Changing the Supply Chain in China

September 3, 2018 IN THE CATEGORY: Supply Chain

SPAR China Partner, SPAR Guangdong, has been working with Swire Beverages (Coca-Cola) to develop a trial targeted at improving efficiencies in end-to-end supply chain. The work is being carried out in line with the government ambition of modernising the country’s grocery supply chain.

The SPAR team has worked with the Chinese government, contributing to a set of standards for vehicles and handling equipment. Building on these standards, the team in Guangdong partnered with Coca-Cola to move from loose loaded deliveries to fully palletised deliveries. We’re delighted to announce that based on this work, SPAR Guangdong has been listed as a finalist in the Supply Chain Excellence Awards category of the IGD Awards.

The project is necessary as the grocery supply chain in China is changing, resulting in the need to implement solutions which are transformative for this situation. The market is facing a myriad of barriers to efficiency improvements, including a fragmented logistics market, lack of delivery vehicles and warehousing standards, rising labour costs, an emerging shortage of unskilled labour, and enabling infrastructure. The Chinese government’s focus on modernising the supply chain has enabled SPAR and Coca Cola to build on the best practice learnings of other international markets, sharing insights with the teams in China to help them identify and build a supply chain model for the future.

Over a six-month period, work was carried out on creating a supply chain process that would be more simple and efficient, with a common target of a win-win solution. A set of nine measures were outlined early on in discussions and the current process was then documented and measured to provide a clear benchmark.

The business changes were put in place and a trial to test and validate the pilot results was agreed upon and completed over a three-month period. A number of operational challenges were identified during this period with corrective actions agreed on by the teams. The clear measurements, common agreements and results modelling allowed all parties to evaluate the impacts at each stage and support the change process.

The project has helped develop new ways of working in the Chinese market, setting new standards and marking a real step change in the right direction. The SPAR team in China are actively collaborating with FMCG and local suppliers to build on the new ways of working towards a modernised supply chain system across the Chinese market.

Read more about SPAR in China

View this video about the project.

About SPAR China

SPAR was introduced to China in 2004 with the signing of the licence agreement for Shandong Province. This was followed by the addition of more partners, and now SPAR has eight partners in nine provinces: Shandong, Guangdong, Shanxi, Inner Mongolia, Beijing, Sichuan, Henan, Hebei and Yunnan.

The privately-owned retail chains licensed to operate SPAR have a cooperative relationship in line with the original SPAR mission of working together to reduce costs, maximise sales and increase profits. The SPAR China Partners, whilst part of a leading international group, maintain 100% local ownership.