The Four Pivots of Supply Chain Management (Part 2)

The Four Pivots of Supply Chain Management (Part 2)
3. The win-win concept of mutual cooperation

In traditional enterprise operation, supply and marketing are independent of each other, which is a relationship of rivalry and profit, and the system coordination is poor. Enterprises and suppliers do not have a coordinated plan. Each department has its own set of activities and only cares about arranging its own activities, which affects the overall optimization. Lack of strategic partnerships with suppliers and distributors, and often starting from short-term benefits, provoking price competition among suppliers, losing the trust and cooperation foundation of suppliers. When the market situation is good, they are arrogant to the dealers, and when the market situation is bad, they pass the losses on to the dealers, so they can't get the trust and cooperation of the dealers. In the mode of supply chain management, all links are regarded as a whole. In addition to their own interests, enterprises on the chain should also pursue the overall competitiveness and profitability together. Because the final customer chooses a product, all members of the entire supply chain benefit; if the final customer does not want this product, the members of the entire supply chain will suffer losses. It can be said that cooperation is a key to the competition between supply chains.

In supply chain management, there is not only a win-win concept, but more importantly, the concept and form are implemented into operational practice through technical means. The key is to integrate the enterprise's internal supply chain with external suppliers and users to form an integrated supply chain. Establishing a good partnership with major suppliers and users, the so-called supply chain partnership, is the key to integrated supply chain management. At this stage, enterprises should pay special attention to strategic partnership management, and the focus of management is to face suppliers. Replace product-oriented with users, increase contact with major suppliers and users, enhance mutual understanding of purpose ((product, process, organization, corporate culture, etc.), maintain certain consistency with each other, and achieve information sharing, etc. Enterprises should Profit by providing users with different market products and services or value-added information from competitors. The application of supplier management inventory and joint planning, forecasting and inventory replenishment is a typical example of enterprises turning to improvement and establishing good partnership. By establishing good partnerships, companies can better integrate and cooperate with users, suppliers and service providers to jointly design and control the entire supply chain in terms of forecasting, product design, production transportation planning and competition strategy. For the main users, enterprises generally establish user-centered groups, which have functions in different functional areas, so as to better provide targeted services for the main users.

Optimize information flow

The information process is the communication process between employees, customers and suppliers in the enterprise. In the past, the purpose of information exchange could only be achieved by telephone, fax, or even face to face. Now it is possible to use e-commerce, e-mail, and even the Internet to exchange information. The means are different, but the content has not changed. The advantage of computer information systems lies in their ability to automate operations and process large amounts of data, speeding up the flow of information while reducing errors. However, the information system is only a tool to support the business process, and the business model of the enterprise itself determines the architectural model of the information system.

In order to adapt to the optimization of supply chain management, it is necessary to start from the first-tier suppliers related to the production of products, and link up with each other until the goods reach the end user, and truly transform the business process of the enterprise according to the characteristics of the chain, so that each node enterprise has the White organization and adaptive ability to handle logistics and information flow. It is necessary to form the information integration of the distributed database of the Gongzi supply chain, so as to coordinate the key data of different enterprises in the policy. The so-called key data refers to order forecast and inventory status. Data on out-of-stocks, production plans, transportation arrangements, materials in transit, etc.

In order to facilitate the management personnel to obtain various information quickly and accurately, the electronic data interchange (EDI), Internet and other technical means should be fully utilized to realize the integration of distributed database information in the supply chain, and achieve the electronic acceptance and sending of shared purchase orders, multi-location Important information for inventory control, lot and serial number tracking, cycle counts, and more.

Cisco is a model of using the Internet to realize a virtual supply chain. More than 90% of the company's orders come from the Internet, and Cisco's staff directly handle the orders. 
no more than 50%. Cisco connects component suppliers, distributors and contract manufacturers through the company extranet to form a virtual, just-in-time supply chain. When a customer orders a typical Cisco product such as a router through Cisco's website, the order placed will trigger a series of messages to its contract manufacturer of printed circuit boards, and the distributor will also be notified to supply the router's common parts Like power supplies, contract manufacturers who assemble finished goods can log in to Cisco's extranet and connect to its production execution system to know in advance the types and quantities of orders that may occur. Information integration also enables companies across the supply chain to share useful information. For example, Wal-Mart and Procter & Gamble share sales information of P&G products in Wal-Mart's retail network, which enables P&G to better manage the production of these products, thereby ensuring the availability of these products in Wal-Mart stores.

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