ON TRACK FOR ’10

What a tumultuous year 2009 was! Despite a perceived hesitation in the industry’s willingness to invest in IT, it was a tremendous year for AEB worldwide. We managed to win some 4,600 new clients for our logistics software solutions and reach our ambitious 2009 economic targets by September.

The large number of new clients stemmed mainly from AEB’s software as a service (SaaS) solutions, which help clients minimize their initial investments. Our freight cost control solutions were also very successful, as their clear focus on cutting costs and enhancing cost-transparency was well-aligned with the industry’s goals in 2009.

A look at supply chain management (SCM) during the economic downturn yields some important lessons, such as how SCM software and its associated IT costs must help supply chains easily adapt to changing market conditions. It is AEB’s mission to provide such solutions.

AEB’s principal objective in 2010, besides further enhancing its end-to-end logistics software solution suite, is to strengthen its market position in the Asia Pacific region. Looking ahead, we expect greater attention to supply chain visibility and trade compliance in the local market. With the momentum of a successful 2009 behind us, we are ready for and eagerly anticipating a good 2010.

Dr Torsten Mallée

General Manager

AEB (Asia Pacific)

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Like most companies around the world, Agility was not immune to the effects of the global financial crisis. However, we took action to focus on cash optimization, capital allocation and cost rationalization, and as a result, our net profits for Q3 in 2009 increased by 15 per cent to some US$142 million. Notable growth was seen in areas such as oil & gas and project logistics.

In Asia Pacific, China has continued to grow, albeit during the last 12 months at a reduced rate, but that is expected to increase this year, as we are seeing a rebound in exports and China’s domestic consumption is robust. Agility has invested in building its own domestic distribution network through its acquisition of Baisui and our business is increasing exponentially in line with consumer demand.

We are building a countrywide network in India and developing distribution centers and a trucking fleet. Agility is now one of the largest international logistics service providers in the country and demand for logistics services is continuing to grow.

Our two biggest challenges in 2010 are finding the right people and managing our costs in fast growing economies like China and India. There will also be increasing competitive pressures as logistics companies look to win market share.

Wolfgang Hollermann

CEO, Asia Pacific

Agility

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2009 was a difficult year for many. However, it provided us with the opportunity to consolidate our operations and tighten our supply chain efficiencies to better serve our customers, while managing costs. Regionally, this year will prove to be an exciting year for UPS. Already we are beginning to see signs of a global recovery and we believe Asia will lead the world out of the global recession. UPS remains committed to the region as we grow our presence in Asia.

The opening of our Shenzhen Asia Pacifi c Hub in Q1 2010 will enhance our air network by connecting businesses in America and Europe to Asia. We firmly believe that our work in preparing the ground throughout 2009 and the plans in place for 2010 will place us in good stead to capitalize on the gradual global recovery.

Gillian Sim

Managing Director

UPS Singapore

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2009 challenged the global supply chain community with severe economic pain and uncertainty. Following the near collapse of world financial systems and the roller coaster ride of world commodity prices, many businesses saw fit to begin regionalizing their supply chain operations.

Typically, three big theatres – Asia-Pacific, Americas, and Europe- Middle East-Africa – constitute the world view of supply chain operations strategies as they are being rewritten to respond to the post-collapse economy. In each of these regions, fast-growing consumer economies are nearby to technologically developed industrial economies, offering growth markets close to supply sources and generally within a few time zones.

From a planning and logistics perspective one major implication of these shifts is that manufacturing and sourcing is less likely to race to the lowest cost country. Where proximity to markets and diversification of sources adds to the resilience of a business, supply chain strategy increasingly will consider higher wage production locations. This allows businesses to backstop weak spots in their distribution networks with higher cost alternate ship-from locations, provided the logistics network can respond quickly and intelligently enough.

For logistics providers, however, the expectations of global shippers are now racing ahead of what most can currently provide. Inventory visibility, specialty packaging and finishing services, reverse logistics and more are all dependent on information systems that still lag in many 3PL operations. The newly regionalized supply chains of the world will bring growth to logistics providers only if they can offer a dramatic upgrade in technology-enabled services.

Kevin O’Marah

Senior Vice President

AMR Research

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The past years have been an economic rollercoaster. The boom phase from 2005 to 2008 was followed by a downturn of unexpected dimensions. However, volatility is part of business and in the future, growing dynamics, volatile business and fluctuating order volumes will result in higher forecast uncertainty. Managing this forecast uncertainty will be the big challenge in logistics and supply chain management in 2010 and beyond.

With our software and consulting service, we help companies to master this challenge. Our simulations and analyses of different business scenarios in logistics and production enable our customers to prepare every part of their supply chain for upcoming developments. At the same time, our integrated optimization solutions help companies to cut costs and increase efficiency.

Thus, already in 2009 we recognized a growing high demand for our offerings, so that we can look back on a successful last year. We completed the first six months of 2009 with the best half-year results in our company history and continued to be on the growth path in the second part of the year, too.

In addition to strong business with existing customers and the acquisition of new customers, the order situation particularly of our international customers is very positive. For the first time, strong international sales account for more than 50 percent of our business. Asia, for example, now generates almost 20 percent of our revenues. Many concrete requests from customers and interested parties from outside Germany indicate a continuing international growth, so that we are optimistic for 2010.

Dr Christoph Plapp

CEO

Axxom Software

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Based on research I conducted recently for an upcoming market study, the demand signal repositories (DSR) market continues to grow briskly (49 percent in 2009). Based on ARC estimates, i2 Technologies, a new entrant to the market at the end of 2008, grew its DSR-related revenues from under US$1 million to over $10 million in one year. We also estimate that IBM has grown its revenues in this area to over $10 million in three years, despite not offering a core DSR database product. And now Oracle has entered the market, and we expect the company to generate at least $10 million dollars in DSR-related revenues in the next five years. (i2, IBM, and Oracle are all ARC clients). Based on these factors, it’s hard to imagine this still immature market not growing by a very healthy margin again next year.

Google continues to roil the supply chain technology market, shaking up the GPS and navigation industry with some recent announcements. It is developing a map database to compete with the routing and navigation maps provided by NAVTEQ and Tele Atlas, and is offering a free turn-by-turn (TBT) navigation app with its Android 2.0-based smartphones. I don’t expect these to be the last announcements that surprise logisticians.

I expect Google to continue investing in mobile technologies, in free cloud-based applications, and in other new areas designed to rattle its mortal enemy Microsoft. Google’s primary focus is serving the mass consumer market, not providing logisticians with new solutions. Nevertheless, I expect to see more solutions based on Google technologies come to market in the supply chain arena.

Steve Banker,

Service Director, SCM

ARC Advisory Group

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Supply chains came under much more scrutiny in 2009 than in previous years as tumbling consumer demand forced CEOs to slash costs and release cash from their balance sheets. Lower transportation costs certainly helped, but carriers footed the bill!

The fight for survival has led to more polarized rules of engagement between key stakeholders in the supply chain; some preferring more transactional relationships while others lean towards closer collaboration. We responded quickly to the crisis and took the opportunity to merge our logistics (Maersk Logistics) and forwarding (Damco) activities under one brand, Damco, which allowed us to simplify organization and marketing approach.

Even as I continue to be very conscious of the role we have to play in reducing the environmental impact of our industry, Damco took another step forward in 2009 with the launch of the Carbon Dashboard; a tool that facilitates day-to-day supply chain decision-making to reduce carbon emissions.

I am optimistic that 2010 will be a much better year, with a few things to look out for. Asia is expected to lead the global economic rebound and we observed the first signs of that in our 2009 Q4 intra-Asia volume, which was significantly higher than in Q1, and bodes well considering Damco’s strength in emerging markets.

Supply chain managers will need to focus more on flexibility, reliability and responsiveness in 2010 to optimize supply availability – because carriers will continue to use capacity constraints to drive up rates and cautious inventory levels could lead to supply shortages and challenges. If there is an upsurge in demand, the winners will no doubt be the ones who can respond fastest.

Tony Hotine

CEO,

Asia Pacific Damco

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Playing out against the backdrop of a global economic downturn, 2009 saw tough challenges faced by all in the logistics industry. Despite these conditions, a number of opportunities presented themselves for Dematic and we have much to be pleased about and proud of looking back on the year.

While there certainly was some resistance to technology investment during the year, the market conditions did not sway a number of forward-thinking companies from proceeding with their strategic plans. Multi-lingual voice picking, high rate split case order assembly and our patented negative pick solution are just a few examples of Asia Pacifi c firsts we successfully implemented in automated logistics systems last year.

During the design and planning phase of logistics projects, Dematic deliberately invests significant time with customers to ensure our solutions meet their operational needs, have a solid business case and provide an acceptable return on investment. These business cases do not fall down in the face of temporary economic contractions. The results that customers’ investments have since delivered now places them well ahead of others in their markets and positions them to take advantage of new business opportunities as they emerge.

Dematic continued with the execution of our own strategic plans and actually increased investment in several areas such as service & support and R&D focused on delivering even more productivity, flexibility and responsiveness to our customers. With a number of significant innovations in our products and solutions made ready for market during 2009 and more to come in 2010, we look to the coming year with both confidence and excitement.

Michael Bradshaw

Director – Integrated Systems

Dematic SEA

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As the economies recovers from the financial crisis, “doing more with less” seems to have emerged as the mantra of ’09. In a logistics industry where extensive paperwork, inventory, tracking, audits, invoicing and stringent processes rule, documentation efficiency and seamless information flow are the lifeblood of each organization, last year saw greater investments in supply chain technology to enhance document tracking efficiency, increase invoicing-related transparency between parties and reduce the amount of costly document storage required.

Canon has continued to develop document management systems that support the stages along the supply chain continuum, and in 2010, Canon continues to invest heavily in R&D to develop document and workflow technology that address real-world business issues.

Today’s combination of economic instability and the growing threat of global warming also underscored an urgent need for companies to embrace “sustainable business practices”. In the logistics sector, Canon expects to see companies adopting more sustainable practices especially in the areas of reducing wastage and cutting operational expenses associated with inefficient document management.

Overall, the outlook for 2010 is positive, with the emergence of economic green shoots. While doing more with less will remain the mantra, instead of focusing on cost reduction, I believe that the industry is gearing up to “doing more”.

Lan Chi Fei

Senior Manager, Marketing

Canon Singapore

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Despite the economic upheaval of 2009, DHL Supply Chain (DSC) in Asia Pacific made great strides in further strengthening our business and positioning it for greater growth. Indeed, we came through the year in good shape having focused on more value-added services beyond our core warehousing and transport solutions, investing in infrastructure and people development to groom future leaders.

In 2009, we launched the DHL Asia Pacific Packaging Center in Malaysia and plan to open six more facilities by 2012; we opened the DHL Eastern China Domestic Transportation Hub in Shanghai – part of a US$25 million investment in the China domestic road transportation market; and a comprehensive safety campaign involved 20,000 employees across 700 sites in Asia Pacific.

One outcome of the recession is that customers are more willing now to look at outsourcing, which of course is very positive for the 3PL industry. In 2010, we need to move even closer into our customer’s supply chains, delivering the right ideas at the right cost and then delivering on our service commitment.

Our strategy this year will see a continued major emphasis on service excellence through First Choice, delivering new solutions, getting even closer to our customers, and gaining market share while maintaining a prudent focus on costs.

Paul Graham

CEO

DHL Supply Chain Asia Pacific

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2009 was a very tough year for all involved in the shipping and transportation industry, with uncertainty around every corner. The eff ect of the global financial meltdown in some way aff ected all countries and all industries. With the huge oversupply of shipping capacity and many new ships on order, it is safe to say, that the shipping industry will be in a turbulent state for several years to come as supply tries to match demand.

Global volumes will pick up in 2010, but the focus will be on margins. The transportation market is as competitive as it has ever been, and companies that continually improve productivity and create innovative solutions will be able to sustain operating margins required for growth in the short, medium and long term. In the current business climate, there is no room for any fat.

Bill Hill

Group Vice-President

The GAC Group (GAC)

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Global companies learnt from the economic downturn that they were too dependent on the American economy. An increasing number of multinational companies are now, therefore, redefining globalization and moving toward a more regional operating model. Because of regulations about sustainability issues and changes in freight costs, multinational companies may find more need to source and store their products in a regional warehouse in their continent, rather than in low-cost countries and shipped to them. That will lead to major changes in manufacturing and logistics networks.

However, the world of today is still an economic globalization in which we see an increasing integration of the world production, consumption and the financial markets with a concurrent homogenization of culture worldwide. The worldwide trend is toward an oligopolistic system, with fewer and larger firms, and growing competition from emerging countries.

The global economic crisis led companies to cancel investment projects in 2009. Even though some economists and investors are expecting a recovery in 2010, the business environment is likely to stay volatile with continuing low worldwide demand and trade. Companies will have to develop more efficient and creative end-to-end supply chains to stay competitive in a changing business environment.

John Paul

Managing Director

iCognitive

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The past year was a challenging one in which the simple strategy of staying focused on small- and medium-sized businesses took hold, and became a key focus and growth engine for many businesses in the region. At Infor we are proud to have made the right move of increasing investments in key potential growth areas i.e. sustainability, supply chain, and automotive solutions. As we move into 2010, we remain optimistic as opportunities abound in the region

The automotive industry is going to be one to watch this year. As China’s auto industry sustains its robust growth into the year, simultaneously garnering attention of the world’s major car manufacturers, software demands for China’s automakers – particularly small- and mediumsized ones – will continue to rise.

Going green will also continue to be a top priority for many countries. Countries such as China and Singapore have committed to reducing CO2 emissions by 2020, which carves open opportunities for green IT providers like Infor. And the demand for ERP solutions well-equipped with global best practices will grow as more Asian companies go global and align their processes with global standards.

Lawrence Chan

President,

Infor Asia Pacific

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2010 is the Year of the Tiger and it should be an exciting one. Drawing on our experience with customers, IT leaders, analysts and researchers worldwide, we foresee that business needs for security, real-time visibility and up-to-date information extending beyond the office door and even further into the supply chain this year

Developments in mobile computing, wireless communication, RFID, bar code and other data collection and communications technologies will continue to help businesses extend visibility and control over more areas of their operations.

Other top technology trends for the coming year include further developments in digital imaging, portable printing, the use of 2D bar codes, real time location systems, and remote management. At Intermec we will continue our commitment to customer delight through best-in-class service, improved response times and acting on customer feedback.

Penny Chai

Marketing Director, Asia Pacific

Intermec

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Despite the challenging economic situation, Kuehne + Nagel’s Asia Pacific operations remained stable in 2009. In fact, thanks to the group-wide dual strategy of intensified sales activities and stringent cost management, the company has continuously improved productivity across business units and enhanced its market position.

During difficult times such as these, many of our customers have decided to focus on their core competencies and to outsource non-core activities such as logistics management in order to secure competitiveness. This has provided opportunities for Kuehne + Nagel to demonstrate its capabilities in global supply chain optimization. We will continue to improve and expand our range of services, focusing on increasing efficiencies of operational processes and ensuring their compliance with the general market trend.

In seafreight, new LCL services with optimized connectivity and transit times are being rolled out across the region. The Cargo 2000 airfreight product suite has proven popular with its special functionalities, and we will gear up this offering in order to facilitate the highest supply chain visibility. Contract logistics will also follow a dynamic development path, and continued expansion plans in the regional warehousing, distribution and lead logistics activities are envisaged this year.

Another development focus is to continue catering to the special requirements of our customers, allowing them to benefit from an enlarged range of end-to-end solutions, for example, in the sectors of aviation, hotel, beverage, reefer and perishable commodities, oil & gas, fairs and exhibitions as well as project management.

Kuehne + Nagel will continue to expand its network in the Asia Pacific region. In particular, we will further strengthen our networks in India and China, so as to capitalize on the expansion of trade and the associated opportunities brought about.

Andy Weber

President

Kuehne + Nagel (Asia Pacific)

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It was a difficult year in 2009. Many companies shook but did not crumble. While the Asian economies are on the road to recovery, we believe capital spending in this region will begin to increase only in mid-2010 and thereafter continue to strengthen modestly over the next two years. Despite these difficult times, Kewill has emerged stronger and secured more global projects.

In the prognosis for a recovery in 2010, companies will continue to focus efforts on improving their business execution. Business priorities for Asian companies include pressures for better corporate governance, focus on core business, cost control, lean operations, efficiency and ensuring customers are at the center of the business. The highest priority among IT decision-makers will be to optimize their IT investments and obtain additional value from existing systems. Kewill solutions, which focus on simplifying the supply chain, are essential tools for companies to ride on the recovery wave.

This year we will execute on our strategy of offering innovative products that help customers to identify and capitalize on growth opportunities, with better business processes and technology application being essential enablers. Among planned releases is a service logistics solution that will support businesses that are involved in reverse logistics activities.

Patrick Chua

Chief Operating Officer

Kewill

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The challenges of 2009 from the hangover of the financial meltdown meant companies had to compensate to meet the economic downturn, i.e. improve efficiency and reduce cost to maintain their share of a decreasing market.

Companies took different approaches to achieving their goals, but a common factor was the demand for service providers to be more transparent, efficient, proactive and professional. This meant scrutiny of the supply chain to ensure best practice processes were being executed.

While this process was long overdue and for some too late, it highlighted opportunities for companies to understand their actual supply chain and show that if it is managed effectively it can make a signifi cant contribution to the bottom line. During the year we had casualties but we also had companies that had successes and while success is measured in different ways, the successful companies operated an eff ective supply chain.

Looking ahead at the logistics industry in 2010, companies that strive to achieve a high professional standard by controlling costs, improving efficiency and equipping their staff to meet client expectations will continue to be successful. LSI will carry on being proactive with initiatives such as the fuel saving program and health check audits to ensure our clients continue to maintain a competitive edge in a global market.

Johnny Fitzgerald

Managing Director

LSI Logistics Integrators Solutions

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2009 was a year of challenge across global markets. It was also a year of return to the basics: cash flow management, cost controls and competitive diff erentiation. Governments stepped in with stimulus packages and created opportunities for growth in some key areas like transportation infrastructure, communications infrastructure, education and healthcare. These to an extent reduced the shock to the end consumer and also supported the enterprises. It was truly a year of two halves and a lot of learning for both the enterprise as well as governments.

Motorola’s Enterprise Mobility Solutions business was able to sustain its overall momentum due to the portfolio spread of the off ering as well as the global footprint of the business. Our public safety and infrastructure focused products and solutions enjoyed sustained interest. We were awarded contracts to supply mobility solutions to major retailers in APAC, also won recognition for the second year in a row from Wal-Mart China for our innovative customer solutions.

In 2010, we are focused on continuing to partner with customers across the various market verticals. We are also strengthening our customer outreach through a much stronger channel focus. The future of telecom technologies looks as exciting as ever. Enterprise mobility will gain even greater momentum and more and more enterprises will leverage the locked up value of mobility technologies. Richer multimedia applications such as video are the next evolution and they will be catalyzed by the higher bandwidth across wide as well as local area networks.

Phey Teck Moh

Corporate Vice President

Motorola Enterprise Mobility Solutions, Asia Pacific

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Economic recessions are cyclic, but there are hard lessons that folks in our industry are still learning. Many companies take on high debt and continue to run relatively inflexible supply chains that are not resilient to the effects of recession, and this is what 2009 was like. The logistics industry was heavily impacted on revenues and profits as a result of falling freight rates, huge debts and excess capacities built over the good times. Recession also showed up in stark relief the inefficiencies within present supply chain set-ups.

Lessons can be learned for 2010. In particular, signifi cant focus should be brought upon to optimize costs and mitigate supply chain risk. Asian supplier financial risks have gone up with the downturn having suffered a scarcity of working capital, excess capacities, currency/commodity volatility and complete unpredictability in demand levels. As a result, most US importers are revising their sourcing strategies and looking at shorter supply chains i.e. sourcing from Mexico.

Asian suppliers will have to be more competitive in order to survive through these times. And logistics service providers (LSPs) should help their customers remove inefficiencies by re-optimizing their supply chains, through such strategies as hub/DC location, resource positioning, modal strategies, and more. At a tactical level they need to help relook their transportation modes, best packaging sizes, carriers, etc.

LSPs cannot take a laidback approach but should aggressively work on customer retention strategies. Interactive and integrated logistics between the shippers and LSPs will evolve further. Strong collaboration around transportation capacity forecasting would be imminent as demand levels will still be “spiky” during the recovery phase. Sustainability would also be a key focus area for companies looking at preserving their brand image, and LSPs can help them build and execute sustainability strategies.

Rathinakumar Vaidyanathan

Director, PLM Applications

Oracle Asia Pacific

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This past year for Panalpina was indeed a roller-coaster ride and presented unprecedented challenges. From a business point of view we experienced much shorter decision-making times/cycles but also much shorter commitments. The behavior in the market-place quite often was very irrational and as they say, it’s during those difficult times that you find out who your true friends and partners are.

As a result from the crisis we witnessed an even stronger focus on total supply chain costs and one of the more significant consequences was the drive to move as much volume as possible by ocean freight instead of air freight. We believe that this will not change back to the old ways but companies will continue to take advantage of leaner inventory levels as well as reduced freight costs. This in turn will present new opportunities to Panalpina, and our industry in general, to work closely with clients to develop and execute just the right strategy for their business.

Despite the crisis, Panalpina in Southeast Asia stayed its course and continued with the various projects already started or planned for. Our strong focus on the development of specific industry verticals remains and we are looking forward to the opening of our new facility on Loyang Off shore Supply Base, located in the eastern part of Singapore, which is dedicated to the handling of upstream oil & gas materials and offers clients a platform for their activities in the region and beyond. Our efforts to establish Panalpina as a preferred service provider to the Pharma & Healthcare industry have also started to bear fruits and we are planning for the roll-out of additional products & services during 2010.

While we are happy to close our books on 2009 we also need to make sure that we draw from the lessons learned when moving into 2010. All-in-all we are optimistic, albeit cautiously, for 2010 but also realize that any recovery is fragile and it won’t take much for it to derail again.

Volker Sachse

Managing Director

Panalpina South East Asia

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When the going gets tough, the tough get going: 2009 was a challenging year with the economic downturn placing pressure on the industry. A year ago I said that the economic challenges would provide TNT an opportunity to nimbly adapt and continue growing, and we did just that. Keeping our focus on expanding our freight portfolio in the hi-tech, healthcare and automotive and industrial sectors, we expanded our reach, connectivity and infrastructure throughout Southeast Asia and India.

Two highlights in 2009 were the launch of the Singapore Regional Hub and the Penang International Gateway facilities. These serve to support the seamless network between our strategic air lanes and distinctive Asia Road Network, which we have also expanded. Security programs were also enhanced, and TNT became the first express integrators to attain the ISO28000 certification.

Looking ahead, the future is a promising one and we won’t slow our pace of development. Riding on the wave of the changing economy, we will build on our connectivity between India, Southeast Asia, China and Europe by creating new strategic routes. We will further integrate our air and road capabilities in Asia, with a keen focus on India, to offer complete end-to-end solutions that add value and meet our customers’ every needs. Look out for this in 2010.

Onno Boots

Regional Managing Director

TNT Southeast Asia & India

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2009 was a year of extremes, in terms of challenges and opportunities. The difficult macroeconomic environment had an obvious and significant impact on trade in the global economy, requiring businesses to, in some way or another, adjust their “internal” and “external” supply chains to remain relevant. Complementing these developments was the increasing emphasis on environment sustainability programs, which is a key area that will see even more focus in 2010.

As customers rationalize their supply chains to harness greater efficiencies, therein lies opportunities for innovation and new solutions, such as our DB SCHENKERskybridge, DB SCHENKERsmartbox products and services. In particular for APAC, we have also seen substantial developments in verticals such as pharmaceuticals, oil & gas projects, as well as renewable energy sectors.

We have also continued with our push to develop and strengthen our network in Asia Pacific, with new logistics facilities in Thailand, Vietnam, Australia, and Singapore, and incorporating enhanced infrastructures and environmentally sustainable systems into our logistics facilities, such as our Green Hub in Melbourne.

The number of industry awards that we received in 2009 serve as our motivation and drive to provide continuously improving and sustainable logistics and supply chain management solutions and networks for our customers in 2010 and beyond.

Klaus Eberlin

Chief Operating Officer,

APAC DB Schenker

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With a long-term strategy for growth and expansion, YCH managed to rise above the challenges brought about by the global recession in 2009 to seize opportunities. We strengthened our presence in the region with the opening of YCH Korea in July, the development of a DistriPark in Vietnam, and a strategic partnership with Chengdu City that will establish an advanced sustainable supply chain framework to address food safety and hygiene issues, and enable round-the-clock, city-wide fulfillment of consumer goods.

In 2010, we will continue to spearhead growth of the supply chain industry in Asia, where GDP is predicted to grow by fi ve percent, compared to just one percent in 2009. With China and India set to contribute 15.4 percent of world GDP, we will capitalize on this by formalizing the opening of our India office where we have already established nationwide distribution over the past few years and are currently supporting manufacturing operations of big multinationals. In addition to launching our Lingang office in Shanghai, we will also be focusing on China’s tier-two cities with the official opening of our Chengdu facility.

2010 will also see the rise of Southeast Asian countries such as Thailand, Vietnam and Indonesia, which are becoming more attractive to manufacturers as they adopt a “China +1” strategy by having secondary operations outside of China. We see particularly great potential in Vietnam as opportunities arise for the development of its logistics network and infrastructure.

Robert Yap

Chairman and CEO

YCH Group

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I know of no other area of business with as much happening as in supply chain and logistics, and I know of no other part of the world where there is more happening than in Asia. So what can we expect in the year ahead? Here is my Top 10:

1. Many firms are viewing the terrible economy of last year as an opportunity to deploy disruptive strategies to gain market share. Supply chain and logistics innovations are often at the center of these strategies.

2. Many firms are for the first time ever really considering the implications of their global supply chains and really looking at optimizing their global resources to minimize total delivered cost while maximizing customer satisfaction.

3. Inventory reduction through more rigorous application of world-class inventory methodologies will continue to be front and center.

4. Global organization will continue to intelligently utilize logistics service providers (LSPs), and the globalization of LSPs will facilitate this trend.

5. Mergers and acquisitions will return with vigor in Asia, facilitated by huge opportunities in supply chain/logistics.

6. Supply chain planning and execution IT will evolve to become a requirement for Asian supply chain/ logistics success.

7. Although the global financial crisis of 2009 was ugly, Asia’s financial performance – particularly China’s – was better then expected.

8. Asia will very much begin to grasp the value of supply chain/logistics benchmarking and best practices, and utilize these to set priorities and goals across the supply chain.

9. Asian distribution centers will become much more automated to keep pace with the increasing distribution requirements. But it goes beyond automation – they will become more and more like Western facilities, incorporating effective designs and more dock areas, as well as increased use of performance and productivity metrics. Basics plus automation will be the trend here.

10. Speed, responsiveness, adaptability and transparency will be hallmarks of all supply chain and logistics innovations in 2010.

Jim Tompkins

President & CEO

Tompkins Associates

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The transportation and logistics sector was not spared by the impact of the 2009 economic crisis. Companies operating in this vertical had to work smarter and harder to survive the storm. However, the rapid increase of Zebra product off erings helped companies in this area to track and manage their businesses efficiently, and at a most eff ective cost.

While Asia was certainly affected by the slowdown, at Zebra we recognized its potential to being the key driver for future economic growth and managed to expand our business in the region. We funded a distribution center in Singapore to reduce the lead time of product customization for our regional customers, and moved our manufacturing base to China. In addition, the Singapore Economic Development Board (EDB) granted Zebra regional HQ status in 2009.

Geographic expansion continues to be a top priority in 2010. We will expand our channel-centric model in all of the verticals that are key to Zebra and continue to grow our global base of value added resellers. Through building relationships with large system integrators (SIs) and independent software vendors (ISVs), we will be able to move up the value chain with large enterprise customers, penetrate existing targeted verticals more deeply, and enable entry into new areas of opportunities more quickly and efficiently.

Andrew Tay

President, Asia Pacific

Zebra Technologies

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After experiencing hyper-inflation in 2008 followed by the crash of steel prices in the last quarter, one would imagine it couldn’t get worse!

We had seen the turmoil of the Financial Crisis begin to effect the export based economies of Singapore, Hong Kong and China, in the last quarter of 2008, but come January 2009, Australia and the Middle East markets, which had previously been in denial, were also severely affected.

Fortunately, prudent cost reduction policies helped the company to deliver positive results even though intense competition put margins under pressure. Lean manufacturing processes with new improved products with cost eff ective designs have enabled both our Asian factories to reduce costs allowing our sales offices to win contracts. Both factories maintained full production and all offices ran with a full staff establishment without any enforced redundancies.

We enter 2010, in an excellent position to meet the anticipated market rebound, with a very healthy order bank, in fact higher than 2009, having won important contracts in India, China, Philippines and Indonesia in the fourth quarter of last year.

This next decade will see Schaefer promoting an Order Fulfillment Program bringing innovative solutions to the warehouse, incorporating the comprehensive range of products in the company’s portfolio.

Brian Miles

Regional Director

SSI Schaefer