Tuesday March 30: Photo Blog Essay

Business Observations
By: Abby Hartman

While in China, I overheard someone say that Hong Kong was just like a very big New York City.  After visiting for a few days, I have to disagree.  New York City is very hurry, hurry, hustle and bustle.  In Hong Kong and in Mainland China I always felt at ease and very relaxed, not as if we were always in such a rush. In the business world, being punctual is obviously still a priority, but I just don't see people rushing around like I do in Chicago or New York, especially not with their morning coffee in hand.

Kohl's made clear during their presentation that they negotiate with a win-win attitude.  Not all businesses or companies may do the same.  Kohl's seems to really value their vendors and at the end of the day want to make a good deal with them but also remain in good relations with them.  They also said it may take awhile for negotiations, but even $3 difference in price can mean a difference of $1 million when dealing with the volume of pieces Kohl's does as a company.

Li and Fung has demonstrated to us that they go above and beyond any factory's Quality Assurance inspections with their own inspections to ensure that they deliver quality products to Kohl's and all of their customers.  Li and Fung have definitely take care of their customers and set very high standards for every step of the process of gathering the information about a product and making sure it is the correct information to ensuring the product is delivered on time and in top notch condition. Communication is key when dealing internationally and Li and Fung are constantly finding ways to improve communications, for example approving colors for Kohl's lines before the product comes out.  This is a way to improve communication of colors but also cut the time it takes from the product to go from a piece of paper to the store shelves.

As a company who is invested internationally, it is wise to spread and balance product assortment across factories.  This is good for the vendors as well.  When doing business internationally, a company always needs to be very conscious of what is going on in the world.  This is not just limited to prices that the vendors are charging or the prices of raw materials, but also includes political unrest, ailing or expanding economics, weather, ect.  You have to be prepared in any situation to move production elsewhere.  "You have to look at the world differently."

Other things to be mindful of when outsourcing or when doing business internationally are traditions, customs, and holidays.  One in particular is the Chinese New Year.  Most of the factories will shut down for 3 weeks during Chinese New Year when all the workers travel back home to be with there family to celebrate.  It is becoming more common for the workers to look for jobs closer to home during that time and not return.  The Chinese government has made it easier for people to work in their villages, so less people have to travel so far away from their families to find work.  Factories are having to deal with labor shortage and are having to pay more to attract workers.  This leads to an increase in costs for companies such as Kohl's and an increase in training if the factories cannot find the skilled labor they need.

April 1st: Photo Blog

Hello! Here is Sara Smits, Brian Reinke, and Jessie Sandler's photo blog entry from Thursday, April 1st! 


Our first day in Shanghai, China:
1) Tour Li & Fung Shanghai Office

It was a bit difficult to pull our bodies out of the cloud-like beds at the Renaissance Hotel Monday morning, but we were all excited to see Shanghai in daylight.  Our coach bus, with our new guide Mac, took us outside of the city center to the Li & Fung Shanghai offices that morning. 

We’d later find out that the offices we were in had a Google-like atmosphere complete with ping pong tables, glass ceilings, and spiral staircases, but we were first greeted by Pamela Chen who gave us a more in-depth perspective of Li & Fung and global retailing as a whole.  While she touched many topics, I’d like to share a few things that I found most interesting.

       
Traditionally, we think of Asian countries like China producing product for American retailers and shipping it to the retailer's warehouse in the United States to be stored and eventually dispersed to stores. But, according to Pamela, US retailers are now toying with the idea of having their distribution center functions outsourced to Asia as well.  That is, product will be divided and made store ready while in Asia and shipped directly to the stores.  

There are some obvious downsides to this, such as longer lead times for product in-store, and the inability to order in small quantities.  Though, I guess the cost savings of storing inventory in Asia makes it attractive for US retailers.  We’ll see if that is the new trend in the coming years…

An interesting fact: the top 1% of richest people in China make an average of S5,000 USD a year.   


Many of us on the trip are starting our careers soon, and, without giving too much away, I can safely tell you that we’ll be receiving salaries far in excess of this.  It really was a culture shock to hear this.  It makes me wonder, though, how Hong Kong – one of the most expensive cities in the world – is supported by this.  There must be an extreme concentration of the very wealthy there.After her presentation we had a tour of the beautiful offices and a great, buffet-style lunch. 

2) Kohl's Factory Tour:

In the afternoon we visited Kohl's factory outside of Shanghai. It was an incredible experience, and we were able to see so many parts of the assembly line to make one garment! We watched the construction process from the beginning to end! On the bottom floor of the factory we saw men cut out layers of fabric using the patterns as a stencil. Those pattern pieces were then sent to be interfaced. 

Once the fabric was ready they went up stairs to begin their sewing process! Each worker sewed one pattern piece, and then the piece would move up the line. 

At the end of the line there was a giant sign with the day's goal and the number already completed. It was fascinating to see all of the different processes to create and complete one garment! We were able to see how many hands really do work on one pair of Apt. 9 pants! 


The factory was extremely clean and well lit. It was also huge! Kohl's mentioned that over 1,000 employees worked at this factory. While we were having our tour, the students were able to get a sense of the size of the factory, and their production. The assembly lines went on for hundreds of feet! You couldn't even see the end of a row of workers! The staff was chatting and seemed to be enjoying their work. They didn't mind all of us students either staring at their work. We were fascinated by the intricate processes for each garment. 


Creating patterns, cutting, interfacing, making button holes, overlock stitching, surging, and sewing are just some of the techniques that go into creating a garment in the Kohl's factory. It is a lot of hard work! 

3) Chinese Acrobat Show:

Tonight we all got the chance to see a Chinese Acrobat Show.  It was so much fun to see and was definitely one of the highlights of the trip.  We got to see acrobats doing many different skills.  Some of them were women balancing these hourglass shaped things on a piece of string- they would throw them up in the air and catch them- sometimes doing multiple back flips.  We also got to see acrobats diving through hoops- sometimes even multiple hoops while doing flips and even while the hoops were spinning.  There was a magician that did many tricks and “pulled” all sorts of things out of his sleeves.  Overall the acrobat show was an amazing experience for everyone. 

Day 9 - Brenna & Kate

Today we had a busy day sightseeing around Shanghai!  We began by visiting a Buddhist temple.  There we saw monks, many jade statues and incense burning.  My favorite part was learning how to drink tea in a little tea shop, and of course sampling many types of tea!

Then, we went to a beautiful garden and a nearby market.  We had fun using our bargaining skills again!  There was a fun mix of regular shops, restaurants and market-type stores with traditional gifts.

We then toured the Shanghai Wal-Mart - which we found very interesting!  There were many varieties of food that were new to us, such as Blueberry chips, Steak flavored Chips, and Shrimp Cheetos.  We had fun finding the differences and similarities to the U.S. Wal-Marts.  One of our favorite parts was the flat escalator-like device that brought us (and our carts) up and down between the first and second floors.

 

Lastly, we took an elevator to the top of the financial building and enjoyed the beautiful view of Shanghai.  There were glass floor tiles, so when walking across them you could see the city below!

We ended the evening at a wonderful dinner reception hosted by Chancellor Biddy Martin for current, prospective and alumni badgers in the Shanghai area.  It was fun to meet new people and share the Wisconsin experience.

The Last Leg: Days 9-10 Caitlin and Abby

Day 9:
The last full day of our trip included sightseeing, shopping, markets and Wisconsin Alumni.  We started the morning with a visit to a temple, which was beautiful.  Below is a picture of the monks as they walked to begin to pray.

We also had the opportunity to shop at the little stores in the temple, and we had a tea tasting.  The tasting was interesting because we tried multiple kinds of teas that were different remedies; such as energy, back pain, migraine, etc.  Some of us ended up buying for the remedy, but we also bought for the taste.

After the temple and tea, we went shopping in a market. Everything was such a low price that we could have spent an entire day there (and we did go back the next day) buying things for our friends, our family and ourselves.  We also saw the Yue Gardens which were attached to the market and absolutely beautiful.

Next, we went to the top of the highest building in Shanghai.  It had a glass floor on the highest level, so we could look down all the way to the ground from the top story!  It was a little scary but very cool.  Here's a picture of a group of us overlooking Shanghai:


After all of that sightseeing, we still had the Alumni Dinner to get to! We were given the amazing opportunity to meet and greet with Chancellor Biddy Martin and UW Alumni.  The night included great food and interacting with people that all love UW-Madison!  Overall, our last full day in Shanghai was busy but fun!



Day 10:
On our last day in China, we spent the morning at the market getting in lots of last minute shopping, and then it was off to the airport to fly home. We're going to miss Haibao (below), we had fun spotting this character all around Shanghai as he is the symbol for the Shanghai Expo coming up.  It was sad to leave, but at least we shopped until the very end!

Day 8 - Brenna & Kate

Today we toured a Kohl's factory.  We saw the manufacturing process of shorts, pants, and many garments that would soon be shipped to Kohl's stores.  It was amazing to see the process from a few pieces of fabric to a finished garment on a hanger complete with security and price tags.

The highlight our evening was the Chinese Acrobat Show!  We were amazed by the talent of these performers. Not only did they have amazing balance, but they were very flexible and strong.  After the show, we were treated to a very nice Chinese dinner.