Annual Report

Annual Report 2005


Public-Private Partnership to Develop
Supply Chains in East Asia

 Increased economic partnerships and acceleration of FTAs in East Asia have made commercial and physical distribution related to all business transactions (hereafter described as logistics) in the region one of the most urgent agenda in promoting trade and investment. Thus, all the stakeholders including manufacturers, distributors, wholesalers and retailers, must examine the best way of logistics and work together to enhance logistics of Japanese corporations.

 The research committee investigated the reality of the supply chain management (SCM) for textile, electric/electronics, automotive, auto-parts, and shipping industries. Then, it considered the importance of SCM as an optimal approach for logistical network. Also, it reviewed production bases in East Asia and the implications of the SCM for trade and investment. Finally, it outlined trade and economic policies over FTAs in the region to recommend corporate strategies and government policies.

 How Japan could utilize the potential of East Asian nations such as China and Southeast Asian nations, while developing both corporate strategy and international trade policy that would enable effective market feedback for product development and production, shortened lead time for development, “high-mix low volume production” and rapid product delivery?

 In order to overcome the challenge, one needs to grapple with a paradoxical task: extending the timescale in response to growing international division of production process, while shortening the timescale to maximize revenues. Moreover, one must pursue how to optimize manufacturing and distribution networks in which Japan already tops and ensure cooperation of governments and corporations to build such a system.

 With these in mind, future directions for corporate strategies and government policies could be summarized as below.

Key recommendations for designing future corporate strategy

To establish an appropriate business structure of process division in China/ASEAN region, leveraging on traits of existing local production bases that would allow suppliers to reduce both cost and lead time.
To reinforce business competitiveness by way of human resources development, technology transfer, protection of intellectual property rights and enhanced function of market research.

Key recommendations for policy makers

Conclusion of economic partnerships in East Asia for adequate integration based on an integrated design and quick response that would never miss an opportunity.
Facilitation of trade and investment by means of increased efficiency in customs clearance and logistics, deregulation in relevant service sectors, adoption of market mechanism or principle of competition, and accelerated improvement of infrastructure.
Contribution for economic structures in developing countries with consistent investment rules and established IP protection schemes.
Dispute-settlement mechanism to help solve practical issues between new entrants and local governments in the area of trade and investment.
Enhanced coordination between international monetary policies and cooperation policies.


 Section 1: Current SCM
Chapter 1: Global operations in textile industry and SCM
Chapter 2: East Asia - an insight from shipping business (research department)
Chapter 3: Supply Chain at Electric Industry -focusing on PC Business-
Chapter 4: Supply Chain at Automotive Industry
Chapter 5: Supply Chain at Auto-Parts Industry
 Section 2: Importance of Supply Chains
Chapter 6: Significance of Supply Chains
Chapter 7: Logistics - a strategic function to materialize SCM
Chapter 8: Management Strategy in Supply Chain
 Section 3: Building supply chains and economic partnerships in East Asia
Chapter 9: Production Sites and Trade/Investment in East Asia
Chapter 10: Trade and Economic Cooperation Policies Focusing on FTAs
Chapter 11: Summary: Recommendations