Your China Supply Chain & Realistic Logistics
December 14, 2018
As China opened up its economy in the late 1980s, many western consumer goods manufacturers set up plants or formed joint or cooperative ventures in China in an attempt to capture the opportunities of this emerging huge supply chain. While the production process could easily be built on the existing manufacturing technologies and while China was an efficient option, cost wise, the distribution and logistic process was still a challenge.
Let us take a quick journey on this subject, focusing on some of the obstacles of the logistical aspect of your China supply chain and how best to navigate the logistics portion of our supply chain.
In March 2016, John Deere launched a TV commercial to market their new Z500 series. People all over were spreading the word: “It’s not how fast you mow, it’s how well you mow fast.”
In logistics, it’s not always how fast, that matters most but how well a shipment is delivered. And with the continued trend towards ‘consumerism,’ the objectives of importers have changed. “How well” means traceability, predictability and reliability. Carriers are responding to the need to provide more and better information on the goods in their charge. This has increased the importance of technology and management of the first miles as well as the last miles. A prime concern of China supply chain management has become where your facility is located.
In recent interactions with importers and procurement leaders, organizations are being forced to undergo a major transformation in their China supply chain management functions. Many used to regard the China supply chain as the least adaptive to technological change. But much progress has been made. Indeed, technology has been changing at an accelerating rate and has enabled companies to expand the efficiency of their logistics operations. Some have turned to 3PL (3rdParty Logistics) companies who have leveraged deeper knowledge of their supplier spend data and are able to successfully convert management information into predictive data that informs decision-making.
Details Matter! Getting a product made for the right cost and at the right quality means nothing if you cannot get it to market on time, every time. Logistics is at the heart of everything in the supply chain.
Let’s take a quick look at a few activities that help deliver good logistics.
Everything starts with planning. The successful delivery of goods to a manufacturing, distribution or retail facility is impacted first and foremost by an in-depth knowledge of all elements of your supply chain, starting with the realities of the local environment in China where the goods are produced and ending with the“last mile”– if one is responsible for the final delivery to the end-user. Such practical knowledge enables good planning.
Efficiency in logistical operations is what provides importers with an opportunity for carving out a competitive advantage in your China supply chain. It is delivered by a combination of factors. including:
- Personnel: A well-trained and enthusiastic staff that takes pride in what they do.
- Storage: Versatile warehousing facilities that are properly equipped to receive, track and re-ship merchandise.
- Technology: Modern logistics and warehouse management systems.
- Communications: clear, transparent, responsive and open communications with all elements of the supply chain.
- Processes: Proven quality control, management procedures, including security and safety.
Quality Checking –and double checking
You respect what you inspect. Rigorous monitoring and checking procedures will improve logistical success.
Your 3PL partner should carry out detailed checks of all your goods as they arrive into the warehouse and inform you of anything missing or if the goods are not as expected. (Learn more about CPG’s Quality Control processes)
China has come a long way with is logistics structure, in fact, the logistic system enablers in China have become so good at this that many importers find it difficult to consider other manufacturing locations, such as Vietnam or Bangladesh. This is because, even if costs are lower, the logistics are not in place. And yet within the China supply chain, there are still large gaps to be filled. How does your system work?
By Jocelyn Trigueros and Guerschom Francois