Mei Jingguo, Master Student of the Department of Business Economics and Administration, Sumy State Pedagogical University named after A.S. Makarenko, Sumy, Ukraine

ORCID ID: 0000-0001-8945-6124
e-mail: olha.hryhoriv@pnu.edu.ua

Supply Chain Organization Experience of Companies in China

Abstract. Introduction. Globalization and the increasing openness of the world are creating favorable conditions for the development of global relationships between countries, companies and consumers. These processes also affect the creation and operation of supply chains. They become links that help to connect suppliers, manufacturers and intermediaries from different countries and continents. This makes it possible to achieve a synergy effect – to produce products that are cheaper, of higher quality, and more functional, and to sell them in more markets around the world. Ukraine’s supply chains became unbalanced after the start of the full-scale Russian invasion. They have been partially stabilized or alternative options have been found since 2022. However, the supply chains of Ukrainian companies remain quite weak and need to be improved for the development of supply chains.

Purpose. The article examines data on supply chains in China, with the aim of further benchmarking best practices in supply chains formed by Ukrainian companies.

Results. Factors for building and maintaining supply chains in China are identified, the most important of which are 1) a huge domestic market; 2) a complete industrial chain, and 3) good infrastructure. It was found that the main challenges that can limit the development of supply chains are 1) geopolitical uncertainty, such as sanctions, export controls and trade war tariffs, 2) market slowdown, and 3) rising business costs. Since costs are an important aspect of logistics activities, it is emphasized that demand forecasting and contingency planning, as well as inventory and stock optimization, are common and effective ways to reduce logistics costs in supply chains.

According to the Logistics Performance Index and the Agility Emerging Markets Logistics Index, China’s position is significantly higher than that of Ukraine. In the Logistics Performance Index of Ukraine in 2023, the “timeliness” and “tracking and tracing” indicators have deteriorated, largely due to military actions; the “infrastructure” indicator also remains weak.

Conclusions. In general, it has been found that when companies restructure their supply chains, they often diversify the location of factories and suppliers, as this helps to reduce supply chain risks.

Keywords: supply chain; restructuring; logistics index; movement; costs.

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