The Analysis on Logistics Finance Business Implementation of Wire mesh Industry

Abstract. Taking the Anping wire mesh industry for example, the paper analyzed the necessary and the ways for anping wire mesh industry to take the logistic finance, and hope give the way to the development of anping wire mesh industry.

Key words: wire mesh, logistics, logistics finance.

With the development of modern logistics industry, logistics services will extend to the upstream and downstream. As a new idea, the logistics finance has gone beyond the simple service contact form of financial industry and logistics enterprises, which has the stimulative effect on boosting the liquid assets of enterprises; accelerating the circulation of commodities and capital turnover cycle; communicating the business and bank credit so that the credit can be full flowed between the commodity market and financial market; promoting the change from the traditional logistics enterprises to modern logistics enterprises, therefore, the research on logistics finance is very necessary for the development of logistics enterprises.

1. The theory of the logistics finance

Internationally, the most comprehensive theory of logistics finance came into being North America. As early as in 1916,《 US Warehousing Act of 1916》 was promulgated at USA, which established a set of system rules about the pledge of warehouse. Friedman, Albert, Eisenstadt, Raymand and Dunham studied on legal atmosphere, business model, storage mode and monitoring method and process of the inventory financing business and accounts receivable financing business, which both are included in the logistics finance business. Barnett and Biederman have studied on the present situation and development trend of the logistics finance. Buzacott and Zhang have quantitatively studied on the way of determination of some important indicators in the logistics finance business and the influence of logistics finance business risk.

The research on logistics finance is relatively late in china. The research on logistics finance was started from material bank, the pledge of warehouse and bonded warehouse business. Luo Qi and Zhu Daoli (2002)who are from the school of management of Fudan University first proposed the concept and operation mode of logistics enterprises financing storehouse service , Ren Wenchao(1998) discussed the material bank concept to solve the problem of Triangular debts in logistics enterprise . Zou Xiaopeng, Tang Yuanqi (2004) who both are from the school of economics, Zhejiang University, gave a comprehensive explanation on the concept of logistics finance, they think the logistics finance is that facing the operation process of the logistics industry, the monetary fund in logistics field are effectively organized and controlled through the application and development of all kinds of financial products. In 2006, Xu Mingchuan analyzed the best selection of cooperation between banks and logistics enterprises from the perspective of game theory. In 2007, Peng Zhizhong from the Shandong University analyzed the trust mechanism of logistics finance. So far, the theory study of logistics finance is gradually mature with the continuous development of the China's logistics industry.

2. the analysis of necessity for Anping wire mesh industry developing logistics financial service

Anping County is known as "The hometown of China wire mesh", "the base of China wire mesh industry", "the base of China wire mesh production and sale". The wire mesh industry in the Anping is the characteristic leading industry and also the pillar industry. Through the years’development, taking the wire mesh industry as the basis, to open to the outside world as the main line, to consolidate and enhance the local economy through the rapid development of foreign trade, anping county is now become the characteristic wire mesh industrial cluster. However, with the advent fluctuation of the economic situation at home and abroad ,there are some problem come into being on Anping wire mesh industry. these problem mainly are the following: the rising production costs which is due to the continuous appreciation of the RMB and domestic inflation pressure, gradually weakened the competitiveness of wire mesh enterprise in Anping; the corporate image and brand building both are not in place; although the government introduced the policy to support small and medium enterprises, the problem of financing for enterprises can not be solved due to the defect of the policy implementation and the some reality problem from the small and medium enterprises, etc .. In general, the current key element which restrict of the development of anping wire mesh industry is the financing. Therefore, in order to promote the healthy and steady development of anping wire mesh industry, it’s necessary to carry out carry out the logistics financial business.

First of all, implementing the logistics finance business can create the cooperation opportunity for the wire mesh enterprises, logistics enterprises and bank, and same time, create new profit. Although the Anping wire mesh industry has a long history, small and medium enterprises is still the main supporting force. Therefore, the poor human resource and the capital resources become the main defect of these enterprises. Facing the fierce market competition, it’s very necessary for Anping wire mesh industry to implement the logistics finance business through integrating wire mesh enterprises, logistics enterprises and the banks. Secondly, implementing the logistics finance business is also an effective way to enhance the competitiveness of the parties. the main competitive means for wire mesh enterprises is price. Today, facing the increasingly fierce competition , the advantage of price competition is gradually disappear. The capital is more and more important for the enterprises. So, implementing the logistics finance business can integrate the capital resources and then enhance the market competitiveness of enterprises. Finally, implementing the logistics finance business can promote anping wire mesh industry overall upgrade. For the overall industrial development, the liquid capital is became the main bottleneck for industry upgrading. The effective solution for the bottleneck is to implement logistics finance business which can promote wire mesh industry upgrading.

3. The strategic analysis for anping wire mesh industry to implement the logistics finance business

3.1 To greatly train the talents of logistics finance business

These professional talents must be known well the relevant finance business, the pledge and the wire mesh industry, can take the accurate judgment for market trend, and possess the quick thinking and strain capacity. And same time, the professional morality and the loyalty both are necessary for the talents training.

3.2 The government should make policy to coordinate and support

In order to encourage the logistics finance business, the government can make the preferential measures for the business. For example, to give a lower tax for the finance institution which provide a loan to logistics enterprises. At the same time, in order to make the logistics financial business implementing smoothly, it’s need to establish a comprehensive set of current assets evaluation system the evaluation method and the uniform assessment standards; also, to establish the pledge system and full insurance business.

3.3 Gradually building the complete enterprise credit system

Because of the lack of credit system, the finance institution can’t make the comprehensive and accurate judgment for the development of enterprises. Because the enterprises may provide the false information to finance institution, the finance institution can’t obtain the real data and then face the risk for using the fund. Therefore, the construction of enterprise credit system an be guided by the government, at same time, it’s also to establish the credit agencies in order to improve the social credit service system.

Even so, there are some problems to pay attention for anping wire mesh industry implementing the logistics finance business. First, it’s very important that how to select the appropriate business model of for anping wire mesh industry, because there are some models for the logistics finance business. secondly, thinking about the cost, it’s should take care the various service fee so that the cost can be controlled reasonably. At last, during implementing the business, risk prevention is also should pay attention to.

References

[1] Yanhui Ju. Research on the Construction of Logistics Finance Information System. [M].Management of e-Commerce and e-Government (ICMeCG), 2012 International Conference on,2012

[2] Ying Yan , Bin Suo , Yingwei Zhang, Risks Analysis of Logistics Financial Business Based on Evidential Bayesian Network,Mathematical Problems in Engineering, 2013, Vol.2013

[3] Supply Chain Finance:Risk and Evaluation[A]. Proceedings of the Conference on Web Based Business Management[C]. 2011

[4] Study on Principal-Agent Model of Logistics Finance in the Environment of Supply Chain[A]. Proceedings of 2010 IEEE International Conference on Emergency Management and Management Sciences(ICEMMS2010)[C]. 2010

[5] Research on Logistics Finance Pricing in China Based on Price Leadership[A]. Proceedings of 2010 IEEE International Conference on Emergency Management and Management Sciences(ICEMMS2010)[C]. 2010