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THE WEEKLY LINK
CHRIS CATTO-SMITH
It is estimated that three million athletes, journalists and spectators have gathered in Beijing for the 29th Olympic Games. Hundreds of millions more around the world are watching on television. It is estimated that logistics services for the Games will cost US$5.8 billion. Information gleaned from China Daily and People Daily.cn sheds some light on the challenges of successfully staging an event of such magnitude.
Huge logistics demand: With more than 200 countries and regions participating, it is estimated that 1.2 million pieces of sporting apparatus and equipment for athletes, officials and reporters will be handled by the various logistics agencies providing support to the event. Jiaotong University in beijing reports that the logistics demand for Beijing Games will exceed that of all previous Games in history, creating huge business opportunities for domestic and overseas logistics companies.
Future vision: During the whole Olympic season in 2008, more than 75,000 tonnes of equipment and facilities will need to be transported, and more than 2,000 transport vehicles will be required. With more and more trans-national logistics companies, such as UPS, DH and, TNT, entering the Chinese market, the huge Olympic logistics demand will become the new target for these giants from overseas.
Closing capability gaps: The significant logistics demand also has attracted many leading domestic logistics companies, such as the Cosco logistics, China Shipping Logistics. Traditionally there has been a noticeable lack of co-operation between Chinese manufacturing and logistics companies, which has severely hindered the development of the national logistics services industry. Facing tense competition, China's local logistics providers are keenly absorbing the advanced technologies and vast international experience to narrow the gaps between domestic and overseas logistics capabilities.
Impeccable planning: The Olympic Games last for only two and a half weeks, but involve an incredible level of logistics work. When Beijing successfully bid for the Games in 2001, the Ministry of Science and Technology organised a number of enterprises to research the Olympic logistics system. The research concluded that the whole logistics project would cost $6.18 billion, occupying about 15.5% of the Games' total budget (this estimate has been quite accurate).
Green issues: The length of time and magnitude with which the committee organising the Beijing Olympics (Bocog) has analysed unique logistics situations, developed supply chain strategies, and forecast effects is unprecedented. While initially focused on dealing with expected environmental issues since 2001, the Beijing government had already been taking measures toward cleaning up the city (notorious for high air pollution) since 1998.
Global supply chain impacts: China has taken on the Olympian task with zeal and accelerated the process by moving factories to other provinces, using cleaner motor fuel, planting new trees, and imposing strict new traffic rules encouraging public transport. The plan included suspending production at 105 factories in Beijing and 56 coal-fired power plants, chemical plants and other industries in nearby Tianjin have been closed. This unsurprisingly has had an impact on global trade with fewer raw materials available and prices rising - particularly with plastics and synthetic materials.
Centralised logistics: A dedicated Olympics Logistics Centre (OLC) was established in Beijing in March last year to handle the vast array of materials and equipment required. The centre is responsible for the 37 main Olympic venues, 15 non-competition venues and 72 independent training venues. It is operated and managed by US-based United Parcel Service.
Expectations of champions: According to UPS, the largest delivery was a 58.75-cubic-metre keel block, and the longest were 10.9-metre canoes and kayaks. A special delivery of unusual size was an 8.8-cubic-metre trampoline, while the smallest included Olympics commemorative badges and USB flash drives. Special dirt has even been imported for the American softball team to help its pitchers feel more at home.
Criticality of logistics: According to Bocog, the logistical demands have risen to a high level because the number of participants is the largest in history. Logistics are of crucial importance and will decide whether the event is judged as successful or not. (I have not even discussed the subject of food logistics, which could easily take another column.)
In summary: A country's performance as host of the Olympics has always been determined by new technology and its strategy of showing the global audience its efficiency in organisation and logistics. It seems that logistics will be playing a much bigger role in the success of future Games - and in exploiting the newly created potential of Beijing.
Weekly Link is co-ordinated by Barry Elliott and Chris Catto-Smith CMC of the Institute of Management Consultants Thailand. It is intended to be an interactive forum for industry professionals; we welcome all input, questions, feedback and news at: BElliott@OliverWight-AP.com, cattoc@cmcthailand.org
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