Original article

Founded at the height of the dot-com boom to support the projected expansion of US-based business-to-consumer website sites into Asia, e-commerce Logistics Ltd (ecL) adapted rapidly to changing market conditions and has emerged as a leader in the Greater China market for e-Logistics services. IBM eServer iSeries form a solid foundation at the heart of ecL's innovative services and also provide a platform for other companies licensing ecL's award-winning software suite.

ecL brings together 24-hour customer care, warehousing, order processing, transportation & logistics, seamless real time data management and technology expertise to meet the varied needs of each link in the supply chain - from suppliers through to manufacturers, distributors, direct marketers and end-consumers. It manages over 1.2 million square feet of warehouse space in 16 logistics centres across China, Hong Kong and Taiwan, supporting the distribution operations of more than 30 local and multinational customers. In 2003 the company grew by more than 100%.

"When we started the company our chief executive made the point that the business was going to be based on trust. To win the trust of our customers we need trustworthy employees and trustworthy systems," said Simon Hsu, Chairman & CEO of ecL. "We knew that, within both the banking industry and the US logistics industry, IBM's iSeries was held in high regard for its excellent reliability and security so that's what we decided to use as our foundation platform."

While strong buy-in from senior management for strategic technology decisions is what every CIO wants, Anthony Yip, ecL's IT Manager, nonetheless faced the task of developing the company's core Warehouse Management System (WMS) on an unfamiliar platform, having cut his teeth on PC network systems.

"Of course the first thing I did was hire programmers with iSeries experience but I was still responsible for application design. I knew the iSeries' reputation for reliability and low operational overhead and was pleasantly surprised by the logical design of the integrated database system, so there really weren't any issues during our first phase development," recalled Yip.

Within four months, Yip and his team of 4 application programmers had developed and implemented the first release of WMS. It was not to be their last. Four years later, Yip says only about 20% or their original code remains as WMS has been continually enhanced, based on suggestions from customers and operational staff.

"We decided early on that if we were to survive and thrive we'd have to compete through innovation since, as a start-up, we certainly couldn't compete in terms of scale compared to established logistics service providers. So we are always encouraging the IT team to develop new things," said Hsu.

The drive to "develop new things" has resulted in ecL having one of the broadest service offerings of any e-Logistics player in Greater China and vindicated the choice of IBM's iSeries as foundation of its IT infrastructure. Since 1999 ecL has built on its WMS core to cover the management of transport, procurement, business-to-retail e-commerce and courier services and has also developed modules for business reporting and integration with ERP systems.

"The innovation strategy has proven successful both for attracting investors and customers who don't necessarily use all the functions but appreciate that we continually push out the boundaries for them," said Hsu.

These days, the WMS database contains over 50,000 individual SKUs (stock keeping units) on behalf of ecL's 30 customers. According to Yip, more than 1,000-end users across the region regularly access WMS through a Web browser yet and the server has never really been stressed by these loads.

And this despite the fact that, in 2002, Yip decided to take advantage of the availability of IBM's market-leaded WebSphere Application Server (WAS) on the iSeries to "collapse" one layer of ecL's three-layer applications architecture on to the core platform.

"We had been using the open-source Apache Tomcat Web application server running an Intel-based Linux system to handle our middleware functions. We realised that, for various reasons, this was not viable a long term solution. WebSphere, which supports the Java 2 Enterprise Edition standard, represented a good alternative," said Yip.

Migration of ecL's Java application code to WebSphere was not without issues but Yip said IBM provided good support to help smooth the process. The result of its effort, however, has been very rewarding for ecL. Not only was ecL able to deliver an improved user interface and better performance to customers, but it also started to receive industry-wide recognition for its achievements.

In early 2003 ecL won the 1st Place Application Gold Award in the Hong Kong IT Excellence Awards organised by the Hong Kong Computer Society and sponsored by the Hong Kong SAR Government. And at the close of the year it followed this up by receiving an Asia Pacific ICT Award, after WMS was selected as a winner by the judging panel ahead of entries from 10 other countries.

"The success we've built on our IBM iSeries foundation has enabled us to start changing our business model to move beyond being an application service provider toward being technology driven logistics company. The revenues are small at the moment but the margins are considerably better," said Hsu.

In early 2004 ecL started licensing its software to the Huaxin Group, a nationwide distribution company in China which serves 200 suppliers and a network of 30,000 retail outlets, whose operations ecL had previously served through its ASP model. The completeness of ecL's WMS solution and its proven ability to handle 7X24 operations were persuasive factors in the deal.

"To our fellow start-ups the decision to base our applications on IBM's iSeries may have seemed unusual but, like our company, our systems have stood the test of time. That's a lot more than can be said by most start-ups and shows that our trust in IBM was not misplaced," said Hsu.