Bringing Order To Chaos? How Companies Hope To Transform The Chinese Agricultural Supply Chain

China ranks first in producing cereals, cotton, fruit, vegetables, meat, poultry, eggs and fishery products, according to the Food and Agriculture Organization of the United Nations.

The Chinese government has historically prioritized the growth of the nation’s agriculture and feeds 20% of the world’s population with less than 10% of the world’s arable land. Companies such as Charoen Pokphand Foods Public Co. Ltd. CPF, Tangrenshen Group Co. Ltd. (SHE: 002567) and Beijing Dabeinong Biotechnology Group Co. Ltd. (SHE: 002385) are key players in one of China’s largest industries.

The size and importance of China’s agriculture to the nation’s overall economy create an environment where even minor disruptions can result in significant setbacks. Robert Kuttner of The American Prospect said, “Chinese responses to the pandemic emergency disrupted production more broadly, extending the supply-chain crisis… to the larger economy.”

As the world continues to evolve after major events such as COVID and the war in Ukraine, each company’s ability to use an effective supply chain may be pivotal in maintaining a competitive advantage. 

In recent years, China has strengthened its supply chain product flow system by developing fresh food e-commerce and fresh food stores. This provides companies an increased ability to optimize China’s agricultural product supply chain regarding logistics management, product control and brand building.

One company that reports having set its sights on improving China’s agricultural supply chain is Nisun International Enterprise Development Group Co. Ltd. NISN. 

Through years of working with the entire supply chain ecosystem, Nisun believes to have developed a strategy that improves production capacity and efficiency, facilitates and optimizes product flows in supply chains and enhances supply chain management capabilities. 

Nisun’s plan involves improving China’s agricultural supply chain technology through four primary fields.

The first is increasing guidance in product demand in planning. The company claims this can be done by using the interconnection of information technology and the accumulation of transaction data to more accurately predict upcoming consumption trends in both variety and quantity. With more accurate information in this area, companies should be able to avoid the imbalance of local supply and demand that is caused by information asymmetry.

The second aspect emphasized by Nisun is end-to-end industrial chain collaboration. According to Nisun, China’s future agricultural supply chain needs to develop and maintain more collaborative synergies between upstream suppliers and downstream buyers. Nisun says the synergy system works to increase the production of suitable products in reasonable quantities and increase the effectiveness of planning required for warehouses and transportation vehicles.

Third, Nisun further believes that because of the shorter lifespan of typical agricultural products in comparison to other commodities, on-demand collection and instant consumption is pivotal. Nisun says that using flat circulation channels to improve the efficiency of information transmission in a large-scale operation will enable companies to implement supply chain procedures that minimize waste through on-demand harvesting and rapid product consumption.

The final area Nisun says it will change in the Chinese agricultural supply chain is what the company calls enterprise supply chain. Because of the increasing need for end-to-end collaboration, Nisun believes that the professional value of supply chain management companies will be reflected in their ability to collect, analyze and share data to ensure each client’s supply chain can function with the utmost efficiency.

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Featured photo by David Vives on Unsplash