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ZHANG Chaoying, WEI Xiao Beijing Institute of Petrochemical Technology, P.R.China, 102600 zhangchaoying@bipt.edu.cn Abstract:Hong Kong SASA International Holdings Limited is the largest and leading cosmetics retailing and beauty care service group in Asia. Its sale prices are much lower than those of exclusive stores and counters because it adopts the strategy of bulk purchase throught the world and marketing many brands comprehensively. This thesis, through field research, systematic analysis and hierarchy analysis,will analyze SASAs secrets of success and challeges confronted today according to its supply chain and logistics system. Two conclusions have been drawn from the thesis: firstly, the supply chain and logistic management mode must comply with the local laws; secondly, the success of a company comes from its good supply chain and logistics system, but it can not be copied at will. Keywords:Hong Kong, SASA, Supply Chain, Logistics System
1 Introduction
Research on Supply Chains and Logistic Management first originated from USA. So far, the research development has gone through the following three typical phrases: earlist Transportation, then Logistics, and latest Supply Chain Management (SCM . Since 1990s, the two concepts, Logistic Management and Supply Chain Managemen,Coexist. At the same time, there are mainly four argument: (1) Traditionalist,who belives that SCM is just the organic ingredient of Logistic Management; (2) Relabeling, who argues that the two are the same thing with different names; (3)Unionist, who believes the category of SCM is wider than that of Logistic Management, which is opposite to the Traditionalists view; (4) Intersection ist, who thinks the two are different displines but overlap. The four totally different arguments indicate that the the two concepts have not come to a consensus, with respect to the knowledge system, theroy system, and fuandation of the displines. In this paper, Supply chain is defined as the logisitic network, composed of suppliers, manufacturers, warehouses, distribution centres, chanel sectors, etc.. Supply chain management (SCM is the integrated management philosophy and methods, which execute the plan and control of logistics from suppliers to end users. Based on the above-mentioned definition, the paper hold the point that Logistics is a significant component of Supply Chain. At present, most of the research on SCM and Logistic management are about entreprises basic business processes, the design of Supply Chain, the operating model of Supply Chain, collaborating partner relationship, and so on. The paper took the supply chain and logistic management system of Hong Kong SASA for intance, intended to discuss the influenc of different legal framework on enterprises supply chain and logistic management mode, then to reveal the fact that compliance with local laws underlies the sucessful supply chain and logistic operating mode.
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At that time, the cosmetics market in Hong Kong was much like the one in mainland today, ordinary cosmetics went at high price for high profit. Cosmetics could only be found at counters in department stores which charged admittance fare and commission from the sale. To save expenses, most of SASAs counters were located in the stores on the steets with many people, and in this way, SASA spared the admittance fare and commission deducted by department stores, with a lot of customers patronaging. If it sold all articles of different brands at the same counter, SASA would save a considerable sum of decoration cost by using their unified counter image. Trained strictly, shop assistants mastered enough knowledge of beauty culture to deal with goods of many brands so that labour cost saved greatly. Giving up the farthest benefits to customers, SASAs marketing strategy, is helpful of forming its steable consumer group. With its expansion, SASA began to stock directly from manufacturers all over the world and has become the exclusive agent of many brands. Presently, SASA owns 7 main markets in Asia, including Hong Kong, China Mainland, Singapore, Malaysia, Taiwan, Tailand and Macao, having about 2,600 employees.
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As is shown in Figure 1, SASA commodity supply chain is a supply system based on markers. The cosmetics manufactures sell their products all over the world through agents. SASA stocks from agents in different places in the world by the means of price competion and collctes the stocks in its ditribution center in Hong Kong. SASAs suppliers are mainly agents of manufactuerers of Hong Kong, America France, England, Japan and Germany as well as other manufacturers whose agent is SASA. Through the
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development of 30 years, SASA has estabilshed good relationship with those agents mentioned above and possesses over 100 chain stores with regular consumers so that any agent in Hong Kong or elsewhere in the world would not ignore SASA. Moreover, each time manufacturers want to market its new product through agent, SASA is one of their first choices. All those conditions above help SASA get goods at even lower price and ensure to keep the supply chain the smooth and continous.
As can be seen in figure 2, SASA adopts a three-level distribution system. The goods are distributed from the master station (first-level distribution center) to the second-level distribution center, then from the second level to the third level, and last from the third level to the retail stores. The distribution centers of each level do the distributing timely according to the sales of the sub-levels, of which the key link to ensure the timely distributing is the sales information delivering system. It is a special limitless information delivering system that does the delivery in SASA Hong Kong.
As shown in Figure 3, the code of each article will be scanned by shop assistants when it is being sold so that not only can the cost be counted out but also the sales information will be sent to third-level
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distribution centers, including the store number, name of the article, volume, model, etc. Then the third-level distribution centers will distribute and deliver the products timely based on the sales information from each store in their administrating areas, ensuring the supply of goods in each store. The third-level distribution centers will also scan the code of each article when they distribute. The cost and models of the goods delivered to each store will be recorded and meanwhile the delivery information will be sent to the second-level distributing centers. The second-level distributing centers will do the distribution and delivery timely in the same way and will purchase goods from the master station according to their own specific condition.
8 Conclusion
The supply chain and logistic management mode of enterprises must comply with local laws. The management and trade policies of cosmetics vary considerably between Hong Kong and China Mainland. The successful operation of SASA in Hong Kong could not guarantee the its prosperity in the Mainland.
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Healthy supply chain and Logistic system, which underlies the success of enterprises, could not be copies easily. Hong Kong SASA copies its Hong Kong mode in the Mainland, but the result is frustrating. Shang Hai Yiting, which copies the SASA mode from its beginning, also learned a bitter lesson. All the facts indicate that successful supply chain and logistic management mode cannot be copied blindly without flexibility.
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