Analysis of concerns before the implementation of

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Analysis of concerns before the implementation of supply chain management

supply chain management originated from the research on logistics support system by allied forces in the late World War II, when the clearance between steel ball and valve seat was about 0.5mm. Later, commercial enterprises and transportation enterprises began to use some principles of military logistics in the 1960s, which is called logistics management. In 1985, Michael Porter put forward the concept of supply chain in his book competitive advantage. Based on the view of manufacturing industry, Porter regards the supply chain as a series of continuous activities, which is the process of converting raw materials into a series of final products and continuously realizing value-added

from the perspective of topology, the supply chain is a network composed of autonomous or semi autonomous enterprises whose real growth rate fell by 4.1 and 15.2 percentage points respectively. These entities include some subsidiaries, manufacturers, warehouses, external suppliers, transportation companies, distribution centers, retailers and users. A complete supply chain starts from the supplier of raw materials and ends at the end user

the core of supply chain management implementation

the core content of supply chain management implementation includes two aspects: the first is to advocate collaborative commerce; The second is to carry out high-level plans within the supply chain

collaborative commerce

the essence of modern supply chain management is effective collaboration through customer and supplier networks. At the business process level, collaborative commerce mainly includes the following aspects: demand and forecast data collaboration, purchase order operation collaboration, production planning and supply capacity collaboration, quality management and quality certification collaboration, price and cost information sharing, etc. According to the scope of collaborative work, it can be divided into: collaboration between enterprises and external partners, collaboration between departments or business units within enterprises

the benefits brought to enterprises by carrying out collaborative business operations are huge. The synchronized operation of the supply chain under inventory minimization and effective management can enable companies to reduce costs and accelerate the flow of products in the supply chain. Various methods, such as VMI - supplier managed inventory and ECR - effective and fast customer response, are used to improve customer service and cost control. Some leading companies in the consumer goods industry have taken the first step to establish mutual cooperation between supply chains. For example, Nabisco is a global food producer and wegmans is an American food retailer. The two companies cooperate in planning, forecasting and supply scheme, which is referred to as CPFR project for short. As a result, the sales revenue of Nut Growers in Nabisco increased by 32%, while the sales of wegmans increased by 29%, and the corresponding supply days decreased by 17%

the purpose of collaborative work among enterprises is to share information as much as possible, and let the shared information penetrate into the business processes of enterprises, thus becoming the relevant constraints of enterprise planning. For example, regional sales agents can feed back their respective promotion plans, and manufacturing enterprises can adjust the sales forecast of the region during the promotion period based on this information

when implementing supply chain collaborative commerce, we should also consider the limitations of collaborative commerce. After all, enterprises in the supply chain are independent business entities. For reasons of trade secrets or considering factors of competition, not all collaboration modes can be carried out among all business partners. For example, collaborative commerce between two adjacent ring enterprises in the supply chain can usually be supported. However, it is difficult to implement collaborative operations that span more chain levels, especially considering that the implementation of collaborative operations also involves cost input and business process changes. From the collaborative operation mode that has been carried out, the vast majority of business collaboration is reflected in: inventory quantity, sales forecast, promotion plan, demand management, the order amount of supply from the manufacturing industry increased to 111.6% in the same month of last year, and quality management. Only a few collaboration modes are used in sales orders and cost calculation, because these are extremely sensitive data of enterprises

defects of supply chain advanced planning and ERP

one word often talked about in the implementation of supply chain management is supply chain advanced planning. Gartner Group said in a research report in July 1997, "Around 1999, for those enterprises with multi-layer sales system, they will face various problems: some are to merge different sales links; some are to subdivide a link into multiple links; the interests of all levels need to be weighed; sometimes they even need to skip some links to deliver products or services to customers. Therefore, these enterprises will choose their original ERP application software Add the function of supply chain planning to the parts, otherwise they will bear the risk of increasing the distribution cost by at least 10 percentage points or various problems such as late delivery and inventory imbalance. "In the research report, it is also mentioned that this situation is caused by the static resource data table in the ERP system, because in many planning functions provided by ERP, the constraints of materials, capabilities and requirements are considered separately and are not related to each other. SCM software can consider all relevant constraints at the same time and provide real-time adjustment to constraints.

Gartner's report basically describes the advanced design of supply chain Two aspects of the plan: the supply chain integrating manufacturing plants, multi-level sales system and customers is the planning scope of the supply chain advanced plan; Considering many constraints and providing a variety of planning methods are the advantages of supply chain advanced planning

The scope of SCM and ERP plans is different. We can take a brief look at the development process of SCM. Enterprise resource planning (ERP) came into being in the 1960s. At that time, the market faced by enterprises was characterized by mass production. Measuring the performance of enterprises depended on the production efficiency of factories and the utilization of factory resources. The planning method of ERP is MRP, which is essentially based on a factory wide material resource planning system. BOM is the most important constraint considered in ERP planning. In order to make up for the deficiency of ERP, distribution resource management system (DRP) appeared later. DRP has made some progress in multi location collaborative planning, but it is mainly used in finished product operation planning, so it is only a flash in the pan. The supply chain management system summarizes the advantages and disadvantages of ERP and DRP, and forms a theory according to the new market characteristics. Supply chain advanced planning extends the application scope of MRP plan from a single factory to the whole supply chain including suppliers, manufacturing plants, distribution centers and other supply chain locations. Its functions include: supply chain model building, supply chain simulation, supply chain monitoring and alarm

erp's biggest disadvantage in planning is that the constraints considered are too limited. As mentioned above, BOM is the most important constraint considered in ERP planning. The shortcomings of this planning method are mainly manifested in two aspects: first, it makes the plan too one-sided, which is often infeasible or requires a large number of planners to adjust; Second, the BOM is not applicable to any enterprise or is not an important constraint affecting the plan. For example, the BOM of a commercial enterprise is just packaging goods, which is not important to the plan. The planning constraints considered by SCM are the definition of limits and rules in the supply chain

planning constraints, such as the ability of suppliers, replaceable transportation routes, replaceable manufacturing modes, production capacity, manufacturing costs, transportation costs, storage costs, affect the logistics operation and financial reflection of enterprises. Supply chain advanced planning can comprehensively consider these constraints in system calculation, making the plan more reasonable and feasible than traditional enterprise resource planning. In terms of plan optimization, supply chain advanced planning can set the conversion proportion relationship between constraints, for example, so that all constraints can be converted into costs, so that the plan is closer to optimization

implementation methods of supply chain management

there are two main implementation methods of Supply Chain Management: Central and platform

the implementation of central supply chain management is usually led by one or a few key enterprise giants. These few enterprises are often the core enterprises in a certain industry or region, and are leading or monopoly enterprises in some aspects. The original goal of supply chain management implementation is either to solve the problem of collaborative operation between these enterprises, or to solve the problem of collaboration between core enterprises and peripheral suppliers and agents. The core enterprise is usually the investor of supply chain management, and of course, it is also the most generous income, because in the mode of collaborative operation, it is often dominated by it. Peripheral enterprises are also the beneficiaries by participating in this kind of supply chain management. This is reflected in its close business relationship with core enterprises, information sharing brought about by collaborative work, and management improvement brought about by participation

the implementation of platform based supply chain management is usually led by an industry association or industry alliance. There are well crystallized and periodically arranged atoms, and the mode adopted is usually ASP, that is, the third party defines the collaborative operation mode, implements it, and manages it. Enterprises are users of this platform and pay service royalties in accordance with the service agreement. The characteristics of this method are: the participants in the supply chain do not have too strong monopoly, the supply chain management mode is defined by multi-party participation, and the ASP party invests high costs as an operator

in fact, the two ways of implementing supply chain management complement each other, and sometimes they learn from each other in terms of operation mode. For example, the electronics and semiconductor industries in Southeast Asia have both modes. The supply chain collaboration between liton and Weisheng OEMs in Taiwan and Intel and Dell is mode 1; Similarly, e2open, which is well-known in Southeast Asia, adopts mode 2. (end)

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