Cross-case Comparison between the Supply-side Elements

The results of the cross-case comparison for the demand-side elements are presented in Table 6-2. As demonstrated, with the production cost increase, some companies such as Companies A and E attempted to relocate their suppliers in neighbouring countries for cheaper production cost. However, a series of other issues occurred, i.e. higher delivery cost and high cost of training, as a supply chain trade-off. Realizing that it would not be an easy task, many firms, i.e. Companies B, C and E, shifted focus to improving logistics efficiency to reduce the total supply chain cost. For instance, Company E worked with multiple third-party service providers in terms of cargo distribution from the suppliers to the distribution centre and storefront warehouses, and last-mile parcel delivery from the store warehouses to the end customer. Store fulfilment method was adopted in Company E in an attempt to centralize the product flow and control the inventory. Meanwhile, the third-party logistics company also provided related information system for warehouse management.

Overstock problem was widely mentioned in all interviewed firms; which also corroborates the literature review of this study. Product price was marked down for cheaper sales. Companies B, C and E were aware of the importance of inventory control, and released a series of monitor initiatives, for example: working with third-party logistics providers for a shared IT platform; introducing order procurement system; and regular stock checks. This has rendered higher supply chain traceability and efficiency, and enhanced collaboration among the supply chain partners.

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Table 6-2: The Results of the Cross-case Comparison for the Supply-side Elements

Supply-side Elements Company A (SOE) Code Company B (Franchised) Code Company C(SPA) Code Company D (B2C) Code Company E (Multi-channel) Code External market

conditions after the fourth structural change

Shrinking profit with increasing costs. The product market has changed to conditions with higher competitive intensity.

P

High competitive intensity and high risk. Market differentiation emerged in the growing market. _P

Aiming towards a market share with low competitive intensity, but high uncertainty. The product segments are augmented in a protected environment.

I

This segment became increasingly competitive under the fourth structural change. Other competitors share the market, which means that there are many different products under the same niche.

P

This segment became increasingly competitive under the fourth structural change. Other competitors share the market, which means that there are many different products under the same niche.

P

Internal company environment Procurement/Supplier

management

 Material costs increasing.

 Sourcing in neighbour countries for cheaper costs.

A

 Material costs increasing.

A

 Looking for skilful suppliers with an innovative and open mind on material development.  Focusing on improving quality.  Aiming to work collaboratively.

D

 Losing quality control of suppliers.  Reordering products that will not

sell.

 Evolvement in guanxi leveraging for a negative purpose.

N

 Attempting to find cheaper materials from the overseas.

A

Production/Manufacturing flow management

 Migrating the factories to inland areas and opening a business branch in Cambodia.  Investing in new

machinery.

A

 Quality problem becomes acute since the OEMs are living under the profit margin.

A

 Integrating different techniques into the production process.  Low volume, high value-added

operation.

 Attempting to realise a more efficient production schedule consistent with product design cycles.

I

 Keeps reproducing the same order.  Losing control of standards in

production due to the pursuit of

the lowest cost. _N

 Requiring shorter monthly production lead-times.  Quality issues become acute  Using store fulfilment for its multiple channel delivery to control inventory and product flow.

P

Logistics capacity  Selling inventory _{through the online} network.

N

 Marking down the price and doing sales campaigns online and in outlets.

 Investing money in reinforcing the logistics team. _P

 Process integration.

 Considering reducing inventory.  Sharing information on the

supply chain for demand

forecasts. I

 Stock piling inventory

 Closing a few DCs for cost saving.  Delivery errors increasing.

N

 Executing more regular stock checks every week in the retail stores.

 Applying barcoding and a warehousing system for higher supply chain efficiency in the regional distribution centres.  Working with another 3PL for last-

mile online order delivery in order to enhance customer service.

P

IT support  Lacking development in _{internal IT; it still uses} the legacy system.

A

 Although investing money in developing some ERP modules, the realisation of information integration between the fragmented processes still takes time.

A

 Focusing on CRM and VMI.  Integrating different functions

for sharing information.

I

 Maintaining the previous transactional system.

A

 Using IT to improve efficiency, such as barcoding technology to track products in transition and POS in store transactions.  Designing a few ERP modules, such

as WMS in DCs and order planning system

 Working with third-party service provider for system development, such as mobile app or online web design

 Trying to integrate ERP systems with 3Pls systems, since the company had fragmented multiple information systems and overlapping functions.

P

Supply chain relationships  Internal connection _{wanes as the} government cuts subsidies.

 Internal suppliers have to work with other private firms to survive.

N

 Working with logistics team for fast delivery.

 Responsiveness has improved by developing information systems. P

 Strengthening IS for an integrated solution on the supply chain.

 Attempting to build more collaborative partnerships with its suppliers and OEMs for mutual benefit.

I

 Looking for low cost production.  Using guanxi to build connections

N

 Working with multiple third-party service providers for a responsive store fulfilment solution.  Internal management problems

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In terms of internal IT implementation, some firms such as Company B invested significantly in self- developing internal ERP modules in a few areas, while others such as Companies C and E worked with the service providers to leverage product traceability. It is shown that there is great interest in technology development in many interviewed companies, i.e. the internal ERP modular and Big Data technologies. However, integration between these fragmented functional modules is still difficult to capitalize. Parties on the supply chain intend to use their own self-developed system, which could lead to a segmented supply chain network. Technology development also tends to focus on a few narrow areas in logistics operation, in which it is still difficult to achieve a scale of integration among the parties in the supply chains.

In terms of material sourcing and production planning, many companies show significant skill disadvantages. With a shrinking labour force, and an increasingly diverse retail market, products are required to be manufactured in a shorter lead-time, and with higher quality and productivity. However, the disadvantages, in the areas of process management and lacking skills and technique innovation, have made this transformation difficult to materialise in a short period. Among the five interviewed companies, only one, Company C, has made its way to a skill upgrade in the production process, in a way that achieves higher product and service value and targets a high-end niche market. In summary, supply chain restructuring in the five companies was mostly initiated by improving logistics capacity, such as building an information system for warehousing and distribution management, and by gradually expanding into building high value-added capabilities for an integrated process management, and material and product development, when the external environment allowed the company to nurture a type of innovative culture and openness for the company to grow with the required technology and human resources.