Reference no: EM133357147

"Haier: the miracle created by modern logistics" Case

Haier Group CEO Zhang Ruimin once talked about the reason for engaging in logistics, saying, "Logistics is very important to Haier's development, for which we spent about two and a half years on the integration and transformation of logistics. So far, we believe that logistics has played a huge role in the development of the enterprise."

According to Zhang Ruimin, "A modern enterprise without modern logistics means that there are no things to flow. Why do you say so? Because it is determined by the driving force of modern enterprise operation. What is the driving force of modern business operation? It is one: the order. If there is no order, the modern enterprise can not work. In other words, it cannot have something to flow. To achieve this order, it means to rely on the order to purchase, for the order to manufacture, for the order to sell. If you want to achieve complete sales, procurement, manufacturing to order, then the most important one to support its process is logistics. If there is no logistics, it is impossible to have a purchase order; if there is no purchase order, it means that the purchase back is inventory, because the purchase of these materials back in the end to who do not know; if there is no manufacturing order, it is the same as every day, although very busy, but in the manufacture of inventory, dry out the product is equal to increase inventory every day. Finally, there is no order sales, to say home, is to deal with inventory, because you do not know who to sell to, the only way, the only way out is to reduce prices, cut prices to deal with."

1, reshaped the business process of the enterprise, the true realization of the highest degree of market-oriented order economy

Haier modern logistics is the starting point of the order. Enterprises to order as the driving force of business operations, as the source of business processes, completely according to the order organization procurement, production, sales and other business activities. From the time of receiving the order, the synchronous process of procurement, distribution and distribution logistics begins, and the modern logistics process starts at the same time. Due to the support of logistics technology and computer management, Haier Logistics realizes the synchronized process through 3 JIT, i.e. JIT procurement, JIT distribution, and JIT distribution logistics. Such operating speed has won Haier a constant stream of orders. At present, Haier Group receives more than 200 sales orders on average every day, more than 6,000 sales orders on average every month, more than 7,000 specifications of customized products, and 150,000 kinds of materials need to be purchased. As all procurement based on orders, the procurement cycle is reduced to 3 days; all production based on orders, the production process is reduced to within a week; all distribution based on orders, products can be delivered within 8 hours from the central city, within 24 hours from the radiation area, and within 4 days nationwide. Total up, Haier complete the whole process of customer orders only 10 days time, 15 times a year back to the capital (in 1999, China's industrial enterprises working capital turnover rate of only 1.2 times a year), stagnant materials to reduce 73.8. Zhang Ruimin believes that the order is the basis for the establishment of modern logistics. If there is no order, modern logistics will have nothing to flow, it is impossible for modern enterprises to operate. No purchase order means that the purchase back is inventory; no order production, it is the same as manufacturing inventory; no order sales, it is nothing more than dealing with inventory. Seize the order, to meet the immediate consumer demand, the development of potential consumer demand, to ?reate a new consumer demand the bull's nose. But if there is no modern logistics to ensure the speed of circulation, with the order will be lost.

2, Haier modern logistics fundamentally changed the circulation of goods in the enterprise, basically to achieve the maximum capital efficiency of zero inventory

Haier has changed the traditional warehouse "reservoir" function, so that it has become a flow of "river". Haier believes that the biggest purpose of improving logistics efficiency is to achieve zero inventory, now Haier's warehouse is not a warehouse in the traditional sense, it is only a distribution center for the enterprise, which has become a temporary storage place for the next process of distribution and materials.

Before the establishment of modern logistics system, Haier occupies more than 500,000 square meters of warehouses, the cost of spending a lot. At present, Haier established two of China's largest, the highest level of automation, modernized, intelligent three-dimensional warehouse, warehouse use only 25,400 square meters. One of the warehouses located in the Haier Development Zone Industrial Park, an area of 19,200 square meters, set up 18,000 spaces to meet the needs of all raw materials and manufactured goods distribution, its storage function is equivalent to a 300,000 square meters of warehouses. This three-dimensional warehouse is networked with Haier's business flow, information flow, capital flow and work flow for synchronized data transmission, using the world's most advanced laser-guided unmanned transport vehicle system, robotics, alleyway stacker, communication sensing technology, etc. The whole warehouse is empty. The automatic stacker lifts the raw materials and manufactured goods onto the 7-story high cargo space, while the automatic shuttle carries the goods down from the space and puts them one by one on the laser-guided unmanned transporter, which orderly follows the instruction to deliver the goods to the robot again, and the robot forks up the pallet and loads the goods onto the outbound laden transporter, which drives towards the exit gate, and the process of flowing things in the warehouse ends. The entire warehouse to achieve a unified code of materials, the use of bar code technology, automatic scanning technology and standardized packaging, there is no link will make the flow of the process of obstruction.

Haier's process reengineering has transformed the business process, which used to be solid, static and rigid, into a dynamic, active and flexible business process. In 1999, before the process reengineering, Haier's sales revenue was 26.8 billion yuan, inventory capital was 1.5 billion yuan, and the occupancy rate of sales capital was 5.6. In 2000, Haier's sales revenue was 40.6 billion yuan, which was 13.8 billion yuan higher than the previous year; inventory capital was reduced to 700 million yuan, and the occupancy rate of sales capital was 1.72. 0.5 or so, when Haier will basically achieve zero inventory. In Haier the so-called inventory items, in fact, become in the flow of logistics, is constantly distributed to the next link of the "things".

3, Haier modern logistics fundamentally break the closed system of enterprise self-loop and establish a rapid response system in the market

In the face of increasingly fierce market competition, modern enterprises to occupy market share, it is necessary to meet the diverse individual needs of end consumers at the fastest speed. Therefore, Haier has established a set of rapid response system to the market. First, the establishment of online order management platform. All purchase orders are issued online, suppliers check the inventory online, and timely replenishment according to the order and inventory situation. Second, the establishment of online payment system. At present, the online payment has reached 20 of the total payment amount, and the payment accuracy and timeliness rate reaches 100, and saves nearly 10 million yuan of travel expenses. Third, the establishment of online bidding and bidding platform. Suppliers together with Haier to face the end consumers, the fastest speed, the best quality, the lowest price supply of raw materials, to improve the competitiveness of the product. Fourth, the establishment of an information exchange platform, suppliers and sellers share online information to ensure the smooth flow of business, logistics and capital. The integrated information platform forms an internal information "highway", bridges Haier with the global user resource network, global supply chain resource network and computer network, converts user information into internal information, replaces inventory with information, strengthens the ability of the entire system to execute orders, and Haier Logistics successfully uses the e-commerce system to greatly shorten the distance between Haier and end consumers. Haier has won the speed of responding to the market and expanded the market share of Haier's products. In the domestic market share, Haier color TV accounts for 10.4, refrigerator accounts for 33.4, washing machine accounts for 30.5, air conditioner accounts for 30.6, freezer accounts for 41.8. In the international market, Haier products occupy 12 of the U.S. freezer market, 30 of the refrigerator market below 200 liters, 50 of the small wine cabinet market, 10 of the European air conditioner market, 10 of the Middle East washing machine market. Haier's export volume has accounted for 30 percent of total sales.

4, Haier modern logistics fundamentally reverses the situation of enterprises to participate in the market competition with a single entity, so that through the global supply chain to participate in international competition is possible

From December 1984 to now, Haier has experienced three development strategy stages. The first stage is the brand strategy, the second stage is the diversification strategy, and the third stage is the internationalization strategy. In the third stage, the core of its strategic innovation is from Haier's internationalization to the internationalized Haier, which is the establishment of a global supply chain network, and supporting this network system is Haier's modern logistics system.

Haier has taken a series of major initiatives around the establishment of a strong global supply chain network system when carrying out process reengineering. First, optimize the supplier network. Optimize suppliers from the original 2,336 to 978, a reduction of 1,358. The second is to expand the proportion of international suppliers. At present, the proportion of international suppliers has reached 67.5, which is 20 percent higher than before the process reengineering. 44 of the world's top 500 companies have become Haier's suppliers. Third, the development of suppliers in the vicinity. Haier has established supply chain relationships with 19 international suppliers that have entered and are preparing to enter Qingdao Haier Development Zone Industrial Park. Fourth, large international suppliers are invited to participate in the front-end design of Haier's products with their high technology and new technology. At present, the proportion of suppliers participating in Haier's product design and development has been as high as 32.5. Suppliers and Haier face the end consumers together and multiply orders by creating customer value, forming a win-win strategic partnership.

While grasping upstream suppliers, Haier has also improved its consumer-oriented distribution system, establishing 42 distribution centers nationwide to distribute more than 100 varieties and more than 50,000 products to 1,550 stores and 9,000 outlets every day according to orders, forming a rapid product distribution and delivery system, spare parts distribution system and return logistics system. At the same time, Haier cooperates with the State Post Office, COSCO Group, and Hutchison Tianbai, etc., and deploys up to 16,000 vehicles in China.

Haier believes that the competition in the 21st century will not be the competition between individual enterprises, but the competition between supply chain and supply chain. Who is in the supply chain of the total cost of low, fast response to the market, who will be able to win the market. One hand grasps the user's demand, and one hand grasps the global supply chain that can meet the user's demand, which is the core competitiveness created by Haier Logistics."