The influence of China-Europe Railway Express on the production system of enterprises: A case study of TCL Poland Plant

doi:10.1007/s11442-021-1866-4

Abstract

Abstract:

The implementation of the Belt and Road Initiative and the increasing frequency of the China-Europe Railway Express (CER Express) have brought new improvement to the production system of enterprises along the Belt and Road regions. On the basis of summarizing the evolution of production system of enterprises, this paper takes TCL Poland Plant as an example to conduct an in-depth study on the characteristics of the plant's current production system and its differences from the original production system, and analyzes the impact of the CER Express on its current production system. Some conclusions can be drawn as follows. (1) CER Express had a great impact on the production system of TCL Poland Plant, which is mainly manifested in the following aspects. First, the transport of raw materials by CER Express improves the time efficiency and shortens the whole supply chain. Second, CER Express acts as a “moving inventory”, which realizes the flexibility of raw material inventory and “zero inventory” effect based on the punctual transport. Third, the time and inventory effects brought by CER Express speed up the response to European market. The comprehensive benefits brought by CER Express lead to a more punctual and lean production system, meet the diversified needs of consumers on account of product quality and diversification, and improve ability to expand European market. (2) On the basis of abandoning the original “Rigid Mass Production” system, we argue that TCL Poland Plant formed a unique production system—“Global Fluid Just-in-Time” which absorbed the essence of Toyota Production System based on the punctual transnational transportation of CER Express. (3) The differences between the current and the original production systems of TCL Poland Plant are mainly focused on the following aspects: the difference of transport and storage mode of raw materials, and the changes of production line, production mode and quality inspection organization, etc.

Key words: production system, Global Fluid Just-in-Time, China-Europe Railway Express, TCL Poland Plant

LIU Hui, GU Weinan, LIU Weidong, WANG Jiaoe. The influence of China-Europe Railway Express on the production system of enterprises: A case study of TCL Poland Plant[J].Journal of Geographical Sciences, 2021, 31(5): 699-711.

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	Original production system (2004-2015)	Current production system (2016-)
Components transport	Ocean transport	CER Express transport (especially the “Chengdu-Europe Railway Express”)
Duration	38 days	22 days (The entire supply chain is shortened, especially transportation link)
Raw materials inventory	Overstock of inventory	“Zero inventory” (CER Express acts as “moving inventory”)
Production lines	One	Five (Original inventory space becomes production lines)
Production modes	Rigid and mass production	Unitization, “Just-in-Time”, and lean production
Type of products	Single: color TV	Diverse: LCD TVs, mobile phones, etc., and other foundries
Quality of products	Exist certain problems of quality	Diversified quality inspection
Market response	Weak	Strong