China’s FMCG supply chain: research from CHEP and CAITEC

CHEP and CAITEC collaborate to publish ground-breaking research report into

  • Analyses the status, challenges and trends in China’s FMCG supply chain
  • Provides cost analysis of a number of logistics scenarios
  • Aims to accelerate supply chain standardization and asset pooling in China
  • Recommends actions for safer, more efficient and sustainable supply chains

CHEP-CAITEC China FMCG Logistics Research Report_mediumLeading global supply-chain logistics company CHEP joined with officials from China’s Ministry of Commerce (MOFCOM) and its research institute the Chinese Academy of International Trade and Economic Cooperation (CAITEC) to publish the ground-breaking “China FMCG Industry Supply Chain Logistics Research Report” today in Beijing.

They were accompanied by over 70 industry leaders, representatives of corporate enterprises and media, who witnessed the launch of the report.

The report is the result of a six-month joint research project undertaken by CAITEC, in conjunction with CHEP China, that analyses the FMCG supply chain in China and the role that standardization and pooling of supply chain equipment such as pallets can play as a means to improve operational efficiency and lower the cost of logistics.

The joint CAITEC-CHEP report begins with an overview of the current status, challenges and trends in the FMCG supply chain in China and includes a detailed cost analysis of a number of logistics scenarios based on pilot projects and case studies, before recommending practical actions to support the Government’s aim of standardized and more efficient supply chain management.

Commenting at the launch event, President of CHEP Asia Pacific, Phillip Austin said: “CHEP applauds China’s Ministry of Commerce for its vision and leadership behind these first steps towards standardization and the adoption of the dynamic flowing supply chains. This has the potential to accelerate industry development in China and lower the currently high cost of logistics as a percentage of GDP. It is with this same spirit that MOFCOM already acted decisively last year to declare 1.2m x 1.0m as the standard pallet specification.”

In his speech, President of CAITEC, Gu Xue Ming remarked: “As logistics optimization becomes more important and gets increasing attention from the government and companies, the Chinese government think tank – CAITEC – has carried out a six-month, deep-dive research project together with CHEP China. We sincerely hope that the analysis provides practical suggestions for better ways of working and more efficient supply chain management.”

The recommendations

The opportunities and recommendations put forward by the report include the potential for government to help accelerate the development of standards for pallets, transportation vehicles, facilities and other equipment through the use of policies and financial incentives; and also to promote good practices and educate stakeholders. Industry associations have a role to play in the areas of regulation, training, promotion and coordination. The report encourages companies to take an overall view of the supply chain and look for ways of collaborating with other participants and with pallet pooling companies. Other practical recommendations for companies include upgrading equipment and facilities to national standards, adopting standard processes and prioritizing lanes to facilitate palletized delivery, adjusting order sizes to full pallets, and investing in forklifts and related equipment.

John Wan, President of CHEP Asia, commented: “CHEP China is fully committed to using the global supply-chain solutions expertise of the Brambles Group to better serve its customers and benefit all stakeholders in the supply chain as we take this journey towards new ways of working together. It is an honour for CHEP to collaborate with CAITEC on a report of this quality, and to play an active role in MOFCOM’s Special Action Plan for Standardization of Commercial Logistics.”

In support of the Special Action Plan, CHEP continues to work with local Commissions of Commerce and companies in several pilot cities to promote logistic equipment standardization.

Mr Austin added: “We are also grateful for the participation in the research of leading manufacturers – P&G and Nestle; retailers and distributors – Walmart, CRV, Wu-mart and Chaopi; and third party logistics provider – Sinotrans Logistics. This cross-industry collaboration is a fundamental ingredient for supply chain efficiency and has led to a number of ‘real-world’ case studies being included in the report.”

CHEP began its operations in China in 2006. Since then, CHEP China has invested in a network of over 80 on-site customer service points and service centres, and owns and manages a pool of more than 4 million pallets, for the benefit of its customers. These pallets are used by customers to transport their goods to market. CHEP’s customers include both multinational corporations and local Chinese companies across the FMCG, beverage, retail and general manufacturing industries, such as Nestle, P&G, Unilever, Walmart, Wu-mart and Chaopi, to name just a few. CHEP also delivers solutions to original equipment manufacturers in China’s Automotive sector for the transport of auto parts.

IFCO, also part of the Brambles Group, is the world’s leading provider of reusable produce crates (RPCs), owning and managing more than 200 million worldwide. IFCO China is working with its customers in the fresh food sector to expand the concept of RPC pooling as a sustainable alternative to cardboard and traditional methods of transporting produce from the grower to the point of sale.

Obtaining a copy of the report

To request a copy of the CAITEC-CHEP report in Chinese or in English (once it is available), contact: Carter Feng – Associate Director of Sales, Marketing & Customer Service, CHEP China
Email: carter.feng@chep.com