Recently, Sanan Optoelectronics released its 2013 annual report, which has a large inventory of raw materials, semi-finished products and finished goods. At the end of 2013, Sanan’s overall inventory amount was as high as 1,158,430,694.43 yuan. The company expects to drop the price by RMB 10,023,528.14 and the book value of the inventory is RMB 1,148,407,166.29. Coincidentally, Huacan Optoelectronics showed in the 2013 annual report that the book value of inventory at the end of the year was as high as 166,188,236.06 yuan, and correspondingly set a price drop of 7,158,756.48 yuan.
On the one hand, it is an expedited capacity layout. On the one hand, it is a high water level inventory, and a large amount of inventory is commonplace in the LED industry. And in the fast-changing industry pace, how can LED companies make good use of inventory to participate in market competition?
Differences in the times Luo Jing, general manager of Zhejiang Hengman Optoelectronics Marketing believes that the current price changes of LED lamps and raw materials are too large, and enterprise inventory should not be prepared too much. Second, the specifications and models of LEDs have not yet been finalized, and the risk of excessive inventory will increase.
In the era of traditional lighting, the inventory standard of enterprises is often 1.5 times of normal monthly sales. The product technology route is relatively stable, and the product life cycle is relatively long. Enterprises must truly carry out large-scale sales coverage and sales promotion, and need to match sufficient inventory. Timeliness can be achieved in response to channel and user needs.
In the era of semiconductor lighting, the speed of iteration of LED lighting is faster than that of traditional lighting. In the process of replacing the light source, the rate of change of the penetration rate of the LED product is also accelerating, and the application demand of the product fluctuates greatly. In this case, If the enterprise prepares too much inventory, once the enterprise's turnover speed is not enough, the enterprise will face product iteration risk.
The risk is largely due to the improvement in product performance, but the price is declining, and the inventory goods lose their original market competitiveness. If companies want to maintain this level of competitiveness, they must quickly dispose of their inventory products, which means that companies have to endure the risk of losing money. Companies with shallow capital and pockets may be caught up in it.
Secondly, the risk that a company may not face inventory is small, but it will contradict the cycle of responding to customers. If the enterprise does not respond to the customer's order requirements or responds in a timely manner without the inventory, the customer will choose not to cooperate, and the enterprise will face the risk of losing the order.
At the same time, most domestic LED application manufacturers rely on foreign trade companies to export their products to foreign markets. Many enterprises are market-oriented enterprises. Coupled with the fierce competition of domestic LED companies, companies are often guided by customers, the industry is in a high-speed development stage, companies must be cautious in preparing for inventory.
However, in the face of fierce market competition, if the company has no inventory at all, its time-sensitive competition weight will be lost.
Liu Xiao, general manager of Intermec, said that the price of LED lamps has been declining some time ago. It will not be too fierce because the price of the products in the enterprise will be too low. Enterprises should prepare some necessary stocks according to their own conditions. At the same time, the LED industry prospects are very optimistic, if everyone is too optimistic about this, so too much investment, it will lead to the industry facing the risk of over-development, companies should be cautious about the inventory.
Wu Zheng, general manager of Everlight Lighting Management (Shanghai) Co., Ltd. said that in the era of traditional lighting, inventory is a weapon for enterprise competition. In the era of LED lighting, excessive inventory is the tomb of enterprises. This year's LED industry competition, inventory is actually a key point of the enterprise, or a life door. If the management is not good, the competition of the company will definitely have fatal problems. By managing inventory, companies can win and at least be alive.
For the current market environment, it is impossible for enterprises to have zero inventory or not stock, because due to market pressure, moderate inventory is still necessary. Now that the LED market is too impetuous and unreasonable, the overcapacity of the industry and the homogenization of products have caused vicious competition in the market. Enterprises must still rationalize their inventory.
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