Friday 28th Oct 2016 - Logistics Manager

Chinese lessons

This is the start of a potentially very fruitful UK-China relationship

Flying back from a China last month I reflected on the fact that if the UK can inspire the logistics sector in this burgeoning economic giant, this will put the UK in a very good place indeed in terms of global trade.

Just as the US voting public returned Barack Obama as President for four more years, the globe’s second biggest economy has been choosing its new leadership, albeit in a rather different process. Despite their different political approaches, these two countries will be driving the global economy.

2011 marked the first year that China’s urban population (690 million) surpassed that of its rural areas (656 million) and it is staggering to see how fast the country is speeding towards an urban population of one billion by 2030. Chinese workers are flocking to its emerging cities, such as Hefei in the Anhui Province, which is considered to be one of the main science and education bases in China, and was, appropriately, the location for a conference in October hosted by the Chinese Federation of Purchasing and Logistics (CFLP), which I attended, leading a British Council sponsored delegation from the UK.

Although just a Tier 3 city, Hefei still has a population of some 3 million people, which is three times the size of Birmingham. Looking at the skyline, it is not hard to count over 50 high-rise buildings of similar height to the 50 storey hotel in which we were staying. Four years ago it was wasteland. It is Tier 3 cities, like Hefei where the really exciting developments are taking place in a country where low cost manufacturing is no longer the growth driver.

Many western companies are bringing production back close to their R&D centres and domestic markets; and it is domestic consumerism that will be driving China’s opportunities. Our reason for being there was that the CFLP has been charged by the Chinese Government to improve the country’s logistics sector, which has in the last several years grown from seven per cent of GDP to 17 per cent, which in an economy the size of China is massive.

According to Li & Fung Research Centre’s China Logistics Industry Update 2012, China’s logistics industry demonstrated robust growth in 2011. In the land becoming known for astounding statistics, the total logistics value reached an incredible 158,400 billion yuan (up by 12.3 per cent year‐on‐year in real terms). That’s US$ 24 trillion, or to put it in more familiar parlance, £15,935bn, which of course dwarves the UK’s £93bn logistics sector.

The good news for our delegation derived from our counterparts’ admiration for the British system of National Occupational Standards (NOS) and the way they have been encapsulated in the Professional Development Stairway. The NOS set out, in detail a generic job role. They state what the standard is about and whom the standard is for. They consider all or the main tasks that can be expected to be undertaken to complete that occupation. This is further broken down into what a person needs to do and what they need to know and understand to complete that task.

China also wants to improve the vocational training of its logisticians – and here’s another big number: there are five million Chinese youngsters getting vocational training headed towards a logistics diploma. In 2003, the Chinese Government identified Logistics as a brake on economic growth and changed the structure of Logistics education in the country. The introduction of a three-tier logistics education system will, in turn bear fruit as the five million “graduates” illustrates.

However, they need help. The introduction of Standards is an essential early step but so is the need to “train their trainers” and give them the experience of working in logistics environments, which is essential if they are to train their future logistics workforce. There is a major opportunity here for UK logistics employers to help out here and to cement good working relationships with their Chinese counterparts in the process.

This coupled with the introduction of a “joint curriculum for logistics” will give us the opportunity to bring UK colleges and universities closer to their Chinese counterparts in a consistent and effective way.

This is the start of a potentially very fruitful UK-China relationship brought home by the fact that the Principals of China’s tier 1 colleges also attended the conference. These colleges offer a diploma, which allows qualification for up to 30 per cent of a degree. It will be interesting to translate this into the UK in co-operation with our further education colleges and universities.

Such initiatives place logistics at the centre of something that will be intrinsically good for the UK economy. If the UK logistics sector can share good practice with China then this will further cement UK’s position as the European logistics partner of choice for China.