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Procurement Lessons from COVID

Current General Manager, Procurement and Supply Chain, SAIC General Motors Corporation

IP Interview
Published on April 20, 2020

Why is this interview interesting?

  • Why the level of safety stock should increase to around 3 weeks post-covid to protect from global supply chain shocks in the future
Executive Bio

Liang Zhou

Current General Manager, Procurement and Supply Chain, SAIC General Motors Corporation

Liang has been working on the ground in the Chinese automotive market for the last 20 years at various different Chinese Joint Ventures with Western automotive companies. He began his career as a Purchasing Manager at Changan Ford Automobile, the JV between Changan and Ford. In 2012, Liang joined General Motors China as a Global Procurement and Supply Chain Manager. He is well connected with OEM's, Tier 1 suppliers and also larger dealer groups in China which proves invaulable given how opaque the market is to Westerners.

Interview Transcript

What is the biggest lesson that you have learnt from this coronavirus epidemic, from a supply chain standpoint?

From the supply chain standpoint, our biggest lesson is that, in the future, we need to find alternative sources for our different assembly parts. Why we say this is, in the past especially, we have concentrated our major components, in the epidemic centers, such as Wuhan, which is also where many global parts are located. But from this, we can see that we are unable to meet our daily mass production, as the factories of Wuhan have been shut down by the government. So in the future, we will try find alternative suppliers, from different regions and different provinces. This is the first point.

The second point is that, in the future, we will have a larger amount of safety stock. In the past, we have only kept one week of safety stock. But now we can see that this one week is not enough. Going forward, we are going to have at least two or three weeks of safety stock, to make sure that, in case of this kind of epidemic, we could have a period of time to find a solution, before our mass production is running out of the parts from our current suppliers. These are the major lessons we have learnt, from this epidemic.

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