Collaboration and Optimization of Equipment Manufacturing Supply Chain of Liaoni

Abstract. Based on current development status of equipment manufacturing industry in Liaoning， this paper introduces characteristics and advantages of the supply chain of equipment manufacturing industry， also points out that appearing issues on the supply chain， and discusses the upgrading of supply chain management of equipment manufacturing and enhancement of port logistics services to achieve coordination and optimization of equipment manufacturing supply chain in Liaoning.

Keywords： Equipment manufacturing， supply chain， collaboration and optimization.

0. Introduction

Equipment manufacturing， also known as the equipment industry， mainly refers to the capital goods industry， is a collectively name for a variety of techniques and equipment manufacturing industries to meet needs of various sectors of the national economy and national security. It does not only involve machinery industry， but also materials， electronics and mechanical parts processing and other related industries. Equipment manufacturing industry is the material basis of the national economy， is one of leading industries to accelerate industrialization and modernization， and is a manifestation of the comprehensive national strength and national competitiveness. Equipment manufacturing supply chain refers to suppliers， manufacturers， distributors and end customers in the industry value chain， who finally through a strategic partnership jointly cope with rapidly changing market environment to achieve synergies and integration operation and to gain new competitive strategy of competitive advantage.

1. Characteristics of equipment manufacturing supply chain in Liaoning

Because of the length of equipment manufacturing industry chain， its upstream and downstream should interact with many types of data on producing design， planning， producing resources， organizing and others. Because of large volumes of data types and complex structure， only highly depending on integrated supply chain management can achieve agility manufacturing. Equipment manufacturing enterprises in the supply chain is a combination of pull-type （production orders） and push-type （predictive product）. As High degree of social labor division among enterprises and bad collaborative manufacturing ability， equipment manufacturing enterprises production plan should be extended to parts suppliers to achieve through the supply chain management.

Equipment manufacturing industry supply chain is shorter， generally do not exist multi-level distributors， and other products out of standard flow directly from the manufacturers logistics service providers to end-users. Equipment manufacturer suppliers and customers may also have their own supply chain.

2. Advantages of Equipment Manufacturing Supply Chain of Liaoning

With the development of economic globalization， by means of improving product quality and reducing inventor to improve manufacturing competitiveness， it is gradually replaced by a reasonable supply chain management. From manufacturing enterprises using of supply chain management， host companies do not only improve the production capacity， accelerate the cash flow to， reduce logistics costs， but also achieve a lean manufacturing； parts suppliers and supporting also get more benefits from the implementation of supply chain management optimization.

Initial stage of establishment and implementation of equipment manufacturing supply chain can cost about 25 % of operating costs， but it can bring a huge profit margins. For example， in the TV industry， for a company with profit margin only from 3% to 4%， as long as the 5% reduction in supply chain cost， profits of the enterprise can be doubled. The fact shows that， after the implementation of supply chain management of equipment manufacturing enterprise， total management costs can be reduced by more than 10%.

Currently world’s leading manufacturing companies widen enterprises business not only by expanding the plant or add equipment， but seeking partners in the worldwide. With the change in resources and links of supply chain， the supply chain management of core equipment manufacturing enterprise will become increasingly complex. We must have comprehensive integration capabilities， and gradually realize the optimization of supply chain management.

3. Issues faced by equipment manufacturing supply chain of Liaoning

Currently although Liaoning has become one of the biggest manufacturing equipment industry province， but is still mainly occupied by rough processing and is in the lower end of the value chain showing characteristics of high-value and low-margin. One important reason is the slow development of the manufacturing supply chain does not have enough support for upgrading the manufacturing sector. To this end， the crucial period of economic transition and structural change， how to effectively combine the upgrading of equipment manufacturing industry and integration of supply chain resources to promote innovation of organization way of equipment manufacturing and industry supply chain and industrial structure have urgent and important practical significance on promoting economic growth in Liaoning Province.

Based on above issues， this paper， based on perspective of the upgraded equipment manufacturing， conducts a preliminary research on collaboration and optimization of supply chain of equipment manufacturing industry in Liaoning Province to promote the development of equipment manufacturing industry in Liaoning Province.

4. Synergy and optimization of supply chain of equipment manufacturing industry in Liaoning

4.1 Targeted management optimization of supply chain

At present， the domestic large-scale equipment manufacturing enterprises， especially private and private， have been advancing in the supply chain management in the course of ten years of rapid development， but just a minority of which truly formed efficient supply chain management system. How to improve business performance and optimize supply chain management are questions that should be considered by core manufacturing enterprises to get new competitive advantages.

4.1.1 Relying on competitive enterprises to build a core supply chain system

Equipment manufacturing products tend to be more complex， involving multi-disciplinary， and multi- processing type. And its supply chain has great difference from retail industry. Under normal circumstances， the structures of the supply chain are made by all joined node enterprises， consisting of a core business as the leading OEMs. In the manufacturing process， logistics subcontractors flows from leading companies， and then flows to customers； capital flow flows from leading enterprises， and then flows to subcontractors.

Currently， in the background of the country 's environment policy， that is， revitalization of the equipment manufacturing industry， we can rely on uniformed equipment manufacturing industry， shipbuilding industry， locomotive industry， petrochemical industry， telecommunications equipment industry and other industries to establish a modern enterprise supply chain systems taking enterprises endowed with competitive advantage of products or core technology advantage. For example， companies with core technology as the core， to enhance the competitive advantage of the product， form a research-based end supply chain system by combining upstream suppliers and downstream customers. Each node company conducts professional investment in the supply chain assets. Core technology leading companies， products component suppliers and end users collaboratively conduct development and creation across enterprises through exchange of personnel. The relationship between the core businesses and upstream and downstream enterprises is not in interest competitive relationship， but in partnership. Not at the expense of suppliers’ interest， core business should achieve win-win situation as the ultimate goal， and ultimately achieve maximization of profits of the whole supply chain.

4.1.2 Optimizing the manufacturing supply chain on the strengthen of VMI mode

Inventory management is a big problem in supply chain management costs of equipment manufacturing. With the development of the logistics industry， there is a management model close to zero inventories， that is， VMI inventory management. VMI （Vendor Managed Inventory） is a way to optimize the supply chain by shared the suppliers’ customers’ inventory data to maintain an inventory level needed by customers. Dozens of large and small warehouses distribute in Shanghai Volkswagen plant of Jiading district within 2.5km. The vast majority of public warehouse are not owned by SAICl， but belong to a number of parts suppliers of SAIC- Volkswagen. The production of parts needed by Shanghai Volkswagen is stored inside the warehouse. Vehicle manufacturers require the necessary materials they need must be reached in time and in the right quantity and perfect quality to achieve “zero inventory”， which is just the application of VMI management mode. In the equipment manufacturing supply chain management， through the application of VMI mode， the upstream supplier’s side manage inventory for the downstream demand-side， effectively reduce demand deposits， and even achieve zero inventory. Suppliers hold the work of replenishing commitments； meanwhile bear the responsibility for timely delivery of goods. It can control the advance date of order， and understand the buyer’s inventory information， which can not only reduce their inventory levels， but also respond effectively to needs of the exception by information-sharing with buyers and frequent replenishment to avoid the library pressure. VMI pattern seems to be a pattern that liquidity of supplier is occupied by the manufacturer， but it protects production planning of manufacturing supply chain in transparency and high degree of coordination， and also save a lot of time to for suppliers； suppliers have a supply chain collaboration agreement at the loss of logistics costs to enhance the viability and competitiveness of the entire supply chain. VMI is an efficient supply chain management model， and with its wide range of applications， will promote the development of China’s equipment manufacturing industry.

4.1.3 Outsourcing of enterprise supply chain management services to promote the coordinated development of industrial clusters

Equipment manufacturing supply chain gathered specialized related industries in clusters. In addition to the upstream manufacturing industry， it covers the areas of trade， information， research and development， finance， etc.， and almost all involved tertiary industries. Supply chain outsourcing providers through the integrated operation of funding flow， business flow， logistics， information flow participate in the customer's business， information， logistics and other rings， improve customer efficiency or reduce logistics costs for customers， and by providing value-added services sharing revenue with customers. Supply chain outsourcing providers based on the source of supply chain integrate social resources by supply chain management technology platform and the ability to optimize the design， It undertakes outsourcing of non-core businesses of equipment manufacturing enterprises （such as logistics outsourcing， business process package， fund settlement outsourcing， and IT outsourcing）， which turns numbers of equipment manufacturers supply chain management services link from the original multiple outsourcing company commitments to unite completion of its own. One-stop service provided by outsourcing supply chain management services can subtract a business unit of many SMEs. One of common characteristics of most small businesses is the lack of funds. And equipment manufacturing makes use of optimized management techniques of supply chain business to help them out of financial difficulties. Logistics and supply chain outsourcing provider by regarding financial services as the breakthrough point， penetrate ideas of supply chain management services to corporate chain； based on sales forecasts needs of enterprises， it helps them execute its distribution business to downstream customers， including business execution， logistics execution， funds settlement execution and information processing execution； with supply chain management technology platform， by combining a number of similar joint enterprise demanding raw materials， it reduces purchasing price of customers acquisition through centralized purchasing. Meanwhile， supply chain enterprises integrate logistics resources to achieve the high efficiency use of logistics resources enabling logistics outsourcing companies in this industry chain to achieve a win-win situation. Construction of outsourcing mode of this enterprise supply chain management can enhance the competitive ability of the equipment manufacturing industry and achieve profit sharing of each company in the supply chain.

4.2 Integration of port logistics service to upgrade supply chain relationship

4.2.1 Connotation and characteristics of supply chain resources integration based on port logistics services

The so-called resource-based integration of supply chain of port logistics services refers to enterprise regarding port as the core services effectively integrate all kinds of logistics suppliers and customers as well as relevant government oversight agencies into a single entity. Through using of the port as a important logistics center， we integrate logistics escort， inventory management， order processing， and packaging and processing operations to achieve a smooth convergence， and through the collection and distribution network， we distribute quickly and correctly product from manufacturer to the final customers.

4.2.2 Multi-level dynamic integration.

In general， the integration of port resources includes the following three forms. First， the "point" integration： integration of ports with other ports， various inland depots in the hinterland， logistics companies and others； second， the " channel" Integration： integration of ports with other ports on the same transport channel， various inland depots in the hinterland and logistics enterprises； third， the " regional " integration： integration of ports and other ports in the hinterland regions， inland depots and logistics companies and so on. Of the three forms of integration， "point to point” Integration is primary integration； “channel” Integration is intermediate integration； “regional” integration is advanced integration. Three integration forms are not in isolation， but in interrelation， interaction and in the process cycle of causal relationships， among which the relationship between primary or secondary integration is to promote levels by levels， which lays a more solid foundation for advanced integration and a more adequate material conditions.

4.3 Implementation Guidelines based on resource integration of port logistics Service supply chain

Based on analysis of equipment manufacturing resources and services cost， port enterprises should establish strategic partnership with related equipment manufacturing enterprise and conduct comprehensive management to improve service quality.

On the one hand， they should strengthen cooperation with shipping companies， third-party logistics companies and railways， road transport sector in order to improve the collection and distribution system， and effectively achieve convergence between the various modes of transport. On the other hand， they should strengthen co-operation with customs and other port units to continually improve the customs environment， to improve efficiency and to create a good environment for the entire logistics process.

In addition to building a public information platform of port logistics service facing their downstream customers， they should establish a public information platform of port logistics service supply chain combined by equipment manufacturing and port logistics information management as soon as possible to achieve the integration of interactive "two chain".

In addition to providing services such as global logistics services consulting， distribution processing， customs clearance and other personalized value-added logistics services for the equipment manufacturing industry， port logistics services should be involved in production and operations of the manufacturing sector to continually encourage customers to generate new demand.

5. Conclusions

Faced with fierce market competition， equipment manufacturing enterprises should look at supply chain issues at a strategic height of enhancing independent innovation capability and initiatively adapting to new competitive environment. They should implement optimization and synergies of the chain links from the supplier’s suppliers， vendors， businesses， customers to customers’ clients to promote coordinating commercial operation of all members of the supply chain. Construction and management of the supply chain has been raised by many international companies to a strategic level. World-class manufacturers can not be achieved without a world -class supply chain. With the deepening of economic globalization， China is not only the world’s manufacturing center， but will be a global logistics hub. From this point of view， the implementation of supply chain coordination and optimization is imperative to accelerate the development of China’s equipment manufacturing industry.

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