What are Chinese LED display manufacturers most likely to be held back to death?

For now, Chinese LED display manufacturing companies are most likely to be dragged down by the following situations. We might as well think about it.

Forecast inventory

In the supply chain, each LED display company will order from its upstream. Under normal circumstances, sellers will not place an order with the upper-level supplier once an order is placed. Instead, based on inventory and transportation costs, they will order from the supplier in one cycle or after a certain amount is aggregated. In order to reduce the frequency of orders, reduce costs and avoid the risk of out-of-stock, sellers often increase orders according to the optimal economic scale. At the same time, frequent orders will also increase the supplier's workload and cost. Suppliers often require sellers to order in a certain quantity or period. At this time, sellers often artificially increase order quantities in order to obtain the goods as early as possible or in full, or to prepare for emergencies. In this way, the layer-by-layer amplification of order quantities may lead to the order demand obtained by the final supplier being several times or even dozens of times the actual demand of users.

Inventory has accumulated a large amount of funds for enterprises, especially sluggish inventory, which occupies warehouse space for a long time, wastes a lot of manpower, material and financial resources, has a serious impact on the company's cash flow and management operations, and also brings great negative effects to the company's inventory management and production.

Based on forecasts, companies actually produce based on inventory. Therefore, in the past, judging the macro market situation and planning production capacity relied largely on luck. If you're lucky, you can get an accuracy of 70% or 80%; if you're not lucky, your accuracy is only 50%, or even completely down.

From the real to the virtual

What people now advocate is not the development of the real economy and manufacturing, but the virtual economy represented by the real estate and financial markets. Therefore, more and more companies are shifting their investment focus to areas such as bank financial management, trust investment, equity investment and real estate.

The reality is spreading rapidly towards the virtual. Why? Because with a lot of money, there are also a lot of fools. Even if you are a fool, as long as you are smarter than others, money will come to you. In fact, the essence is the restlessness of the entire society. People have lost confidence and lack a sense of security, causing virtual capital to pursue huge profits by any means.

There is no doubt that the foundation of a country is high value-added manufacturing industry.

Everyone knows that the first industrial revolution made Britain king. However, as London became a global financial center, the domestic rentier class grew stronger, and investment in manufacturing and the real economy continued to decline. Everyone knows the final outcome: the British Empire fell. Think about Germany again. During the financial crisis and the European debt crisis, only the German economy stood out. Why? Because of the spirit of craftsmanship, because Germany never takes shortcuts, and because Germany's high-end industrial manufacturing accounts for 29% of GDP and has become the mainstay of its economic development.

However, sometimes, in the process of development, enterprises forget the principle of "industry first, finance first".

Low-end manufacturing

China's manufacturing industry generally suffers from the shortcoming that it is large but not strong, and is overly dependent on foreign capital and foreign companies in terms of core technology, product design and international marketing.

At present, the self-sufficiency rate of key technologies in my country's manufacturing industry is still very low. Core technologies and core components should not rely on foreign countries. For example, as we all know, as a variety of chips, this chip can be used in manufacturing and various equipment, including various household items. It is its heart. However, 80% of our chips are now imported, which exceeds 200 billion US dollars a year, exceeding the amount of oil.

Generally speaking, we are more engaged in low-end processing in the value chain, and we are very weak in high-end design and subsequent services. Therefore, some people say that China is engaged in low-end melee and redundant construction, without the ability to occupy the high-end, and all the money has been made by outside companies.

Ignore innovation

Chinese LED display manufacturing companies are still more market- and marketing-oriented, ignoring original technological innovation, and their R&D investment is far below the international average. Most companies only have D (Development) and no R (Research). Most entrepreneurs in China's manufacturing industry are still eager for quick success and quick profit. They focus more on how to quickly occupy the market in the short term and increase the company's turnover and profits. However, they do not pay enough attention to and invest in the development of core technologies. As for the long-term development strategy of the company, they almost still remain on slogans.

Many manufacturing companies have introduced advanced foreign technologies, but over the years, they are still resting on their laurels and have not innovated on the basis of digestion and absorption. Furthermore, on the whole, corporate technicians no longer have respect and love for technology, at least not as down-to-earth and silently working as before. Engineers have no intention of studying, let alone innovating, and abandoning technology to go into business is no longer the choice of a few people. Innovation? It would be nice to update!

Extensive management

If China's manufacturing companies are divided according to the pyramid, then the manufacturing companies at the top of the pyramid are already very good, and have even entered the level of world-class manufacturing companies. However, the vast majority of small and medium-sized manufacturing enterprises are still at a very low level in terms of product quality control, financial management and cost control, production and manufacturing management, customer service, etc. They mainly rely on experience for extensive management, and the application of automation technology and information technology is still in its infancy. The standardization, modularization and serialization of manufacturing enterprises are very poor. In order to manufacture the same variety of products, they need many more types of parts than abroad.

In the process of development and growth, many enterprises rely more on the expansion of scale rather than improving management levels, resulting in enterprises with weak ability to resist risks. Once there is a problem in the capital chain, the company will be in trouble. In the past, when competition was not fierce, companies could still survive with extensive management, but when competition became fierce, it became unsustainable. Therefore, the "average life span" of Chinese private enterprises is very short. The key reason is that success lies in marketing and failure in management. There are also some excellent manufacturing companies that were eventually destroyed after being controlled by capital predators.