Challenges Of Global Supply Chain Of Tianhong Textile

The twenty-ninth annual conference of the international garment Federation (IAF) was held in Kunshan, Shanghai at the end of September. Spin Experts gathered to discuss the solution of the two challenges facing the Chinese mainland in response to the reduction in foreign demand and the increase in production costs.

Hong Tianzhu, chairman of the China Tianhong textile company, said in the meeting that "in addition to moving some of the production out of the mainland, it is also a challenge for mainland companies to upgrade factories and processes, forcing our companies to change and upgrade, because this is the only way to survive and create new situations. The mainland industry has been crawling along the low end market for many years, resulting in overcapacity. A great deal of waste of natural resources. The company, which is also listed in Shanghai and listed in Hongkong, is the largest cotton spinning core spun yarn in the world. cloth One of the suppliers of garments.

The conference was organised jointly by IAF and CCCT, a 12000 member Chinese textile import and Export Association. The conference elaborated the problems faced by the Chinese textile industry. Jiang Hui, President of CCCT, pointed out that "according to the statistics of the chamber of Commerce, the total export value of textiles and garments in mainland China in 2012 was $254 billion 900 million, an increase of 2.8% over the 2011 US $247 billion 900 million, which is a bad year in mainland China.

He acknowledges that many of the US and EU brand purchase orders have been transferred to the fact of lower cost countries such as Bangladesh, Vietnam and India, and that these countries will have great growth in attracting orders over the next five years, according to the McKinsey management consultancy study.

The theme of the conference is "how to create value in the global fashion supply chain"? Many leading executives in mainland China say they understand that exporting to a mature market is no longer an absolutely important source of revenue for the company, but rather that domestic markets and exports to emerging markets such as Russia, central eastern and ASEAN (ASEAN) countries are also important.

Tianhong textile's global investment

The shift in sales focus is the key to the gradual shift of the production line from mainland China. For example, it plans to invest four hundred million yuan (US $63 million 100 thousand) to build a spinning mill in Uruguay. The first stage is scheduled to be completed in 2014 with an annual output of 20 thousand tons. Hong Tianzhu said at the conference that setting up factories in Uruguay will not only allow the company to avoid paying anti-dumping duties imposed on the mainland's export products by major markets, but also help to quickly change the demand for fast fashion American retail businesses.

In addition, Tianhong also shifted its focus to chemical fiber yarns to balance the risk of price fluctuations due to the purchase of cotton and cotton processing. At the same time, we will invest 180 million US dollars to set up factories in Turkey, producing 16 thousand tons of cotton core spun yarn and blended yarn annually for European customers. For Vietnam, which has already entered the company in 2006, Tianhong will invest 2 billion 500 million US dollars to build an industrial area on the Sino Vietnamese border. The case will be launched by the end of 2013. The high precision supply chain management system and wastewater treatment facilities will be built in the area. The investment target is to transfer the production line to the mainland manufacturers in Vietnam.

Tianhong's key niche in Vietnam is the output of Vietnam's support for the trans Pacific Partnership Agreement (TPP), which can be exported to the relevant TPP member states including Japan. Hong Tianzhu predicts that many mainland Chinese enterprises will make significant investments abroad in the next few years.

Challenge of supply chain

The strategy of investment and production by Chinese mainland enterprises in Vietnam and other places can make them enjoy substantial benefits, but it also brings great challenges to the company's operation. In fact, it is indispensable for a company to succeed in its business and to set up a fast response, specific and precise global supply chain, and its importance is important for mainland China enterprises to internationalize.

Cloud-basedSCMtechnology, deputy director KurtCavano of Oakland GTNexus company, specializes in cloud supply chain management technology (KurtCavano), emphasizing that SCM is a new way of thinking from the viewpoint of network. Whether you look for orders from Africa or other foreign countries and see the complexity of the supply chain, you know that you really have to deal with a whole group of partners. This is a fundamental change from the traditional insidethecompany and internalthinking.

Breaking the barriers between the internal and external thinking, bringing together the retailers and suppliers can save the company up to 3% of the cost, which can be achieved by cloud computing system. The cloud creates networks for partners, enabling everyone to receive messages in real time, just like Facebook (Facebook). The traditional old method is that a retailer should liaison with many different suppliers, including raw material suppliers, factory owners, financial institutions, logistics companies and inspection companies. Everyone needs to know the relevant information at the same time.

Some enterprises have benefited from the cloud SCM. For example, Guess, a fashion retailer in the US, has been actively expanding its global business to bring pressure to its suppliers. However, because of the cloud SCM system, Guess can see the manufacturing process and shipment information in real time, so that the products can be delivered and the company can pay the manufacturers. Cavano emphasizes, "the new SCM system will make you no longer squeeze profits from your partners, but will enable them to grow stronger and do better services for you".