Manufacturing In China Under Epidemic Situation: Danger And Opportunity In Supply Chain

Manufacturing relies on complex and complete production systems. A key area or link has a difference, and the "Butterfly Effect" is easy to appear. The epidemic has made many enterprises feel the pressure from the supply chain and let the seemingly unfamiliar word of supply chain enter the public view.

At the special summit of leaders of the group of twenty dealing with the new crown pneumonia held in March 26th, it is a common appeal of all parties to ensure the safety and stability of the global supply chain.

How important is the supply chain? What are the dangers facing the supply chain under the epidemic?

How important is the supply chain?

Cutting wires, inserting buckles, wiring, wrapping tape... Qingdao Jimo Jingxin Electronics Co., Ltd., 22 thousand square meters of production workshop, workers are busy. "We are fully committed to order, automatic tangent equipment running 24 hours." Park run theory, Minister of corporate management, has produced about 200 thousand sets of automotive wiring harness and sent them to Korea.

Automotive wiring harness is mainly used to transmit signals and power supply to various parts of chassis, engine, motor and so on. It is called the "nervous system" of automobiles. More than 30 Korean automobile harness industry chain enterprises occupy the vast majority of Shandong. Every move to resume production is related to the smooth progress of vehicle production.

Behind a garment is a chain of yarns, fabrics, accessories, trademarks and so on. The production of a car involves tens of thousands of parts. The manufacturing industry is interlinked, and each node is interlaced.

The supply chain determines the cost control. The strong supply chain network in China is not only large scale, wide variety, fast logistics, but also many suppliers can produce high-quality parts and semi-finished products at lower cost.

Supply chain also determines efficiency improvement and industrial safety.

The dis group is a well-known foreign trade garment manufacturer. Zhu Lihua, chairman of the enterprise, said that the global epidemic is spreading, and the production link of protective clothing is also fluctuating. "A lot of materials and excipients come from different suppliers, and the production of one area is blocked, which will be affected."

Many large manufacturing enterprises responsible person said that by some countries, such as terminal consumption, matching supply, many Southeast Asian enterprises are also facing the lack of orders and pressure to survive, the emergence of Matthew effect.

"The international division of labor is deepening, and the global supply chain system is expanding and intertwined." Luan group, director of the policy and Regulation Research Institute of the Sai Di Research Institute of the Ministry of industry and commerce, said that the importance of supply chain and the significance of win-win cooperation are more prominent.

Challenges and opportunities in supply chain

Market fluctuation, chain disruption, cost rise... Under the epidemic, many manufacturing enterprises feel the pressure from the supply chain.

Welded pipe was once the most anxious thing for Jiang Jinglei, general manager of Ningbo elephant blow molding Furniture Co., Ltd. Since the resumption of operation, the failure of the upstream raw material welded pipe has caused the company to get into trouble. The local government urgently contacted and screened several suppliers with annual output value of more than 15 million yuan for docking.

"Unable to control, very helpless, also very weak" is the feeling of many enterprises.

Pressure always forces enterprises to think and move forward. Under the crisis, many industries and enterprises began to reflect on the "supply chain".

More flexible enterprises can survive better. Many small and medium-sized enterprises began to make efforts to develop "Plan B", reserve alternative suppliers, and improve the industrial chain. And many large enterprises are already laying down or strengthening control over the supply chain.

Shenzhou is the largest garment processing and manufacturing enterprise in China. With the control of the whole industry chain such as yarn, digital printing and surface accessories processing, it has fully resumed production in a short time, and the order has not been affected. "We need to put the core link in the country and make an extension of manufacturing overseas." Shen Zhou International chairman Ma Jianrong said.

Industry experts believe that the epidemic will accelerate the reconstruction of global supply chain to some extent and promote the global manufacturing pattern adjustment. Seize the opportunity and enhance manufacturing competitiveness is a pressing matter of the moment.

In Luan group view, the epidemic is like a comprehensive physical examination of manufacturing industry, which can better realize what links are weak and timely fill short board, which is conducive to seize opportunities in changing circumstances.

Accelerating the development of industrial Internet to increase the integration of supply chain is also a current opportunity.

In the recent series of "new infrastructure" initiatives, the Ministry of industry and information has proposed to speed up the pilot demonstration and popularization of industrial Internet. China's industrial Internet Research Institute deputy chief engineer field believes that the aim is to promote information, technology, production capacity, order sharing, achieve precise configuration and efficient docking, thereby strengthening the supply chain coordination.

Contributing to the stability of global supply chain

China has the most complete manufacturing system in the world. Among the 500 main industrial products published by the United Nations, more than 220 of the world's largest industrial products are among the world's top suppliers, and are the center of many manufacturing global supply chains.

To a certain extent, China's supply chain is stable, and the global supply chain is stable.

The five departments of the people's Bank of China and other departments of the people's Republic of China requested that enterprises, especially small and micro enterprises, that have difficulties in development, but not in the relevant industries, should not blindly loan, break loans and suppress loans. The Ministry of finance will increase the discount support for loans guaranteed by individuals and enterprises affected by the epidemic. The Ministry of industry and Commerce has combed the core supporting small and medium enterprises of more than 7000 global industrial chains, providing accurate help for practical difficulties. Only when Foxconn resumed production together, it would coordinate and mobilize resources in nearly 20 provinces and promote the resumption of more than 60 core supporting enterprises.

The executive meeting of the State Council, which was held in March 24th, specifically put forward the plan to further enhance China's international air cargo capacity and strive to stabilize the supply chain.

At present, the average operating rate of industrial enterprises is over 95%. According to the situation of resumption and recovery of ten thousand key foreign-funded enterprises mastered by the Ministry of Commerce, as at March 12th, except for the north of the lake, the recovery rate of 60% of the key foreign-funded enterprises in the manufacturing industry reached over 70%.

Since the outbreak of the epidemic, China has been promoting industrial chain synergy and resumption of production in an orderly way, contributing to the stability of the global supply chain.

China will increase the supply of raw materials, daily necessities, epidemic prevention materials and other products to the international market, especially to ensure that enterprises and key products exported and produced in the global industrial chain have important influence. We must continue to expand and open up a series of measures to provide protection for global supply chain security.

"Risks and challenges highlight the importance of solidarity and cooperation." Zhang Weiguo, a two level researcher at the Shandong Academy of Social Sciences, said China should contribute to maintaining the stability of the global supply chain and share development opportunities for international enterprises.