Be fast and be flexible! This formula for success holds true during prosperous times and is even more relevant in the face of the current global economic slow-down. Companies in Hong Kong, large and small, now recognise reduced costs and increased efficiency as pre-conditions for survival, never mind success. Which is why discussions about how to use information technology to gain an advantage are popular in business circles.

The tale of Hai Luen Trading Co (HK) Ltd is a case in point. Established in 1979, Hai Luen is the only member of the China Merchants Group involved in the distribution of duty-free alcohol, tobacco, food and drinks. Its three main business areas are: supplying duty-free goods, food and drinks to ocean liners, river trade barges and passenger ferries; supplying goods to duty-free outlets in various Chinese ports; and as a significant supplier of well-known Chinese liquor and foreign wine products to both the wholesale and retail markets in Hong Kong.

Providing duty-free supplies to ocean vessels is the largest of these three business areas. After more than 20 years', the company has become one of the leaders in this area in Hong Kong. In order to provide a "one stop shop" service to customers, Hai Luen has acquired its own godown and warehousing facilities, transport and shipping fleet, as well as ports and offices. All these help to ensure a seamless supply to its customers.

The benefits of going electronic
There is little doubt that being a subsidiary of a large red chip company helps. However, one of the main reasons for Hai Luen's success is its judicious use of information technology. As pointed out by Chu Hing Shu, Deputy General Manager of Hai Luen, providing supplies to ships has, by its nature, unique difficulties.

"Because Hong Kong is one of the busiest ports in the world, there are always many vessels docking in our harbour - in the morning, at nights and during holidays. Usually, they stay a very short time. So the biggest challenge for our business is to replenish their supplies within the shortest time possible, with the least disruption."

Because Hai Luen also supplies taxable goods, such as tobacco and liquor products, it has to apply for permits from the customs office, as well as arrange the normal import/export declarations, before these products are allowed to leave the country. In the past, processing these documents was done manually. In a race against time, Hai Luen often found itself in a very awkward situation, which, inevitably, had an adverse effect on business.

After embracing an e-strategy to handle trade documents, things immediately changed for the better. "The best thing this change has brought us is time savings," explains Chu. "In the past, getting the permit for taxable goods could easily take 48 hours. Now, electronically, it usually takes only half a day. This has resulted in a great improvement to our operational efficiency." And this greater efficiency has enabled Hai Luen to provide more - and more suitable - services to the ships that are in Hong Kong for a very limited period of time.

Up and down the IT road
Yet the IT road for Hai Luen has not been smooth. As Barnaby Mo, Deputy General Manager, recalls, "We started using computers 10 years ago. The first computer was brought in to the office from a colleague's home. Not sure about the efficacy of this equipment, there was a lot of resistance to its use among our senior staff. But, since the whole industry was heading toward computerisation, we realised that this was an irreversible development. Over the following years, our computer knowledge and skills have caught up with the times."

Mo also points out that, since Hai Luen realised the benefits of IT tools in improving efficiency, the company has been actively investing in IT. Hai Luen now has its own web site and hires programmers to develop a customised database and related software. A logistics management system links administrative offices and warehouses, and managers can obtain information about where goods are at any given time during their journey.

A bright future
The advent of the Internet has shown the world business community many innovative ways of trading, and Hai Luen pays close attention to developments in this area. When waves of e-commerce swept over Hong Kong a couple of years ago, senior management made plans to set up an e-commerce system to distribute and sell wine products. Although the plan has not yet been put into action due to technical difficulties involved with payments, Hai Luen is continuing to explore its feasibility and hopes to implement it one day.

In the meantime, Mo notes, Hai Luen will focus on improving the company web site so that the products it distributes can be better marketed through the far-reaching power of the Internet. The expanded functionality of the site will make it easier for customers to obtain information about product types and prices.

As the global economy focuses on integration, competition between companies across regions is becoming more intense. One important agenda in corporate boardrooms is how to adjust business strategies to improve competitiveness and become a player in the global race. The changes that Hai Luen has undergone in embracing IT will surely be of interest to other companies with the same concerns and aspirations.