In-depth analysis of Shein’s supply chain model: the perfect combination of small order quick response and flexible supply chain
The Shein supply chain model is famous for its efficiency and speed. It relies on advanced technology and global resource integration to achieve flexible and fast production and logistics management. This article aims to deeply explore how Shein created a unique supply chain system by building a supply chain community and introducing an MES management system, combined with small order quick response and flexible supply chain strategies.
Building a supply chain community
In order to meet the growing order demands of consumers, Shein works closely with the supplier system to achieve strict standards of small batches, fast speed, high quality, and low latency. Shein not only provides suppliers with a capital chain security guarantee, but also proactively assumes inventory risks, reducing the pressure on suppliers. Specific measures include but are not limited to:
- Capital chain guarantee: Shein promises not to default on payments to suppliers and ensure settlement is completed within 30-45 days;
- Support Plan: For smaller suppliers, Shein has launched a support plan to help them purchase equipment and expand factories;
- Quality Control: Shein requires cooperative suppliers to have the ability to supply goods within 7 to 11 days and to be able to handle small-scale orders of 100 to 500 pieces;
- Strict standards: Suppliers are required to comply with regulations such as “delivery within 40 hours for spot goods and within 5 days for replenishment”, which far exceeds the industry average.
Through these initiatives, Shein has formed a highly binding, mutually beneficial and win-win relationship with its suppliers.
MES management system facilitates refined management
Shein also developed MES systems for full process management of factories and workers. The system is designed to help the production department introduce management rules and concepts to garment factories and improve overall operational efficiency by educating suppliers on how to use this platform. This approach further strengthens Shein’s control over all aspects of the supply chain and ensures the standardization and transparency of the production process.
Application of quick response for small orders and flexible supply chain
Traditional clothing manufacturing usually relies on manual workshops rather than automated production lines. However, the secret to Shein’s ability to achieve world-class delivery speeds in such an environment lies in its unique flexible supply chain management model – quick response for small orders. This model emphasizes rapid response to market changes and production in small batches and multiple batches to adapt to changing consumer needs.
Core advantages
- Quick iteration: From design and prototype to final delivery, Shein only takes about 20 days;
- High frequency of new releases: During peak periods, daily new releases can reach 5,000-6,000 SKUs;
- Short cycle turnover: Inventory turnover days are only 30 days.
Behind these data, Shein’s outstanding capabilities in supply chain management are reflected. By closely integrating with China’s local manufacturing resources, Shein not only achieves cost control, but also ensures product quality and delivery speed.
Conclusion
To sum up, Shein’s success is no accident. Its supply chain model is an important cornerstone for it to become a leader in cross-border e-commerce. Whether it is the construction of a supply chain community, the application of MES systems, or the implementation of quick response strategies for small orders, Shein’s innovative spirit and practical wisdom in supply chain management are demonstrated. In the future, as Shein continues to optimize its supply chain system, we have reason to believe that it will achieve more brilliant results on a global scale.
The above content is compiled from two articles about Shein’s supply chain model. Through an in-depth analysis of its supply chain management characteristics, we can better understand how Shein stands out from the global competition.