How To Tackle The Complexities of China’s Supply Chain?

Root Causes of China’s Supply Chain Complexity 

High Customer Expectations. 

Supply chain complexity can arise from various factors. One of the most prominent causes is the constantly changing customer expectations. 

Customers always expect fast deliveries. To meet the demands, we need an efficient supply chain. E-commerce has strengthened the pressure on businesses to optimize operations and adapt strategies to meet clients’ expectations.

Network complexity

Network complexity is another factor that makes the supply chain more complex. As the network expands with more nodes and links, it becomes increasingly complex and intricate. 

Additionally, companies rely on external suppliers for goods and services. These suppliers, in turn, depend on other suppliers, creating an extended network that companies may need more visibility of. When there is a lack of transparency in the supply chain, it may lead to unexpected disruptions. 

Process Complexity 

Every supply chain model of an organization has numerous processes, both internal to the firm and managed by upstream and downstream partners. It leads to complexity in China’s supply chain.

Product complexity can arise due to many components or subassemblies or a lack of commonality across Bills of Material for different products. The Bill of Material level affects product mix and volume flexibility.

Vast Supplier Base Complexity

The complexity of suppliers arises from having a vast supplier base, which can increase supply chain complexity by adding to the number of relationships that require management and increasing the total transaction costs. Managing inventory across multiple parties can also be complicated, and obsolete inventory can adversely affect profitability. Nowadays, suppliers, partners, and manufacturers work on a checklist, making it essential to have real-time visibility and control over the entire partner network to avoid the “bull-whip effect” of rising, unused merchandise across the web.

The above factors can cause a lack of integration with China’s supply chain, leading to poor coordination, data discrepancies, and limited information sharing. The absence of these elements can majorly impact business operations, resulting in lower performance, increased costs, difficulty in managing supplier relationships, and higher risks.

Supply chain operations are becoming increasingly complex, which poses a significant challenge for supply chain leaders. Managing different complexities related to operating models, such as equipment, product design, business models, and partners, requires much effort and expertise. The Chinese supply chain industry will likely experience mounting pressure as manufacturing and fulfillment complexities increase. The traditional approach of reducing the long tail of product SKUs is no longer a viable or profitable option to limit supply chain complexity. To stay competitive, businesses can adopt advanced technology-customized solutions and incorporate digital supply chain management.

How to Tackle China’s Supplier Chain Complexities?

Here are a few strategies that we have identified to handle China’s supply chain complexity:

Supply chain visibility

Greater visibility creates resilience through process optimization. Companies can plan better and develop effective solutions with a well-implemented digital supply chain.

Forwarding planning

Businesses can ensure their supply meets demand by engaging in demand planning and forecasting. Demand planning technology can analyze real-time data and market conditions to anticipate needs. It’s a good idea to share demand forecasts with critical suppliers to help them prepare in advance.

Standardized methods of operation

Standardizing the supply chain operations can help businesses create integrated procedures that improve employee and company productivity and eliminate unnecessary steps from the supply chain.

Real-time inventory management

Real-time inventory management creates visibility with up-to-the-minute data, optimizes delivery, and minimizes disruptions. It also offers seamless flexibility and scalability in the long term.

Automation

Automating existing supply chain procedures reduces supply chain complexity. Automation can be incorporated in all operational areas, from automated accounting to an automated warehouse. It saves time and costs, helps track orders, and allows making inquiries across multiple supply channels.

Data analysis improves supply chain efficiency, reducing time and resource waste.

Digital Manufacturing 

Digital Manufacturing simplifies China’s Supply Chains. Here’s the effective procedure.

– Submit parts for a quote online 24/7.

– Get a design for manufacturing feedback within hours.

– Enjoy short lead times and no minimum order quantities.

– Minimize communication with the team to streamline the process.

– Transfer online purchase requests to buyers with just one click.

– Check online for order statuses and updates.

– Reduced pricing at low volumes due to less human labor required.

Digital manufacturing has unique advantages, which enhance transparency and accelerate the process from RFQ to part delivery.

Conclusion

Tackling the complexities of China’s supply chain can be a challenging task. However, using the above strategies to manage your suppliers in China will decrease the risks and maximize opportunities for successful business. At Enze, we offer customized meetings to discuss how digital manufacturing can help your business. This approach enables addressing challenges and identifying opportunities for digital manufacturing impact across departments and supply chains. Contact us if you have any questions.