Qing­dao Kute: Es­tab­lish a Smart Pro­duc­tion Chain

China's Foreign Trade (English) - - Special Report - By Liu Guomin

“We take pride in be­ing the des­ig­nated gar­ment sup­plier for the China Pavil­ion of the Expo 2017. We will pro­vide the qual­ity and tai­lored ser­vices as al­ways and show­case the charm of work­ing staff of the China Pavil­ion.” said the per­son­nel of brand cen­ter of Qing­dao Kute Smart Co., Ltd., which has be­come the des­ig­nated gar­ment sup­plier for the China Pavil­ion of the Expo 2017.

The fo­cus on smart, flex­i­ble and per­son­al­ized pro­duc­tion has be­come the main rea­son for Qing­dao Kute to be­come the co­op­er­a­tion part­ner of China Pavil­ion of Expo 2017 As­tana. The com­pany’s C2M (Cus­tomer-to-man­u­fac­tory) model has be­come the study case for other com­pa­nies and re­search in­sti­tu­tions.

Con­sumers could get ac­cess to Kute’s web­site through com­puter and mo­bile app, to se­lect the style, de­sign and raw ma­te­ri­als of the prod­uct, place or­ders and set­tle the pay­ment on­line. So the prod­uct or­der, trans­ac­tion, pay­ment, de­sign, man­u­fac­tur­ing, lo­gis­tics and af­ter-sales ser­vices could be fin­ished on the in­ter­net through dig­i­ti­za­tion. “Our fac­tory will not start pro­duc­tion un­til the cus­tomers place or­ders. So we don’t have liq­uid­ity is­sue in terms of cap­i­tal and in­ven­tory. The cost of tai­lored pro­duc­tions has 10% higher than nor­mal mass pro­duc­tion, but the prof­its will dou­ble,” said work­ing staff of brand cen­ter of Qing­dao Kute.

“Now the Kute Smart is not only a gar­ment pro­duc­tion com­pany and it has a com­pre­hen­sive ap­proach and model to trans­form tra­di­tional man­u­fac­tur­ing through big data and smart pro­duc­tion.” The starter of Qing­dao Kute Zhang Daili said that the smart trans­for­ma­tion of tra­di­tional fac­to­ries is a large niche mar­ket. Qing­dao Kute has in­cor­po­rated scale pro­duc­tion and tai­lored ser­vices into so­lu­tions that could also ap­ply to other in­dus­tries. It is said that Qing­dao Kute has signed con­tracts with about 100 com­pa­nies in jeans prod­uct, hat, show, fur­ni­ture, mak­ing and elec­tri­cal prod­uct in­dus­tries, for en­ter­prise up­grad­ing and trans­for­ma­tions. Af­ter three months of work, the en­ter­prise ef­fi­ciency picked up 30% and the costs re-

duced by 20%.

Now some South­east Asian en­ter­prises are com­ing to learn and in­tro­duce the smart pro­duc­tion model of Qing­dao Kute. Qing­dao Kute said that the com­pany is build­ing an in­ter­na­tional busi­ness group to es­tab­lish di­rect con­tacts with end cus­tomers, to avoid busi­ness in­ter­me­di­aries. Af­ter years of trans­for­ma­tion and up­grad­ing, Qing­dao Kute’s smart pro­duc­tion ca­pac­ity could meet tai­lored de­mands of the Euro­pean and U.S. Mar­kets. The OEM model with low added value has been re­placed and the com­pany’s prod­uct struc­ture keeps im­prov­ing with higher added value prod­ucts. Take Q1, 2016 for ex­am­ple, the rev­enue com­ing from OEM busi­ness has re­duced to zero and the com­pany only pro­duced tai­lored prod­ucts. The cor­po­rate prof­its have risen markedly.

Qing­dao Kute has re­ceived var­i­ous cus­tomers from the U. S., Ger­many, Aus­tralia, Ja­pan, S. Korea, Thai­land, Tai­wan and Hong Kong. “Be­sides those ma­ture mar­kets of the U.S., Canada, the U.K., Ger­many and France, Qing­dao Kute is striv­ing to en­ter more over­seas coun­tries and re­gions,” said work­ing staff of the brand cen­ter of Qing­dao Kute.

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