The New Planned Economy Is Coming: Is It Ready?

The so-called "new planned economy" era, that is, all production will be carried out in accordance with consumer demand. Every product in the future will know its consumers before production and know what the standard of this product is.

The competition between manufacturers is no longer price, but who can be the first to receive the needs of consumers, and to achieve the precise degree of consumer demand.

At this point, there will be no inventory, there will be no vicious competition, the industry is further fragmented, the new supply relationship is taking shape.

On November 2015, at the meeting of the central financial and economic leading group, President Xi Jinping put forward five simple words of "supply side reform". Many people still did not realize the weight of these five words. The signals they revealed were very significant, indicating that the top level economic judgment and governance ideas had been adjusted.

At present, the supply and demand of consumer goods in China is facing a structural imbalance that can not be ignored.

"Dislocation of supply and demand" has become the biggest obstacle to China's sustained economic growth.

Excess capacity has become a big constraint on China's economic pformation.

Overcapacity will occupy a large amount of resources, making human, capital, land and other costs remain high, which restricts the development of new economy.

Xi Jinping's original words are: "while expanding the total demand moderately, we should focus on strengthening the structural reform of the supply side, and strive to improve the quality and efficiency of the supply system."

The supply side reform should start with production and supply side.

The widespread existence of zombie enterprises has become a vampire in the national economy. On the one hand, the supply of traditional low-end consumer goods is seriously oversupplied, such as clothes, shoes, cap and toys can not be digested and prices continue to decline. On the other hand, the supply of high-quality consumer goods is insufficient, and Chinese residents are sweeping away from the sea, toilet closets also go to Japan to buy.

What is the underlying logic behind this?

There are two main activities in the economy: production and consumption.

When production and consumption complement each other and complement each other, the whole society will move forward and the economy will grow healthier.

On the contrary, when the production and consumption are out of line, one side can not keep up with the other side, there will be stagnation growth, that is, the economic crisis is coming.

First, looking at the development of China, we have experienced two stages: planned economy and market economy.

In the planned economy stage, we implement "production according to plan and consumption according to plan". At this time, there will never be an economic crisis. But because everything is planned, all of us have no enthusiasm for production and the level of economic development is too low.

In the stage of market economy, we execute production according to our wishes and distribute according to profits. At this time, because the power of "production" is open, if a product is needed, someone will "produce" and will not be restricted, so that the producers of the same product will have competition.

Moreover, in order to pursue profits, producers continue to expand production. When the quantity of products exceeds the consumption demand, the products will be surplus.

According to China's development path, when we are highly productive, we will enter the Communist stage, when all production is orderly, there will be no surplus of products, and there will be distribution according to needs. That is to say, you can give anything you need.

So how did this ideal come true?

Let's take a look at the first stage of on-demand distribution: Production on demand.

The so-called on-demand production is actually the product of China's post market economy era, and we will gradually enter this stage.

In the traditional mode of production, products are calculated by producers, and consumers only need to decide whether to buy or not to buy according to their needs.

And the innovation of production technology represented by Internet + and industrial 4 has caused a great liberation of "consumption relationship". The future consumption relationship is: what consumers need, what producers have to produce, this is a reverse production process.

The supply relationship of the whole society was destroyed and rebuilt.

Internet development to a certain stage, will inevitably go deep into the manufacturing industry and the Internet of high integration, the birth of C2F (customer to factory, referred to as guest factory) mode.

This is also the essence of the industry 4. Industry 4 will realize the interconnection of factories, consumers, products and information data in the future, and ultimately realize the interconnection of all things, so as to reconstruct the production mode of the whole society.

That is, the use of the Internet of things, big data and mobile Internet means that the factory can achieve customized production (on-demand production), thereby implementing the integration from consumer demand - factory manufacturing - follow-up services.

In the past, the growth of China's economy depended mainly on government investment.

That is to say, expanding production is a push.

At this time, the focus of China's economic supply chain lies in the producer and the backend.

In the future, China's economic growth must rely on people's consumption to stimulate people to "spend".

At this time, the supply chain of China's economy is focused on consumers and front-end.

Therefore, the supply relationship of China's economy has also undergone a great reversal.

At the same time, our production, marketing, channels and profit models have changed. That is to say, the traditional consumption theory and experience have all failed. The next thirty years are huge opportunities made in China. The pformation of China's future manufacturing industry is not the manufacture of today's simple meaning. Future manufacturing must be based on demand and customization, and is the creation of wisdom.

For example, when will the production and production of Haier refrigerators meet the demand in the future?

From the "three carriages" to the "supply side reform", this change of discourse outlines the evolution of China's economy, and the proportion of consumption in the national economy is bigger and bigger, and the demand for supply side is higher and higher. Under the pressure of pressure, the effect of "supply side reform" is directly related to the smooth landing of China's economic pformation.

China will also enter the era of "new planned economy", that is, all production will be carried out according to consumer demand, and every product in the future will be aware of it before production.

Who is it and knows what the standard of this product is.

The competition between manufacturers is no longer price, but who can be the first to receive the needs of consumers, and to achieve the precise degree of consumer demand.

At this point, there will be no inventory, there will be no vicious competition, the industry is further fragmented, the new supply relationship is taking shape.

The C2F mode is the integration of B2C mall and mobile social networking. It is an integrated production and marketing mode that is directly communicated by brands and users through the Internet and technology.

Now most factories are produced according to the requirements of distributors, and they do not understand, statistics and integrate the needs of consumers.

At this time, the process of consumer demand, design, production and sales service is separated. The production is based on production and not knowing the needs of consumers.

Trade and sales do not engage in production, which can not meet the requirements of consumers' small batch and individuation.

It is inevitable that inventory and pressure will be generated on the basis of products predicted by retailers. Inventory and pressure is a black hole that devours profits and is also a stumbling block for commodity prices.

Pressure and inventory are natural enemies of profits. The retail price of Chinese retail goods is often 5 times the cost. The retail price of spectacles, jewellery and luxury goods is often a hundred times the cost. Such a huge price difference is caused by the level of inventory, pressure increase and terminal retail cost.

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They will only design products according to their own public needs, and will not care about the individual needs of small groups, because the manufacturing industry will rely on the volume scale to win. The larger the volume, the lower the cost of mold opening.

It is one of the cores of C2F to get rid of the intermediate links of sellers and directly face the final customers. Manufacturers can sell products directly to the final consumers by establishing a mall, while gradually increasing the volume of trading in the market, and gradually eliminating trade marketing intermediaries, no longer holding the sales terminals by sellers.

Of course, powerful and visionary sellers are fighting back. They sell terminal products through self built mall, improve consumer shopping experience through big data and Internet of things, and then export their demand data to manufacturers. At the same time, manufacturers have to get consumers' needs through their stores. In fact, a large number of subdivision industry stores have been built in recent years.

If we say that the past ten years belong to the Internet companies, and the next ten years belong to the traditional enterprises that have successfully pformed, the traditional enterprises will have fission and reconstruction because of the Internet, bringing about innovation.

Consumption data determine what the factory produces, not what the factory produces and what the consumer decides.