Growing Pains Of "Light Company" PPG: Supply Chain Cycle

Light companies can omit traditional channels and stores, but can not omit too much in product quality and customer experience.

When Harry Hui, the smiling chief executive of Pepsi Cola, dressed in this summer's popular pink shirt to endorse the PPG advertisement, Internet users are crusade against PPG in numerous forums.

Most of these Crusader bought PPG shirts through telephone and Internet, but they also dissatisfied with PPG and let them out on the "light" channel of PPG, the Internet.

Li Yongjin said that PPG will take measures such as lengthening supply chain time and strengthening quality control to stabilize product quality.

"In May, there was a problem with a number of goods, which accounted for a very small proportion of the total sales volume, and our return mechanism has always been open to consumers, but to our surprise, the amplification effect of the Internet has exceeded our imagination."

Li Yongjin, PPG's COO, told reporters that PPG was responding for the first time in the face of online questioning.

In the business mode of PPG, the core is to reduce the middleman link, and control the upstream suppliers through IT technology, create a fast response supply chain, and the downstream is light asset free shop marketing mode.

But the two core iron laws of PPG today are like double-edged sword -- too fast to make it difficult to control the quality, while the light sales channel weakens the customer experience and the process of face-to-face communication between enterprises and customers.

When upstream problems occur, adverse reactions spread to the downstream as Domino dominoes. Low cost sales network also provides customers with a zero cost complaint place, and the new PPG has not built an interactive platform to communicate directly with customers at this time.

In fact, this is not PPG's exclusive worry. This is a problem that any fast developing light company needs to face.

Supply chain cycle

Perhaps it is because PPG is developing too fast: in the face of the rapidly increasing market demand, fabric suppliers neglect quality in order to catch up with time, and the shrinkage rate of customers who start to complain is too large.

"In the short term, we will increase our inventory by one or two weeks (to about 20 days). With a little more stock, we can give the upstream suppliers more room.

And we must first stabilize the quality of products, and then carefully sort out the supply chain process. "

Li Yongjin said.

In the clothing industry, the speed of the supply chain is inversely proportional to the quality of the product. We must know that 7 days' stock has always been the PPG's proud data. However, when the product quality is on the red light, PPG must balance the speed and the quality.

"In the early days of our business, our warehouse was less than 300 square meters, and the inventory was more than 20 days."

Li Liang, PPG's CEO recalls.

Now PPG's warehouse is several thousand square meters, and its stock has been reduced to 7 days. Relying on IT system, PPG has integrated an efficient supply chain. When PPG's warehouse sends out the alarm, the information is sent to the purchasing department through PPG system. The purchasing department orders the fabric manufacturer in real time according to the forecast data of the market department and the warehouse shortage. The fabric is sent to the garment processing factory directly from the fabric supplier, and the warehouse is directly pported to PPG after processing.

Stock from more than 20 days to 7 days, from 7 days to more than 20 days, PPG is experiencing painful pformation in this undulating curve.

PPG's partner SGS-CSTC Standard Technology Service Co., Ltd. has undertaken the process and quality control of PPG's garment processing suppliers.

According to Huo Zhenrong, director of textile department of SGS, told reporters that in April this year, SGS began to cooperate with PPG. At present, it provides professional inspection and testing services for 9 suppliers, as well as some technical and technical advice.

He said that the quality control of PPG involves more than 20 processes, and the international common inspection standards are adopted.

"We usually have a QC manager and two assistants in each factory."

SGS, a person in charge of PPG project, said.

As the largest third party inspection company in the world, SGS has a good reputation in the industry.

The highly effective collaborative supply chain and the credible third party quality inspection organization are all very strict. What went wrong?

Fabric quality check!

In the PPG supply chain, the fabric is purchased by the purchasing department of PPG. In order to ensure the speed and fabric quality of the supply chain, PPG always works with a fixed fabric supplier, and requests it to issue the corresponding quality inspection report.

The quality inspectors of SGS are stationed in the production plant, just monitoring the production process.

When the market demand rises sharply, the demand for raw materials and the scale of production suddenly expand, and the speed of supply chain should be maintained at the original level. Under the disposition of the original QC staff, some impractical links are beginning to expose problems.

It is worth mentioning that the fabric of PPG is directly pported from fabric suppliers to garment processing plants, instead of being pferred by PPG quality inspectors, and the problem starts here.

"PPG is growing fast, but we are still a child, and there are still many places to learn."

Li Yongjin said.

He believes that in the past year, PPG has built a fast response supply chain, and its internal process has stabilized. The bottleneck that needs to be overstepped is how to help upstream suppliers to sort out the process when the scale of enterprises expands rapidly, so that PPG and their cooperation will be more closely linked, so that they will have a stronger control over product quality and supply chain speed.

Some traditional clothing enterprises even outsource their production, but after years of running with suppliers and accumulated experience, their quality control and supply chain collaboration are more mature.

Dan Feng, chief information officer of Fujian seven wolf industrial Limited by Share Ltd, introduced seven wolves in the upper reaches of the supply chain, and the two level quality inspection process was carried out for the accessories suppliers. The first was in the stage of proofing proofing, when a small number of surface accessories were sent to the seven wolves, suppliers needed to provide relevant test reports.

The second step is to carry out large quantities of goods when they are delivered.