As the COVID-19 pandemic continues to affect the global supply chain, China’s leading corporates in the sector are carefully balancing their efficiency and safety to ensure operations continue smoothly, senior executives and experts said.
Zou Yin, CEO of SF Supply Chain, the co-branded supply chain business of SF Holding Co Ltd and Deutsche Post DHL Group in China, said the greatest challenge is the sector’s recent shift in focus from pursuit of maximum efficiency over the past decade to making safety the top priority in operations.
SF Holding Co Ltd generated 5.29 billion yuan ($829 million) in revenue from its supply chain business in the first half of this year, up 74 percent year-on-year, with its SF Supply Chain contributing more than 80 percent.
“Regardless of the impact of COVID-19, our business is among of the fastest-growing business units of SF Holding,” Zou said.
The high growth rate was achieved amid various challenges to global trade and supply chains in the past few years.
Zou said that after the outbreak of the pandemic, the real economy, manufacturing and production all witnessed unprecedented difficulties.
In the changed situation, risk control became increasingly important. According to Zhu Jia, managing director of Bain Capital Private Equity, the pandemic let many nations reconsider supply chain safety, and change their cost-focused mindset to one centered on safety control.
“As a result, whenever a node of the supply chain encountered problems, the capability of supply chain providers to solve the problem with other resources would enable the supply chain to circulate smoothly,” Zou said, calling the impact of the pandemic a revolution. The trend toward improvement would not fade away in the coming five to 10 years, he said.
SF Supply Chain’s solution has consistent focus on safety. Through new technology and stable service, the supply chain company has constantly promoted the development of its six core capabilities: distribution, aftermarket, transformation of channel supply chain, enterprise supply chain, digitalization management platform and efforts to reverse the negative impact.
National social logistics total value rose 10.5 percent year-on-year to 261.8 trillion yuan in the first 10 months this year, and the logistics demand still grew 0.5 percentage point from September, bucking the trend of the pandemic and problems in global supply chains, according to data published by the China Federation of Logistics & Purchasing.
The pandemic has forced the global supply chain to improve itself, especially in China, and the resilience of Chinese supply chain has also continuously improved, said Cai Jin, vice-president of the federation.
“The rapid development of digitalization has helped the supply chain sector to innovate and upgrade,” said Cai.
“The transformation to digitalization and smart operations is the greatest advancement SF Supply Chain has achieved in the past three years. With that, we can serve our customers with higher efficiency and more flexible solutions,” Zou said.
Since 2019, SF Supply Chain has poured several hundreds million yuan every year into digitalization and smart operations, which led to a rollout of about 100 digital products per year, Zou said.
One of the latest examples is the robotic process automation, or RPA, center established in Shenzhen, Guangdong province, early this year.