The US-China trade war is now spreading across every industry and even across nations. Beyond the political and economic choosing of sides and the responses it provokes, industry must also rapidly translate its strategies for chain fragmentation, restructuring, and risk dispersion into executable operating methods, because this wave has already arrived with great force.

The background that originally shaped dispersed supply chains and flexible management is now different from the original design assumptions of the central plant and supplier ERP. Take Apple’s supply chain, for example: the relationships of mutual interdependence and local proximity that formed an industrial cluster on the mainland are now being split into a Chinese national-team supply group and a Taiwanese supply group, and the US push for a friend-shoring supply chain follows the same pattern.

Beyond ERP-SCM being reshaped, on the quality side SQM (Supplier Quality Management) needs ever more supporting systems and countermeasures as products today trend toward low volume and grouping by category. Only then can a company put forward a genuine supply system that meets the harsh demands of central plants and brand owners while still satisfying their cost requirements. This allows both sides to form a new strategic partnership and even a deeper relationship of mutual interdependence; those who cannot reach this level are very likely to be eliminated and replaced by Japan, South Korea, or Southeast Asian and other nations.

 
Drawing on MiDFUN’s decades of dedicated experience in quality, the next generation of SQM must have several characteristics to meet the needs of the times:
1. Openness – it can connect to all kinds of ERP. After all, basic data such as suppliers and products must come from the ERP, so an open integration platform is the foundation.

2. Solving pain points – ERP itself already has an incoming-material module and supplier management, so an add-on is not necessarily required. But faced with today’s chain-fragmentation situation, many ERP systems have not yet formed countermeasures for it, let alone systems that can respond. In my view the biggest pain point is that supplier COAs cannot be automatically inspected and lack supporting measures. To solve this pain point, however, many hurdles must be cleared: for example, systematized sampling processes (not merely sampling plans) based on each supplier’s grade (dynamic) and product category (core materials and packaging materials cannot possibly use the same standard), combined with valid-period document management such as GPD, and extending to supplier-side audits, so as to form an effective SQM management system that integrates into the entire ERP’s payment, nonconforming-product MRB, and supplier 8D supporting measures. This whole set includes SPC statistics, supplier WEB platform management via SQP, supplier audits (SA), and management of supplier one-time documents and documents requiring periodic audits. It also extends to systematic countermeasures for sudden events (such as document control and management of follow-up contingency plans after radiation contamination occurs somewhere, or after a factory in some region halts shipments due to a political decision).

3. Flexibility and reasonable pricing – because risks keep growing and black swans appear frequently
In an era of ever finer division of labor and specialization, the situation in which a single vendor takes full responsibility is becoming rarer and harder. To disperse risk, flexible supply while maintaining consistent quality has become a rigid requirement, and the same applies to systems. When a single vendor integrates, invests in, and sells an SQM system, the price often runs into the millions or more, which enterprises can hardly bear. A dispersed system of suppliers is more difficult to manage and, in terms of information security, poses yet another challenge. Therefore, keeping core data inside the enterprise while moving data exchanged with external suppliers to the cloud also becomes a consideration for enterprises (of course, when security is assured, everything can be moved to the cloud). A professional mathematical-model control and traceability system is all the more a weapon that enterprises must have ready under modern conditions.

 
In short, a crisis is a turning point. Enterprises that are well prepared and respond appropriately will surely be able to gain a leading advantage under intelligent supply-network management. We hope Taiwan’s manufacturers can also prepare ahead of time and seize the best business opportunities.