On June 11, 2023, during the inaugural Shanghai International Carbon Neutrality Expo on Technologies, Products and Achievements, Schneider Electric's Business Value Research Institute and Tsinghua University's Institute for Global Development collaborated to publish a supply chain insight report titled "Towards Exceptional Customer Centric Supply Chain - Lean, Resilient, Green and Digital." The report focuses on the present state and challenges of supply chain management within Chinese enterprises, consolidates successful practices from industry leaders, and offers goals and guidance for enterprises to attain a first-rate supply chain.
BAI Chong-En, dean of the School of Economics and Management at Tsinghua University (Tsinghua SEM) and executive dean of Tsinghua University's Institute for Global Development; MA Hong, professor at Tsinghua SEM; Tony XIONG, senior vice-president and head of Strategy and Business Development of Schneider Electric China, and dean of Schneider Electric Institute of Business Value; ZHANG Kaipeng, SVP of Global Supply Chain China, Schneider Electric ; and GU Yue, vice president, head of Marketing, China & East Asia Operations, Schneider Electric, co-dean of Schneider Electric Institute of Business Value, participated in the press conference.
BAI said the green supply chain holds significant importance in the fields due to "dual carbon" objectives and supply chain management. The government has proposed to reach peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060. As part of these efforts, it plans strict oversight of high-energy-consuming enterprises. With growing environmental awareness, customers and downstream clients within the supply chain increasingly prefer products with a low carbon footprint. Carbon emissions have become a crucial factor in ESG (Environmental, Social, and Governance) ratings. Enterprises must adopt innovative thinking and forward-looking perspectives to explore ways to achieve sustainable development goals within their supply chain management practices.
Tony XIONG said: "The essence of supply chain transformation lies in promptly fulfilling clients' requirements, which serves as one of the key factors in determining the competitiveness of enterprises. The fundamental principle of being 'client-centric' consistently directs enterprise endeavors toward achieving improved quality, shorter delivery times, and more precise services."
The report highlights four major challenges faced by Chinese enterprises in supply chain management. There challenges arise from the evolving global environment, new technological advancements, and changing demands. Firstly, there is a rise in external operational risks for enterprises. Sudden events can exacerbate supply chain fluctuations, industrial upgrades can impact traditional supply chains, and changes in customer demand can cause supply-demand imbalances in the supply chain. Secondly, internal management efficiency requires immediate improvement. The cost of establishing supply chain resilience is increasing, and as enterprises expand in scale, the complexity of supply chain operations also increases. Thirdly, there is a growing difficulty in ecosystem collaboration. Insufficient transparency and collaboration within the ecosystem pose challenges to effective collaboration among stakeholders. Lastly, there is an urgent need for green transformation. Increasing policy and market pressures call for a reduction in carbon emissions.
The report, based on research and in-depth interviews with industry-leading enterprises, uncovered the "optimal solution" for supply chain transformation in Chinese enterprises. This involves establishing a first-class supply chain collaboration centered on customers. The report also identifies four key transformation trends: lean, resilient, green, and digital. "Lean" serves as the foundation for efficient supply chain operations and acts as an internal driving force for enhancing the competitiveness of enterprises. It focuses on streamlining processes and eliminating waste to maximize efficiency. "Resilient" is crucial for ensuring stable supply chain operations. It involves transferring, reducing, and eliminating uncertain risks in business operations to maintain the continuity and reliability of the supply chain. "Green" is an integral aspect of the sustainable development of enterprises. It contributes to the stable development of the nation and society by adopting environmentally friendly practices. "Digital" plays a vital role in supply chain transformation. It leverages digital technologies to optimize operational processes, improve management levels, and enhance overall supply chain performance.
The report presents directions for constructing a first-class supply chain and delineates key areas of development within each direction. It further provides descriptions of three maturity levels for each area: "basic level," "expert level," and "leading level." The objective is to offer guidance to enterprises in establishing their supply chains, with the ultimate goal of aligning with market demands and enabling end-to-end business integration and improvement for customers, suppliers, and partners.
Schneider Electric, the organization that initiated the report, has consistently secured a position among the Global Supply Chain Top 25, as recognized by analyst firm Gartner, for eight consecutive years. Notably, in 2023, Schneider Electric attained the top ranking globally. ZHANG Kaipeng, a representative for Schneider Electric, emphasized the significance of constructing a supply chain that embodies the principles of being "lean, resilient, green, and digital." ZHANG highlighted how building such a supply chain requires a systematic approach and engineering. The foundation of this endeavor lies in adopting lean learning practices, while "digital" tools connect various stages within the supply chain, he said.
Click to download the report.
