23 July 2018
Smart Logistics for Pharmaceuticals Expands Rapidly in Zhongshan
Interview with Guangdong Jointown Pharmaceutical Co Ltd
With the Hong Kong-Zhuhai-Macau Bridge (HZMB) expected to open in the autumn, the overland transport links between Hong Kong, Macau and the western bank of the Pearl River estuary are set for a massive upgrade. In order to assess the impact of the opening of the bridge on the logistics industry in Hong Kong and the western Pearl River Delta (PRD) region, HKTDC Research visited the latter in May 2018 with the assistance of the Guangdong Commerce Department. During the course of the visit, the views of local commerce officials and logistics sector representatives were solicited with regard to the likely cooperative and developmental opportunities set to emerge once the bridge is fully operational.
Biomedicine: A New Pillar Industry
Home appliances, garments, electronics, lighting and furniture are some of Zhongshan’s traditional industries. The city’s 13th Five-Year Plan supports the development of electronic information, semiconductor lighting and biomedicine as new pillar industries. The National Health Science and Technology Industrial Base in the Zhongshan Torch High-Tech Development Zone, a national-level health industry park which houses about 200 companies, has become a demonstration base for the biomedicine, medical devices and medical information industries.
Guangdong Jointown Pharmaceutical’s distribution centre in Zhongshan is a third-party logistics service provider approved by the Guangdong Food and Drug Administration. The centre’s core business activities cover pharmaceuticals wholesaling, logistics distribution and e-commerce. It deals in more than 9,000 varieties of products, including proprietary Chinese medicine, health supplements, anti-biotics and chemical agents.
Efficient Inventory Management
In order to deal with constraints imposed by the shortage of land, companies in Zhongshan are trying to manage their inventories more efficiently through standardisation. Pharmaceutical products are compact and come in standardised packaging. There are uniform standards for the height and width of stacks, the area of trays and units of storage. Guangdong Jointown’s automated stereoscopic warehouse has trays measuring 1.2m x 1m, capable of carrying goods 1.2m-1.5m high. Each tray forms a standard cube. The uniformity of storage space and the relative lightness of pharmaceuticals compared to other goods make it possible to lift and store whole trays of goods using automatic stackers and lifting tables.
Using its proprietary logistics information system, and with the help of the Warehouse Management System (WMS) and Warehouse Control System (WCS), Guangdong Jointown’s warehouse can check in 200 and check out 180 trays of goods per hour at the same time. Full automation means the company can drastically cut its manpower costs. Furthermore, automated stereoscopic warehouses can make full use of their vertical space and store several times more goods than traditional warehouses.
Smart Data Management
Another factor helping to increase Guangdong Jointown’s efficiency is its centralised platform. It can receive orders in real time, allowing staff at its distribution warehouse to use the wireless electronic label sorting system to pick out the goods being ordered. The goods are then checked manually by staff using the final verification system before being packed into boxes. The centralised platform instantly updates the inventory records. Guangdong Jointown places orders with suppliers when necessary in order to meet Just In Time (JIT)  distribution targets.
Guangdong Jointown has more than 4,500 suppliers and about 11,000 clients, including medical institutions, drug store chains and medical service centres. Its distribution network covers Zhuhai, Jiangmen, Foshan, Shaoguan, Dongguan and Huizhou in South China. It aims to deliver goods within 24 hours inside a radius of 500 km, and within 12 hours in the PRD region. Smart data management helps trace the distribution, quantity and flow of goods and improve the efficiency of third-party warehousing services.
Zhongshan: Western PRD Logistics Hub
Zhongshan is developing into an important logistics hub connecting the eastern and western sides of the Pearl River estuary and cities within the Guangdong-Hong Kong-Macau Bay Area. With the scheduled opening of the HZMB, Second Humen Bridge and the Shenzhen-Zhongshan Corridor  over the next few years, Zhongshan’s logistics industry is expected to develop from a city and regional provider of distribution services into a logistics hub connecting the areas to its east and west.
At present, Zhongshan’s regional distribution network mainly covers Zhuhai, Jiangmen and parts of Guangzhou and Foshan, while also extending to the western part of Guangdong. After the opening of the HZMB, its logistics services may extend to Hong Kong and Macau. The opening of the Shenzhen-Zhongshan Corridor will greatly shorten travel times between the east and west banks of the Pearl River and strengthen Zhongshan’s logistics role in the Bay Area. The promotion of standardisation, automation and the application of information technology will be crucial if Zhongshan’s logistics industry is to be upgraded in the face of land shortages, rising labour costs and other constraints.
 JIT distribution refers to the delivery of the right product in the exact quantity to the destination and at the time designated by the client.
 The Second Humen Bridge and the Shenzhen-Zhongshan Corridor are expected to open to traffic in 2019 and 2024 respectively.