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MIT Media Lab Shenzhen, 2013-01-14, CTS Logistics | Print |
Written by Akiba   
Thursday, 17 January 2013
2013-01-14

It's Monday and the factory tours are starting up again. Today's destination is a logistics facility called CTS that works with big brands like Apple, Beats by Dre, etc, and suprisingly, Little Bits. The security was extremely heavy at this facility and we needed to provide passports and go through security clearance before we entered the facility. Cameras were unfortunately not allowed since Apple products are housed there so there are no pictures of this facility. 

The first area we were taken to is the packaging department. For mass production, most people including myself only consider the production of the actual product. However there are also separate assembly lines for the packaging. We were watching one popular consumer product getting packaged up and there were eighteen people in the assembly line. It starts with an empty acrylic box. Paper inserts were put in the front and back with the company logo and product picture. A molded insert was then added to hold the product, labels were added, barcode stickers, documentation, accessories, styrofoam bag to encase the main device, and then the final product was put into a shipping box. 
 
They had mutliple assembly lines to handle this type of packaging for different companies. I asked what the minimum order quantity was to set up an assembly line for product packaging and was told that it goes by worker shifts. Its not possible to bring workers in for partial shifts so minimum order quantities are based on how much throughput workers can finish per shift. At the minimum, it was 600 units per hour for a 10 hour shift, aka 6000 units/shift. Of course my next question I asked was if its possible to just order one shift, at which everyone started laughing at me. The lesson here is that you need to have some massive quantity for them to take on packaging assembly for you. On the upside, they have special engineers that work with you to make the packaging really beautiful. I suspect most consumer electronics companies just come up with the color scheme and artwork, then have the packaging engineers at the logistics facilities come up with the full packaging architecture. Strange...

We were then taken to the next part of the logitics facility which is the fulfillment area. This area impressed me the most. When I first heard we were going to a logistics company, the first image that popped into my head was that we'd see a huge warehouse, forklifts, and people pulling boxes. I now see how mistaken I was.

My image of logistics in China is that once products are manufactured here, they get strapped to pallets, crated, and sent by cargo ship to the US. That's completely not the case at PCH. They have a process called pick to line which is very technically sophisticated. They're integrated into the ERP systems of the customers they work with via a web application. When an order is placed via an individual customer at an online shop, the order immediately shows up on their side, creates an invoice, packing list, and barcode labels. The line workers then pull the parts for the packing list from stock at the fulfillment area, scan the product bar codes along with the packing list barcodes, and if everything matches up, a shipping label is produced, inventory is adjusted on the customer side, and they release it on to a conveyor belt. At the conveyor belt, the shipping label is attached and the individual boxes get put into a larger box for bulk shipment. The larger box is taken to a different part of the floor which is owned by FedEx or UPS. Once it reaches that part of the floor, the boxes are legally owned by FedEx or UPS and it goes into their tracking system. They would then ship it to their hub overseas, ie: the FedEx hub in the US, from which it would be sorted and then shipped to the individual customer who ordered the device. The turnaround from customer placing the order on the online shop to the customer receiving the order is 2 days. That was amazing. For large consumer companies that have an online shop, in many cases, the products are manufactured, packaged, and shipped to the end customer from China. It was jaw dropping.

It's really unfortunate that pictures were not allowed. The system was very sophisticated and my words can't really do it justice. It was an amazing the amount of technology and IT that had to go into the system so that they could provide that kind of service. My image of manufacturing in China was mostly that it was possible to do things of low to moderate technical sophistication. But after seeing the operations of the fulfillment center, I can see that I really need to readjust my perception of the capabilities out here.
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written by non woven interlining, November 14, 2013
Social Enterprises are companies who are adopting social based technologies to jump to the next level of innovation and projects productivity
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