffic flow and even more airlines would come to Hong Kong. Despite of carrying too much uncertainty, Hacis continuously helps Hactl to diversify its business so as to ties in with these developments. Also, Hactl has more capacity available for its new customers to catch the opportunities.

9.   It is the fact that the competition between Hong Kong airport and other mainland airport is getting fierce. Is air transportation industry still profitable now? What is the future outlook of Hong Kong air transportation industry?

A: In last year, cargo volumes increased by 2.4% in Hong Kong and increased by 1.4% worldwide. HKIA forecasted that there will be an increase of 4% about Hong Kong cargo volumes in 2014 and airlines estimated there will be 3.2%. So, the air transportation industry is still profitable and can be continuously developed.

The re-export trade becomes more important in Hong Kong since some countries’ flights cannot fly to Europe directly, e.g. Vietnam. As Hong Kong is a transshipment point, there is a steady increase of the transshipment business in Hactl. So, Hactl increases capacity available for transshipment cargo, and creates business strategies and facilities to focus on transshipment.

10.  What is the policy or strategy of HACTL in the area of CSR? How do HACTL contribute to the community and being a sustainable responsible business?

A: CSR can be refer to question 2 about doing environmentally friendly works.

Hactl maintains business strategies for sustainable development of itself and terminal industry, such as providing customized solutions.

TAL Apparel Limited Company Visit

Company Background
TAL Apparel Limited is a Hong Kong-based apparel manufacturer. It is one of the world leaders in the production of innovative clothes that combine style, comfort and functionality. TAL specializes in the manufacture of quality men’s and women’s garments for the world’s leading brands. Its partners include Burberry, Callaway, Giordano, JCPenney, etc. TAL is also well-known as a high-tech garment manufacturer since 1980s. It has adapted famous IT systems such as Electronic Data Interchange (EDI), Enterprise Resource Planning (ERP) very early.

Visit Agenda
Visiting TAL is the first out-going activity of our class. Although we have done a case study in the class, it is still a wonderful learning experience as the talk were given by the managers and even the CEO of TAL in Hong Kong. After we arrived TAL, we first were given a lecture-like sharing from a staff of TAL. It’s quite informative as the staff presented with a PowerPoint. The presentation was about some general information about the supply chain and some recent facts and working process of TAL. After the presentation, several staffs started to answer the questions from us. This is actually the best part of the day as our questions were well designed and all of them are something we want to know but may not be easily searchable by us alone. Later on, the CEO of TAL also came to our room and answer our questions. 

After the sharing section, TAL also gave us some sample of their cloths to help us understand what is the difference between products made by other companies and products made by TAL.    
Q & A
1. Since fashion trend changes day by day, how do TAL maintain the efficiency of supply chain management? 

A: The core objective of supply chain management is to add value to the whole supply chain. It is essential to make every partner in the supply chain to achieve the lowest cost possible to obtain higher efficiency. Tal has provided a famous service to its clients called VMI (Vendor-managed inventory). This service effectively helps the clients to cut costs and control inventory, and a shorter replenishment cycles can also be achieved. As long as the partners along a supply chain can cooperate, the efficiency can be guaranteed. 

2. Will TAL further develop an online platform for direct sales to customers? 

A: Actually TAL is trying to avoid to compete directly with their clients so that an online platform for direct sales to customers may not be possible. However, TAL do provides an online platform for their clients so that the clients and reach to TAL in a more convenient way. The online platform provides service such as real time data interchange.  

3. Asides of IT system like ERP, are there any new IT system TAL are using to create competitive advantages to differentiate your services to others? 

A: There are some IT programs that are in-house developed by TAL itself. As its private so that other companies cannot have this technology so that TAL can have a comparative advantage. Those IT systems can help TAL to share the data between its clients.

4. We all know that TAL has been using IT to gain a big success. However, most companies are likely to follow the strategy to succeed by using the similar IT systems. How could you continuously keep the company in business in terms of market share? 

A: It’s common that when one IT system generates remarkable profit for a company, other companies would like to have that system too. However, the main IT system adopted my TAL is self-developed and thus other companies cannot imitate it from TAL’s success.

5. Due to the low profit margin of MTM, why do you still offer this service? Will MTM have any further development to become the main elements of the business? 

A: Actually MTM has a high profit margin as it’s a tailor made program for the clients, so that it requires a higher charge. About the further development, forming partnership is important for MTM as TAL can have a better understanding of the requirement of the clients and thus the MTM program can be even more fit and useful.
  
7. How does TAL show their Corporate Social Responsibility in the sense of being environmentally friendly? 

A: As a socially responsible corporation, TAL is working constantly to help 
achieve a better quality of life for everyone, now and for the next generations.

TAL has introduced several environmental friendly solutions in its South East Asian factories. For example, waste water treatment and recycling for flushing and landscaping irrigation, water scrubbers for exhaust emission management, and heat exchangers that recover energy from steam to heat domestic water. TAL also recycle paper, cardboard, plastics, cans, textile cones and used chemical drums. Besides, emissions from kitchen of the canteens are also in high control, and this is actually a voluntary measure that not much companies are doing.

8. How does TAL strike a balance between the high R&D costs and the benefits generated? 

A: TAL has put a lot of focus in R&D as they want to provide better quality products to their clients. This is actually not contradict with the benefit. It is because when TAL can add more value to the product because of the R&D, the clients will love to pay for it too because the clients also want a better product. So this is actually a win-win situation.

9. Why has TAL not gone into retailing its own products under its own brand? 

A: There is no own brand of TAL in Hong Kong. However, TAL does has its own brand in US, but it’s only for wholesales and online sales. The reason that TAL don’t develop its own brand in Hong Kong is that TAL don’t want to compete with its clients as it would cause contradiction to the policy of TAL.

10. What is the future plan of TAL? Are you going to further expand? Is manufacturing still profitable?

A: It’s possible that TAL will close the factories in China as RMB is appreciating. The cost of hiring workers in mainland china is much higher than before. However, manufacturing is still profitable because TAL will set up new factories in other low cost countries from the Asia-Pacific region such as Vietnam.