Focus on New Trends of Supply Chain

 

Logistic is a significant part in supply chain management. Currently, logistic development improves a lot than before. Some terminal manufacturers, trading companies began to use modern logistics management concepts, methods and techniques, implement process reengineering and outsourcing; traditional transportation, warehousing, freight forwarding companies have already begun to implement functional integration and extension services, to accelerate the transition to become a modern logistics company.

 

In addition, a batch of new logistics enterprises is growing rapidly, forming a variety of ownerships and service models as well as multi-level logistics enterprises group. Overall, logistic costs are in a downtrend, promoting the improvement of economic operation quality.

 

To develop logistics industry, logistics center is necessary, with functions of storage, material handling, consolidation, break bulk and cross-docking. This is especially urgent in China.

 

According to data, China's logistics costs account for about 30% of GDP, comparing with around 10%-12% in American and European countries. This shows 20% of resources are wasted in commodity circulation annually. In order to shorten the flow of product, reduce logistics cost and create larger profit for enterprises, building logistics center is imperative.

 

And, logistics shows signs of spatial concentration of production, spatial concentration of inventory, creation of hub-satellite networks and development of break-bulk/transshipment systems.

 

In addition to efficient logistics, another major breakthrough of supply chain comes from “Virtual Production”. This is not a new concept, but is heating up is recent two years.

 

Shenzhen SJET Technology Company ltd is such a company with more than 20 virtual production customers, over 600 suppliers as well as 20 co-factories. It is reported virtual production has grown into the core business of the company, representing 60% of total volume of business.

 

Virtual production services are designed on the basis of vertical integration of supply chain fine division and value chain. Xicheng Wang, deputy director of operations in SJET notes “Based on vertical e-commerce, SJET can fully and effective participate in customers’ supply chain system via its own E-commerce platform, and build high-integrated service system addressing Chinese domestic and international commissioned orders, procurement execution, warehousing logistics, import and export customs clearance, document processing, supply chain finance, tax administration, processing and production, as well as worldwide distribution.”

 

In other words, SJET, based on customer demand, can provide all supply chain services from order to delivery, excepting R&D and sales. Help customer achieve "Refocusing", namely allow customers to focus on core business (R&D and sales) they are good at, SJET takes charge of other non-core aspects of supply chain. The division of labor generates complementary advantages. 

 

Via virtual production services, customer companies enable concentrating on market analysis, product development, branding and marketing, cultivating its core competitiveness, thus achieving leapfrog development. Freeing customers from tedious transactional operation is the new revolution visual production brings to supply chain industry.

 

Supply chain brings opportunities to develop potential markets, enabling companies to effectively utilize external resources, reduce costs; but also generates a lot of challenges, such as different tariffs, foreign exchange, financial regulation and other issues. And with changes of economic situation, monetary tightening and rising labor costs also directly lead to development bottlenecks. “Financing difficulties, high cost, transformation and upgrading are three major obstacles facing most enterprises,” says Kaiping Zheng, vice president Shenzhen Everich industry development Co; ltd.

 

To solve these problems, professional financial supply chain services are very important. Everich is known as China's first financial supply chain service integrator. After years of development, it has gradually formed its own unique pattern of integrated supply chain services and professional service advantages.

 

“Everich first introduced integrated financial supply chain service model in China. With the help of innovative ability, resources integration as well as operational capacity; and using financial instruments and risk management techniques; plus aiding enterprises to broaden the financing channels, activate the flow of funds, Everich enables providing supply chain financing, factoring, billing, ticket, tax, exchange and other financial supply chain operations as well as a variety of business, customs clearance, logistics and information and other supporting services, to help customers improve supply chain management, increase supply chain operations security, enlarge business scale and enhance customer benefits,” says Zheng.

 

Put another way, financial supply chain services mean supply chain companies, on the basis of its own strength and reputation, integrate bank, insurance, and guarantee corporation’s resources to provide the above service for enterprises, and enhance in-depth customization. Due to current electronics market fluctuations, it becomes one of the hottest supply chain services.

 

“In fact, it is supply chain companies disguised offer major customers business services for bank,” says Dianbao Lin, general manager at Shenzhen Sunrow Supply Chain Management Co., Ltd.