China’s Businesses Start Down the Path of Recovery from Covid-19
Short-term headwinds
Two priorities to grow out of the crisis
Cost reduction
Define clear targets using a today-forward, future-back perspective. Cost-reduction plans with clear targets and specific measures are more likely to deliver the expected results. Leaders formulate a plan to improve current operations while developing future productivity targets and long-term strategy.
Focus on best in class vs. best in cost. Instead of cutting costs indiscriminately, successful companies adapt the cuts to their strategy. They invest in low-cost capabilities, but also build a competitive advantage to fuel sustainable growth.
Supply chain optimization
Align supply chain objectives with business strategy. Supply chain managers typically balance three competing priorities: improving efficiency (cost, lead time and inventory turnover, for example); reducing supply risk; and enhancing customer satisfaction. To make the right trade-offs, leaders review their medium- to long-term business strategies and focus on the factors that sharpen their competitive edge, such as speed to market, supply security, pricing or innovation. Setting strategic priorities guides future supply chain objectives and the overall supply network’s design, as well as daily supply chain operations.
Adopt a global perspective. A global supply network—including suppliers, manufacturing sites, logistics and warehousing—helps lower costs and spread risks across regions. Companies can reconfigure their manufacturing footprint by moving production to lower-cost regions such as inland China or parts of Southeast Asia. To improve supply security for core components, leaders are developing alternative suppliers and sites in other countries. They also are cultivating strategic suppliers for key technologies to avoid potential disruption from international trade disputes.
Embrace digitalization. Digital tools give managers a comprehensive view of their internal and external supply chain and provide real-time performance feedback. In addition, leaders make sure the digital platform is linked to the operating model and includes a mechanism that can rapidly engage senior executives for decisions on critical issues at the right moment.
Kelly Liu
Head of Bain's Performance Improvement practice in Greater China
Kevin Ye
Principal
关键词
企业
of the
贝战疫情
in China
supply chains
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