By Zhang Ya

Martin Christopher, a famous British economist, has once said that, "The true competition takes place not between companies but between supply chains." In occidental countries, the logistics cost of automakers occupies 8 percent of the sales revenue; in Japan, this proportion is 5 percent; while in China, this proportion is often above 15 percent. In China, the value of supply chains is still omitted by lots of auto enterprises.

In 2009, driven by policies and measures issued by the government, both output and sales volume of autos in China have exceeded 10 million sets, entering the new stage from big to power. "In such a background, China's auto industry shall contribute more to developing the supply chain." Dai Dingyi, Vice Chairman of China Federation of Logistics & Purchasing, expressed at the seminar about supply chains, which was held in Nanjing Iveco Motor Company Ltd recently.

As a pillar industry of national economy, the development of supply chains of auto industry concerns the overall development of logistics in the industry. Meanwhile, sound management on the supply chain is also needed to develop the auto industry.

"With the rapidly increased auto output, the continuously increased auto type configuration, as well as the greatly fluctuated market, the supply chain has become more complex and the cost of logistics is also increasing persistently." expressed by Zhu Weidong, Vice General Manager of ANJI-TNT Automobile Logistics Co., Ltd.

In the post-industrial era, people's demands have become more diversified. When buying autos, consumers have extra demands on color and configuration. Meantime, the demand itself has also been changing increasingly. It's likely that a consumer wants an auto type today but gives it up tomorrow. While as far as the production of suppliers, what is requested is to realize mass production and stability. Thus the contradiction will produce. In such a background, requests of enterprises on the supply chain will also be increased continuously.

Besides answering the variation of market demands, the optimization of the supply chain can also effectively reduce the production cost of automakers. To reduce cost is one of the important manners for the auto industry to face competition. Further more, there is a huge space to cut down on the cost of logistics of auto components and parts. Viewing from the status-quo, the auto-unloaded rate of China's auto logistics enterprises is very high, and there is a problem of resource waste. What's more, it will take too more time in storage, loading and transport of auto components and parts, therefore driving the cost of logistics to rise further. In China, the inventory of components and parts of autos is only rotated 2 to 3 times per year, which is far lower than the average level of 10 to 20 times per year in occidental countries.

"How to reduce the cost of logistics for components and parts effectively on the basis of guaranteeing high quality, fast speed, low energy consumption and strong responding ability will greatly help automakers in completely reducing the cost of whole cars and improving the competence of products in the market." Huang Weizhong, the principal of Jiangyin Alpal.S Auto Part Co., Ltd, pointed out, "Trying to innovate in logistics and facing the market with low-cost logistics have become a main method for auto component-and-part manufacturers to improve their competitive strength."

"At present, most of the supply chains that we're talking about are only one tache thereof, rather than the complete one. It is far enough in spreading to the two ends." Zhou Liang, General Manager of Nanjing Iveco Motor Company Ltd., believed that automakers shall discover more space on the supply chain, stretching it upward to the raw material of components and parts and downward to the after service and clients, so as to run through the entire value chain.

It is also the need of developing the industry to shorten the supply chain by integrating suppliers as well as to stretch the chain to the both ends. "It is a big trend to merge, acquire and integrate component enterprises. In the future, what the automakers need more is 0.5-class suppliers (refers to those suppliers with higher-level modules or systems), for example, the power assembly suppliers, what they supply does not only include motors but also gear boxes and rear axle so as to integrate and match with the power chain." expressed by Zhou Liang.

In fact, just through the "weight loose" to links of the supply chain, Nanjing Iveco Motor Company Ltd. entered the express track of development. In 2009, the sales volume of products of Nanjing Iveco broke through 87,000 sets with the growth margin of more than 25 percent. Enterprises' guarantee rate of resources was elevated from 89.7 percent in 2007 to 98.8 percent in 2009, and the cycle of purchasing plan was reduced from 9 days to 5 days, additionally, the dispatching ability was also improved greatly.

The year of 2010 is the first year for Nanjing Iveco to implement the new "Five-year Plan", and a target of selling morn than 100,000 sets of vehicle has been put forward. To realize the new target, the management on supply chain is still an important and innegligible link. "We shall develop few super suppliers with obvious comprehensive strength and establish super cooperation relationship on the basis of optimizing and integrating suppliers." Zhou Liang pointed out that the content of cooperation does not only include good supply, but also include joint and parallel development, pricing and so on. What shall be done is to strive for simplifying the flow between both parties, making resources shared and realizing the maximized profit. As understood, for the moment, Nanjing Iveco has 609 component suppliers, and according to the target of integration, before 2012, the 609 suppliers will be integrated to 407 ones finally with the integration proportion of 33.17 percent.