With the emergence of the European Monetary Union and the harmonization of European regulatory standards and the convergence of prices, the advantage of having subsidiary units in multiple national markets has become less advantageous. A growing number of companies have responded by choosing to centralize their manufacturing and distribution operations with significant cost savings to provide high quality and low cost financial, administrative and support services to customers and line management.
Chinese companies starting business in Europe usually ship their products directly to clients and distributors. Some of the activities involved are: transit by sea or air, customs clearance in various European countries, transport negotiation, etc. The preferred alternative would be to have a single point of entry for the inbound flow of goods, a European Distribution Center (“EDC”) which will have the advantage of:

	Reducing transport costs to Europe due to optimization of inbound transport
	Improving delivery time and higher service level to customer
	Maintaining one customs clearing center

Companies that already have a European network of sales offices in place would also benefit from having a central stock-point instead of keeping stock at the local offices:

	Improved efficiency in stock management;
	reduction of inventory and other overhead costs
	EDC can handle all the product customization for the various national markets which can range from adding manuals and plugs to different packaging activities (see Value Added Logistics)
	The EDC can also serve as a central repair center

When choosing the location of these centralized European activities centers, factors to be considered are:

	Established supporting infrastructure for efficient connections to and from Europe and Asia in terms of customers and goods
	Competitive operational costs
	An international and open legislative environment with regard to finance, transportation, people, etc.
	Qualified labor force with multi-lingual skills

The Netherlands can fulfill all these conditions and was recently voted as the best place to do business by The Economist Intelligence Unit - evidence to the high number of EDCs and European Operation Centers that have selected the Netherlands as their primary site. These EDCs are operated by the company’s own management or entrusted to a third party service provider. Besides cost advantages, increased flexibility and speed, an additional benefit is the positive effect on marketing and sales.