Asian Business Leaders Differ Sharply from U.S. Execs on Supply Chain Practices

Moreover, having embraced the outsourcing of supply chainmanagement, the Asian business leaders are much less likely to view"customer loyalty" as a business problem. Some 14% of the U.S. andEuropean executives surveyed listed "customer loyalty" as the mostimportant business issue they faced compared to only 2% of the Asianexecutives. The latter say a much more important business issue facingthem is "expanding to new markets."

The Asian leaders addressed those and other business issues in asurvey conducted by Harris Interactive(R) for UPS. The executives,more than three-quarters of whom are director- or vice president-levelmanagers, attended a special symposium here last week co-sponsored byUPS known as Longitudes '05. Their answers then were compared to thoseof business leaders who attended three earlier Longitudes conferencesin Chicago, Paris and New York City.

In discussing their embrace of outside expertise in running supplychains, a full 29% of the Asian executives said they had moved "veryextensively" or "completely" to outsourcing. In contrast, only 11% ofthe U.S. and European executives had gone so far.

Indeed, some 27% of the U.S. and European business leaders saidtheir embrace of supply chain outsourcing was "not extensive at all."The corresponding number for Asian executives was just 9%.

The survey results suggest that executives who have made the leapto reliance on outside supply chain partners are able to focus on adifferent set of business problems and challenges. For example, whenasked what was the most important business issue facing their companytoday, all executives surveyed were most likely to mention "revenuegrowth." But then they diverged sharply.

Where the Asians next focused on "expanding to new markets," theU.S. and European executives focused on "profitability."

On another question, some 7% of the U.S. and European executivessaid their No. 1 supply chain objective was to "improve workingcapital." Not a single Asian executive surveyed saw that as their No.1 problem.

Similarly, a surprising 23% of the Asian respondents said theirNo. 1 supply chain objective was to "improve product cost," while only7% of the U.S. and European executives ranked this objective as high.

"Asian business leaders clearly understand that effective supplychain management addresses a number of strategic issues and can be acompetitive differentiator," observed UPS Chairman and CEO Mike Eskew."They also appear much more willing to turn to outside supply chainservice providers while focusing instead on their core competencies."

There was one topic on which all the executives, regardless oflocation, agreed: whether you manage your own supply chain or rely onoutside expertise, the most common problem with supply chainmanagement right now is "difficulty accurately forecasting demand."Some 77% of the Asian leaders listed this as a problem, just as did76% of the U.S. and European leaders.

"The most commonly cited problem in effective supply chainmanagement is forecasting," added Eskew. "And overwhelmingly, theseexecutives understand that collaboration between customers, vendorsand suppliers is key. We believe technology can solve these problemswhen it's backed by a trusted partner with the necessary intellectualcapital and experience."

In another interesting finding, almost three-quarters of the Asianexecutives view China not only as a "very" or "extremely important"source of manufacturing (71%) but also as a "very" or "extremelyimportant" domestic market opportunity (72%).

The Longitudes conferences are designed to stimulate dialogueabout the future of global trade, including its human and culturalaspects, as well as the supply chains and technologies that shapecommerce. Longitudes Shanghai was co-sponsored by Harvard BusinessSchool Publishing, the China Europe International Business School andUPS (NYSE:UPS).

The just-completed Asian conference featured a variety of speakersincluding Dr. Victor K. Fung, the group chairman of Li & Fung; GangYu, vice president of worldwide supply chain operations forAmazon.com; Larry Wilk, vice president of logistics and operationsservices for Hong Kong Disneyland; Joe Hatfield, CEO of Wal-MartChina, and Thomas Friedman, the noted book author and foreign affairscolumnist for The New York Times.

UPS is the world's largest package delivery company and a globalleader in supply chain services, offering an extensive range ofoptions for synchronizing the movement of goods, information andfunds. Headquartered in Atlanta, Ga., UPS serves more than 200countries and territories worldwide. UPS's stock trades on the NewYork Stock Exchange (UPS) and the company can be found on the Web atUPS.com.

About Harris Interactive(R)

Harris Interactive Inc. (www.harrisinteractive.com) is the 13thlargest and fastest-growing market research firm in the world, perhapsbest known for The Harris Poll(R) and for pioneering and engineeringInternet-based research methods. The Rochester, New York-based globalresearch company blends premier strategic consulting with innovativeand efficient methods of investigation, analysis and application,conducting proprietary and public research globally to help clientsachieve clear, material and enduring results.

Blending science and art, Harris Interactive combines itsintellectual capital and one of the world's largest online panels ofrespondents, with premier Internet survey technology and sophisticatedresearch methods to market leadership through its US, Europe(www.harrisinteractive.com/europe) and Asia offices, its wholly ownedsubsidiary, Novatris in Paris (www.novatris.com), and through anindependent global network of affiliate market research companies. EOEM/F/D/V

Methodology

Harris Interactive(R) conducted an online survey on behalf of UPSbetween April 8 and 15, 2005, among 70 high-level business executiveswho attended Longitudes '05 in Chicago in April, or who attended twosimilar conferences in 2004 in New York City in April or Paris inOctober. The same online survey was also completed by 35 high-levelbusiness executives between Sept. 22 to Oct. 6, 2005, who attended theLongitudes Shanghai '05 conference (October, 2005). Data from eachonline survey administered were not weighted and are onlyrepresentative of those business executives who replied.