Supply chain becomes the most important factor
Taipei, May 27, 2008 - According to the United Parcel Service (UPS) newly-released Asia Business Monitor 2008 (ABM), an annual survey conducted on competitiveness and issues facing small-to-medium enterprises (SMEs) in Asia, Taiwan SMEs have demonstrated confidence in, and new thinking on their competitiveness, believing that they need to pursue overseas expansion in order to drive growth over next decade.
A comparison of the findings from ABM 2006 through ABM 2008 shows that Taiwan SMEs consider these factors not obstacles to their competitiveness year by year. It indicates strengthened confidence in their competitiveness. Also, supply chain efficiency has become the most important of the top-three competitiveness factors for the first time. The other two are innovation and qualified staff.
Moreover, 64% of Taiwan SME leaders are optimistic of their company's overall prospect in the next 12 months. As to the top-three drivers to Taiwan SMEs next decade's growth, 66% consider to move into higher value added parts and services; 65% think to maximize opportunities in China; and 64% think to expand overseas into emerging markets.
"For fourth consecutive year, innovation and qualified staff amount to the key competitiveness factors of Taiwan SMEs," said Gary Wu, General Manager of UPS Taiwan. "This year the increased importance of supply chains will further provide new creativity related to business models to local SMEs. Supply chain functionality not only goes beyond transportation of goods but also can be a driver of business differentiation by integrating supply chains with business strategies. Small-to-medium enterprises must immediately focus on supply chain management as a top business priority,"
"Supply chains can turn out to be value chains, and globalization requires SMEs to change their international market management," said Sun-Quae Lai, Director-General of the Small and Medium Enterprise Administration, Ministry of Economic Affairs. "We are very optimistic of the future of Taiwan SMEs, which are outstanding in business model and product innovation, and one of our foci for this year is to assist them in overseas expansion."
Taiwan SMEs rated supply chain efficiency as the most important factor to their competitiveness. The result also compared importance of supply chain efficiency among the 12 countries surveyed. Thailand got the first ranking, followed by Taiwan and Korea. On the level of cost savings Taiwan SMEs expect, 45% are still experimenting with ways to manage their supply chains more effectively; 49% look forward to an efficiency improvement of 5% -10% and 19% look forward to an enhancement of higher than 20%. The top-three supply chain issues facing Taiwan SMEs are "difficulties in forecasting demand" (47%), "supply chain is fragmented with too many parties involved (30%), and "lack of knowledge and expertise in supply chain management" (25%).
Marco economy-wise, 42% of Taiwan SMEs think prospects for Taiwan's economic growth in 2008 will grow slightly or strongly. Another 42% think that it will stay the same. Trade volumes between the US and Asian countries as well as Taiwan has been sliding, but growing trade between Taiwan and other regions shows a trend of market diversification, which has resulted in a 3% increase in trade with Europe and a 9% increase with Latin America.
48% of Taiwan SMEs do not think the struggling US economy will affect their business in 2008; 48% think it will hamper their business somewhat or significantly; and 6% think it will benefit their business.
As to the China issue, the findings from ABM 2006 through ABM 2008 show that more 60% of Taiwan SMEs view China as both a boost and a threat to their business. They want to have strategies for the opportunities provided by China and be able to manage the risks accompanying such opportunities. SMEs elsewhere in Asia primarily consider the rise of China a boost to their business. According to the ABM 2008 findings, 41% of SMEs in Asia see the rise of China as a boost and 30% see it as both a boost and a threat.
Since its launch in 2005 the UPS ABM has been conducted annually to deliver the latest insights on the changing business needs of SMEs, the largest business community in the region. According to Asia Pacific Economic Co-operation (APEC), SMEs make up about 99 percent of enterprises in the regional APEC economy, contributing between 30 and 60 percent of an economy's gross domestic product. This year, the UPS ABM 2008 surveyed 1,201 company owners, proprietors, CEOs, Managing Directors and other top management across 12 markets.
UPS (NYSE: UPS) is the world's largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. The company can be found on the Web at UPS.com. To get UPS news direct, visit pressroom.ups.com/RSS.
Notes to Editors
- UPS ABM series provides the latest insights into the changing opinions, attitudes and habits of business leaders from the region's small and medium sized enterprises.
- UPS ABM 2008 surveyed 1,201 decision-makers of SMEs between December 18, 2007 and January 24, 2008. Interviews were conducted by an independent research organization, TNS, in Hong Kong using the respondents' native language. SMEs are defined as companies with fewer than 250 employees.
- Interviews were conducted in the following 12 markets: Australia (100), China (150), Hong Kong (100), India (100), Indonesia (50), Japan (100), South Korea (100), Malaysia (100), Philippines (101), Singapore (100), Taiwan (100), Thailand (100).
- Respondents were from a range of industries: automotive, electronics & electricals, garments & textiles, gifts & housewares, healthcare & pharmaceuticals, timepieces, jewellery & optical goods, toys & sporting goods, and others.
The UPS Asia Business Monitor is available for download at www.ups.com/abm.
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