Core Solutions for 21st century commerce (hktdc.com)


	Michael Hung (left) and Tim Chiu count leading global players among their Core Solutions clients

Michael Hung and Tim Chiu are a globalisation success story. The Hong Kong entrepreneurs have powered to success over the past 12 years creating automated supply chain management solutions for some of the world's biggest trading companies.

Their company, Core Solutions, is a global trade solutions provider that is weaning buyers and vendors off cumbersome late 20th century technology - spreadsheets, emails, telephones and piles of paper – in favour of a centrally managed, fully integrated business intelligence system equipped for 21st century commerce.

All those in the supply chain – from buyers to vendors, manufacturers to transporters, banks to customs – can now all work from the same page in real time. Core Solutions' systems enable clients to easily monitor product development, product testing, order management, merchandising, quality assurance, quality control, logistics tracking and financial settlement.

That means more timely orders, more accurate delivery and greater efficiency for all those in the supply chain. And that adds up to huge cost savings, too.

Adding value

"As global sourcing continues to grow, large sourcing organisations are struggling to keep up with the increasing business, while continuing to be responsive, contain costs and manage thousands of vendors," said Mr Hung, the company's CEO.

"With faxes and hundreds of emails, if you make a mistake a lot of goods could vanish or get stuck somewhere because of missing paperwork. We're moving companies from the old paradigm of tools to a system," added Mr Chiu, Managing Director for Greater China. "We are dedicated to increasing value to customers along each critical step of the global trade chain."

Mr Hung says that in essence the company facilitates trade rather than act as a matchmaker between buyers and sellers. Its systems are so sophisticated that they not only enable clients to keep real-time tabs on sourcing and buying operations but also to handle quality checking, inventory functions and even ethical auditing of its suppliers.

The increased efficiency means seasonal businesses such as fashion brands that depend on timely delivery for success are among their biggest clients. "We can save up to 40 percent of productivity in the supply chain and streamline the lead time from design to store. Cutting 12 to 15 days provides savings for the customer. In fashion, every day is significant," said Mr Hung.

Streamlined business

Mr Hung and Mr Chiu – who graduated in the US in IT and electrical engineering respectively - were both working as consultants at Lotus Consulting (now part of IBM) in Hong Kong when they met in the mid 1990s and decided they wanted to run their own business. They founded Core Solutions in 1995 with the goal of building solutions that streamline business processes within and across organisation boundaries. The pair, who clearly relish a challenge, decided to find out what problems companies had and then set about solving them with software-based systems.

Hong Kong was the firm's ideal location base, they say, because of its strategic location as a trading and logistics hub, as well as its free economy, world-class air cargo facility and its bustling container port, the world's second busiest.

What started out as a small business now counts more than 100 staff on its payroll, with offices in several countries including the United States, and a low-cost software-making centre in Zhuhai. It also boasts a client list that includes suppliers to the world's leading brand names, from Carrefour to Polo.

"It's been a story of steady growth. We didn't ride the dotcom boom," said Mr Chiu. "A lot of companies are embracing it (the systematic approach). They recognise there's a problem and are looking for real solutions."

Global clientele

Among Core Solutions' key clients is European retail giant COOP, which uses the firm's flagship global sourcing system, CBX Merchant, to manage 16,000 orders across many Asian countries from its regional Hong Kong base.

Three of the world's largest apparel global buying organisations - Redcats Asia, Kirkstone and Newtimes Group – which source for many of the world's biggest brands also use CBX Merchant, as do giant retailers such as Carrefour.

Mr Hung likens the company's systems to a car dashboard. Thousands of orders can be monitored and managed on one screen. If something goes wrong – such as a delay in fabric arriving at a factory – an alert is sent to flag the problem to all those in the supply chain so they can take necessary action to minimise delays or consequences.

The company has expanded beyond retail to develop systems for logistic companies, banks and even customs.

The firm's systems work for suppliers too. A better supply chain means vendors such as apparel manufacturers can get the job done faster and with less potential penalties from buyers for faulty products or missing paperwork. Mr Hung and Mr Chiu also believe Core Solutions intelligence will enable manufacturers with a good track record to arrange cheaper financing to fulfill orders – most have to bear the cost themselves as buyers won't pay until after successful delivery.

Core Solutions systems also provide access to intelligence on sellers that can be useful to clients who want to ensure they have the right partners. "For example, we can make sure a supplier is reliable and doesn't use child labour. We also know their delivery history, and we know their product defect history," said Mr Chiu.

Both Mr Chiu and Mr Hung see themselves as a real Hong Kong company and see a bright future in the city. "We're making trade better for Hong Kong," said Mr Hung.