The true competition takes place not between companies but between supply chains

Keywords auto supply chains   Date Saturday, February 27, 2010   From Chinahourly    Views

Christopher Martin, a famous British economist, once said that  the actual competition takes place between companies but between supply chains. In western countries, notes the logistical costs of car 8 percent of sales in Japan, the share of 5 percent, while in China the figure is often more than 15 percent. In China, the value of supply chains are still automatically excluded from many companies.

In 2009, guided by the policies and measures taken by the government, both production and the volume of car sales in China exceeded 10 million pieces, begins the new era of great power.  In this context, the Chinese automaker to develop the supply chain.  Dai Ting-yi, vice president of the China Federation of Logistics and Purchasing, delivered at the seminar on supply chains, which was found held in Nanjing Iveco Motor Co. Ltd. recently.

As a pillar industry of national economy, the development of supply chains in the automotive industry, the general development of the logistics industry. Meanwhile, the tone for supply chain management is also necessary to develop the automobile industry.

With the rapid increase in car production, which has steadily increased self-regulation error, and the market has fluctuated sharply, the supply chain is increasingly complex and logistics costs continues. Expression of Zhu Weidong, Deputy General Manager ANJI-TNT Automotive Logistics, Ltd

In the post-industrial era, human needs have changed. With the purchase of cars, consumers have additional requirements for color and configuration. Meanwhile, demand for change in increasing numbers. It is likely that consumers want a model, but today there until tomorrow. Although the extent of production of suppliers is needed is mass production and achieve stability. The opposition is producing. In such a context of investigations of companies for the supply chain will be continuously improved.

In addition to meeting changing market requirements to optimize the supply chain can also significantly reduce the production costs for manufacturers. To reduce costs, is one of the most important ways for the car to cope with competitive pressures. And more: there is a considerable scope for cost reduction in the supply of car parts. View the status quo, the percentage of self-discharge of automotive logistics company in China is very high and there is a problem of wastage of resources. It is also more storage, loading and transportation of automotive components and parts to obtain, thus increasing the cost of additional supply. In China, the list of components and car parts are twisted, 2 to 3 times a year, well below the average level of 10 to 20 times per year in Western countries.


Today, most of the supply chain, we are only a point like that, instead of the whole book. It is quite normal at each end.  Zhou Liang, general manager of Nanjing Iveco Motor Co. Ltd said that car manufacturers have more space for the supply chain to discover that it has a higher trended, raw materials and components and down the service and the client, through the chain value.

It is also the need for industrial growth in the supply chain through the integration of suppliers and reduce the chain at both ends of the section.  This is a great trend for the merger, acquisition and integration of the constituent companies. In the future, what car manufacturers need more than 0.5 provider category (see suppliers of modules or systems of superior quality), for example, makes assembly suppliers, what they offer not only the engines, transmissions and rear axles, but also to incorporate this way and play with the food chain.  Expression of Zhou Liang.

In fact, only beaten by  weight  of the supply chain, stepped Nanjing Iveco Motor Co. Ltd. as an explicit development. In 2009, broke sales of products of Nanjing Iveco 87.000 records with margin growth of over 25 percent. Warranty Corporation of all funds increased 89.7 percent in 2007 to 98.8 percent in 2009, and the cycle of program acquisition 9 days 5 days and greater shipping capacity has also declined significantly improved.

The year 2010 is the first year of Nanjing Iveco new  five-year plan to implement, and aims to sell 100,000 records from the morning when the vehicle is proposed. For the new goal of achieving supply chain management remains an important link and innegligible.  We will develop a few large suppliers with full force his hand and make a great working relationship based on merit and the integration of supplier.  Zhou Liang stressed that the scope of cooperation is not only good food but also joint and parallel development , prices and so on. What you should do is go to the simplification of the flow between the two parties to resource allocation and maximize the realization of profit. Understanding how even, Nanjing Iveco has 609 suppliers, and is consistent with the goal of integration, in the year 2012 will be 609 to 407 suppliers integrated with those of integration ultimately represented 33.17 percent.

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