Business Lunch

On Tuesday, March 20, 2007 I attended to my very first business lunch. The topic of the day was “Time as an Indicator of Supplier Capability,” and the speaker was Paul D. Ericksen. The presentation was about the supply chain with emphasis on the suppliers. Paul D. Ericksen argued that time is the essence of the supply chain, and that minimizing the Manufacturing Critical-path Time (MCT) is the best way to reduce your costs. This means that the supplier has to use the “lean” approach in order to reduce the “waste” time. The longer an item is immobile, the more money is going to waste. The goal is to have constant movement on the products and minimize the storage. This is not as easy as you might imagine; collaboration between the supplier and the company is utterly important. In a perfect world, a company would receive an engine for example, right before the installation, and the supplier would ship it on arrival from the factory, while the factory assembles all the pieces in the engine with every part arriving right before the assembling. Although the world we live in is far from perfect, but we are working towards this goal.

As this was my first business lunch, or business anything for that matter, I was far more nervous than I should have been. I had a lot of time to think about the meeting and there is so much I would want to change. During the round were everybody presented themselves I actually managed to panic and do the worst possible presentation. I understand now that next time, I should do ANYTHING but what I did. What happened was probably worst case scenario for me, therefore next time I should try to relax more and be more confident.
Attending to this meeting has made me realize that I have so much more to learn, and now I have a clearer picture on what I need to work on. First of all I need to find out my strongest features and emphasis more on this during a business conversation. The part that needs the most work is that I need to learn how to let go of my mental blocks that stops me from talking. Bottom line is I have nothing to loose, so why approach this matter in a shy way? The only thing that could happen is that I go away, without anybody’s business card. Well, I have already done that so now it is time for a different approach. Next time there will be a different Daniel.

China

For centuries China stood as a leading civilization, outpacing the rest of the world in the arts and sciences, but in the 19th and early 20th centuries, the country was beset by civil unrest, major famines, military defeats, and foreign occupation. After World War II, the Communists under MAO Zedong established an autocratic socialist system that, while ensuring China's sovereignty, imposed strict controls over everyday life and cost the lives of tens of millions of people. After 1978, his successor DENG Xiaoping and other leaders focused on market-oriented economic development and by 2000 output had quadrupled. For much of the population, living standards have improved dramatically and the room for personal choice has expanded, yet political controls remain tight.

Population: 1,313,973,713 (July 2006 est.)
Natural Resources: coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium, hydropower potential (world's largest)
GDP (Purchasing Power Parity): $10 trillion (2006 est.)
Agricultural Products: rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish
Currency: yuan (CNY); note - also referred to as the Renminbi (RMB)
Airports: 486 (2006)
Railways: total: 74,408 km
Ports and Terminals: Dalian, Guangzhou, Nanjing, Ningbo, Qingdao, Qinhuangdao, Shanghai

Common Assignment

Host Company – Gain Vigor Trading. LTD China
Mainly imports waste paper from Europe and USA.

Supply chain costs: N/A
Annual report: N/A


Host Country
China’s import and export commodities.

Import (777.9 billion f.o.b. 2006 est.)
Machinery and equipment
Oil and mineral fuels
Plastic
Optical and medical equipment
Organic chemicals
Iron and steel

Export (974 billion f.o.b. 2006 est.)
Machinery and equipment
Plastics
Optical and medical equipment
Iron and steel
https://www.cia.gov/cia/publications/factbook/geos/ch.html

China’s trade partners - amount shown in US billions, and brackets indicate changes from the year 2004.

Export partners (2005):
United States = $162.9 (+30%)
Hong Kong = $124.5 (+23%)
Japan = $84 (+14%)
South Korea = $35.1 (+26%)
Germany = $32.5 (+37%)
Netherlands = $25.9 (+40%)
United Kingdom = $19 (+24%)
Singapore = $16.6 (+31%)
Taiwan = $16.6 (+22%)
Russia = $13.2 (+45%)

Import partners (2005):
Japan = $100.5 (+9%)
South Korea = $76.8 (+23%)
Taiwan = $74.7 (+15%)
United States = $48.7 (+9%)
Germany = $30.7 (+1%)
Malaysia = $20.1 (+11%)
Singapore = $16.5 (+18%)
Australia = $16.2 (+40%)
Russia = $15.9 (+31%)
Thailand = $14 (+21%)
http://internationaltrade.suite101.com/article.cfm/chinas_top_trading_partners

Free Trade Zones in China

Ningbo Free Trade Zone - Ningbo Free Trade Zone

Qingdao Free Trade Zone - Qingdao Free Trade Zone - Is specialized in the processing and trade of peanuts and peanut kernels.

Shanghai City Waigaoqiao Free Trade Zone - Shanghai City Waigaoqiao Free Trede Zone - Was established conforming to the international custom.

Tianjin Port Trade Free Zone - Tianjin Port Trade Free Zone
http://www.escapeartist.com/ftz/ftz.htm

Objective

To provide China with waste paper in the direction of recycling for the booming industry, as well as increasing the profit for West Seattle Recycling and complying with the laws of both countries.

Intro

Due to the high export rate and lack of trees in China, the demand for paper is vastly high, and the market prognosis is that the demand will continue to increase in the future. I intend to fill this demand with the cooperation of West Seattle Recycling and Gain Vigor Trading in Jiangmen City, China. 60% of the containers from China return back empty, this could lower the price for shipment.

http://www.westseattlerecycling.com/index.htm
http://www.ecplaza.net/tradeleads/eunicelee.html

Export Plan

The easiest approach to exporting is to use a freight forwarder. With a freight forwarder you can choose your involvement in the transaction. A freight forwarder helps you to ensure that the goods are handled properly and arrive on time the right place, and also provide help for the documents and labeling needed. Below is information of what you need before exporting.

Documents needed for Exporting

• Shipper's Export Declaration (SED) Chinese translation needed (dual use)
• Commercial Invoice
• Certificate of Origin
• Ocean Bill of Lading
• Insurance Certificate
• Dock Receipt
• Shipper's Letter of Instruction (SLI)

Shipper’s Export Declaration (SED)

Commercial Invoice

Certificate of Origin

Ocean Bill of Lading

Insurance Certificate

Shippers Letter of Instruction (SLI)

Product Category

The ECCN is EAR99 for waste paper. It does not fall under any category listed on the homepage of Export Administration Regulation Database.
Newsprint (newspaper) Schedule B code 2007, Chapter 48, 4801000002
OCC # 11, DOSCC # 12

Incoterm and Container

FOB, meaning Free on Board, translates to the shipper (seller) having upheld his/her part of the agreement when the goods pass the ship's rails at the port of exit. The receiving party (buyer) assumes risk and costs associated with the goods once they pass the ship's rail in the seller's home port.

Ocean Freight Container, 20 foot open full container load
20' containers: 24,000 kg (52,910 lbs) according to the latest issue of ISO 668;
30, 480 kg (67,200 lbs) valid for most Hapag-Lloyd 20' containers; exceeds ISO minimum standards.

Shipping

Specific marking and labeling is used on export shipping cartons and containers to:
Meet shipping regulations;
Ensure proper handling;
Conceal the identity of the contents;
Help receivers identify shipments;
Insure compliance with environmental safety standards.
The overseas buyer usually specifies which export marks should appear on the cargo for easy identification by receivers. Products can require many markings on for shipment. For example, exporters need to put the following markings on carton to be shipped:
Shipper’s mark;
Country of origin (U.S.A);
Weight marking (in pounds and in kilograms)
Number of packages and size of cases (in inches and centimeters);
Handling marks (international pictorial symbols);
Cautionary markings, such as “This Side Up” or “Use No Hooks” (in English and the language of the country of destination);
Labels for hazardous materials (universal symbols adapted by the International Airi Transport Association and the International Maritime Organization);
Ingredients (if applicable, also included in the language of the destination country)
Packages should be clearly marked to prevent misunderstanding and delays in shipping. Letters are generally stenciled onto packages and containers in waterproof ink. Markings should appear on three faces of the container, preferable on the top and on the two ends or the two sides. Any old markings must be completely removed from previously used packaging.

Ocean Route

PNW: Pacific Northwest Service
Port Rotation: Seattle - Vancouver - Pusan - Kwangyang - Kaohsiung - Yantian - Hong Kong - Shanghai Highlights: Connect to China's Bohai Rim via dedicated relay at Pusan to Dalian and Xingang

http://www.apl.com/routes/html/asia_north_america.html

Starbucks Takes Over Instead of Wal-Mart

After further researching about walmart I hit a huge unbreakable brick wall, and I was forced to take a different approach. After doing more research about Sweden I realized that they have far too many small businesses for the government to accept walmart into Sweden. Therefore I had to start all over again, but after careful consideration I found another company that would have great success in Sweden, a company named Startbucks.

Starbucks offers an experience that envolves coffe of different blends, and has been successful all over the world. Since Sweden is a booming country that means that the pace is changing into a faster and faster rythm. This is where Starbucks fits in. Starbucks could offer the Swedish people different blends of coffe on the go however they like it. Right now Sweden does have some coffe places to go, but they are rather rare and only exists in the big cities in general. Cutlurally, coffe is one of the most important beverages to the Swedish people. And another reason I think it would work is because Sweden is slowly changing towards a more Americanized society. Some people even think that obiesity is soon to come with it as well.

Empty Shelf at Walm-Mart

Let’s assume that you purchase a flashlight at Wal-Mart. The cash register reads the bar code price tag and reportedly within fourteen seconds, the Wal-Mart central warehouse is notified that the Wal-Mart retail store needs a new flashlight for the shelf to replenish the purchased item. Further, the manufacturer is also notified that the Wal-Mart central warehouse needs a new flashlight. Even the raw material suppliers are notified that the manufacturer now needs a little more raw materials (plastic housing, switch, light bulb, etc), and so it goes – all the way up the supply chain.
Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt was largely unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves.



http://www.asaresearch.com/ecommerce/supplychain.htm

Short about Wal-Mart in Germany

Clearly dominating the US retail market, Wal-Mart expanded into Germany (and Europe)
in late 1997. Wal-Mart’s attempt to apply the company’s proven US success formula
in an unmodified manner to the German market, however, turned out to be nothing
short of a fiasco. Upon closer inspection, the circumstances of the company’s failure to
establish itself in Germany give reason to believe that it pursued a fundamentally
flawed internationalization strategy due to an incredible degree of ignorance of the
specific features of the extremely competitive German retail market. Moreover, instead
of attracting consumers with an innovative approach to retailing, as it has done in the
USA, in Germany the company does not seem to be able to offer customers any compelling
value proposition in comparison with its local competitors. Wal-Mart Germany’s
future looks bleak indeed

By: Andreas Knorr and Andreas Arndt

Information about the EU and the Pacific Northwest

COPENHAGEN EUROPEAN COUNCIL
Membership criteria require that the candidate country must have achieved:
· Stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities;
· The existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union;
· The ability to take on the obligations of membership including adherence to the aims of political, economic & monetary union.
MADRID EUROPEAN COUNCIL
Membership criteria also require that the candidate country mush have created the conditions for its integration through the adjustment of its administrative structures, as under lined by the Madrid European Council in December 1995. While it is important that European Community legislation is transposed into national legislation, it is even more important that the legislation is implemented effectively through appropriate administrative and judicial structures. This is a prerequisite of the mutual trust required by the EU membership.
http://ec.europa.eu/enlargement/archives/pdf/historic_opportunity_2003_en.pdf

The first pillar is the European Communities.
EC
Customs Union and single market
Agricultural policy
Structural policy
Trade policy
New or amended Provisions on:
· EU citizenship
· Education and culture
· Trans-European networks
· Consumer protection
· Health
· Research and environment
· Social policy
· Asylum policy
· External borders
· Immigration policy
The second pillar is common foreign and security policy.
Foreign policy
· Cooperation, common positions and measures
· Peacekeeping
· Human rights
· Democracy
· Aid to non-member countries
Security policy
· Drawing on the WEU: questions concerning the security of the EU
· Disarmament
· Financial aspects of defense
· Long-term: Europe’s security framework

The third Pillar is cooperation in justice in home affairs.
· Cooperation between judicial authorities in civil and criminal law
· Police cooperation
· Combating racism and xenophobia
· Fighting drugs and the arms trade
· Fighting organized crime
· Fighting terrorism
· Criminal act against children, trafficking in human being
http://europa.eu.int/eur-lex/en/about/abc/abc_12.html

The “economic and monetary union” is the development of a unitary economy across the member states of European Union with a single currency, single market, and harmonized interest and taxation rates. EU member governments run their economies according to similar principles of economic management. They coordinate their policies in order to deliver steady growth; more jobs and a competitive economy across the EU, one which will at the same time preserve the European social model and protect the environment.

Characteristics for the single market in European Union
Lower prices for the consumer
Greater choice of goods and services
The four freedom of movement are for goods, services, people and capital
http://europa.eu/pol/singl/overview_en.htm

The major cities in the Pacific Northwest region are Seattle, Portland, Spokane, Boise, Victoria and Vancouver. The US and the EU together are responsible for two fifths of the world trade. The EU and the US is the “world’s two largest economies account for a combined total of 57% of world GDP.” (http://ec.europa.eu/trade/issues/bilateral/countries/usa/index_en.htm) “The two economies are interdependent to a high degree. Close to a quarter of all EU-US trade consists of transactions within firms based on their investments on either side of the Atlantic. The transatlantic relationship defines the shape of the global economy as a whole as either the EU or the US is also the largest trade and investment partner for almost all other countries.” The EU and the US are part of Transatlantic Economic Partnership (TEP). The goal is to create stronger bonds economically between the regions. Together they are account for half of the entire worlds GDP.