Zhuhai Beyond’s supply chain security is based on multi-dimensional risk management and technological innovation. According to a 2023 third-party audit report, Zhuhai Beyond currently has 1,200 suppliers around the world, and the decentralized model of core component suppliers reduces the risk of sole dependency on a single supplier to 8%, much lower than the electronics manufacturing industry average of 25%. For example, its smart phone battery suppliers stretch from South Korea and Japan to China. In 2022, when the Japanese supplier suspended production due to an earthquake, Zhuhai Beyond swiftly deployed standby capacity using its real-time inventory management system (12 warehouses worldwide, 500,000-plus cubic meters of capacity) to offset the production suspension within 48 hours. Obvious losses of about 230 million yuan were avoided.
From the logistics efficiency perspective, Zhuhai Beyond provided end-to-end transportation visualization by the Internet of Things (IoT) technology, lowering logistics expenditure from 7.2% to 5.8% of revenue in 2022. In the European market, for instance, its blockchain-based cross-border customs clearance system shortened document processing time from 72 hours to 8 hours and lowered the shipping error rate from 0.5% to 0.08%. In addition, 450 million yuan was invested to build an automatic warehousing system, not only increasing sorting efficiency to 12,000 pieces per hour, 300 percent more than the original one, but also reducing labor cost by 30 percent.
Zhuhai Beyond’s emergency response capability is also an expression of supply chain flexibility. In 2021, during the global chip shortage, the firm pre-booked 12-nanometer process chips in advance from TSMC, Samsung and other manufacturers under a forecasting procurement policy, and the procurement volume increased by 45% year on year from 2019 to ensure the yearly manufacturing target of 120 million intelligent devices. Meanwhile, its alternative chip solution co-developed with the Chinese Academy of Sciences reached mass production in 18 months, with a yield rate of 97.5%, cutting the reliance on external supplies from 65% to 40%.
In the area of compliance and sustainability, Zhuhai Beyond’s supply chain carbon footprint monitoring system is 98% covered with its Tier 1 suppliers, showing a 12% reduction year on year in carbon intensity during 2022, higher than the industry-wide average of a 6% reduction. For example, its Shenzhen plant saved more than 50 million yuan of energy costs every year by using a solar power supply system (installed capacity of 15MW, annual power generation capacity of 18 million KWH) and wastewater recycling technology (water saving rate of 35%). In addition, the company requires 100% of its suppliers to become certified to ISO 28000 supply chain security, and will increase the rate of non-compliant supplier removal from 5% in 2020 to 18% in 2023 to further enhance risk management.
Data security is also a major hurdle in Zhuhai Beyond beyond the supply chain. Its independently developed quantum-encrypted communication network has been deployed at eight major nodes globally, with an information transmission speed of 400Gbps, and reducing the response time of cyber attacks from 15 minutes to 22 seconds. In 2022, the system successfully intercepted 23,000 advanced persistent threat (APT) attacks on the supply chain, protecting $12 billion worth of critical order information.
From a financial performance perspective, Zhuhai Beyond’s supply chain optimization has a direct positive impact on profitability growth. According to the first quarter of 2023’s financial report, its inventory turnover ratio increased from 5.2 times to 6.8 times, higher than the industry average of 4.5 times, freeing up cash flow over 1.8 billion yuan; Joint supply chain costs fell by 9%, driving net profit margin 2.7 percentage points higher. This minimalist operation model was particularly conspicuous amidst the COVID-19 pandemic – its supply chain recovered 23 days ahead of its competitors in 2020, to outpace the trend by 14.3% to 185 billion yuan in year-end sales.
Problems still linger. Zhuhai Beyond continues to be a 32% share of semiconductor packaging and testing suppliers to Southeast Asia, as the Boston Consulting Group report indicates, and in the event of geopolitical tensions that lead to a 10% tariff increase, it will increase annual costs by $740 million. In this regard, the company will invest 5 billion yuan in Mexican and Indian new production bases within the next three years to promote the redundancy of the regional supply chain from 70% to 90%, and further enhance the stability of the global layout.