"Zero inventory" mode or the transformation of LED lighting channels

[Text / high-tech LED - lighting and market September issue Xiong Yuheng]

Since the beginning of this year, the price war has intensified in the entire LED lighting field, and the smoke has not been scattered for a long time.

On June 15th, the "price butcher" Mulinsen announced that it had again made a substantial price adjustment for some of the company's LED bulbs and T8 tubes, a drop of more than 40%. This is the second time since the beginning of the year, Mulinsen has adjusted the price of its lighting products. The two price adjustments have accumulated more than 70%.

Coincidentally, the listed company Changfang Lighting also lowered the price of its lighting products in January and June this year, and the price of some products even fell by more than 100%.

The resulting "butterfly effect" quickly spread in the market, and many listed companies including Zhen Mingli and Dehao Runda followed the price war.

It is understandable to increase the price/performance ratio of products by lowering prices, so as to seize market share. However, relying on sacrificing product quality or maliciously preempting the market share of frequent price cuts will bring serious consequences that damage corporate brands.

The resulting chain reaction is beyond the scope of the company itself. As the LED lighting industry is still in the market development period, the product technology of the middle and upper reaches is still in a period of rapid development. Once the market price fluctuates abnormally, the enterprise does not dare to mass produce, and the dealers do not dare to bulk inventory.

Considering that most enterprises are still in the period of scale expansion, inventory pressure will inevitably become a dilemma for the LED lighting industry.

囤 or not

As the saying goes: There is food in the family, and the heart does not panic. The so-called grain here is the inventory.

Usually, in traditional manufacturing and processing enterprises, the role of inventory is to be able to respond quickly to customer needs and maintain continuity of production, and the corresponding production plan can be appropriately delayed, thereby reducing the market risk of the enterprise. However, if the inventory cannot be realized in time, its value will continue to decline every day. At this time, having the inventory may not be a good thing, and it will make the leader of the enterprise feel like a needle.

According to the survey data of the High-tech LED Industry Research Institute (GLII), in the first half of 2012 alone, the average price of L ED bulbs in the domestic market dropped by 8% to 10% compared with the second half of last year.

According to industry insiders, according to the current price trend of LED lighting, inventory will only depreciate and will not increase value. Therefore, many companies use on-demand production and zero-inventory methods to avoid inventory risks caused by continued price cuts.

"Currently, domestic LED lighting companies, especially small and medium-sized LED lighting companies, basically adopt on-demand production methods, and they do not dare to have inventory. In addition to occupying the company's liquidity, the stocks continue to fall and the inventory becomes Hot hand mountain." Liu Shiquan, general manager of Jing Lande Lighting, mentioned in an exclusive interview with Gao Gong LED reporter.

In addition, the rapid changes in LED lighting technology have also accelerated the company's inventory depreciation.

Xie Xiaopei, general manager of Yuyu Lighting, believes that the promotion of new LED lighting products will take a long time. If the time of market opening is too long from the development of new products, your product technology will fall behind or even fall into a situation that will be eliminated. "At this point, inventory has no meaning to the enterprise, and even creates an additional burden."

However, although zero inventory can reduce the operational risk of the company, it does not work well for the distribution channel. "High-tech LED" reporters learned in the field of lighting and lighting market in Beijing, Xi'an, Nanjing, Chengdu, Changsha and other places, dealers prefer to choose brands with considerable inventory and fast supply to act as agents.

The reporter noted that Foshan Nanhai Lake lighting store in the store such as Beijing Shilihe Lighting City, Xi'an Guangcai Lighting City and other stores in the store, the number even exceeds the first-line brands such as Philips, NVC, Op. The explanation given by the dealer is that compared to other brands, the Leike lighting inventory is relatively sufficient, and the dealer can quickly pick up the goods when doing large-scale LED lighting projects.

Wang Maozhong, director of domestic sales of Zhongming Semiconductor, believes that if the company adopts on-demand production and zero-inventory methods, it will only start mass production when the dealers purchase the goods. At this time, production and logistics will take up a lot of time, when the products reach the dealers’ hands. When it comes to the price, the price is often not competitive in the market, especially when the market price is fiercely competitive. This is the last thing dealers want to see.

On the one hand, the risk of product depreciation brought about by the continuous decline in prices, and on the other hand, the rigid requirements that dealers hope to get goods quickly to the inventory of enterprises. Between the shackles and the shackles, the company is in a dilemma.

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