SETZ logistics models and system framework for manufacturing and exporting large engineering assets

Given the dynamic and increasingly competitive nature of international commerce, manufacturing companies must plan global logistics operations for sustainable competitive advantage. Many enterprises build collaborative manufacturing networks across multinational regions to reduce production costs and gain access to new and often unfamiliar markets. Recognizing the strategic importance of globalization, government agencies are developing Special Economic Trade Zones (SETZ). These zones are regulated industrial districts which encourage manufacturing by offering incentives such as new logistic designs linked with the latest information technologies. The objective of this paper is to analyze and design SETZ logistics hub models and system framework for linking manufacturers. By defining the characteristics of the different types of specialized trade zones, and briefly discussing the older types of trade models that are no longer competitive, this research uses the case of a Taiwan power transformer manufacturer to analyze the supply chain logistics processes for manufacturing and exporting large engineering assets within a SETZ. The logistics models and information system framework developed provide a general reference for other governments, companies, and industrial sectors that intend to design export-oriented industrial parks incorporating IT-centric and globally oriented SETZ techniques.

► This research develops a new Special Economic Trade Zones (SETZ) logistic hub concept and system framework.
► The SETZ operation model shows effective processes among manufacturers, 3PLs, and SETZ administrators.
► The case studies the logistics of large engineering assets using SETZ and can be extended to other applications.