Supply chain management has been a familiar concept to executives in North America and Europe for some time now. Yet only a few short years ago when I would visit business people in Asia/Pacific, they were still relatively unfamiliar with the concept. In places like Japan, China, Thailand, and Singapore, I always had to start by introducing the term and then go through the difficult task of explaining what it meant. In the course of doing so, I naturally would talk about supply vs. demand, chain vs. network, and management vs. integration and coordination.

Ultimately, I ended up describing the concept as "demand-supply network integration and coordination." That's not a bad definition, although clearly not as clean as "supply chain management." Since I speak Chinese, people also would ask me the Chinese translation of supply chain management. Now that was quite a challenge.

The point is that between the time of my earlier visits and now, things have changed dramatically. Supply chain management is anything but a new concept to executives in Asia/Pacific. The following observations bear this out.

The World Economic Development Congress, which focuses on economic development worldwide, is held annually in different countries. Last year's venue was Washington, D.C. This year in September the conference will be held in Hong Kong. The event attracts high-level government officials as well as business executives from the major manufacturing and financial sectors.

Financial issues and economic development themes have dominated past conferences. But this year, an important new topic has been added. The conference will include a logistics and distribution summit, allowing the business and government leaders in attendance to share their ideas on the subject. It's clear that the World Economic Development Congress recognizes the increasing importance of global logistics and supply chain management as a means of competition and collaboration among countries worldwide.

Importantly, the conference location brings a natural Asia/Pacific slant to the program. The Hong Kong venue and the subject matter have combined to generate a tremendous amount of interest among business leaders in the region.

Another strong indicator is the growing number of countries in the region now stressing the importance of supply chain management as a core competency. To develop that competency, they are creating higher awareness, educating and training their workforce, and conducting cross-continent benchmarking.

Canon-Japan provides a good example. Two years ago, it started a Supply Chain Management Group to advance corporatewide adoption of supply chain concepts and disseminate best practices companywide. The company also has conducted numerous cross training sessions with Hewlett-Packard, its key partner in the laser-printer business in the United States. Canon-Japan's Supply Chain Management Group also launched a company newsletter covering its activities.

In Korea, companies such as LG-Electronics, Samsung, and the Tong Yang Group similarly have begun extensive supply-chain training of their executives.

Government is beginning to play a significant role in advancing the supply chain concept. Singapore's Economic Development Board, traditionally a key motivating force behind industrial development, is pushing aggressively to create supply chain expertise in that country. The board recognizes that with limited land and human resources for further expansion of manufacturing operations, Singapore will see a number of companies migrate production to countries like Malaysia, Indonesia, and Thailand.

In addition to encouraging manufacturing with higher value added, the Economic Development Board is promoting Singapore in the role of global supply chain manager—managing the flow of supplies from all over the world, the manufacture and final assembly in neighboring countries, and the customization and distribution of products to markets worldwide. The board is encouraging Singapore companies to develop the supply chain management expertise that will allow them to capitalize on this potential.

The same holds true in Hong Kong, which increasingly finds itself playing the role of supply chain manager for manufacturing operations based in China. Companies headquartered in Hong Kong are investing in information technology and management skills—while integrating the functions of procurement, manufacturing, planning, and distribution—to assume that leadership role. Some field offices in Hong Kong, in fact, now refer to themselves as the "control tower" of the larger enterprise. The Hong Kong Productivity Centre, a semi-governmental agency, plans to lead an effort to build supply chain excellence within Hong Kong companies.

This region's new awareness of supply chain management also is reflected in the massive infrastructure programs under way. These countries have made significant investments in constructing or expanding airports and seaports. The world's largest containerports (Hong Kong and Singapore) can be found here. The new Hong Kong airport represents a $20 billion investment. Airport expansion also is proceeding in Singapore and Taiwan, while a mega-airport is under construction near Seoul. The objective in these business centers is to coordinate seaport, airport, and rail centers into a virtual transportation and logistics hub.

The supply chain management potential is awesome. Imagine, for example, what the new Young Jong Do Airport just outside of Seoul could do to establish Korea as a supply chain leader. Built on reclaimed land linking several islands, the facility has enough space for companies to locate warehouses and perform light manufacturing without having to go into crowded Seoul. Since the airport is located next to the seaport, products can arrive by sea or by air and, just as in any cross-docking operation, flow out without lengthy delay in the country. Similarly, components and subassemblies can be transported to the airport where light manufacturing operations can quickly turn them into finished goods, without having to be transported from plant to plant.

These developments underscore the dynamics taking place in Asia/Pacific. Though this region was relatively late to embrace the supply chain concept, don't be surprised if the next generation of supply chain innovation comes from here. As in every other part of the world, of course, the major players in this region will encounter technical obstacles and organizational barriers to achieving such innovations. But given the robustness of the economy and the inventiveness already shown in so many other areas, these barriers will surely be overcome.