NEWSROUNDUP
Supply Chain Management
A roundup of supply chain news
Supply Chain When the facilities reach their final ex- est car manufacturer after Japan which
pansion stage, about 200 engineers and holds the pole position.
China supply chain problems technicians will be working in the center,
cost Hornby £2m Sourcing
UK model toy maker, Hornby’s model
toy sales in the UK and Europe have con- Li & Fung, posts 21% net drop,
tinued to be constrained by supply chain sees no growth for retailers
issues with its Chinese supplier. Hornby’s Li & Fung Ltd., the biggest supplier of
main Chinese supplier, Sanda Kan was clothes and toys to Wal-Mart Stores Inc.
purchased by a Hong Kong based com- and Target Corp., said customers will
pany in January 2009 and since then the have no growth in 2009, as the Hong
new owners have been restructuring and Kong company posted its first profit de-
integrating the Sanda Kan operations, re- cline in seven years. “We expect existing
sulting in disruption to customer service. customers to have no growth,” Managing
Hornby believes the delay in shipments Director William Fung said after the com-
from China cost it around £2 million. pany’s 2008 net income fell 21 percent
to HK$2.42 billion ($312 million), missing
R&D analyst estimates. “We are budgeting very
conservatively.”
Continental opens new China Li & Fung’s growth this year will be
R&D center driven by acquisitions and outsourcing
Continental AG has expanded its pres- deals as clients report business is down
ence in China with a new Technology Cen-
Li & Fung, Managing Director William
as much as 20 percent, he said. The Hong
ter in Jiading, which will develop electronic Fung, speaking at a conference. Kong-based company has said sales may
and hydraulic brake systems, motor man- be boosted $1 billion by the purchase of
agement systems and electronic controls which includes design offices, test labs for Liz Claiborne Inc.’s sourcing business,
for the Chinese automotive market. Two of brakes, undercarriage, drive systems as whose brands include Kate Spade and
Continental business units—Chassis and well as workshops. By 2013, Continental Juicy Couture.
Safety, and Powertrain—have invested aims to achieve 25 percent of its sales in - Stephanie Wong, Bloomberg
an undisclosed amount in Jiading, near the region. China recently surpassed the
Shanghai. United States as the world’s second larg- Manufacturing
Whirlpool closes Shanghai wash-
ing machine plant
Whirlpool Corp is closing its washing
machine manufacturing facility in Shang-
hai, China, eliminating 600 jobs, as the
appliance maker consolidates its Chinese
operations. Washing machine production
will be moved to the Hisense-Whirlpool
joint venture manufacturing plant in ZheJi-
ang Province, where 900 new jobs will be
created by the end of 2009, the company
said.
The move will be beneficial because of
the greater scale and size of the ZheJiang
facility, which will optimize the use of re-
sources and provide cost savings. “This
consolidation, like other changes we’ve
Appliance maker, Whirlpool is optimizing its washing machine manufacturing
made as part of our global operating
operations in China to save costs.
strategy, are difficult but necessary, to en-
24 MAY/JUNE 2009 www.chainaonline.com
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