Hunan Jinzhinuo Supply Chain Platform is located in Yiyang City. It is a local supply chain service platform with the largest logistics park area and 100% occupancy by major distributors. Today, we had the honor of interviewing Lu Jurong (referred to as "Mr. Lu"), one of the founders of Jinzhinuo Supply Chain Platform. The following is the interview transcript: Q1: Hello, Mr. Lu. Could you introduce your overall development process? Mr. Lu: Since 2001, I entered the FMCG trading industry. By 2014, our annual turnover for brands such as Mengniu ambient, Mengniu low-temperature, Kasi low-temperature, Mars, Mondelez, and Wanglaoji had reached nearly 200 million yuan. Considering the need for new models to lead development, in 2014 we joined the Eternal Asia system. Until 2017, the trading business faced increasing social costs, leading to losses. At that point, we urgently needed rapid innovation and system optimization to reverse the losses. So we exited Eternal Asia. Later, we continued to cooperate with Lingshoutong and became a high-quality partner in Hunan. Through these collaborations, we realized that the path of self-reliance is the most innovative, best preserves our own value, and strengthens our channel capabilities. Ultimately, we embarked on the path of "building and implementing our own supply chain technology platform." To enhance the backend capabilities of the supply chain, we jointly established a 30,000-square-meter logistics park with several local major distributors. While supporting our own channels, it is also open to the outside. Q2: Mr. Lu, your development process is closely watched by industry peers. You have also experienced cooperation with several national platforms and finally chose to build your own supply chain platform. Could you talk about your current implementation and reforms? Mr. Lu: I think the innovation and self-reliance of a supply chain platform should be discussed from two points: 1. Our own trading company must be self-reliant We come from a trading background. Our original channel focused on the KA system, gradually penetrating and cultivating business teams to sink into small stores and channels with good cash flow. Besides being an agent for first-tier brands, we established an external procurement department to meet market demand, gradually optimizing and penetrating second- and third-tier brands and categories. We truly implement "procurement based on sales" rather than the traditional distribution model, where distributors are service providers for brand owners. At the same time, we have fully automated and platformized our order processing system, systematized and intelligentized our warehousing and sorting system, and made our financial system standardized and transparent. Of course, facing innovation and self-reliance, we continuously optimize our team building. For example, while our business teams manage by category, we also try sharing brand business mechanisms, gradually shifting from product-based assessment to store-order-based accounting. We have also achieved results in practicing the Amoeba model. 2. Backend supply chain capabilities must be self-reliant To meet the demand for thousands of products in the market, as a supply chain platform with a trading company background, we have our strengths in brand power, channel power, and customer relationship capabilities. However, we cannot handle all brands, nor do we have the capital to self-purchase and expand so many brands and categories. Therefore, after having the idea of establishing a local logistics park with several local major distributors, we immediately implemented it! Currently, our park covers 30,000 square meters with 100% occupancy. Local distributors and even many major distributors are eager to get in. The categories of the resident major distributors include snacks, daily chemicals, general merchandise, beverages, etc. These park partners will become the backend main force of our city's FMCG supply chain platform. Q3: Mr. Lu, one thing I don't understand: Is the self-reliance of the trading company related to the construction of your entire logistics park? Is having major distributors in the park the ultimate success? Mr. Lu: As a core resident of the park and a local major distributor, I have the obligation to first empower my own products, channels, warehousing, distribution, and finance with the supply chain technology platform, and then open it to everyone. That is, my business (orders), finance, warehousing, and distribution form a pathway and integration through my own trading company, and open to the major distributors in the 30,000-square-meter park, activating myself and making others shine. The park will be led by a supply chain service company, first serving itself, then the supply chain service company will have its own organizational structure and serve more partners. In terms of organizational structure, it includes the team led by Mr. Zeng responsible for expanding the order business platform, the core team for intelligent warehousing, sorting, and distribution, and the financial department for the entire park's supply chain. The financial department's work is to separate financial flows from orders and concentrate them in the park's supply chain. The next day, the park's finance clearly allocates accounts, ensuring that everyone's profits are not touched. Therefore, by sharing business, finance, warehousing, and distribution with park cargo owners through technology, we can form the strongest supply chain platform in the FMCG field and serve local channels, including the small stores we jointly sink into, as well as our complementary channels, optimizing the existing and complementing the incremental. In summary, the Jinzhinuo Supply Chain Platform is open to urban channels. Joining the logistics park will become a reserve force for major distributors, and we must truly serve local major distributors with deep integration in business, finance, warehousing, and distribution! What everyone wants is not just cost savings in warehousing and distribution, but a more competitive future! Of course, the Jinzhinuo Supply Chain Platform is open. It will serve more "business front-ends" in a city, and will be open to national platforms such as Lingshoutong, Huidanxia, JD.com, and Furong Xingsheng. We will open to urban small and medium chain systems as their backend supplier. We do not reject any front-end business, so our city platform will be more powerful! Our platform can provide financial, business, warehousing, and distribution services to product providers and sales business providers! In this way, our platform can be strong! Q4: Mr. Lu, I believe your summary may not only affect local partners but also influence regional major distributors across the country who are confused. Do you have any suggestions for partners nationwide? Mr. Lu: I don't have the ability to influence everyone. I can share my speech at the annual meeting with you, titled "Accounting for 2019." We currently drive our internal brand categories and department divisions according to the Amoeba model, so I hope major distributors will clearly know their accounts in 2019 and earn more money, so that enterprises and platforms will be more vibrant! Accounting for 2019 (The following is a compilation of Mr. Lu's speech at the Jinzhinuo Supply Chain Platform 2018 annual meeting) The era of product shortage and high profits has passed. The era of saving and efficiency is coming. Only by saving costs and improving efficiency can we survive and develop. Whoever can achieve the extreme in this regard will achieve great success. "Accounting" and "all-staff accounting" are the path to this extreme! If everyone can calculate their own profit and loss, and each team can calculate its own profit and loss, eliminating losses and retaining profits, the company platform will be built higher and higher. Employees, as "dancers" on the platform, will become increasingly relaxed and efficient. Promoters must calculate accounts. Know which products to promote to earn more money. Salespeople must calculate accounts. Know which boss to do business with to earn more, thereby clarifying work priorities. Delivery personnel must calculate accounts. The company gives you bulk business, so you should make the company spend less than hiring outside delivery personnel. The savings are your value to the company. Warehouse managers and pickers must calculate accounts. The company's departments give your department fixed costs and fixed rates. How to take on more work to save personnel and various expenses? The savings are your value to the company. Finance and business personnel must calculate accounts. Use the fewest personnel to achieve the best work results. On this solid foundation, achieve financial and business output, thereby achieving the goal of making money. With the above foundation, we will surely achieve a favorable situation where all Mengniu segments are profitable, all agency brands are profitable, warehousing and distribution are profitable, and finance and business are profitable. At this point, the company's transformation is successful, and we will usher in more than 10 years of brilliance! In this process, the current boss will be upgraded to "founder"; those who succeed in the transformation will become future board members and general managers of the company. Let us abandon the mentality of working for wages, establish the idea of partnering to make money, and strive towards the century-old enterprise dream of Tianyu (Jinzhinuo)! Tips will be paid 400-2000 yuan once the story is adopted. China FMCG + Internet Professional New Media Committed to FMCG manufacturer and distributor transformation and upgrading and channel digital solutions