How Supply Chain Helps Enterprises Reduce Costs and Increase Efficiency (First-line Investigation)
Figure ①: The bridge crane is loading and unloading at Haitian Wharf in Dongdu Port Area of Xiamen.
Photo courtesy of Xiamen Free Trade Commission
Figure ②: Jianfa Logistics Shanghai Warehouse.
Photo courtesy of Xiamen Jianfa Co., Ltd
Figure ③: Xiangyu Agricultural Products Modern Grain Logistics Storage Base located in Fujin City, Heilongjiang Province.
Photo courtesy of Xiamen Xiangyu Co., Ltd
Source: Xiamen Municipal Bureau of Commerce.
Industrial chain supply chain is the lifeblood of manufacturing industry and an important support to stabilize the economic market. Report to the 20th CPC National Congress of the Communist Party of China mentioned the industrial chain supply chain three times, and put forward "improving the resilience and safety level of industrial chain supply chain" and "ensuring the safety of food, energy resources and important industrial chain supply chains".
From helping enterprises reduce costs and increase efficiency to service infrastructure construction; From the acceleration of the supply of catering raw materials to the acceleration and simplification of customs procedures, in recent years, Xiamen, Fujian Province has actively promoted the construction of supply chain and integrated supply chain services into every corner of production and life.
— — Editor
It was awarded the first batch of demonstration cities of supply chain innovation and application in China, with three of the four major supply chain groups in China, and the annual meeting of supply chain management in China was permanently settled … … In recent years, Xiamen, Fujian has vigorously promoted the construction of supply chain, which not only helped enterprises to reduce costs and increase efficiency, but also promoted urban construction and improved people’s lives.
How does the supply chain work? What are Xiamen’s experiences and thoughts? What are the problems to be solved in promoting supply chain construction? With these questions, the reporter conducted an interview.
Rational allocation of supply and demand resources
Why does a Xiamen enterprise want to build a branch in the northeast?
Engaged in grain supply business for many years, in 2013, Xiamen Xiangyu Co., Ltd. made a bold decision: to go to the northeast and build grain storage outlets at the doorstep of farmers. "I thought about working in Xiamen, but I stayed in the northeast for four years." Chen Xiuxian, who is now a senior manager of Xiangyu Operation Management Department, told reporters.
"The production area is in the north and the users are in the south. Building storage outlets in the northeast is the optimal solution after comprehensive consideration of costs and benefits. " Qi Weidong, general manager of the company, said.
In Yi ‘an County, Qiqihar City, Heilongjiang Province, Chen Xiuxian followed the farmers to the fields and went through the whole process of corn harvesting, purchasing, quality inspection, drying, warehousing and transportation. By continuously reducing the loss of each link, he reduced costs and increased efficiency for the whole process. While optimizing the production links, a large channel for transporting grain from the north to the south has been opened up. Taking Fujin City, Heilongjiang Province to Chengdu City, Sichuan Province as an example, Chen Xiuxian calculated an account: "Thanks to the multimodal transport network of transporting grain from the north to the south, the transportation time is shortened by five days, and the transportation cost per ton is reduced by 20 yuan."
"Downstream enterprises have stabilized production, and upstream grain growers no longer need to find their own sales, and their enthusiasm for growing grain has also increased." Qi Weidong added.
Why should a manufacturing enterprise invest 50 million yuan in software?
The machine roared, and there was only one production line in the huge workshop. "Although the production line was still 30 years ago, the annual output has doubled compared with 10 years ago." Jianfeng Zeng, director of Linde forklift supply chain, said.
The number of products has increased to more than 20, and the delivery period has been shortened by nearly half … … Looking at the data on the wall, the reporter didn’t believe it.
In no hurry to explain, Jianfeng Zeng led the reporter to the warehouse. In the warehouse, different parts are placed on different shelves and at different heights according to the frequency of use and the order schedule.
"The customization rate of forklift trucks is as high as 70%, involving as many as 40,000 kinds of parts. It is necessary to ensure production delivery and achieve effective inventory control." Pointing to an internal inventory system, Jianfeng Zeng revealed the secret of efficient production: after receiving the order, the internal inventory system will automatically generate a list of spare parts. At the same time, each supplier obtains the list requirements and organizes raw material assembly according to the order schedule. The day before production, the parts package arrived at the designated location in the warehouse. On the day of production, which parts arrive at which position on the production line at which time is accurate.
"This is the role of the supply chain." Lin Yuting, the person in charge of the supply chain of Xiamen Free Trade Commission, explained that through the rational allocation of supply and demand resources, supply chain management can calculate the optimal scheme of cost and benefit for enterprises, and realize the value enhancement of the whole chain through the collaborative integration of upstream and downstream industries.
Optimize process and improve service.
In addition to exerting strength in the production process, how will the supply chain change our lives?
At 8: 45 a.m., at Hubin East Road Station in xiamen metro, Lin Yanan got out of the station, went upstairs and clocked in. She sat in front of the company station 10 minutes in advance. Living in Xiang ‘an District outside the island, Lin Yanan has never worried about being late since the opening of Metro Line 3 last year.
On the other hand, in the building of Xiamen International Trade Group Co., Ltd., 10 kilometers away, Cai Bochao, a staff member of the International Trade Municipal Key Project Support Group, has also arrived at the station. Looking at the receipt form in front of the computer, Cai Bochao hasn’t recovered from the tension of the previous night.
In Xiamen, the subway is one of the important ways for citizens to travel. Three subways have been opened, three and a half are under construction, and more than 20 stations are under construction at the same time. "There are more than 10 kinds of steel specifications used in the 1 km subway. Without one, the whole site may be shut down. " Cai Bochao’s job is to ensure the steel supply of the construction site in xiamen metro.
2,000 tons! At 5 pm the day before, Cai Bochao looked at the numbers on the order, and his nerves were tense instantly — — This order involves a large amount of steel, miscellaneous specifications, many sites and tight time.
Race against time. Within half an hour, three ITC steel warehouses in Quanzhou, Sanming and Fuzhou received the electronic bills of lading from the headquarters. At the same time, after receiving the consignment note, the three teams set off from Xiamen in three directions. At 7: 30 that night, a motorcade arrived in Anxi Ku, Quanzhou. Outside the warehouse door, the administrator has been waiting by, and the goods are ready to go. After 1 hour, 1000 tons of steel finished loading and returned immediately. At 0: 00 that night, at Baicheng Station of Xiamen University in the south extension section of Metro Line 3, the steel was in place in time.
"It is the reserve and dispatching ability honed day after day by ITC in the steel supply chain that ensures the smooth progress of daily subway construction." Cai Bochao said.
After work, Lin Yanan and his colleagues came to a pickled fish restaurant near the company. Ordering and placing an order, 15 minutes later, steaming pickled fish was served.
A few kilometers away, in the factory of Xiamen Green Lily Food Co., Ltd., three or four workers are moving quickly to slice fish. Start with a knife and drop it into the room. Pack fresh standardized fish fillets on ice packs and send them to the kitchens in various restaurants. "One master can handle hundreds of live fish in one day. It not only saves the labor cost of the store, improves the efficiency of the kitchen, but also enhances the experience of consumers. " He Liqin, general manager of the company, introduced.
Ensuring infrastructure and improving the quality of life, along with the development and optimization of the supply chain, there are also urban public services.
"Once the customs clearance is stuck, the detention will start from 7 days. Rescheduling fee, wharf storage fee and container fee … …” Counting by fingers, the person in charge of a supply chain enterprise is frowning more and more tightly. "In order to save logistics time to the greatest extent, we have moved the factory to the dock, but the time after the goods enter Hong Kong depends on the efficiency of customs approval."
Further simplify customs procedures and reduce logistics costs & HELIP; … In December 2022, the overall customs clearance time of Xiamen Port was 23.96 hours and 0.89 hours, respectively, which was 11.13% and 35.97% lower than that of the previous year, creating the best level in history.
"Xiamen has considerable import and export transactions, and the innovative development of the supply chain has opened up a new road for Xiamen." Chen Min, director of Xiamen Municipal Bureau of Commerce, said.
Transformation of key enterprises in testing water
Xiamen has a land area of only 1,700 square kilometers, but it is here that nine national supply chain demonstration enterprises have been born, occupying three of the four domestic supply chain groups.
Small Xiamen, how to develop into a supply chain city?
"I have to start with three people." Luo Jianpeng, a second-level researcher at the Development Department of Circulation Industry of Xiamen Municipal Bureau of Commerce, said that the three local state-owned enterprises in Xiamen are Jianfa, Guomao and Xiangyu.
In 1980, Xiamen was granted a special economic zone. Following the open spring breeze, a number of foreign trade enterprises have sprung up in Xiamen.
"There are opportunities almost everywhere." At that time, the founders of the three companies had the same experience: the demand of domestic enterprises for steel, coal, rubber and other commodities was large and stable. Based on the original resource advantages in import and export channels, the three companies focused their main business on commodities.
In international trade, iron ore — The steel industry chain is one of its key business chains. In the early days, the main customers of ITC were steel mills, and "supply" and "sales" were the main service contents.
In the 1990s, with the transformation and upgrading of the steel industry, steel mills gradually changed from extensive management to refined development. "Our service content must also be extended." Chen Xinhuang, general manager of the supply chain transportation management department of Guomao Co., Ltd. introduced.
Lack of funds, provide financing credit endorsement; Lack of logistics, providing one-stop logistics service for multimodal transport; Lack of industry information, integrate market information for them and help them make development plans … … "From simple trading to deep involvement in the development of upstream and downstream enterprises, we rely on the growth of supply chain and the growth of service supply chain." Chen Xinhuang explained.
At present, Jianfa, Guomao and Xiangyu have developed into integrated supply chain service providers with four services: logistics, capital flow, information flow and business flow.
"Starting from a foreign trade enterprise and transforming into a supply chain integrated service provider; Starting from one link in the industrial chain, it radiates to more links and enterprises in the upstream and downstream; From simply buying low and selling high to providing customers with more comprehensive value-added services. The supply chain service enterprises represented by "Three Masters" have grown from scratch. The secret behind it is to grow together with the upstream and downstream and share the benefits. " Luo Jianpeng pointed out.
Policy guarantee helps enterprises grow.
In April 2018, the Ministry of Commerce issued the Notice on Launching the Pilot Project of Supply Chain Innovation and Application. Subsequently, Xiamen started the construction of pilot cities for supply chain innovation and application, and vigorously supported supply chain enterprises.
"At first, I also crossed the river by feeling the stones." Chen Min, then deputy director of Xiamen Free Trade Commission, said frankly that just as supply chain service enterprises serve their own customers, the government will provide what services they need.
From a small vegetable transporter to a leading fresh-keeping enterprise integrating planting, processing, sales and transportation today, the green lily business is getting bigger and bigger, and He Liqin’s concern is getting deeper and deeper: "In the food industry, safety is the top priority. Once the consumer side reflects the problem, it is impossible to find out which link has gone wrong. "
Promoting the digital transformation of supply chain is one of the directions for Xiamen to carry out the pilot project of supply chain innovation and application. In 2021, Green Lily was awarded the first batch of Xiamen supply chain innovation and application pilot enterprises, and a series of key cultivation measures followed. Direction and financial assistance & HELIP; … Soon, a set of fresh supply chain management system that can be traced back to the whole process landed. Nowadays, a fish has its own "identity card" from the fry. Breeding, processing, transportation and serving, through this fresh supply chain management system, the "life" of fish is recorded all the time.
When he liqin is worried about the unclear development direction, more supply chain enterprise leaders can’t keep up with the company’s development speed in distress.
"Three customers, A near the city, B near the expressway and C near the port, where should our warehouse be built?"
"Built in a place where goods are concentrated, or built on the dock?"
"Usually we may simply consider the logistics cost, but in fact, supply chain management requires us to comprehensively consider the customer’s picking frequency, unit picking cost, own transportation capacity and other factors, and get the optimal location through the algorithm."
Wang Dayi, assistant general manager of operation management of Xiamen Jianfa Co., Ltd., was vividly remembered by the teacher’s question and answer at the training course for supply chain talents in the whole city three years ago.
As early as the beginning of the pilot project, Xiamen established a leading group for Xiamen’s supply chain innovation and application pilot project, with two deputy mayors as the team leader and deputy team leader, to plan the development of the city’s supply chain as a whole. In 2022, Xiamen successively issued the Action Plan for Accelerating Supply Chain Innovation and Application to Enhance Core Competitiveness (2022— 2026) "Several Measures to Promote the High-quality Development of Supply Chain" and other measures.
"Policy support, talent cultivation, association exchange … … Strong supply chain development atmosphere gives us confidence. Since the development of the enterprise, it is the government’s strong support again and again, pressing the fast forward button for our growth. " Wang Zhibing, deputy general manager of Jianfa, said.
Innovation and development have a long way to go.
"The development of supply chain is highly internationalized. In the process of going global, different countries have different laws and cultures. Can the government carry out relevant training?"
"Supply chain management, data is the core element, and the cost of building a digital platform by enterprises is high. Can we build a city-level public service platform?"
"The importance of talents in supply chain management is becoming more and more prominent, but not every enterprise has a special supply chain position. What if enterprises have supply chain management needs?"
… … … …
Not long ago, at a city-wide supply chain industry forum, Luo Jianpeng, who was sitting under the stage, remembered it in his notebook.
"Platforms, talents, systems, and enterprises mostly reflect common problems, which is also our direction of efforts." Luo Jianpeng said that in recent years, a modern supply chain federation has been established in the city as a communication platform between the government and enterprises. Establish a supply chain science and technology innovation center to provide supply chain solutions for more enterprises in a market-oriented way; The framework of public service platform has also been basically completed, and the first phase of service has been launched, and it is expected to continue to superimpose various services such as supply chain finance and legal affairs … …
At 8 o’clock in the evening, Lin Yanan and her colleagues finished eating. She uploaded a meal evaluation: "Last time it was a little spicy, this time it tasted just right, like it."
After the background flow, the evaluation was finally unified into the fresh supply chain system of Xiamen Puzhen Food Co., Ltd., which is the main supplier of pickled fish sauce packets in this restaurant.
A few years ago, the relevant person in charge of the company often worried about the oolong order: "The internal departments have no information. This order has been cancelled, but the goods have been sent out!" The difficulty of puzhen food is the specialty of supply chain science and technology innovation center. At an industry exchange meeting, the two sides hit it off — — Supported by the Science and Technology Innovation Center, a supply chain management platform was built for Puzhen Food. Today, the platform not only opens up the internal management process, but also faces upstream and downstream customers. "After the import of sales data and customer feedback, it provides a direct basis for us to improve our products." Zhang Lin, the marketing manager of the company, introduced.
"To build a national key industrial chain supply chain resource allocation center, a supply chain science and technology innovation center and a supply chain financial service center, Xiamen’s supply chain innovation and development still has a long way to go." Chen Min said that in the next step, Xiamen will continue to strengthen the construction of supporting systems and the cultivation of business entities, and accelerate the layout of the supply chain network with Xiamen as the hub and radiating the whole country, so as to contribute to ensuring the security and stability of the industrial chain supply chain and helping the domestic and international double cycle.