A look at the supply chain issues, strategies, and technologies in play in China, from the perspective of foreign multinationals as well as Chinese companies.

By Leo Yeung; courtesy of Line56

Sourcing, manufacturing and distributing in China are becoming facts of life for an increasing number of manufacturing-based multinational companies (MNCs). It is, however, difficult for MNCs to understand how supply chain integration can be achieved in China given that country's different political, economic and cultural environment. As such, it will be useful if we can take a more inside-out perspective in examining supply chain integration in China.

Today, supply chain integration cannot be a success if it is detached from e-Commerce & B2B technologies. China is no exception. As such, to understand supply chain integration, one has to start from knowing the B2B e-Commerce environment in China.

There are a few interesting questions about B2B e-Commerce & Supply Chain Integration in China including the following which this article would like to address:

What is the government's role in driving B2B e-Commerce and Supply Chain Integration?

Why overseas Supply Chain Integration Solution may not work in China?

What technology is used in China for Supply Chain Integration?

What is the government's role in driving B2B e-Commerce and Supply Chain Integration?

The government's role in driving B2B e-Commerce and Supply Chain Integration can be perceived in 3 areas including legislative, directive, and supportive.

The government's legislative role can be seen in the passing of the appropriate legislation to create an environment for Supply Chain Integration technologies. The Digital Signature Law in China, officially passed effective April 1, 2005, is one good example. Similar to the Digital Signature & Electronic Authentication Law (SEAL) passed in US in 1998, this law makes the Digital Signature as legally binding as a signature and company stamp.

This is a major milestone in the development of e-Commerce in China. It also marks the takeup of supply chain digitization for the legitimacy for digital signed electronic messages.

As far as the directive role is concerned, the government is taking steps to speed up the adoption of e-Commerce technologies in supply chain integration.

An example is the release of a document by the State Council in January 2005 named "Suggestions to expedite the development of e-Commerce." The document called for the expediting of e-Commerce adoption in China by means of improving public policies and regulations; credit services; digital certification; standardization; online payment & settlement; and modern logistics.

Since then the respective government departments as well as public organizations and industry associations are working aggressively in organizing awareness/education activities or implementation projects to drive adoption of e-Commerce technologies in enterprises for supply chain and logistics integration.

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