SHANGHAI -- About two dozen supply chain executives from around the world gathered here earlier this month to discuss the business-technology challenges of managing their dispersed and diverse supplier networks in China, a country rich in opportunity but short on support infrastructure.

Sponsored by the Supply-Chain Council and GeorgiaTech's Executive Masters in International Logistics program, the Supply-Chain Executive Forum attracted senior supply-chain managers from Lowe's Companies, Sealed Air Corp., BMW Manufacturing Corp., The Walt Disney Co., Motorola Corp., Hewlett-Packard Co., Intel Corp., and Dell Inc., among others.

Carrefour China president Jean-Luc Chereau kicked off the forum with a presentation about the logistical difficulties of distributing retail products within China, a market that accounts for 22% of the world's population. Carrefour entered China in 1995, and now has 73 hypermarkets in 28 of the largest cities. The company had €2 billion in sales last year, and was the leading foreign retailer in the country.

Size and geography creates its own set of problems for the company. Carrefour has 9,000 different suppliers in China, shipping 250,000 different products. A typical store would have about 40,000 different products, he said.

However, there is no nationwide distributor in China. In fact, the country's fleet of five-million delivery trucks is distributed among four-million different transportation companies -- an average of just over one truck per company. And the distances are huge. It takes seven days to ship a product from Shanghai to Urumqi in the far west of the country.

Meanwhile, local politics can hinder products shipped from one province to another, and in some places the physical infrastructure is just being built.

Supplier service levels are also unstable. Carrefour has to teach suppliers how to do business with the company and provide many of them with computers.

Systems Disconnect

The technology used by suppliers -- or lack thereof -- is an issue for other companies doing business in China, as well.

At Rosemont, Ill.-based World Kitchen Inc., for example, whether or not a supplier has ERP installed makes a big difference. Wilfredo Tan, the company's managing director for the Asia Supply Chain, buys cookware from hundreds of factories in China. Without ERP, World Kitchen must have its own engineers and quality control people at some suppliers' factories to monitor daily production.