Turn Passivity into Initiative: The Incremental Growth of Small and Medium-sized Enterprises Lies in the New Ecosystem of the Industrial Chain
Starting from four types of on-chain losses in information, standards, capabilities and capital, cross-enterprise collaboration can unlock the hidden value of the industrial chain.
In the past few years, Chinese enterprises have generally felt "exhausted" and caught in involution. It has become increasingly difficult to secure orders, profit margins are shrinking, and enterprises are waging price wars and even taking orders at a loss to compete for customers. In this harsh business environment, small and medium-sized enterprises (SMEs) have felt the brunt most acutely: huge in number, they are a key force in the industrial chain, but often limited in resources, weak in bargaining power and poor in risk resistance, making them most vulnerable to price wars, account payment term wars and homogeneous competition. It is almost impossible for Chinese SMEs to get out of their predicament only by reducing internal costs and improving efficiency. They must return to the industrial chain and seek solutions from upstream and downstream relationships.
The focus on the industrial chain comes not only from the author's long-term experience as a senior executive in large enterprises, but also from the personal experience of the hardships of survival accumulated in managing a number of small and medium-sized private enterprises in recent years. In large enterprises, the author witnessed firsthand how industrial chain collaboration determines efficiency and competitiveness; in the process of managing SMEs, he gained a more tangible understanding that only by integrating into or co-building the industrial chain ecosystem can enterprises break away from the predicament of fighting alone. The author has participated in and promoted industrial chain cooperation of several enterprises, accumulated front-line experience from strategic design, resource docking to implementation collaboration, and thus maintained continuous observation of the blockages, breakpoints and benefit distribution on the industrial chain.
The essence of the current sluggish economic environment and involution is not that there is no demand in the industry, but that Chinese enterprises have fallen into the prisoner's dilemma of "stock game". This zero-sum game or even negative-sum game not only consumes a lot of energy of enterprises, but also obscures the real problems deep in the industrial chain.
Based on experience and reflection, the author believes that the key to breaking the above dilemma is to break through enterprise boundaries and move towards in-depth collaboration across multiple links of the industrial chain. Through cooperation, we can accurately identify the pain points and blockages at each node of the industrial chain and solve them one by one. The so-called incremental value does not necessarily mean "finding new markets", it can also refer to recreating the value that was lost in the industrial chain due to problems such as information asymmetry, inconsistent standards, broken credit and overstocked inventory. The process of solving problems itself is the process of creating incremental value.
Pain Points and Blockages in China's Industrial Chain: Where Does Incremental Value Come From
The industrial chain is not a simple two-way connection between upstream and downstream, nor a hierarchical stack of "supplier-core enterprise-customer", but a full chain connected by multiple processes, multiple entities and multiple interfaces. To understand what this "full chain" means, we can take the silver-based industrial chain that the author has tracked for a long time as an example.
Silver is an irreplaceable core raw material for photovoltaic silver paste. According to data from The Silver Institute, global silver consumption for photovoltaics is expected to reach 7,560 tons in 2025, accounting for more than 25% of the total silver demand. Calculated based on the transaction price of the industrial chain in December 2025 by Sinolink Securities, silver paste has accounted for 17% of the total cost of photovoltaic modules, exceeding the 14% of silicon materials and becoming the largest single cost item for modules. It can be said that the smooth operation of the silver-based industrial chain is directly related to the cost competitiveness of China's new energy industry and the security of the supply chain.
Following this industrial chain: silver ore is mined and then smelted to form silver ingots, silver ingots are processed into silver nitrate, silver nitrate is prepared into silver powder, silver powder is then made into silver paste, and silver paste finally enters the photovoltaic module factory for the manufacture of cells and modules, and the modules are then delivered to photovoltaic power stations. Each link is an independent enterprise, and there are interfaces for technology, information, logistics, capital and credit between each link.
Poor interfaces will form four types of on-chain losses: information and demand loss, time and production capacity loss, standard and capability loss, capital and credit loss. Incremental value is to convert these interface losses into efficiency and value shared by the whole chain through cross-enterprise collaboration. It is worth noting that the common amplifier running through these four types of losses is the lack of trust between all links of the industrial chain, which will make information more opaque, inventory higher, capital tighter and standards more difficult to unify. It can be said that the lack of trust is the most hidden and stubborn root cause of interface losses.
Information and Demand Loss
The problem of information silos in China's industrial chain is very prominent. The information of all participating entities is fragmented, and business data such as orders, logistics, quality inspection and invoices are scattered in independent systems. Enterprises at a certain node of the industrial chain cannot fully grasp the real business status of upstream and downstream. Opaque information leads to repeated confirmation and repeated games between upstream and downstream, and a large amount of collaboration efficiency is consumed.
The deeper problem lies in the progressive distortion of demand signals. For example, in the silver-based industrial chain, every time information is transmitted one layer, it is distorted and delayed once. Upstream enterprises that are far from the photovoltaic end often cannot see the real shipment, inventory and technical route changes of module factories, and can only make judgments based on intermediate orders. The distortion of demand signals will further be transmitted to delivery date fluctuations and inventory mismatches.
Time and Production Capacity Loss
The most easily overlooked loss in the industrial chain is time. Affected by factors such as unlinked production scheduling, different inventory strategies and overlapping account payment terms, taking the production cycle from silver ingot to silver paste as an example, the normal production cycle and logistics cycle are about 15 days, but the actual delivery period of the whole chain often reaches more than 68 days. For downstream customers, a shorter delivery period is value in itself — they are willing to pay for certainty and speed.
The lack of trust is manifested here as defensive overstocking. Because they dare not rely on a single supplier and worry about upstream default, supply interruption or temporary price increase, downstream enterprises often actively increase safety stock, and even carry out repeated certification and repeated stock preparation. Overstocking seems to ensure safety, but in fact it pushes up inventory, lengthens the delivery period, occupies capital, and eventually turns into time and production capacity loss of the whole chain. Default and supply interruption caused by market fluctuations will force downstream parties to increase inventory, adjust production scheduling and change delivery dates, further amplifying the loss.
Standard and Capability Loss
Inconsistent standards lead to upstream and downstream enterprises acting on their own in product specifications, data formats and quality standards. Each cooperation requires re-run-in and re-testing, and this "translation cost" and "adaptation cost" erodes a large amount of profits.
Capability mismatch is also prominent. Every enterprise has its own bottlenecks: some have manufacturing capabilities but no technology and customers, some have technology accumulation but no capital, some have hardware but no software. The cost of struggling on their own is huge — production capacity cannot be fully released, technology cannot be verified quickly, and the trial and error cycle is extremely long. Against the background of intensifying industry competition, a single-point shortboard is more likely to be amplified into a full-chain risk.
Capital and Credit Loss
Another hidden killer of the industrial chain is account payment terms. From upstream to downstream, account payment terms are stacked layer by layer, and the accounts receivable of SMEs are getting larger and larger. In the meantime, they also need to advance labor and material payments, and all profits are eaten up by financial costs.
The credit of core enterprises cannot penetrate along the chain to all upstream and downstream links, resulting in high financial costs of the whole chain: upstream requires advance payment, downstream requires shorter account payment terms or cash on delivery, and both sides tend to bring capital risks forward. As a result, SMEs have tighter cash flow and higher financing costs. Default and supply interruption caused by market fluctuations also mainly fall into this type of loss.
So where does incremental value come from? The incremental value is hidden in the interface losses of these multi-link process chains. When every enterprise no longer regards upstream and downstream as rivals in the game, but as partners to solve problems together, those demand signals distorted due to the overlong chain, market opportunities wasted due to blind spots in the chain, connection efficiency lost due to inconsistent standards, and capital locked due to broken credit will return to the entire industrial chain.
Four Typical Cross-Enterprise Collaboration Mechanisms
Over the past 10 years, Chinese enterprises have generally reduced costs and improved efficiency through lean production and digital transformation, and these practices are not ineffective. However, there is a ceiling for cost reduction and efficiency improvement of a single enterprise. When an enterprise compresses internal costs to the extreme, further compression will damage product quality and employee interests. What can really release huge value is the collaboration of the entire industrial chain, which must create incremental value through activities in multiple links rather than optimization of a single link.
The "collaboration" mentioned here is not the cooperation between internal R&D, production, circulation and capital departments of an enterprise, but cross-enterprise and cross-link industrial chain collaboration. R&D collaboration means that upstream and downstream jointly define products and standards; production and circulation collaboration means that end-demand data penetrates across levels, and finally realizes cross-enterprise linkage of production scheduling and production capacity; capital collaboration means that the credit of core enterprises is transmitted along the chain; capability collaboration means that the longboards of different enterprises are spliced into systematic efficiency.
The logic of collaboration in every link is the same: anchor pain points, solve pain points through cooperation, and finally create incremental value. When these incremental values converge, enterprises will break away from the quagmire of the stock game.
Co-construction of Standards: Turning Standard and Connection Loss into Collaborative Efficiency Increment
At the product definition stage, enterprises from all links of the industrial chain are brought in to get involved in advance, informed of which parameters will lead to lower yield and what the most concerned pain points of customers are. Through joint definition of requirements, specifications, data formats and quality standards by all upstream and downstream links, problems are solved at the R&D stage, which not only shortens the time-to-market cycle, but also greatly reduces the later trial and error cost.
Anshan Falan is a leading enterprise in China's packaging steel strip industry. At the beginning of its establishment, domestic packaging steel strips were prone to breakage during high-temperature strapping, the industry lacked unified standards, the high-end market was monopolized by foreign countries for a long time, the overseas certification cost of domestic packaging steel strips was high, and the large standard differences between countries formed trade barriers. Instead of working behind closed doors, Anshan Falan carried out in-depth cooperation with hundreds of large domestic steel, non-ferrous metal and glass enterprises to directly obtain end pain points such as high-temperature resistance of hot-rolled steel coils and dimensional accuracy of automatic strapping machines, and converted them into technical basis for product improvement. At the same time, it joined hands with the China Metallurgical Industry Information & Standardization Research Institute to form a tackling team covering R&D, production and standardization, and dismantled the differences between domestic and foreign standards one by one with production test data.
It took the lead in formulating industry standards in 2002, formulated Chinese national standards in 2018, and led the release of China's first ISO international standard in the packaging field in 2022. In the research of ISO international standards, in response to the disagreement on the initial gauge length for elongation testing — the Chinese standard is 30mm, the EU standard is 100mm, and the US standard is 152.4mm — the team demonstrated with a large amount of data and after several rounds of technical consultations, finally promoted the adoption of China's L0=30mm scheme in the international standard. In 2025, it used this international standard to revise the national standard in reverse.
After the standards were unified, technical trade barriers were eliminated, and the domestic industrial chain followed up to improve quality. Anshan Falan's domestic market share in the mid-to-high-end sector exceeds 40%, and its international market sales volume increased from 1,800 tons in 2022 to 2,500 tons in 2023 and 3,600 tons in 2024, selling well in more than 30 countries and regions. In the process of co-constructing standards, they turned the value that was originally wasted on "translation" and "run-in" into incremental value shared by the whole chain. When this collaborative standard further spills over into industry standards, national standards and even international standards, the incremental value expands from a single chain to the entire industry.
Demand Penetration and Production Scheduling Collaboration: Turning Information and Time Loss into Full-Chain Efficiency Increment
Let the real demand penetrate the entire chain. Through information sharing, end-point sales data can be directly transmitted to the most upstream raw material suppliers, and all enterprises arrange production and stock preparation based on real demand. At the same time, the production scheduling plans are linked, so that upstream machines follow the rhythm of downstream orders. When downstream demand fluctuates, upstream can respond quickly to reduce ineffective production and overstocked inventory. When the full-chain inventory drops, capital occupation decreases, and the return on assets naturally increases.
Wanfeng Electronics provides a typical sample. As a global leading enterprise in PCB (Printed Circuit Board), it invested 3 billion yuan in Xinfeng, Jiangxi to build a high-layer multilayer PCB intelligent manufacturing project. As a "chain leader", it drove nearly 20 upstream and downstream supporting enterprises to settle in the park, with raw material suppliers next door, logistics service providers opposite, and cooperative manufacturers downstairs, realizing "delivery through the wall" — it only takes a few minutes to transport materials from the upstream workshop to the downstream production line. More importantly, Wingtech Electronics broke enterprise boundaries through management output such as information sharing platform and unified production scheduling system, so that the rhythm of the entire chain resonates synchronously: production scheduling information is shared in real time, inventory data flows transparently, and delivery nodes are aligned synchronously. Upstream and downstream no longer work separately in series and wait, but fight side by side in collaboration. As a result, the delivery cycle is shortened by 40%.
The essence of shortening the supply cycle is to eliminate the waiting time — supporting enterprises moving into the same park eliminates logistics waiting, real-time information sharing eliminates communication waiting, and synchronous rhythm resonance eliminates production scheduling waiting. Every time a "wait" is eliminated, the delivery period is shortened, and customer satisfaction is improved.
Credit Penetration: Turning Capital and Credit Loss into Cash Flow Increment
Through the credit penetration of core enterprises, high-quality credit is transmitted to upstream or downstream enterprises. With the accounts receivable vouchers of core enterprises, they can obtain loans from banks at extremely low interest rates. The financial cost of the whole chain is reduced, suppliers can survive better, and the supply chain is stable. This is also a real incremental value.
Haier Group has built a supply chain bill platform through its subsidiary Xinhaihui Digital Technology, which is directly connected to Industrial Bank's system, using supply chain bills as the settlement carrier to efficiently transmit the credit of core enterprises along the industrial chain to upstream and downstream supporting enterprises. The bill receiver applies for bill financial support from the bank through the direct connection of the platform, realizing "multi-level circulation of bills and one-click arrival of funds". In 2024, the platform issued more than 20 billion yuan of supply chain bills, and the average discount interest rate of enterprises in the platform was 82 basis points lower than the one-year loan prime rate. As of September 2025, the platform has served 7,000 customers in total, including more than 5,000 SMEs.
Capability Splicing: Turning Capability Mismatch into System Efficiency Increment
Every enterprise has its own bottleneck. Capability splicing is to combine the manufacturing capabilities, technology accumulation, application scenarios, capital strength and digital capabilities of different enterprises to form a system efficiency that no party can achieve by fighting alone.
In August 2026, two A-share listed companies in Yantai — Addie Industries and Dongfang Electronics signed a strategic cooperation agreement. Addie Industries started with hydraulic breakers and high-end hydraulic parts. In 2025, its revenue from high-end hydraulic parts reached 2.081 billion yuan, and its industrial robot revenue increased by 58.26% year-on-year. Dongfang Electronics is a municipal state-controlled enterprise deeply engaged in power automation for more than 40 years, with a revenue of 8.377 billion yuan in 2025, covering three major sectors: smart grid, smart energy and smart city.