Supply Chain Is The Life-Saving Straw For Footwear Export Enterprises?

Since July 21, 2005, China began to implement a regulated floating exchange rate system based on market supply and demand and reference to a basket of currencies. Since then, the exchange rate of RMB against the US dollar has reached a new high, and the appreciation rate has gradually accelerated.

In April 10th this year, the RMB exchange rate between the RMB and the US dollar in the inter-bank foreign exchange market was the first "breaking 7" - 1 yuan against 6.992 yuan.

Domestic enterprises relying on exports will have to face a test of "severe winter".

How can we survive the severe winter?

Is migrating like migratory birds - adjusting direction or hibernating like some animals - compressing the scale of production, or is there any better way?

Should exporters rely solely on the look of exchange rate?

The "exchange rate gate": exporters are reluctant to live up to RMB appreciation. The most direct impact on export oriented industries is the relative increase in export prices, which means that the competitiveness of Chinese products in foreign countries has declined, and the price advantage is the real vitality of "made in China".

In addition, the exporters will suffer the loss of foreign exchange when the export income is converted into RMB, and the losses caused by the decrease in export volume.

At the same time, the appreciation of the renminbi will lead to the increase of labor costs and other production costs, so the short-term impact on industries with large dependence on export trade will be inevitable.

The export industries in China mainly have traditional labor intensive industries, such as textile, clothing, household appliances, chemical industry, electronic machinery manufacturing industry, among which the textile and garment industry is the most affected.

China's textile and garment industry has a dependency ratio of about 50%, and the added value is low, mainly based on price competition means, export price elasticity is relatively low, and the price reduction space is very small.

Therefore, the appreciation of RMB will greatly weaken the price competitiveness of China's textile and apparel products in the international market.

According to the relevant research, the profit rate of cotton textile, wool textile and garment industry will drop by 3.19%, 2.27% and 6.18%, respectively, for each appreciation of 1%.

If the RMB appreciation is 3%, it may erase the average profit level of the domestic textile and garment industry.

China's textile exports account for about 20% of total exports, and its position in foreign trade is very important.

The appliance industry, communications equipment, computers and other electronic equipment manufacturing industries are also the worst hit households for the appreciation of the renminbi.

Chinese household appliances have gained relative comparative advantages in the international market at low cost, and exports have become an important force in stimulating the growth of household appliances industry. Therefore, the export growth situation is of great significance to the overall growth of household appliances industry.

It is estimated that RMB appreciation of 1% will result in the loss of 4% of household electrical appliances export profits, and the growth rate of the total output value of household appliances will drop by 1.5 percentage points.

In 2004, the export dependency ratio of China's communications equipment, computers and other electronic equipment manufacturing industry reached 60.1%. Although they shared the benefits of RMB appreciation due to the decline in the cost of imported raw materials and machinery and equipment, the negative impact will be obvious because of the high dependence on exports.

It is estimated that the appreciation of the RMB will be 1%, and the loss of the export of communications equipment, computers and other electronic equipment manufacturing industries will exceed US $1 billion, and the growth of total industrial output value will drop by 2 percentage points.

In addition, China's toys, timber, furniture, and manufacturing of cultural, educational and sporting goods, instruments and meters, cultural and office supplies, machinery manufacturing, leather shoes, fur, feather (velvet) and its products, bicycle manufacturing, furniture manufacturing, container and metal container manufacturing industries will also be affected by the appreciation of the renminbi. These products are mainly labor-intensive products, and the export growth rate of these industries will slow down in the short run, and the profit level will decline.

If the RMB continues to appreciate or appreciate too much, then the marginal negative effect caused by the appreciation will expand.

More frightening, at present, most people on the market for this year's appreciation of the RMB against the U.S. dollar is expected to be around 10%.

Supply chain: Lang Xianping, a famous economist of export enterprises, says that the logistics supply chain has promoted the world. This is the general trend of twenty-first Century.

Today's competition is no longer dominated by the manufacturing industry. Supply chain competition has become the core content of modern enterprise competition. The real competition is not the competition between enterprises and enterprises, but the competition between supply chain and supply chain.

The comprehensive analysis shows that in a whole supply chain system of a commodity, the cost of non production has exceeded 80%.

Among them, the logistics cost of goods accounted for more than 40%, and time cost accounted for more than 90% of the entire supply chain.

Without doubt, China is already a big manufacturing country, but a small supply chain.

China's export oriented enterprises are mostly manufacturing enterprises.

With the upgrading of market competition, the cost reduction of most export oriented enterprises has almost reached the limit, and the increase in sales is also difficult to break through. The optimization and refinement of the logistics supply chain has become a new way for enterprises.

More importantly, the optimization and refinement of logistics supply chain is not only a topic related to efficiency and cost. For those companies who want to speed up their market reaction and better meet customer needs, choosing the right supply chain means choosing a new opportunity to take off.

For many enterprises, this is a matter of life and death.

As the RMB dollar exchange rate continues to rise, China's export oriented enterprises need to see clearly that the problem is that although the global manufacturing center has shifted to China, "made in China" has moved to the world, under the background of the global supply chain, China's export oriented enterprises are facing the situation of no progress or retreat. Whether they can occupy the world market in the long run and establish a comprehensive, perfect, effective and fast modern logistics system is the top priority.

Supply chain Informatization: how to establish a comprehensive, perfect, effective and fast modern logistics system?

Shen Guokang, chairman and chief executive of China's largest supply chain management software supplier, Boko information, believes that the informationization of logistics supply chain is the most effective way to establish a modern logistics system.

Using information technology throughout the logistics supply chain system is just like establishing a smooth highway between enterprises and suppliers, distributors and customers. It can reduce the time between each step and compress the time to zero.

Especially for export-oriented enterprises, the effective integration of all nodes in the industrial chain is of great significance for information sharing and risk sharing.

Supply chain management will actively create value for enterprises and enhance their core competitiveness.

According to the survey, effective supply chain management can improve product quality, reduce production cost, shorten delivery time and reduce inventory, and then integrate their own resources, optimize enterprise configuration and improve enterprise profits.

With the intensification of market competition, in order to enhance their competitiveness, modern enterprises have been gradually expanding their industries, business scale, and strengthening their services, and have gradually shifted from saving external expenses to optimizing internal structure and controlling internal costs.

The key to establishing the competitive advantage of enterprises should turn from the "first profit source" of saving raw materials and the "second profit source" of improving labor productivity, and turn to the "third profit source" of efficient supply chain system.