Supply Chain Management in China by alicejenny

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									Supply Chain Management in
          China
                   Erick Li
     Department of Management Sciences
        City University of Hong Kong
  Presented to Cyber Transportation Logistics
                 Conference
              SCM in
Paradigms              Summary   Q&A
              China

Three-stage
   view


 Three-flow
    view
   Paradigms of Supply Chain
• Two major paradigms of SCM
  – Three-stage view
    • Procurement, conversion, and distribution
  – Three-flow view
    • Financial, information, and product flows
                SCM in
Paradigms                       Summary   Q&A
                China

Three-stage   Financial flows
   view

               Information
 Three-flow       flows
    view
              Product flows
 Supply Chain Management in China
• Financial flows
  – Domestic
    • Cash transactions are still very common.
    • Banking services are improving.
    • But firms have the tendency to pay as late as
      possible.
       – Slow A/R turnover.
    • Very limited credit-rating services
 Supply Chain Management in China
• Financial flows
  – International
     • CNY is not freely convertible.
        – Department of foreign currency regulation
        – Underground banks
        – Payment process hampers financial flows, eventually
          slows down product flows.
     • Increasing demand for better payment solutions
       and supplier/buyer certification agents.
 Supply Chain Management in China
• Information flows
  – IT infrastructure is weak
     • ERP or SAP are pricey.
     • Decision Support Systems are rarely adopted.
  – Employees prefer to use Chinese in
    communications
     • Use phone, fax, not email.
     • Seal business deals over dinner tables or in golf
       courses
 Supply Chain Management in China
• Information flows
  – Intellectual Property protection is weak
     • Forged brands
     • High staff turnover reduces investment in on-job
       training
     • However, Hong Kong has restrictive laws and
       regulations on Intellectual Property protection and
       can server as a knowledge hub.
 Supply Chain Management in China
• Information flows
  – Low level of trust among supply chain
    partners hamper information sharing.
    • Win-lose perspective when dealing with suppliers
    • Low level of visibility over inventory and demand
    • Lack of process standardization and data
      transparency
 Supply Chain Management in China
• Product flows
  – Domestic logistic providers
    • Major role is to complement International logistic
      providers.
       – Licenses limit the areas where a logistic provider can
         provide services.
       – Small truck fleets, no Distribution Center, service quality
         varies from firm to firm.
 Supply Chain Management in China
• Product flows
  – International logistic providers
     • Most of them are state-owned.
     • Rely on domestic logistic providers to transport
       goods inland.
     • More foreign investors come in this sector.
 Supply Chain Management in China
• Product flows
  – Infrastructures
     • Electricity and energy shortage
     • Sea ports
        – HK seaport faces strong competitions from mainland
          ports.
     • Airports
        – HK airport edges mainland competitors on International
          connectivity.
 Supply Chain Management in China
• Product flows
  – Infrastructures
     • Roads
        – Subpar, fragmented, but growing networks.
     • Rivers
        – Congestions in some areas caused by
           » Height limitation of bridges
           » Small inland ports and high demands
           » Drought
 Supply Chain Management in China
• Product flows
  – Distribution channels are inefficient,
    fragmented, and costly.
     • No national distributors but a plethora of small and
       medium-sized local wholesalers.
     • Too many nodes in supply networks.
                SCM in
Paradigms                        Summary           Q&A
                China

Three-stage   Financial flows
   view                         • Regulation
                                • Infrastructure
               Information      • HR factors
 Three-flow       flows
    view
              Product flows
                        Summary
• Regulations
  – Business Licenses
  – Currency
  – Environmental
    protection
     • Closed loop supply
       chain
  – Labor laws
     • Firms in coastline
       close and move
       inland
                  Summary
• Infrastructures
  – Subpar transportation networks
    • Recent ice storm looms many problems
  – Almost non-existed e-Commerce capability
                 Summary
• Human Resources
 – Not attractive to college graduates
 – Weak professional identity
 – Problematic performance measures and
   incentives
 – Low awareness of the benefits of scientific
   supply chain planning and execution
Thank You!
  Questions?

								
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