Although the "Internet craze" seems to be receding quickly around the world, the age of the "New Economy" has definitely arrived. Enterprises everywhere are actively learning to apply IT (information technology) to their operations so that they remain competitive. One of the companies that has been successful in this endeavor is Motorola Semiconductors Hong Kong Ltd, which, by adopting various technologies, has greatly enhanced the efficiency of its logistics department.

When people in Hong Kong think of Motorola, they mostly think of mobile phones. In fact, Motorola Semiconductors Hong Kong Ltd has two main business areas: the Semiconductor Products Sector and the Communications Enterprise. To facilitate its semiconductor business, Motorola has set up a manufacturing plant - Silicon Harbour - in Tai Po where it develops and produces its various proprietary silicon chips. As far as its other branch is concerned, Motorola has set up a sales office to coordinate the sales and distribution of its communication products, including mobile phones and pagers.

The distribution operation
In order to coordinate the distribution of such a vast array of products, Motorola established a Logistics and Distribution Centre in Hong Kong to oversee product inventory, order fulfillment and shipment. As Benson Leung, the section manager, explains, "The hectic pace of operations in this centre stems from the fact that we are responsible for Motorola's product distribution in the North Eastern Asian region, which includes Australia, China, Hong Kong, South Korea and other countries."

In addition, the centre is a Global Distribution Centre in Motorola's worldwide distribution network and is responsible for shipping other products (such as the locally produced "Dragonball" processor chip) to other regions around the world.

When the centre receives an order, its workers retrieve the required product from the inventory, pack it into appropriately sized lots and ship it to the client through different transportation channels. In addition, centre workers apply various value-added treatments to the shipments, such as moisture control and the addition of identification bar codes, depending on the clients' needs.

Benson points out that the centre receives hundreds of orders every day and most of the shipments processed are transported to clients by air. It is clear that a smooth declaration process is vital to the efficiency of this export operation. Which is why Tradelink's electronic declaration service proved the perfect solution for Motorola's Logistics and Distribution Centre.

"Before Tradelink launched its electronic services, we processed our declarations the same way as other enterprises did - by submitting paper declaration forms. During that period, we employed five people to handle the forms on a full-time basis," Benson recounts. "Later, we participated in the government-initiated 'Diskette Submission Scheme' which reduced our employees' workload in handling import/export declarations. However, after Tradelink launched its electronic services, we immediately realised that this tool would further reduce the time needed to process declarations, thus increasing our efficiency, and promptly registered as a Tradelink customer in July 1997. As a result of this improvement, we now employ just three people, who handle more declarations than ever before."

In addition to tools such as Tradelink's services, Benson is delighted that tremendous developments in the IT industry over the past few years have also contributed to the streamlining of operations within Motorola's logistics centre. For example, centre staff now use e-mail as their main method of confirming with clients the details of their orders, as well as of maintaining a constant exchange of information with colleagues in other divisions. This not only enables centre staff to respond even more quickly to clients' needs, but also creates a more coherent network for staff to exchange information with one another. All these factors contribute to the overall efficiency of the centre.

Moreover, by employing different kinds of technology - such as accepting orders through EDI (Electronic Data Interchange) and the use of barcode scanning for shipment identification - the centre is able to track the status of each order accurately, ensuring that errors and client dissatisfaction are kept to a minimum.

Such multinational enterprises as Motorola tend to have ample resources for incorporating IT into their business operations. However, many local small and medium-sized enterprises still view such an investment as a risk. Should these companies simply continue to conduct businesses as usual? Or should they jump on the IT bandwagon just as every other company seems to have done? Confronted with these questions, Benson replies: "Although our experience at Motorola may not be equally applicable to other companies, it is evident that IT can enhance the efficiency of information exchange for all businesses, regardless of their size. A more efficient exchange of information can benefit businesses in many ways, including a greater flow of industry information on the market, a simpler management process for enterprises and more direct communication with clients. In other words, companies of all sizes can share in the benefits of adopting IT in their operations."

Benson concludes: "Any company that refuses to respond to the changing times probably won't experience any detrimental effects on their business in the short term. However, in the long run, it is highly probable that this same group of companies will drop out of sight as they fail to meet the demands of clients and the industry."

As the Hong Kong economy becomes more international than ever, local enterprises are bound to face stiffer competition from overseas companies that provide quality products and services. IT can be a potent tool for Hong Kong companies to counter this competition.