Zhejiang Jinhua Ham Limited Supply Chain Strategic Management And Implementation Research

Zhejiang Jinhua Ham limited was established in 2004. It is a State-holding enterprises focusing on ham production, processing and distribution. It owns the "Jinhua Ham" registered trademark. In 2012, its sales reached Y62.97 million Chinese Yuan, with a profit of Y 902,000, and has become one of the leading enterprises in the industry.During the past two years, Jinhua Ham faced fierce external competition and internal issues, resulting in profits decrease. There are three external reasons:the first reason is due to the seasonal ham production, long production cycle, technology backward and low productivity; the second reason is that with similar product quality, small to medium-sized companies have great advantage in price competition; thirdly, due to fragmentation in production and processing, ineffective management and little rivalry within the industry, there is a high risk for food safety. Internally, the first reason is a lack of high level production management with inefficiency and information miscommunication. Secondly, distribution network is incomplete. Sales model is simple and backward, which discourages the sales capability. Thirdly, the simple model in value chain and instability in supply chain lead to a low capability in competition, profitability and risk management. Fourthly, "OEM" production model seriously impacts enterprise credibility and development. With associated risk being higher than opportunities, there is a hidden risk for product quality.Jinhua Ham is one of the few traditional brands that have a world-class reputation. It is Jinhua Ham’s social responsibility to maintain the healthy development of Jinhua ham industries, explore fit strategies for supply chain management, improve manufacturing management level and corporate profitability. It is expected and urgent. This paper is an in-depth study on the subject.The paper focuses on the need to strategic transition for Jinhua Ham Limited. It is based on academic reading about supply chain management theory and Jinhua Ham industry documents. Research, analysis, and conclusions are conducted. PEST and Porter’s Five Force are used to deeply analyze the industry structure of Jinhua Ham, competition pattern and industry supply chain. At the same time, SWOT analysis is used to assess the challenges and opportunities facing the company and their own strengths and weaknesses. Therefore, the necessity and feasibility of Jinhua Ham implementing supply chain management are confirmed.Center around the topic of solving cost control and quality control problem, the article explores the construction of supply chain management model. Based on the current market demand, any reduction in costs and value added initiatives are generated from higher efficiency in supply chain. According to DuPont analysis, cost control and channel management are two keys to enhance profitability of Jinhua Ham. Therefore, a competitive strategy of "cost savings and differences" is raised. The article argues that comparing to agile supply chain strategy, effective supply chain management strategy has a higher matching with company competitive strategies. Therefore, the effective supply chain management strategy is chosen. Based on value chain analysis on Jinhua Ham company, the paper will integrate lean thinking into supply chain management model of building, raising "lean thinking of supply chain", and establish a collaborate institution basing quality and safety. Ultimately, it will achieve process and standardization operation; establish timely and transparent information passed and shared mechanism, in order minimize the risk in supply chain. Finally, this paper provides a detailed implementation plan for supply chain management; it includes building strategic alliances with raw material suppliers, improving "OEM" manufacturing model, having regional selling agency and jointly warehouse management. Also, it is recommended to establish quality tracking policy, build information sharing platform and have performance evaluation for both suppliers and distributors.