Operation Mechanism of Supply Chain Management

Operation Mechanism of Supply Chain Management
1. Cooperation mechanism
The supply chain cooperation mechanism reflects the strategic partnership and the integration and optimal utilization of internal and external resources of the enterprise. The product manufacturing process based on this enterprise environment, from product research and development to market launch, the cycle is greatly shortened, and the degree of customer-oriented (customization) is higher, modularization, simplification of products, and standardized components. Flexibility and agility have increased significantly in the market, virtual manufacturing and dynamic alliances have increased the degree of utilization of business outsourcing (outsourcing) strategies. The scope of enterprise integration has expanded, from the original low-level internal business process reorganization to the collaboration between enterprises, which is a higher-level enterprise integration model. In this kind of enterprise relationship, the most obvious change in the strategy of market competition is time-based competition and value chain and value transfer system management or value-based supply chain management.

2. Decision-making mechanism
Because the source of decision-making information of supply chain enterprises is no longer limited to an enterprise, but in an open information network environment, information exchange and sharing are continuously carried out, so as to achieve the purpose of synchronization, integration planning and control of supply chain enterprises. EDI, Internet/Intranet has developed into a new basic platform for enterprise decision support information, and the decision-making mode of enterprises will undergo great changes. Therefore, any enterprise decision-making mode in the supply chain should be based on the open information environment of Internet/Intranet. group decision-making model.

3. Incentive mechanism
In the final analysis, supply chain management, like any other management thought, is to make enterprises perform well in "TQCSF" in the competition towards the 21st century (T is time, which means quick response, such as short lead time, Quick delivery, etc.; Q refers to quality, which means high quality of products, work and services; C refers to cost, and enterprises should obtain greater benefits with less cost; S refers to services, and enterprises must continuously improve user service levels and improve user Satisfaction; F is flexibility, enterprises should have better adaptability). The lack of balanced and consistent supply chain management performance evaluation indicators and evaluation methods is the weakness of current supply chain management research and a major problem that leads to inefficient supply chain management practices. In order to master the technology of supply chain management, it is necessary to establish and improve the performance evaluation and incentive mechanism, so that we can know in what aspects and to what extent the supply chain management thinking can improve and improve the enterprise, so as to promote the continuous improvement and improvement of enterprise management, and also make Supply chain management can develop in the right track and direction, and truly become a new management model that enterprise managers are willing to accept and practice.

4. Self-discipline mechanism
The self-discipline mechanism requires supply chain companies to keep pace with industry leaders or the most competitive competitors, and constantly evaluate products, services and supply chain performance
price, and continuous improvement, so that enterprises can maintain their competitiveness and sustainable development. The self-discipline mechanism mainly includes the self-discipline within the enterprise, the self-discipline in comparison with competitors, the self-discipline in comparison with peer enterprises and the self-discipline in comparison with leading enterprises. By implementing a self-discipline mechanism, enterprises can reduce costs, increase profits and sales, better understand competitors, reduce user complaints, improve customer satisfaction, and increase reputation. The performance gap between internal departments can also be narrowed and improved. the overall competitiveness of the enterprise.

5. Risk Mechanism
The cooperation between supply chain enterprises will lead to the existence of various risks due to the existence of information asymmetry, information distortion, market uncertainty, political and economic laws and other factors. In order to satisfy the cooperation between supply chain enterprises, certain measures must be taken to avoid risks, such as information sharing, contract optimization, supervision and control mechanisms, etc., especially through the operation of the excitation mechanism at all stages of enterprise cooperation, to implement various incentives means to make the cooperation between supply chain enterprises more effective. In view of the various risks and their characteristics in the cooperation of supply chain enterprises, different preventive countermeasures should be taken. Risk prevention can be considered from the strategic level and the tactical level. The main measures include:
(1) Establish strategic partnership.
To achieve the expected strategic goals, supply chain enterprises objectively require supply chain enterprises to cooperate to form a win-win situation of shared profits and shared risks. Therefore, establishing a close partnership with other members in the supply chain has become a very important prerequisite for the successful operation of the supply chain and risk prevention. Building a long-term strategic partnership first requires members of the supply chain to strengthen trust. Second, the exchange and sharing of information among members should be strengthened. Third, establish a formal cooperation mechanism to achieve benefit sharing and risk sharing among supply chain members.
(2) Strengthen information exchange and sharing, and optimize decision-making.
Supply chain enterprises should eliminate information distortion through mutual information exchange and communication, thereby reducing uncertainty and risk.
(3) Strengthen the application of agonistic mechanism.
The prevention of moral hazard is mainly through the study of information asymmetry and principal-agent problems, and the use of certain incentive means and mechanisms to eliminate the moral hazard problem caused by the agent.
(4) Flexible design.
There is demand and supply uncertainty in supply chain cooperation. When supply chain enterprises cooperate, by providing flexibility to each other in the contract design, the influence of the uncertainty of the external environment can be partially eliminated, and the information of supply and demand can be transmitted. Flexible design is an important means to eliminate the variable factors caused by the uncertainty of the external environment.
(5) Daily management of risks.
Companies in competition are always facing risks, so the management of risks must be persistent and an effective risk prevention system must be established. The daily management of risks includes: risk prediction and analysis, risk tracking and monitoring, risk early warning, crisis handling, etc. In addition, establishing a lasting and effective risk management system and arranging specialized managers is also an important task.

6. Trust Mechanism
Trust mechanism is the foundation and key of cooperation between enterprises in supply chain management. Trust plays an important role in supply chain management. The purpose of supply chain management is to strengthen the core competitiveness of node enterprises, quickly respond to market demand, and ultimately improve the market competitiveness of the entire supply chain. To achieve this goal, strengthening the cooperation between supply chain node enterprises is the core of supply chain management, and in the mutual cooperation of supply chain enterprises, trust is the foundation and trust is the core. Without the minimum trust between enterprises, any cooperation, partnership, benefit sharing, etc. can only become a good wish. Therefore, it is crucial to establish a trust mechanism between supply chain enterprises.

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