The production of electric vehicles must be based on smart manufacturing. This is a holistic, new business model which takes user needs into account. Therefore, it must also innovate, change and improve the entire supply chain system.
Huang Lei, Vice President Chongqing Sokon Industry Group
As Vice President of the Chongqing Sokon Industry Group, Huang Lei is pursuing a clear goal: to build a complete supply chain system from scratch for the intelligent production of the new electric vehicle.
Huang Lei is convinced that the new drive technology combined with new production methods also requires a new business model. Seres Automobile, the subsidiary of the Chinese manufacturing giant Sokon that was founded specifically for this purpose, therefore uses the so-called customer-to-manufacturer (C2M) approach.
The challenge of C2M
The basic idea behind the C2M model is its high user focus, which enables tailor-made adaptations. Production is organized according to the individual needs of the customer. This allows consumers to actively participate in product design. This in turn places higher demands on the supply chain.
“C2M requires appropriate capacity building, supply chain modernization and optimization of both organizational structures and business relationships,” explains Huang Lei.
From the outset, Seres focused on the enhancements of supply chain capabilities to gain the competitive advantage in electric vehicle market. The manager is convinced that the supply chain is the backbone for products and marketing.
Seres‘ “321 Supply Chain System“
This is why Seres set up a so-called “321 Supply Chain System” for smart manufacturing. According to Huang Lei, this system consists of three components:
- Three circles: These three circles consist of data collection, analysis and interpretation and feedback for improvement. Together they form a closed loop. The data for this comes from the SupplyOn platform.
- Two chains: For intelligent manufacturing, the supply chain (i.e. purchase order) and the production chain (i.e. sales’ order or customers’ voices in terms of demand) are closely coordinated and interlinked.
- One pyramid: Seres is organized in the form of a nine-level pyramid – from the production site to the sensor technology to control and finally to sales.
Find out more in the following interview with Huang Lei:
From traditional supply chain to supply chain ecosystem
Everything is new in electric vehicles: the organization, the models, the management, the suppliers. Equally new is the way of thinking about and approaching the supply chain as a whole. An essential role plays the concept of ecosystems, here. Thus, Seres places great emphasis on collaborating closely with its suppliers, from access to other suppliers and product development to the coordination of supply and demand.
A key reason why Seres Automobile chose SupplyOn was its large ecosystem, which includes more than 65,000 companies and suppliers in the production sector worldwide. Moreover, having R&D facilities in the US and a clear growth target, the SupplyOn network will help Seres to achieve smooth collaboration on a global scale.
Plus, the numerous best-practice examples for rapid supplier onboarding also helped to convince the Chinese electric vehicle manufacturer.
Smart Manufacturing is based on three pillars
A prerequisite for intelligent production is the appropriate technological support. Liu Yusheng, head of the Sokon Seres Automotive Intelligent Manufacturing project, focuses on three areas: “We use ‘3T’ for intelligent manufacturing: Operation Technology (OT), Information Technology (IT) and Automation Technology (AT).”
Right from the initial development of its IT platform, Seres also designed the supply chain management (SCM) system alongside other core systems such as MOM (Manufacturing Operations Management) and ERP. Liu Yusheng is convinced that supply chain collaboration plays a decisive role in the manufacturing value chain. For Seres, it was particularly important that this supplier collaboration be completely digitized from the very beginning.
To learn more about the positioning of the SCM system, watch the following interview with Liu Yusheng:
A flexible SCM platform for global needs
The SupplyOn platform supports all of Seres’ business processes with its suppliers: From Supplier Management through Source-to-Contract (strategic sourcing and contract synchronization) and classic Supply Chain Collaboration (Forecast, PO, JIS/JIT, ASN, Goods Receipt etc.) to Procure-to-Pay and eInvoicing. This full-cycle collaboration across the entire production process ensures high efficiency and transparency. It creates a comprehensive data pool, which opens up a wide range of analysis options, for example for optimizing the supply chain or supplier performance.
From the very beginning, Seres pursued a global, cross-functional and holistic strategy with its SCM project. Across the companies, everyone was to be able to use the same basis and benefit from synergy effects. At the same time, the different needs in the individual regions had to be considered. All this is made possible by the standardized SupplyOn platform, which easily meets the different regional requirements through flexible process configurations.
In China, for example, the platform supports both eInvoicing and the Golden Tax invoicing process via Fapiao. In the US, by contrast, the integrated Procure-to-Pay (P2P) process has been set up. Similar regional differences are also implemented in sourcing, for example.
Implementation took place in two phases, grouped according to strategic and operational processes. Although Seres as a company started out right from scratch, the first phase was finished within just six months. Another six months later, further enhancements and refinements were implemented – and the first 200 suppliers connected.
Find out more about the implementation of the SCM project in this interview with Wei Lai:
For Wei Lai, Director Purchasing at Seres Automobile, however, the project is not yet finished: “An intelligent supply chain cannot be built in a single step. Rather, it must be iteratively improved and refined over several years. That’s why we continue to work closely with SupplyOn to optimize our supply chain even further”.
To best meet the challenges of the Chinese electric vehicle market, Seres New Energy Automobile has established a completely new supply chain management system. As a technology partner, the Chinese electric vehicle manufacturer relied on SupplyOn as the global management system for all collaboration processes with suppliers. This forms the foundation for the success of the Customer-to-Manufacturing (C2M) approach in the context of smart manufacturing.