Mechanism for Core Positions in Small and Medium-sized Manufacturing Supply Chain: A Case Study of XH Enterprise
Abstracts
Against the backdrop of profound global economic restructuring and deepening industrial transformation, supply chains have become pivotal drivers of core competitiveness for small and medium-sized manufacturing enterprises. As a key manufacturing hub in China, the Pearl River Delta region faces challenges where numerous SMEs constrained by management philosophies and cost pressures still exhibit issues such as homogeneous compensation structures and insufficient incentive mechanisms for key supply chain positions, severely impacting operational efficiency and talent retention. This study focuses on Dongguan-based XH Precision Connector Manufacturing Company, leveraging the author's 25 years of manufacturing experience and 8 years of supply chain management consulting expertise. Through literature review, field surveys, questionnaire analysis, and interviews, we systematically examined compensation incentive systems for three core positions: planning, procurement, and warehousing. Findings reveal that XH's compensation framework predominantly relies on fixed salaries, plagued by structural rigidity, inadequate internal equity, weak market competitiveness, and lack of collaborative incentives, resulting in low employee motivation and high turnover rates. Building on classical theories like equity theory and expectancy theory, and considering the unique characteristics of SME compensation systems, we propose a "base salary + performance-based pay + collaborative rewards" tripartite compensation structure. This is complemented by a differentiated performance indicator system and dynamic adjustment mechanisms, supported by institutional, organizational, and cultural frameworks to ensure implementation. The study aims to address practical management challenges at XH enterprises, provide actionable insights for optimizing compensation incentives in core supply chain positions across similar SMEs, and enhance supply chain management efficiency and market competitiv