A study on the impact of digital tobacco logistics on tobacco supply chain performance: taking the tobacco industry in Guangxi as an example
| DOI | https://doi.org/10.1108/IMDS-05-2021-0270 |
| Published date | 31 August 2021 |
| Date | 31 August 2021 |
| Pages | 1416-1452 |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
| Author | Xiaoping Shen,Yeheng Zhang,Yumei Tang,Yuanfu Qin,Nan Liu,Zelong Yi |
A study on the impact of digital
tobacco logistics on tobacco supply
chain performance: taking the
tobacco industry in Guangxi as
an example
Xiaoping Shen and Yeheng Zhang
College of Economics, Shenzhen University, Shenzhen, China
Yumei Tang and Yuanfu Qin
Guangxi Tobacco Monopoly Bureau (Company), Liuzhou, China, and
Nan Liu and Zelong Yi
College of Economics, Shenzhen University, Shenzhen, China
Abstract
Purpose –This paper, with the tobacco industry as the background, establishes an indicator system for
tobacco supply chain performance evaluation using the FAHP method.
Design/methodology/approach –Based on the relevant data of tobacco enterprises in Guangxi, the paper
calculates the performance values of tobacco companies in various cities of Guangxi, and through the analysis
of each indicator and the performance values of each city, the authors find that the improvement ability has a
major impact on tobacco supply chain performance. Then, the paper establishes a system dynamics model to
further demonstrate the impact of information digitalization on the performance of the tobacco supply chain in
Guangxi, thus providing theoretical support for building digital tobacco logistics in Guangxi.
Findings –The findings of the study show that the performance of the tobacco supplychains in various cities
of Guangxi is generally at the level of “Pass–Good,”which can barely meet the requirements of tobacco supply
chain operation, but there is still plenty of room for improvement.
Originality/value –The authors show that digital and IT-based empowerment can maximize the
performance of Guangxi’s tobacco logistics performance.
Keywords Digital twin, Digital empowerment, Digital logistics, Physical Internet, Tobacco supply chain
performance
Paper type Research paper
1. Introduction
Tobacco is a special product. Generally speaking, there is no great difference in the sales and
services of tobacco products among tobacco enterprises in different regions, and the demand
of consumers for tobacco products is also relatively stable. All countries in the world have
relatively strict control over the production and sale of this product. China has also
implemented a relatively strict tobacco monopoly system. Therefore, China’s tobacco
enterprises generally lack competition awareness and still have outdated ideas. The high tax
revenue generated by the tobacco industry accounts for a large proportion in China’s
financial revenue. Nevertheless, the proportion of tobacco tax revenue in the national tax
revenue is declining, which undoubtedly brings a crisis to the tobacco industry. Under this
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This work was supported by the Project of Technology Innovation in China National Tobacco
Corporation (Guangxi) (Grant No. 2020-04) and the Project of Longgang Innovation Research Instituteof
Shenzhen University (Grant No. SZJR006).
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0263-5577.htm
Received 1 May 2021
Revised 9 July 2021
Accepted 31 July 2021
Industrial Management & Data
Systems
Vol. 122 No. 6, 2022
pp. 1416-1452
© Emerald Publishing Limited
0263-5577
DOI 10.1108/IMDS-05-2021-0270
declining trend, the tobacco industry must make further efforts to strengthen its
competitiveness, improve its service level and enhance its operation efficiency.
China’stobacco industry implements the management system of “unified leadership, vertical
management and monopoly.”This specialness limits the adjustment space of tobacco output
and sale prices. Therefore, the focus of enhancing the tobacco industry’s competitiveness should
be on reducing logistics operation costs and improving logistics management efficiency. In that
sense, improving the logistics level is an i mportant task for the tobacco industry. The core
competitive position of tobacco logistics in China’s tobacco operation is self-evident. How to
enable tobacco logistics to create greater value and bring more benefits for China’s tobacco is an
important issue facing the tobacco logistics industry at present. Since tobacco logistics, as the
core business of the tobacco industry, provides an important support for China’s tobacco
industry to improve its core competitiveness for the future, it has attracted a great deal of
attention and its contribution to the tobacco industry has become increasingly prominent.
Judging by the development data of 2018, the tobacco industry performs well mainly in the
following three aspects: (1) Achieving industrial goals: th e logistics line of the tobacco industry
maintained a safe, stable and green operation state, guaranteeing the production and
manufacturing of cigarettes across the country, completing the terminal distribution, ensuring
the safe storage and transportation of raw materials, and supportin g the smooth development of
the tobacco industry’s production and operation business. Commercial enterprises in the
industry had returned a total of nearly 115 million cigarette packing boxes to industrial
enterprises, and industrial enterprises had produced 75.35 million boxes of cigarettes by
recycling packing boxes. Industrial and commercial enterprises had used pallets for combined
transport of 2.39 million boxes of cigarettes, which had greatly improved the logistics efficiency.
The recycling of cigarette packingboxes and the pallet-based combinedtransport of industrial
and commercial cigarettes both exceeded the annual task goals. (2) Operational efficiency
improvement: As of the end of 2018, for industrial enterprises, the number of logistics employees
had decreased by 1.9% year-on-year, the per capita operational efficiency had increased by
4.59% year-on-year, the average daily inventory of cigarettes had decreased by 3.8% year-on-
year, and the turnover days of cigarette inventory had decreased by 1 day year-on-year; for
commercial enterprises, the number of logistics employees had decreased by 4.02% year-on-
year,per capita distribution efficiency hadincreased by 8.04%year-on-year,the daily inventory
of cigarettes had decreased by 4.1% year-on-year, the turnover days of cigarette inventory had
decreased by 3 days year-on-year, the sorting error rate had decreased by 22.22% year-on-year,
the number of county-level transfer stations had decreased by 40 years-on-year, down by 3.42%,
the number of delivery vehicles had decreased by 482 years-on- year, down by 3.55%, and the
average delivery response time had decreased by 1.46% year-on-year. (3) Cost control: for
industrial enterprises, the single-box logistics cost was down by 0.54% year-on-year; the
proportion of logistics costs in sales revenue had decreased by 0.07 percentage points year-on-
year, and its proportion in the three cigarette cost items had decreased by 1.22 percentage points
year-on-year; for commercial enterprises, the single-box logistics cost was up by 2.7% year-on-
year; the proportion of logistics costs in sales revenue had decreased by 0.02 percentage points
year-on-year, and its proportion in the three cigarette cost items had decreased by 0.36
percentagepoints year-on-year.
Although after years of efforts, the tobacco logistics industry has accomplished some
achievements in constructing logistics networks, implementing lean logistics management,
improvingthe utilizationrate of logistics resources,establishinga basic information technology
(IT) system for logistics, and attracting high-level logistics talents, there is still room for
improvement.In terms of the layout of logistics networks,currently, the logistics networksof
various industrial and commercial enterprises are relatively independent of each other, their
scales are relatively small, and usually the single-connection mode is adopted. Therefore, the
whole industry must consider and plan the whole situation comprehensively and thoroughly
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optimizethe existing network layoutand resource allocation,so as to gradually solveproblems
such as the difficultyin forming economies of scale, the overall low transportation efficiency,
the relativelyslow response speed and the highcost and expenses. With respectto promoting
lean logistics management, due to thedifferences in the management basesand development
stages of industrialand commercial enterprises,the level of industrial logisticsmanagement is
still not balanced enough to some extent. As for the comprehensive utilization of logistics
resources, from theperspective of the industry as a whole, because the logistics business has
been managed by multipledepartments within an enterprisefor many years, the problems of
decentralized allocation of logistics resources, repeated construction, excess capacity, idle
assets and so on existto varying degrees. The willingness to co-build,share and pool logistics
resources among enterprises and within enterprises is not active enough, and there are still
some policy obstacles in the integration and full utilization of resources. The awareness of
overall utilization of intra-industry resourcesand social advantages is not strongenough, and
there is still much room for improvement in the depth of potential exploration and
comprehensiveutilization of resources. The establishment of the basic IT systemfor logistics
has played a very good supporting role for the construction and operation of the industry
logistics.However, due to the lack of top-levelarchitecture design,the contents and methods of
information collection are not unified, and the data standards and interfaces are not unified,
which hindersthe interconnection and real-time controlof logistics information andaffects the
improvement of the logistics management level of the industry. With the increasing
dependenceof logistics businesson IT, these problemsare becoming more and more prominent.
Logistics personnel’s overall competence has been improved in recent years, but logistics
personnel planning is insufficient, logistics professionals’age structure, aca demic degree
structure,professionalstructure, and experiencestructure are not reasonable,and there is still a
shortage of senior management talents who have expertise and understand the industry,
interdisciplinary talents who understand both management and technology, and high-level
skilled talents who have both theoretical knowledge and practical capabilities. Other existing
problems include unstable team composition, insufficient talent reserve, and insufficient
development momentum. Therefore, the tobacco logistics industry still needs to further
improve its service level from multiple aspects, and improving the extent of IT use and
digitalizationin tobacco logistics system will be an important way.
China is a manufacturing power, but its manufacturing industry is not strong enough
despite its large scale. Most manufacturing sectors are in the processing and manufacturing
part of industrychains, and the addedvalue of products is low. Moreover,with the aging of the
population and the change of people’s concept of childbearing, the cost of labor gradually
increases and the population advantage is no longer significant. Therefore, China’s
manufacturing industry must transform and upgrade itself in order to maintain its
competitiveness in the global market. Currently, the use of IT and digitalization has become
a trend in the manufacturing industry, and data has become an important factor in industry
development. The application of information technologies such as digital twinning and the
Physical Internet has dramatically accelerated the process of digitalization. Many companies
and industries have used digital twinning technology to identify problems and improve
efficiency (Tao et al.,2019). Digital twinning refersto the organic whole of a physical asset(or
entity) andits digital representation,which communicates, promotesand co-evolves with each
other through two-way interaction (Tao et al.,2018). Through various digital technologies,
entities, behaviors and relationshipsin the physical world are digitized as a whole to create a
high-fidelityvirtual model (Tuegel et al.,2011).This virtual model relies on the real dataof the
physical world to formulate its real-time parameters, boundary conditions and dynamics,
thereby more representatively reflecting the corresponding physical entities (Glaessgen and
Stargel, 2012). Inthe face of the huge challenge of global logistics sustainability, the Physical
Internet is considered to be a very promising solution. The initiative suggests designing a
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