China Supply Chain Management in Change Edge
The Chinese government is carrying out a lot of investment to invest in logistics and transportation facilities. Local and foreign investors include state-owned companies to strengthen their logistics capabilities. Transporters and manufacturers work together to develop new better supply chain capabilities to help them provide services with lower cost. These changes are highly welcomed and have long been desired. Compared to other developed countries, China is lagging behind, the crushing and confusion, local protectionism, lack of 3PL capabilities, cash flow and receivable, unstable and unstruely implemented laws. These situations directly meant that China is currently lacking effective supply chains, and these aspects have taken time. However, China has joined WTO in 2001 and enhanced the free opening of government management, which means that China's supply chain will be more rapid than ever. This paper describes the status of China's supply chain foundation setting, which is a key challenge, and summarizes the impact of national supply chain low-efficiency, looking forward to the driving force of this country, such as market growth, government policies. Open and WTO join.
1 China Supply Chain Challenge The challenge of China's supply chain can be summarized as 6 factors: 1, geographic factors 2, infrastructure 3, customs efficiency and transparency 4, government and various rules and regulations 5, counterfeit and shoddy goods 6, business limit
1. Problems in the region China is a number of countries that have a self-reliant provincial administrative agency. However, this is the product left by the Mao's era, which has led to a large number of duplicate infrastructure, excessive manufacturing and distribution capabilities, complex and invalid administrative agencies, and very little collaboration between provincial levels and high lack of productivity. . The demand in this country also has uncoordinated aspects, and the market demand is more concentrated in urban areas of the southeast coast, as well as around Beijing Tianjin and Shanghai. Not surprising, these areas have concentrated China's main logistics facilities, including port, transit station, etc. Here is the region of China's highest income. Instead, China's inland and western regions provide the greatest development opportunities because there is a 2/3 population. The challenge is huge, there is lower income, local protectionism, and more difficult to enter channels and business operations. This area is a non-prioritized investment area in a short term. However, some family companies and local capabilities in eastern China are more valued in the west business investment and operation.
2. In countries where the infrastructure is the most industrialized country, China's infrastructure development is the weakest. Because international lack of enough roads, railways, aviation, ports, and logistics networks, it is difficult for enterprises entering China to implement normal supply chain management methods. At present, China's most common travel way is highway, once again rail, air, sea or water transport.
1) Highway: Although the cost of the road is generally higher than that of railways, waterways, road transportation or priority. Typically, foreign companies use road transport to carry out elasticity and control of shipping time, while ensuring the delivery of goods. For example, Dell, at first considering he should use air transport to deliver, and completed within 7 days. But later he found that the FREIGHT FORWARDER will take advantage of the highway more flexible and low cost. Don't consider Dell's success, China's road transportation has a long way to go. This country has invested till billions of dollars to upgrade its road transport network. The primary purpose is to connect China's main economic regions and four leading provinces and will achieve highway lines along the coastline and the Yangtze River. Realize the road from Lanzhou to Lianyungang, Beijing to Guangzhou. But unfortunately, these attempts did not follow road transport: urban transport is still crowded, and the speed of trucks is blocked in Shanghai and Beijing. The road transportation industry is also very broken in China, and 5.4 million trucks are registered in 2 million independent freight providers, with an average of 2.7 trucks per family. In all providers, Sinotrans has the largest freight capacity (3000), which is twice as many as Beijing freight companies. However, China does not have a national freight network, all of which are regional, provincial, and local enterprises or local government-led companies leading the market, and most of the vehicles provided are inefficient, old and non-standardized. vehicle. Other issues include: overloaded transportation, poor service quality, insufficient preventive maintenance, existing low-efficiency, quality control vacancies, due to bad road conditions and equipment damage, and unreasonable price agreement, up to 50% The empty carrier rate, which leads to a daily loss up to $ 8 billion. In contrast, technological investment and equipment upgrades have lack budget input. The national scope, only 187,000 registered as heavy trucks, only 20% of container transportation, the latter's impact is that the goods will often be damaged by placing in the opening of the car. Foreign companies and domestic companies have introduced container trailers, which can be more effective in handover work. However, due to the complex license (license) system and protectionism, the transportation between the provincial level still has problems. In fact, when some provinces and municipalities and autonomous regions require external transportation companies to enter the operation license, many cities have not allowed to enter the vehicle that has not been licensed, and these licenses often take a few hours to get it. In some cases, the truck is restricted in the province for unidirectional drag; many cities have also set up the running time of the truck into the urban area, and some cases are only to protect the local economy to restrict the entry of field vehicles. Recently, nearly 20% of transportation costs are due to tolls. In some provinces and cities, there is also an additional passage of trucks for the field, and local management institutions even detained and discovered foreign trucks. The influence of China's local management department's influence of logistics systems cannot be underestimated. For example, Xi'an official proposal development area as a commissioned logistics transfer station, and asked the driver to use their warehouse, Hoau, a private transport company in Heilongjiang, specializing in his own facilities, refused to delegate, so, Xi'an detained him goods. For two months, HOAU cannot ship Xi'an. Safety is also very important, some poverty provinces and guards are important.
2) The railway railway is the cheapest transportation for cereals and coal. At the same time, it will also give priority to the transportation of military and strategic materials in a long time. Today, the railway is still the preferred transportation tool of coal, cereals and other bulk goods, such as chemical materials. However, the transportation of railways is usually rarely prioritized. Railway transport often has a large number of shipping capacity shortages, and service quality issues. Essezhe's research report shows that there is approximately 25% to 30% of rail transport goods to meet, and there are no railways in about 2,000 cities. The defects of these issues are mainly missing basic settings. For example, the port and plant usually lack the joint transport connection port and the railway branch line, which makes the rail transport selection becomes incapable. Without United Transportation, the container cannot be directly reprinted on the train, there is no railway branch, and the goods must be reloaded and the unloading points for two operations, and the chance of damage is increased. (According to estimated damage, the damage is 3 times higher than the road transport). The lack of information facilities, also worsen China Railway transportation issues: The full load rate of the goods is usually determined by the long-term agreement? All of these inevitable results are long, slow delivery, and the goods are usually unloaded in the wrong location or is simple in unknown railway vendors. From Shanghai to Northern Province, the time is from 15 to 45 days, and it takes 60 days from the Northeast. (Delivery time usually uses weeks rather than day count). In addition, the result is that many companies are simple to choose from other optional shipments. HAVI food service provider, in China for McDonald's, if there is a relatively reasonable frozen food transportation service, the train will be more ideal, and they still choose a frozen carrier for transportation. Although COSCO and China International Trade Transportation Corporation can also provide a small number of railway services, most railway services in China are managed by railways. Traditionally, these organizations are mainly engaged in passenger transportation, but the calls that require better railway freight services are increasing. Currently, several large projects led by the railway bureau have been implemented in the implementation process to improve railway speed and loading capacity. 3) The air transport is predicted that the China Air Transport Market will get a large-scale growth over a longer period of time, but the current air freight behavior is still distressed because of the following issues: high-priced, messy routes, delivery people and airline information Blocking, China's main route is concentrated in passengers and leads to insufficient freight in freight, and the network distribution of the route is uneven. In addition, the shipper is rarely providing normal value-added services provided by Europe and America. In addition to these restrictions, foreign service providers are restricted to expand their service capabilities. In the next 10 to 15 years, China plans to spend $ 10 billion in the construction of the airport, including super transit cargo in Guangzhou, which will cause great competition to Hong Kong Airport. The air post department has been plagued by a short service time and the accidental suspension of the freeware of the freight terminal. "The same day delivery service" often has various problems unless the customer's goods have been picked up early. The higher tax burden in the shipping department is also much higher than other transportation industries.
4) The shipping of the sea and the inland shipping Sea Canal is the most developed way of transportation in China. About 1,200 Haihe Hong Kong Wei's 33,000 ships provide a berth, including more than 780 deep water berths to provide services for 10,000 tons of cargo ships. At the same time, China's ship tonnage is also the world's largest, COSCO is the seventh largest sea company in the world. Inland shipping is very cheap for domestic transportation, but for various reasons, it has been kept inefficient to use: 1. Most ports lack of international standard efficiency. 2. Flight lack of mobile 3. During delivery reliability 4. Transfer operations require multiple cranes to perform simultaneous operations, often cause bottlenecks 5. The bureaucrat delay in the customer service is very common. 6. Theft and damage rate is quite high. The tonnage ship corresponds to these situations, China's recent investment of $ 17 billion in the construction of an inland shipping network with international container joint transportation capabilities. These include the construction of the Yangtze River and the Pearl River. In the next decade, the container terminal will be built in Dalian, Ningbo, Qingdao, Shanghai, Shenzhen, and Tianjin. Recently, SinaTrans has been able to provide an inner barge service to directly enter the transportation of marine routes. Usually water transport is not suitable for time-sensitive cargo and finished goods, but P & G is found to perform cost-effective in certain occasions. For example, they use the inner river shipping to transport from Beijing to Guangzhou, which can obtain less expensive and lower loss and damage rate than road transportation. Water transportation can be said to be a successful method for carrying out major cargo transportation, especially long-distance transportation, but there is only more complete infrastructure, otherwise this model is always difficult to efficient. 5) Warehousing management of warehousing is very necessary for China. At present, the state has controlled 90% of the warehousing capabilities. The current warehouse operation is in the top level, limited automation, unreasonable design, low-time position design, low lighting conditions, and refrigerated moisturizing items are unstable, lack of pests Prevention, etc. In more case, the goods are handled by manual, in many cases, the goods are directly mixed, and the pollution that may be caused by each other. The use of storage automation and information technology is still very small in China, and the warehouse operation can be described as lack of inventory differences in control, limited capacity order tracking and high frequency of cargo loss, theft, and damaged high frequency. The existence of these situations makes many companies aware of better warehouse design, infrastructure construction, technology, and operation methods to consider the preferred choice. Some foreign logistics joint ventures have begun to build a modern warehousing system, but these proven are extremely expensive due to lack of scale. Of course, with more modern warehouses, high quality and low cost services will appear. China's national and provincial governments have announced the construction of highly modern warehouses and other supply chain facilities. EIU (Economics Intelligence Units) Report: By 2005, the Chinese government aims to build 30 modern materials and transportation centers, two of these centers have settled in Shanghai, and local governments have invested $ 150 to build a world-class logistics industry. The 3rd logistics center is building in Beijing. Some companies, such as HAVI, is planning their own divide school, to get the same productivity as the West.
6) Information technology facilities attempt to put the logistics attempt is in progress, the use of IT and networks in this country is very low, in fact, IDC is reported in 2001 to report China's electronic logistics services, China SMEs are electronically logistics The above cost is only $ 5,000 annual. However, electronic logistics only accounts for 1% in China's logistics market, compared with 12% of Hong Kong. According to a survey of China Storage Association, 61% of China's logistics providers have no logistics information system. In companies that implement information systems, only one-third of their customers provide stocks to their customers. . Although there are many attempts are in progress, China's implementation investment in online systems such as electronic payment, customer document management, third-party management, or supplier risk management is still small. Due diligence's reliable data is not as public as Europe and the United States. These leads to more participants to make a large number of hand-logging operations. In addition, lower IT inputs make it difficult to track goods, contact supply chain participants, access and judgment customer demand information, and trust and convenience are still harmful. A China Computer Daily reported that 80% of network users have doubts about network settlement, which can help explain why for online transactions, cash on delivery is also selected as a payment method. Many Chinese companies do not pursue the cutting-edge technology, and many state-owned enterprises and local companies, and begin to implement the ERP system, it must be explained that there is no centralized real trading data storage and standardized business processes, it is difficult to achieve even The basic level of operation performance, because standardization and at any time available data, and the reorganized process is the basis of supply chain management, this is not possible, and it is more impossible to introduce advanced supply chain attempts. However, there is still a part of the company's successful implementation of ERP and acknowledged the income after removal cost. 3. Customs in China, many different levels of administrative agencies participate in customs license business. As a result, the text work is very heavy, and the treatment process is cumbersome. In addition, the customs clearance business can only be carried out at the working day, while the customs are closed in public holidays. In contrast, other Asian ports of the customs workers 24 × 7 work. Similarly, there are also related documents, responsibilities, or assessments of the parties often lead to the detention of goods from customs offices until the dispute is released. This means that the storage process is the greatest worries in China's foreign organizational calls. Some customs have difficulties can be resolved electronically, but this mechanism is not universal. Handmade is reserved in all place, however, if you give enough attention, it is foreseen that there is an interesting improvement in a short period of time. The computerization process of this clearance has begun to work, ChinaEport, a state-owned IT service company, using EC carrying paperless trading and performs data processing between government departments.
4. Government logistics is not a clearly defined industry, and different parts of logistics services have their own different government departments. Logistics is the whole concept of State Domestic Trade Bureau (State Bureau of Internal Trade), Ministry of Communications, Ministry of Railways (MOR MOR), State and Economic Trade Commission (SETC State Economic and Trade Commission), State Development Planning Commission (SDPC national development Planning Board), Ministry of Foreign Trade and Economic Cooperation (Moftec Foreign Trade Department), And The Civil Aviation Administration (CAA Civil Aviation Administration) is dismissed. There is no doubt that the sharing of this responsibility makes the company (foreign or domestic companies) is difficult to distinguish the institution. Working in multiple departments in the industry, more tricks are needed to meet different approvals. Overlapping privileges, the scope limitations of business activities and opaque regulations have increased the difficulty of market entry. For foreign companies, you can get all things if you can get all the things. 5. The rules and regulations are not the result of the increasing development of China's supply chain. It is largely the result of severe rules and regulations. Since the past, it has strictly restricts the distribution authority of foreign companies. Three areas: distribution channels, multinational operation entities, and third-party non-capital associated logistics providers are the products caused by rules and regulations.
