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Global Logistics -- A New Way of Doing Business in Taiwan

Global Logistics -- A New Way of Doing Business in Taiwan. Chi Schive President Taiwan Academy of Banking and Finance Advisor Council for Economic Planning and Development. Global Entrepreneurship for the New Millennium Syracuse University August 21, 2000.

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Global Logistics -- A New Way of Doing Business in Taiwan

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  1. Global Logistics -- A New Way of Doing Business in Taiwan Chi Schive President Taiwan Academy of Banking and Finance Advisor Council for Economic Planning and Development Global Entrepreneurship for the New Millennium Syracuse University August 21, 2000

  2. Global Logistics --A New Way of Doing Business in Taiwan Outline I. Introduction II. Factors behind global logistics (GL) III. The emergence of GL in Taiwan: a brief review IV. Taiwan’s two-way investment flows V. Production fragmentation by Taiwan firm: an integrator VI. GL and information industry VII. Infrastructure for GL VIII. A new way of doing business in the region

  3. Behind the Emergence of Global Logistics • Production fragmentation - Classic trade theory To push cost down, vertically integrated production processes are taking place across country borders . • New phenomenon Shortening product cycle is generating inventory pressure. • New phenomenon ICT reduces the cost of information transmission and goods transportation.

  4. Operation Characteristics in Taiwan: from OEM to GL Before the mid-1980s In the late 1980s and early 1990s After the mid-1990s : Local operations

  5. Taiwan’s International Division of Labor from Triangle to Diamond I: Investment M: Materials/Intermediates Q: Finished product/commodity S: Strategic alliance Japan S Q I&M I&M Taiwan U.S. Q Q S I&M Q Before the mid-1980s Late 1980s and early 1990s After the mid-1990s Q M ASEAN China

  6. Investment in Southeast Asia and China According to Host Country Statistics US$ million Sources: Board of Investment, Thailand; Malaysian Industrial Development Authority, Malaysia; Board of Investment, the Philippines; Investment Coordinating Board, Indonesia; State Commission for Cooperation and Investment, Vietnam; Ministry of Foreign Trade and Economic Cooperation, mainland China .

  7. Production Fragmentation by Taiwan Firms, 1998 % Source: Ministry of Economic Affairs, Statistics Department, Survey on Manufacturing Activities,July 1999.

  8. Foreign Production of Taiwan Firms, 1998 % Source: Ministry of Economic Affairs, Statistics Department, Survey on Manufacturing Activities,July 1999.

  9. Geographic Distribution of Sales of Domestic Production, 1998 % Source: Ministry of Economic Affairs, Statistics Department, Survey on Manufacturing Activities, July 1999. In Chinese

  10. Sources of Materials/Intermediates of Taiwan Domestic Firms, 1998 % Source: Ministry of Economic Affairs, Statistics Department, Survey on Manufacturing Activities, July 1999. In Chinese

  11. Production Sharing of Taiwan’s Information Industry % * Estimates. Source: Market Intelligence Center, Institute for Information Industry.

  12. Exports to Mainland China % Source: Board of Foreign Trade, ROC.

  13. Imports from Mainland China % Source: Board of Foreign Trade.

  14. Shipment Distribution of Taiwan-based Companiesby Countries of Major Investment % Source: Ministry of Economic Affairs,. Survey on Foreign Investment by the Manufacturing Industry, 2000. Taipei, Taiwan.

  15. Central Geographic Position The average flight time between Taipei and other Western Pacific cities is the shortest.

  16. Manufacturing Strength High-Tech Share of Taiwan’s Exports % 52.1 26.0

  17. No flight prior to the establishment of transit hubs Achievements - Air Transportation Unit: flights/week FedEx Unscheduled flights 70 66 UPS 63 Flights by foreign couriers up 42% in 4 years. Source: UPS, FedEx

  18. Performance of Asian Airports after the Crisis CKS Airport was the only Asian airport that maintained a positive growth of air cargo in 1998. Hong Kong Taipei Kuala Lumpur Seoul Singapore Tokyo Bangkok Manila Source：ACI (Airports Council International).

  19. Achievements - Telecommunications Popularization of Internet use Unit：％ ％ Source: Institute for Information Industry, TAS homepage, OFTA homepage

  20. Taiwan as a Global Logistics Center 1. DELL sends a request to Taiwan upon a Singaporean client order 2. The U.S. firm sends CPU to Taiwan 3. China sends cases and power supplies to Taiwan 4. China sends semi-assembled parts to Taiwan 5. Malaysia sends PCB to Taiwan 6. Taiwan sends DRAM mainboard and semi-asembled parts to Singapore 7.China send monitors to Singapore 8. Singapore assembles and sends the finished PC to the client 9. DELL sends the payment to Taiwan China U.S. DELL 2 CPU MONITOR 7 4 9 Order 3 1 Taiwan Singapore 6 DRAM main-board PC 8 5 PCB Malaysia Steps 1 to 8 take 2 to 5 days to complete Source: Prepared by CEPD.

  21. A New Way of Doing Business in the Region Intra-regional Trade as a percent of Total Trade

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