When you first enter the Shenzhen premises of vegetable wholesaler San Kee Chan, it is a stimulating sensory experience. Your nose is immediately filled with the rich aroma of fresh vegetables and your vision is saturated with a vibrant scene of colour and movement. It's not just the vegetables themselves: brightly coloured storage baskets indicate the final destination of the contents, and staff wear brightly coloured t-shirts to indicate their role and rank. As you take it all in, you quickly become aware of a sense of order and purpose in the bustle of activity: this is a smooth, swift operation.

The obvious commitment to organization and efficiency, evident in every detail of these operations, is the achievement of San Kee Chan's owner, Thomas Ng Wing Yan. In the early days of the company this was realized in fundamental ways' like the colour coding that were nevertheless innovative in what has long been a traditional business linked to the sedate pace and conservative mindset of farming. But in recent years Mr Ng has gone much further, and taken full advantage of the power of information technology and computers to lift the performance of his company to a completely different level. In so doing, he has made San Kee Chan an exemplary business model and an inspiration to any operation faced by complex logistics, tight schedules and ruthless deadlines.

Getting it started

Mr Ng is definitely an original thinker. When asked about the precedents in his business that inspired him to streamline and re-invent his company's operations? eventually culminating in the use of some of the most sophisticated e-commerce technology available today- he simply laughs. "There were none that I know of," he says. But he adds that he has long held a firm belief that the global trend towards IT and e-commerce would eventually reach into even the most traditional industries - like vegetable wholesaling- and enable efficiencies far superior to the old ways. Those who were first to find ways to implement this technology would immediately gain a significant competitive edge. So as soon as the opportunity arose Mr Ng didn't hesitate to take that big step forward, even though it meant that in the eyes of his peers he was making San Kee Chan a guinea pig for the rest of the industry.

Shortly after his landmark decision was made, he called in a leading information technology consulting firm in Hong Kong to help him achieve these goals. Computers were set up in San Kee Chan's offices in Hong Kong and China, and software was specially designed in accordance with the companyÕs daily operational needs. Under the new system, clients could send in their orders directly via the computer links or for those who still preferred to use the phone through Internet phone systems manned by San Kee Chan staff who would log the order in the computer system. Either way, the order was immediately documented in a database shared by the Hong Kong and China teams.

The centralized system enabled massive improvements in organizational efficiency as well as the analysis of data. For example, it immediately informs relevant managers if deliveries are behind schedule, enabling them to come up with fast, effective solutions before any situation becomes critical. It may seem like a basic function, but it addresses an extremely important issue in an industry where assuring the freshness of the delivered product is a life-or-death matter for all the wholesalers.

The unconventional twist

A year or so ago, our staff were still writing down each item by hand, recalls Mr Ng. Many other long-established vegetable wholesalers continue to accept this inconvenience because they focus on supplying just a few kinds of vegetables and handle only bulk orders.

But in order to break into this tough business, and then get ahead of competitors, San Kee Chan chose a different area of operations and a different development path. We'll take orders for as little as four leung (approximately 37.5g), says Mr Ng. they might be orders that were rejected elsewhere, but we take them all. That has required a business model that's decidedly different from most of the traditional operators, and places maximum emphasis on speed, efficiency and the cost effectiveness of all activities. It was a bold business approach from Mr Ng, and if it were to be successful the old ways weren't adequate.

To trace the history and development of this family business, you have to flip the calendar back to 1985, when Mr Ng and his brother were working for their father's wholesale vegetable operation in Sai Ying Pun. His father had a 25 percent stake in the company, and Mr Ng realized it was going to stay that way despite any future expansion. So in 1985 just 10 days before the end of the year according to the Chinese calendar, and traditionally the year-end for the agriculture industry he boldly proposed to his father to start his own company.

He got his father's approval, but at that early stage apparently didn't have his full confidence: old Mr Ng agreed to rent his son just one-third of the shop next door so that he could set up a base to realize his ambition.

Fast food rules

Back in the 1980s, fast food had still not won Hong Kong people's hearts, says Mr Ng, But I had no doubt given the speed Hong Kong people demand in every aspect of lifethat it was due to explode in popularity. Foreseeing the emergence of big fast-food chains that would require massive volumes of vegetables, Mr Ng decided to transform his new-born company from a wholesaler targeting wet markets to a supplier serving restaurant and fast food groups.

But no one in the industry clapped their hands on hearing his big plan?

The turning point came when Mr Lo Kai Tun, from the prominent Lo family, founders of the Vitasoy Group, came to buy potatoes. The deal officially started Mr. Ng's business as a vegetable supplier. Less than four months later, San Kee Chan was supplying Maxim's, another major fast- food chain. These early successes prompted Mr Ng to take another ambitious step: He started a subsidiary company called Ewing Transportation so that San Kee Chan could provide one-stop services for their fast-growing client base. Soon after that his client list included Cafe de Coral, Fairwood, Farmers Restaurant Group, hospitals, supermarkets and even school cafeterias.

Time is gold

Mr Ng continued to study market trends and the development of the fast- food business, and in the 1990s inspiration struck again. Fast is the keyword,?he says today when discussing this next big idea. What could be better for a restaurant than being able to use the vegetables immediately upon delivery to the kitchen? So Mr Ng developed another role for San Kee Chan: the processor. From washing and peeling potatoes through to chopping choi sum into set lengths for school cafeterias, San Kee Chan took over part of the kitchen work and helped their clients save time, labour, water and even space.

(With fewer staff and working areas required in their kitchens, restaurants had the added bonus of being able to reduce the floor area of the kitchen and expand guest areas.)

Mr Ng also invented a new concept which he called actual price. For instance when potatoes were being prepared by the restaurant kitchens, the thickness of the skin being peeled off varied considerably but the end result was always a vegetable that was smaller and lighter than the one the restaurant had paid for. The thicker the removed skin, the larger the loss for the restaurants. But now that San Kee Chan were preparing the vegetables for immediate use eg peeling the potatoes. The restaurants could order the precise amount they needed and estimate the real cost.

The China expedition

But this flurry of expansion, development and diversified operations meant San Kee Chan were faced with growing overheads. Mr Ng decided it was time to move most of the operations to China to take advantage of the lower costs of labor and rent. Working from China doesn't surprise anyone today, but in the vegetable wholesale industry back in 1998, the idea was still very foreign.

"When we told our vegetable suppliers that we were relocating to China, they began to request immediate payment upon each delivery, says Mr. Ng. it was tough, but it was also understandable. In those days, no one including myself knew exactly what would happen when you relocated your business to China. Concerns like labor quality, slow and chaotic customs clearances, poor facilities, unexpected government levies, etc. disturbed everyone, except for those few, like Mr Ng, who had the courage to take an extra risk. Mr Ng moved to China expecting plenty of rough times on the road ahead, but saw it as being the best way to taking San Kee Chan forward.

One month after settling in to Shenzhen, at first occupying just 400 sq m in another company's office, San Kee Chan made its first delivery: one truck of 26 baskets of vegetables. By 1999 the company was able to move to an 800 sq m plant Today they operate from 3,500 sq m premises, with an extra 5,000 sq m of reserved land under their own name, leased from the People's Liberation Army at a favorable rate. Not only has San Kee Chan turned their business into a success story, the reputation and credibility of the company is now well recognized by the local government.

The daily routine

Today, the San Kee Chan operation in Shenzhen runs virtually 24 hours a day throughout the year.

A typical working day starts at 9:30 am with the first deliveries from San Kee Chan's Shaoguan plantation, the Buji Wholesale Market or for some special varieties of vegetables from the northern provinces. The vegetables are separated into approximate quantities according to the orders that have been received, and after damaged or rotten parts have been removed the vegetables are sent to different units for processing. Finally the processed fresh vegetables are put into colored baskets with labels indicating their final destinations in Hong Kong. The clearance station for agricultural products at the Man Kam To border control closes every night, so San Kee Chan's fleet of six trucks two for frozen food and four for fresh must arrive at the gate before 10pm to ensure timely delivery to the Hong Kong office early next morning. There, the baskets are reloaded onto a Hong Kong fleet of trucks, which head out on various routes throughout the territory, ensuring that clients large and small get their orders on time and in good order.

E-commerce efficiency

The whole computerization process has made the complex internal operations of the company smoother and more efficient, but utilization of the Internet is playing an increasingly significant role. With a truck fleet running back and forth every day between China and Hong Kong, finding fast, easy ways to handle customs declarations and documents is essential, and can mean major gains in utilization of resources and return on investment. For San Kee Chan, the best solution for this potential bottleneck has come in the form of Tradelink's Web Form Declaration Service.

Tradelink provides the exclusive gateway for online submission of trade declarations. Instead of presenting the customs documents by hand and in hard copy to the Customs Department, San Kee Chan's staff now handle it all from their own office simply by pressing a few keys. The whole process from logging on to the Tradelink business Website (http://www.tradelink-ebiz.com) to filling in the online forms then making a final click for submission takes place in a matter of minutes. San Kee Chan is extremely pleased with the resulting efficiencies and savings, and in the near future, acting on the advice of Tradelink, will install the full-package ValueNet software, which comes with database and management functionalities.

Together with Internet phones, the internal procurement system and barcode labels, San Kee Chan has joined the wave of new technology and demonstrated its efficiency by a massive 40 percent cut in the labor required for these procedures.

The industry is now impressed. Wow, how can you be so quick! is the general reaction of peer wholesalers when Mr Ng demonstrates to them how things are done with the aid of computers and the Internet. Mr Ng sums up his advice to the newcomers in three simple words: Learn and communicate. Try to learn even if things are totally new to you. Communicate with your software developer on what you need. The positive results for San Kee Chan are already obvious.