Published in Issue June of 2020 of Southern Entrepreneurs
President of Liby Group Chen Zebin
The epidemic heavily impacted the supply chain of enterprises. Even so, some headed forwards bravely: quickly seeking replaceable upstream suppliers, expanding new marketing channels and selecting logistics partners according to principle of proximity……demonstrating strong toughness of the supply chain of Chinese enterprises. The epidemic turned on a certain situation nowadays. For more supply chain management experience, reporter interviewed president of Liby Group Chen Zebin.
During the epidemic, Liby Group and Cheerwin Group donated and distributed disinfection products valued 200 million Yuan to all designated hospitals across the country. It was a huge challenge for the supply chain system of Liby Group from donating disinfection products valued 200 million Yuan to distributing them to more than 2000 hospitals in 363 cities.
Challenge: Production and distribution of disinfection products valued 200 million Yuan
“Under concerted efforts of Liby people, we delivered a good report and I felt quite satisfied with how Liby Group fought the ‘epidemic’.” Chen Zebin spoke highly of Liby Group’s action to fight the epidemic.
The donated disinfection products were quickly produced and distributed to more than 2000 designated hospitals, which was unprecedented for Liby Group due to suddenness, tight schedule and heavy task.
The epidemic occurred during the Spring Festival holiday when upstream enterprises of the industry chain delayed resuming work, workers were unable to return to work, factories were unable to start work, and material supply and production became the first problem. Then, cities were closed to traffic. Besides, Liby Group mainly adopted mass multi-lot B end dealer-oriented transportation mode before, but the donated materials were small-lot, bulk and C end terminal-oriented for more than 2000 hospitals, which symbolized that Liby Group faced great transformation of logistics mode.
“We faced great challenges and difficulties then. On one hand, we should satisfy the need for disinfection products valued 200 million Yuan. On the other hand, we should deliver these products to more than 2000 designated hospitals in 363 cities as quickly as possible, which was a test for us.” Chen Zebin said.
Action: Rapid repair of the whole supply chain
On March 15, Liby Group completed distribution of all donated products 5 days prior to the time agreed with Red Cross Society of China, which was attributed to strong supply chain ability of Liby Group.
The first end of the supply chain was material purchasing. To ensure production and distribution of disinfection products valued 200 million Yuan, supply of raw and auxiliary materials must be guaranteed. However, raw and auxiliary materials were in short supply because some suppliers could not start work as scheduled. The Purchasing Management Department started to follow up work resumption situation of suppliers and seek and develop new suppliers from January 27. For example, Liby Group quickly developed 14 new 20kg large barrel suppliers to ensure supply of packaging.
Based on adequate supply of raw and auxiliary materials, rapid production became another difficulty. Delay in work resumption and 14-day quarantine……posed a great challenge on production. How to ensure productivity? For one thing, branches and subsidiaries qualified for production resumed work as soon as possible. For another, Liby Group actively communicated with the government and applied for a license of 3 companies on the condition that only 2 factories had the production license of 84 Disinfectant. Meanwhile, a series of capacity improvement plans was developed to improve capacity. Liby Group adopted many measures to raise the capacity of disinfectant from 165t/day to 375t/day within a short time.
In the hurdle race, Liby Group overcame the difficulties in material supply, production and packaging and finally attempted to deliver the products to more than 2000 designated hospitals across the country. Nevertheless, logistics distribution was hindered. Except distribution standard and whole-process tracking such as in-transit tracking and vehicle arrival tracking, the Logistics Management Department communicated with local governments about handling a traffic permit and offering convenience to traffic control. According to statistics, Liby Group delivers disinfection products valued 200 million Yuan using 1000 vehicles and 1000 drivers with a load distance of about 4000,000km and delivery fee up to 10 million Yuan.
Liby Group completed the task from material supply, production, processing, packaging, transportation to delivery to designated hospitals of disinfection products valued 200 million Yuan in advance and succeeded in repairing the supply chain.
Advantage: Perspective layout of digitalization construction
Liby Group’s quick and accurate repair of the supply chain could not be separated from digitalization construction.
“Supply chain 3.0 strategy carries on 3.0 strategy of Liby Group, energizes internal and external partners based on channels and supply chain superiorities and realizes comprehensive digitalization and sustainable development when the business model changes from traditional manufacturing enterprise to platform-based enterprise.” Chen Zebin introduced.
In such a supply chain, Liby Group has the shield to resist the risk. First, supply chain ad business were based on business objectives (delivery period, cost and quality) and customer satisfaction and accurately solved the problems of products, delivery time, delivery method, delivery place and commitment. Second, continuously arrange global resources, plan suppliers and logistics route in advance and prevent and avoid potential business continuity risks. Third, establish low-cost, large-scale, reciprocal and win-win partnership with raw material manufacturers on the upstream of the supply chain, strategic partnership in logistics management and supply chain finance with logistics enterprises such as port, railway and sea transportation and financial institutions such as bank on the midstream of the supply chain, and customer cooperation relations in stable supply and individualized service with terminals on the downstream of the supply chain.
The supply chain repair diagram of Liby Group showed a perspective layout of a Chinese enterprise and “responsibility” of a Chinese enterprise facing the epidemic.
Future: Ecosphere, group purchase platform and digitalization construction are the trend
The epidemic has had an impact on the supply chain and Chinese enterprises fought the epidemic one after another. However, the epidemic will be over eventually. When everything returns to normal, we will still keep reflecting on and exploring how to achieve the goal of cost and efficiency of China’s supply chain and possess the ability to cope with the risk, especially when the current business environment becomes increasingly challenging with intense resource competition and rising labor cost, supply chain is of greater importance for sustainable development of enterprise.
Chen Zebin thought, “In future, technological innovation, big data, artificial intelligence, digitalization, Internet of Things and industrial 4.0 will accelerate change of new supply chain, new manufacturing and new management. Liby should build a digital, automatic, function module platform-based, end-to-end integrated supply chain service platform, because supply chain realizes a whole-process synergetic organization form from product design, production and marketing to service with customer need as the guide, quality and efficiency improvement as the goal and resource integration as the means. Supply chain will develop from chain to net and ecology.”
Mentioning future development tendency of supply chain of Chinese enterprises, Chen Zebin considered, Chinese enterprises should integrate and optimize the whole supply chain in three aspects. First, form an ecosphere. Namely, gradually develop an ecosphere within suppliers included, facilitate with ability enhancement of suppliers, form a mutually dependent and symbiotic ecological system and a virtuous circle and help enterprises realize strategic development goals faster in order to elevate supply ability and level of the whole industry. Second, build an acquisition platform and a transaction platform of bulk commodities and basic materials, serve middle and small-sized enterprises and reduce purchasing cost. Third, carry out digitalization construction, build supply chain digital scenes covering order, plan, purchasing, production, logistics and service to satisfy consumer needs quickly, ensure, visualization, interconnection, efficiency and synergism of process, build digital business model and realize digital supply chain.
