Spinning And Weaving Industry: Optimizing Supply Chain, Laughing At High Cost

In the eyes of Sun Ruizhe, vice president of the China Textile Industry Association, there are two phenomena in the new normal development of China's textile industry. It is worth paying special attention: first, the advantage of factor cost is gradually diluted, and the two is that the polarization of industry is gradually intensifying.

This means that the original advantages can no longer rely on them.

With the popular popular language, the 2011 Fourth Global Conference on textile and apparel supply chain has been "overflowing".

On the morning of July 22nd, the meeting arrived at the meeting of Keqiao, Shaoxing, Zhejiang. The enthusiasm of the participants was really shocking.

Fortunately, the organizer arranged ahead of time, and the reporter found a place. He looked around and stood listening to the delegates.

So what is the situation that makes the topic of supply chain so popular?

Sun Ruizhe summed up the current macro environment with "new normal" and "new contradictions".

What is the new normal for the textile and garment industry? "The first is uncertainty, and the second is certainty."

Sun Ruizhe said.

The uncertain factors are mainly policies, including the instability of monetary policy and the ups and downs of policy orientation, which will bring deep harm to the industry.

The identified factors represent the irreversible age of high cost, the polarization of industries, and the upgrading of industrial concentration.

In Sun Ruizhe's speech, the monetary tightening policy trend PK the urgent need to release the consumer demand (domestic market), the overall cost increase PK "cost-effective" fashion consumption mode (export market), the upstream BTS mode PK downstream BTO mode, constitutes the three new contradictions in the current industrial development.

Specifically, it is the tight monetary policy of the state that directly causes loans and investment difficulties. However, expanding domestic demand has become the main theme of industrial development during the "12th Five-Year" period.

During the "11th Five-Year" period, China's per capita fiber consumption is about 18 kilograms, while the "12th Five-Year" period will reach 22 kilograms. The blowout of consumer demand has an internal conflict with the inhibitory effect caused by tight monetary policy. It is necessary for the policy to grasp the timetable and appropriate intensity between the adjustment of industrial structure and the growth of industrial economy.

The second contradiction is taking the US market as an example. In 1995~2010, due to the decline in the cost of pnational purchase, the consumer price index of clothing decreased by 12.4%, while all consumer goods such as food, medicine and energy all showed an increasing trend during the same period.

Corresponding to the statistics of 2008.1-2011.5, the price index of imports from the United States has increased by 17.46%, while the growth rate of clothing imports from the United States has also seen a significant year-on-year decline.

From the entire export data, in 2011 1~5 months, China's textile and clothing export prices increased by 21.49%, the volume increased by only 3.88%, the growth rate dropped 12.52 percentage points from the same period last year.

This implied a signal: the "cost performance fashion" of rational consumption has become the mainstream. Whether the market is willing to pay for the price rise is the premise that the way of life can not be completely overturned.

However, despite the pressure of rising costs, Sun Ruizhe's view that the comparative advantage of China's textile and clothing will remain for a long time.

The third contradiction is that the upstream production mode represented by cotton is a typical BTS Build (To Stock), that is, the planned production mode, which affects the downstream prices through the supply manipulation of raw materials.

Textile and clothing brands mostly use the typical BTO Build (To Order), that is, the order production mode, directly facing the terminal consumer demand, which needs quick response to orders, and there are also many uncertainties.

The conflict between "slow cycle" and "fast fashion", between BTS and BTO, will lead to distortion of information pmission in supply chain, leading to price upside down of upstream and downstream products.

This new era context urges the whole supply chain to actively develop innovative management mode.

Meanwhile, manufacturers and brands who are caught up in high cost and shrinking orders are also looking forward to finding Noah's Ark through the harmony and health of the supply chain.

Competitiveness of modern supply chain

Times change everything, suppliers, manufacturers, distributors, retailers, logistics networks, consumers, and the supply chain thus formed.

In the view of Du Yuzhou, President of China Textile Industry Association, the supply chain is a two-way and interactive chain, and buyers, retailers and service providers are not independent.

Suppliers are chosen as objects, which are downstream choices for upstream, and discourse power is often reflected in the needs of consumers.

The choice of the supplier as the main body is the choice of the upstream to the downstream, which is generally expressed by the price, and the right of discourse creates a new consumption object and mode of consumption.

Du Yuzhou believes that three of the external factors that affect the composition of the supply chain can not be ignored.

First, technological factors, the technological revolution not only changes the mode of production, but also changes the way of consumption.

Under modern technology, the supply chain can be extended to the whole world, and can also be shortened to the consumers themselves.

Technological progress is the foundation of modern supply chain.

Second, globalization.

Globalization has created many possibilities for supply chain creation, and it also represents a variety of risks.

In the globalized economy, the supply chain has been constantly adjusted, which has changed the market competition pattern.

Based on this, the principle of comparative advantage will become an indispensable factor in the modern supply chain network.

Therefore, in the era of globalization and technological progress, our opportunity lies in the promotion of comparative advantage, rather than stopping in simple processing.

Third, cultural factors.

Cultural changes directly affect the composition and management of the supply chain.

Nowadays, people's values are more important to sustainability, which is first reflected in the harmonious coexistence of man and nature. This also makes cleanliness and safety a connecting principle of supply chain.

In addition, people also pay more attention to the sustainability of industrial structure, so the brand culture has changed from the pursuit of maximizing profit to the creation of brand value of four in one: quality, innovation, rapid response and social responsibility.

Together with several factors, Du Yuzhou's definition of the competitiveness of modern supply chain is, first of all, the power of science, followed by the power of cooperation, and finally embodies the principle of truth, goodness, beauty and people-oriented.

New measures of supply chain optimization

According to the three elements mentioned by Du Yuzhou, what new attempts have been made to optimize and manage the supply chain in order to cope with the current industry situation?

In order to ensure the comparative advantage in the supply chain, Sun Ruizhe introduced three new measures of supplier selection and Optimization in the globalization pattern.

Move one: the soft digestion of hard cost.

According to the latest Accenture survey of 2011, the hard cost problems, including raw materials, logistics, pportation and labor, remain the primary factors that restrict supplier selection and product price rise.

Based on this, through the technological research and development of alternative raw materials and the targeted use of financial instruments, we gradually realize the decentralization and reduction of cost risk.

Step two: make suppliers brand.

Sun Ruizhe pointed out that this will become an important measure to cope with the high cost era.

In the planning direction of industry development, the brand is divided into industrial manufacturing brand and terminal sales brand; the "100, 000, 000 projects" cultivated by independent brand also incorporate the upstream brand into the cultivation area, so as to change the situation of the imbalance between the upstream and downstream brands and create an advantageous environment for manufacturing suppliers to "brand".

Initiative three: Supply Chain Integration Innovation under resource integration.

In Sun Ruizhe's view, the thinking of integrated innovation is first reflected in improving the applicability of quality standards in the whole industrial chain, and changing the standard conflict between the upstream and downstream enterprises of the textile and garment industry.

The specific operation is to encourage suppliers to participate in the joint development of new products in the early stage of product design, jointly predict the terminal consumer demand, save development costs, establish the mechanism of information sharing and information support, realize the EDI and RFID system RFID of electronic data interchange, achieve inventory information sharing, sales information sharing, demand forecast information sharing, order status information sharing and production planning information sharing.

In terms of green management of supply chain, Sun Ruizhe said that the China Textile Industry Association launched the CS9000T social responsibility management system, which is divided into three parts: labor relations harmony, environmental harmony and supply chain harmony.

In June 28th, 16 enterprises with the core position in the supply chain jointly issued the annual report on social responsibility.

Dialogue between upstream and downstream of supply chain

As a textile and garment industry cluster, there are also textile inspection equipment, dyestuff manufacturers, and fashion brands' participation conference. There is a dialogue between the upstream and downstream of the supply chain. What kind of suppliers do I want to cooperate with and what can I provide for the downstream? Paul, President of Huntsman textile dyeing and finishing division, said: "Huntsman is a global manufacturer and marketer of differentiated chemicals.

By 2030, the gross domestic product of China, India, Brazil and South Africa will account for 30% of the world's gross domestic product, while they will consume 43% of the world's water resources.

It is estimated that there will be a 40% water supply gap in the next 20 years.

In view of the fact that the textile industry is the second largest water intensive industry in the world, we must cooperate at all stages of the production chain to jointly develop and adopt innovative technologies to provide real solutions. "

Zhou Rusheng, director of Construction Management Committee of China Textile City, "the key to supply chain optimization is textile production, sales, information pmission and service.

China Textile City as the world's largest textile professional market, through the accumulation of textile products, the textile industry authority information agencies to improve public support services, and gradually formed a traditional market shops, modern business city, textile business services in one of the modern professional market.

During the '12th Five-Year' period, we will strive to become the core of the global textile and apparel supply chain through the linkage of visible and invisible markets and the linkage between domestic and international markets.

Chou Ying, Minister of Industry Department of Zhejiang Ya Ying Clothing Co., Ltd., said: "we do women's clothing brand, more products.

The characteristics of our purchase are small batch, multiple varieties and fast delivery.

In the supply chain, the problem we encounter is that because of the small amount of procurement, it is more demanding and difficult to choose suppliers.

Second, because of high quality requirements, customers have high expectations for us, and the added value of products is high.

Third, the fabrics we use are relatively new, and the basic materials have not been put into the market in large scale, so we have to choose them first. In this way, the quality control of the products has become a key link.

The supply chain is more realistic and critical to us.

We do not regard suppliers as trading relationships, but as business partners, relying on each other and developing together. "