Textile Industry: Is Your Supply Chain Healthy?

Business Club June 20th June 13th, several meeting rooms in the China National Textile and Apparel Association building at 12 East Chang'an Street, Beijing were almost full. One of the conference rooms was occupied by reporters waiting early. An official news that is very important to the industry as a whole is that the 2011 Global Textile and Apparel Supply Chain Conference will be held soon. For Chinese textile and apparel companies, it will be another crucial year for the supply chain health inspection season. They are eager to know There is no better supply chain management approach to maximize value, and at the same time, they will never miss any chance of finding a better partner. Sun Ruizhe, vice president of the China Textile Industry Association, arrived at the venue on time. In the face of supply chain management, which is currently a subject of controversy in academic circles, Sun Ruizhe is obviously well-prepared.

Individuals of enterprises who have more dominance From the perspective of individual enterprises, the definition of the supply chain should come from the core enterprise. It refers to the control of information flow, logistics, and capital flow. It starts with the purchase of raw materials and produces intermediate products. And the final product. Finally, the sales network sends the product to consumers. It is a functional network chain model that connects suppliers, manufacturers, distributors, retailers, and even end users.

White-collar chief Miao Hongbing once positioned his own company in the supply chain as a leading core enterprise. He believes that in the supply chain management, white-collar workers should operate according to the core enterprise rules. For example: The white-collar design is done by Italians. The white-collar fabrics are made by the French. White-collar marketing is done by global planning companies, including advertisements. Models include the use of the world's best people and the best companies. The reason why white-collar workers sell expensive clothing, he believes that because white-collar workers have a strong supply chain support.

Undoubtedly, in the point-to-point supply chain, the core enterprises have theoretically dominant power. Sun Ruizhe believes that, from a good point of view, the core companies in the supply chain are maximizing value through supply chain control. From the harsh point of view, it is easy for the interests to focus on the dominant party, and the risk is easily passed on to the other party. That is, who is strong, who can lead the supply chain, who can control the interests, while at the same time to pass risks to others. The leading party in the supply chain is generally the terminal brand. Of course, there are also some upstream companies that have become core players in the supply chain, such as DuPont, due to their core resources and technical strength. The global textile and apparel supply chain assembly, to a certain extent, tends to create a win-win balance between brand owners and suppliers.

The reporter's investigation found that this kind of win-win relationship has formed a consensus in the successful core enterprise supply chain management practice. Miao Hongbing described the win-win situation in this supply chain management as a kind of door-to-door cooperation. White-collar workers can no longer work with white-collar workers who are better than white-collar workers and better companies, nor can they be as white-collar workers in the world. Cooperation between people and companies can only benefit from supply-chain management if they are right, otherwise the established supply chain may not be healthy.

There is such a set of data for the slow cycle of industrial sectors responding to fast fashion. Generally, garment enterprises release fashion trends six months in advance. Fabric companies must release fashion trends about 12 months in advance, and yarn enterprises must release fashion trends 18 months in advance. Why? Will this be? Sun Ruizhe believes that the more upstream the industry chain, the longer the cycle it needs to organize production, and the professional term is "planned production mode." The more downstream, the higher the demand for quick response to market demand or orders. Called "Order Production Mode." He called this phenomenon the contradiction between slow cycle and fast fashion in the textile and clothing supply chain.

How to solve these contradictions, the reporter found that some companies try to control the entire supply chain. Among them, represented by Youngor's full industrial chain model. In just a few years, Youngor has created a complete industrial chain from the start of cotton cultivation to the spinning, weaving, printing and dyeing, fabrics, garment manufacturing, design, and retail sales through joint ventures or wholly-owned methods. In the words of the economist Lang Xianping, Younger is now not involved in sheep-raising, and everything else related to the apparel industry has been done.

In this regard, Younger's chief executive Li Rucheng's explanation is that the future competition is not only the competition of brands and products, but also the competition of the industrial chain and the supply chain. For some time to come, production companies are a scarce resource, especially fewer factories with R&D capabilities and rapid response capabilities.

Of course, let the industry talk about the value of the whole industry chain model in addition to the case of Youngor, there is a discussion about the supply chain management progress or regression, although no one gives the exact answer, but it is clear that Youngor does not It may be eaten on the vast textile and apparel supply chain.

So, what is a healthy supply chain model in the context of the entire industry?

Sun Ruizhe gave reporters a general analysis of the general path taken by the international textile and clothing supply chain: first, the model of the front-to-back factory, the core company's design, production, and sales; then the separation of production and retail links. Production outsourcing; and later, some brand companies to shift the design link, here is represented by Apple's social design services, of course, fast-fashion companies based mainly on buyers can also be included; then third-party quality inspection agencies Establish and so on. From this perspective, the various links in the supply chain are increasingly subdivided and increasingly specialized, and the corresponding supply chain optimization management becomes more and more important.

In the optimization of the supply chain, some companies choose to integrate resources, while some strong companies choose to control resources, Youngor is clearly the latter. Of course, the integration and optimization of the entire industry chain is undoubtedly a problem that the global textile and apparel supply chain assembly (and even the entire industry) must resolve.

Four Transitions in Global Perspective Supply Chain Management In the study of textile and clothing supply chain management, there is a very typical case of globalisation, ZARA. Although we have seen different versions of ZARA's supply chain system with a lot of data decomposition, but ZARA's supply chain management in the end is what, still only ZARA knows. What we can see is the rapid response of ZARA on a global scale. She has made fast fashion a benchmark, but more and more people think that ZARA is also likely to fall on fast fashion, especially after seven consecutive appearances. After the door incident, ZARA fans began to puzzle: What happened to ZARA? However, people at a glance have seen that: ZARA's suppliers have experienced problems.

The theme of the global textile and garment supply chain conference that will be held in Shaoxing in July happens to be: supplier selection and optimization. Fu Guangwei, deputy director of the China Textile Information Center, believes that the global textile and apparel supply chain conference aims to solve a problem in one year. This year will focus on the selection and optimization of suppliers to explore how to strengthen supplier management, through the selection of suitable suppliers, to ensure the quality of procurement, reduce procurement costs and create the company's core competitiveness. He also stressed that the future competition is the supply chain competition, and each country is part of the supply chain. Both the developed countries and the developing countries, whether they are poor or rich countries, are all in it.

Then, how to achieve a healthy and sustainable supply chain in a global context?

Sun Ruizhe believes that it is necessary to complete several transformations of supply chain management: one is from the past point-to-point supply chain management to the system-to-system, chain-to-chain management system; the second is from the relatively closed trading relationship to the open platform. The third shift is from the tangible internal quality control to the intangible sustainable development; another change is from the disorderly enterprise competition behavior to the orderly enterprise to take the initiative to undertake the social responsibility transformation.

One thing is certain: China's textile and garment enterprises have long been an indispensable part of the global textile and apparel supply chain. This may be the original intention of the global textile and apparel supply chain assembly. What will happen in the future? Perhaps we can find the answer at the conference in July.