Supply Chain Management in China: a 2021 Comprehensive Guide
February 25th, 2021
The reach of Chinese products is availed separately by developing and developed sectors due to its manufacturing and managing strategy. Supply chain management in China is the biggest plus to its export trade model.
But the problem arises here; why few companies find it easy to work with supply chain management in china while it’s difficult for other enterprises?
What are the managing and manufacturing strategies China is using that enable it to have a strong supply chain worldwide? How supply chain management in China is different from supply chain management in the west?
All of these questions are answered in this blog.
Before getting into the detail of supply chain management in China, it’s important to decode the term ‘Supply Chain Management’.
Chapter 1: Introduction to supply chain management
Supply chain management is the active management of supply chain activities that includes the flow of services, goods, and all those processes that transmute the raw material into the end product.
Supply chain management represents the collective attempt of supply chain firms that develop, manage, and effectively run supply chains.
1. How researchers define supply chain management?
The words of researchers hold a strong impact when it comes to the definition and significance of supply chain management. This is because of the great experience they endeavor or the insight they get after exploring the management skills of different supply chain firms.
According to Ayers JB:
‘Supply chain management is the maintenance, planning, and supply chain processes activity that is demanded by the customer and is obtained for the satisfaction of customers’ needs.’
Alberta future center acknowledges supply chain management as an act of optimizing activities across the supply chain. Little (1999) declares supply chain management as ‘the deliverance of the right goods and services to the right location, in the right quantity at the right time, and at the right cost.’
Decoding the term ‘Supply Chain’:
The term supply chain is decoded by Beamon B. (1998) as ‘a structured manufacturing process wherein raw materials are transformed into finished goods and then delivered to the end customers’.
The whole managing process that includes the production, product development, required information system, sourcing, and logistics is referred to as supply chain management. Getting into the conversation of How China manages its supply chain, first, it’s essential to know the working principle of supply chain management followed all across the world.
2. The working phenomenon of Supply Chain Management
The working of Supply Chain Management includes the 6 essentials steps:
Strategizing the process
Getting the source (of service or raw material)
Manufacturing i.e. is focused on product’s efficiency and productivity
Delivery of final product
Back end system (for returning of product for unwanted and defective materials)
A managed supply chain firm is recognized for its smooth process where it keeps the company away from recalls and lawsuits.
3. Top trends of supply chain management in 2021:
The top trends of supply chain management figured in 2021 considering the top risks caused due to the pandemic are:
Automation using robots helping in fast service
Blockchain technology increasing transparency and decreases disruptions
Product life cycle must be short to immediate fast and efficient service
Introducing ‘knowledge workers’
Circular supply chain replacing linear supply chain
This is the surface knowledge of supply chain management that runs throughout the globe but still more than half of the world relies on Supply Chain Management in China thus making it a Global supply chain.
What is different with supply chain management in China? How it stands outs as a global Supply chain network? Let’s discuss;
Chapter 2: Supply chain management in China
China’s development system is known to depend upon its export-oriented growth modal. This economic growth miracle of china is having some characteristically values:
Inseparable from the price advantage
Large scale production these key factors have led to the trade surplus in the international market and has become the cause of rapid growth of the economy.
1. Supply chain modal in China
The secret to leading supply chain modal in China is a single fact i.e. The relationship with suppliers. The supply chain management in China shares a strong bond with its suppliers.
The main struggle while managing the supply chain done is choosing an appropriate supplier. By evaluating and managing their relationship with suppliers, the chances of disagreements, opportunistic behavior, transaction, and listing charges are reduced to a great deal.
This also enhances quality, pliability, delivery, and customer service thus helping the Chinese firm to gain a competitive advantage among the internal market. To more get supply chain management modal in China, it is necessary to get into the shoe of the Chinese firm.