"The United States is studying the exclusion of Russia from GPS satellite navigation systems," Russian Space Agency Director Rogozin relayed on March 19.
Under the conflict between Russia and Ukraine, the United States and other Western countries have imposed all-round sanctions on Russia, allowing the world to see the most cruel industrial chain supply chain tearing today. These also give China's supply chain a warning preview that anti-globalization is not a regional flu, but a virus that is still spreading.
China is the epicenter of this anti-globalization attack. Up to now, more than 300 Chinese technology companies, including Huawei and ZTE, have been included in the so-called "entity list" by the United States. Huawei, which has experienced five consecutive rounds of bans and suppressions, has been accurately cut off from the supply chain of many software and hardware technologies, which has caused Huawei to suffer a heavy blow in its chips, mobile phones and other businesses.
Some insiders claim that the US supply cut is about to turn four years, and Huawei's Waterloo in the supply chain of mobile phones and other aspects has made huge market space for Apple in the United States and Samsung in South Korea. Palm Chain Xiaobian believes that from the ZTE dilemma to Huawei's supply cut, in the face of the US stifling of the Technology Supply Chain to China, does China's telecom equipment supply chain need to be united to fight?
On the evening of March 8, ZTE disclosed its 2021 annual report: in 2021, ZTE achieved revenue of 114.52 billion yuan, an increase of 12.9% year-on-year; net profit of 6.81 billion yuan, an increase of 59.9% year-on-year, and deduction of non-net profit of 3.31 billion yuan, an increase of 219.2% year-on-year. Core financial metrics are all at record highs.
ZTE did not fall, the operator network business in 2021 to achieve operating income of 75.71 billion yuan, 5G base station shipments ranked second in the world, optical network revenue ranked second in the global operator market share; among which the original humble mobile phone business performed brightly, shipments increased by 60%.
Since the lifting of the ban in the United States in July 2018, ZTE has returned to the "right track" and has maintained a steady increase in performance. From 2018 to 2021, ZTE achieved positive growth in revenue, especially in the past two years, maintaining a double-digit growth rate and returning to the 100 billion mark.
ZTE's "rejuvenation" is not only the rapid acceleration of 5G infrastructure but also the awakening of independent research and development awareness. Sai Weng is not blessed to lose his horse, and what cannot be ignored is that ZTE has been sounding the alarm bell for supply chain construction for a long time...
I. Going International, ZTE Supply Chain Development "Four Steps"
ZTE has been involved in the international market since 1995, and has been implementing an internationalization strategy, which is inseparable from a sound, orderly and efficient supply chain system in the global communications market.
1. In the early days of establishment, the supply chain was decentralized and developed
Before ZTE stepped into the international market, the business scale at this time was still very small, only need simple material procurement, product production, product distribution, commodity marketing and other links, in general, it is still in the early stage of establishment, only simple, decentralized management, and did not form a complete system.
2. Internationalization route, strengthen integrated procurement
After 1995, with the implementation of the internationalization strategy, the scale of business began to rise wildly, and how to quickly control costs and improve efficiency naturally became a top priority. To this end, ZTE Kangxun came into being, which is a subsidiary of ZTE and is responsible for the management and operation of the supply chain. ZTE Kangxun's main functions include: device certification, supplier certification, planning, procurement, production, warehousing and other services. At this stage, many remarkable results have been achieved, such as the independently developed supply chain collaboration system, the online bidding system, and the financial management system developed in cooperation with Oracle... The integration of these achievements has formed a relatively mature procurement support system, and ZTE's supply chain system has taken a big step forward.
3. Dredge the downstream and integrate the supply chain management system
From 2007 to 2010 can be regarded as the third stage, during this period, ZTE re-integrated the business department, formed a relatively complete logistics system, combined with the development of the second stage of supply chain management system, to this point, ZTE established planning, procurement, production, delivery, reverse logistics, five major parts of the supply chain management platform, ZTE has a complete set of professional management system.
4. Summarize experience and take care of professional supply chain companies
In 2011, ZTE established a subsidiary, ZTE Supply Chain Company, which summarized the supply chain implementation experience of the parent company since its inception and analyzed it as a reference to integrate the company's internal and external resources and provide efficient supply chain integration services for global customers.
"According to the scale, relying on advantages, gradually establish, effective integration" ZTE supply chain construction chain four-step composed a new movement of global supply chain services, continuous optimization and innovation in international competition, laying the competitive advantage of the supply chain.
Second, a painful lesson to awaken the security awareness of ZTE's supply chain
More than a decade ago, ZTE in the mobile phone market can be said to be a surprise, when the mobile phone market was almost occupied by ZTE, Huawei, Coolpad, especially ZTE is very famous, Ren Zhengfei called it "the most admired opponent".
Until 2018, with the swing of the stick of US sanctions, the ban on the sale of technology and services of US companies immediately pushed ZTE to the point of life and death. ZTE realized the huge bugs in its own supply chain system, and also sounded the alarm for domestic high-tech enterprises.
(76-year-old Hou Weigui made a comeback for ZTE)
On the one hand, in order to reduce management costs, ZTE previously implemented the "Improve Procurement Concentration" project, concentrating 80% of the procurement volume on the top 50 core suppliers. From the perspective of total procurement, among the major suppliers of ZTE in the United States, Qualcomm ranked first with sales of nearly $40 million, followed by Broadcom, Microsoft, and Intel with total sales of nearly $35 million. In 2017, ZTE's procurement scale from the top five suppliers has already exceeded 10 billion yuan.
On the other hand, if the core technology falls into the hands of others, it is inevitable that it will be contained. In the process of internationalization of domestic enterprises, especially some high-tech enterprises master the core technology in the supply chain, only by mastering the core technology and becoming the core node of the supply chain can they ensure their own safety.
Then we can't help but wonder, what is ZTE's dependence on American products? ZTE's imports from the United States are basically the key components that support ZTE's signal base station, optical communication and mobile phone three major businesses, if the supply chain of these key components is interrupted, it is difficult to find alternatives in a short period of time, and ZTE's three major businesses will face a full-line rout.
Technology is constrained, core components can not be supplied, coupled with too concentrated suppliers, there is no other non-Using suppliers to choose. In the ZTE incident, we can reflect: independent research and development and supply chain security construction is already imperative, which will directly affect the survival of enterprises.
Third, born to die, ZTE supply chain optimization "trilogy"
After this disaster, ZTE also began to re-examine the security of the supply chain. At ZTE's 2021 Annual Global Analyst Conference, Xie Junshi said that ZTE has increased its supply chain management capabilities from three aspects.
Including research and development to achieve high compatibility, replaceability, increase the choice of the supply chain width, avoid exclusive supply; while strengthening strategic cooperation with the head of the supply chain enterprises; and strengthen their own forecasting capabilities, the aforementioned to build a highly resilient organization, one of its core goals is also to better improve the prediction skills, and then to carry out safety preparation and other responses in advance. According to reports, ZTE also realizes business online and key business intelligence through the application of big data and AI technology, thereby sensing supply and demand changes and risks in real time, and establishing a supply chain intelligent operation center to enhance supply chain resilience and ensure business continuity with maximum efficiency.
1. Increase R&D and move towards the upstream of the supply chain
According to the 2021 financial report data, the R&D investment in 2021 reached 18.80 billion yuan, an increase of 27% year-on-year, accounting for 16.4% of the operating income.
Benchmarking global technology companies, Apple's research and development amount exceeds 110 billion yuan, and Huawei's research and development amount is as high as 125.7 billion yuan. ZTE and other giants are clearly not an order of magnitude in terms of amount. However, from the perspective of research and development, Apple's research and development expenses account for about 5% of revenue, Samsung is about 8%, for ZTE, 16.4% of such research and development proportion undoubtedly shows its determination to attack the core technology self-research.
At present, ZTE has realized the market commercialization of self-developed chips up to 7 nanometers on the main control chips of 5G wireless base stations, switches, home wireless routers and other equipment, and has the industry-leading chip full-process design capabilities. Including the first launch of the under-screen camera in the field of mobile phone business, the self-developed 7nm and 5nm base station main control chips in the chip field, the operating system, 5G, global patent applications and a series of scientific research achievements can not be underestimated.
In addition, the current chip supply chain is tight, and ZTE has made two preparations early. According to the financial report, ZTE's inventory reached 36 billion, based on which ZTE also gave a reply: mainly due to the tight global chip supply situation, the company prepared materials in advance for key materials.
2. De-Americanization, decentralized procurement of supply sources
On August 20, 2020, according to Taiwan's Economic Daily, Huawei and ZTE are accelerating "de-Americanization" and are beginning to change product designs and reduce dependence on the United States. They invariably informed some suppliers to slow down the shipment of specific products and intend to slow down the construction progress of 5G base stations.
Global 5G competition is fierce, and seizing the opportunity of 5G construction plays an important role in enhancing the discourse power of the global communications industry. Why do Huawei and ZTE take the initiative to slow down in such a context?
This is actually a key step for Huawei ZTE to accelerate its de-beautification. In order to avoid a recurrence of the tragedy, the control of the core components must be firmly controlled, so it will take a period of time to comprehensively check the key components to facilitate the replacement of parts or the improvement of the design.
3. Digitize and build an intelligent supply chain
Today, in the face of uncertainty and instability in the external environment, ZTE proposes to build a safe, accurate, intelligent, reliable and efficient supply chain SPIRIT strategy.
Under the guidance of strategy, ZTE is accelerating the digital transformation of the supply chain. In 2020, ZTE fully deployed 12 supply chain digital transformation projects, including the "5G" manufacturing 5G intelligent manufacturing project that leveraged ZTE ICT technology and 5G industry application advantages, the customer collaboration platform (iCCP) and supplier intelligent collaboration platform (iSCP) with minimalist architecture, ZTE Global Customs Management System (GCM) and global freight center (iLMS), etc., with remarkable results.
The digital transformation of the production process is the top priority of the entire supply chain, and ZTE's Binjiang Smart Factory is a typical representative of it. Zheng Huawei, project leader of ZTE Binjiang Factory, said in an interview: "The traditional manufacturing management is based on on-site management transmission, paper transmission, this information transmission process is cumbersome and easy to lose, for management is a black box, what we are doing is through equipment interconnection and machine identification, so that all elements in the production process, expressed by digital means, so that information becomes a white box, a smart box." ”
With the continuous deepening of the application of digital technology, ZTE is constantly exploring the application of key technologies such as intelligent AI, Internet of Things, cloud computing, big data, AR/VR, blockchain, and robotics in the supply chain business fields such as planning, procurement, manufacturing, warehousing, and transportation, driving the supply chain to the direction of automation, unmanned, and intelligent.
(Author: yoga)
Typography: Xiaolan