Supply chain management in the end is what?

    Many people ask me through various channels, supply chain management in the end is what control? If I work in the future supply chain management, will there be a way out?

    I said, you will not go online Baidu?

    Their answer is often that Baidu, but still confused by a variety of claims to the confused.

    I will not explain from the academic point of view what is the supply chain management, I just talk about my personal understanding of supply chain management.

    I personally think that supply chain management, one is the so-called C-cost, cost, and the other is the so-called I, inventory, inventory, which is the supply chain management of the two basic starting point, or supply chain management The fundamental purpose.

    The so-called C, cost, easier to understand, such as source procurement (sourcing), they are a very important KPI is CR (costreduction, cost reduction%), despite the so-called
But the actual work, C has always been the focus of source procurement, because C is relatively easy to score, visible, tangible, to the owner's IQ (quality, cost, delivery, service) Can be read, so we all like to follow the C fire, so there will be a large number of "buy cheap, with your" situation.

    Similar to the source of procurement is the logistics (logistics), mainly with the cost, transportation costs, storage costs, customs clearance costs and so on.

    Logistics management as a typical supply chain management department, there is also a QCDS problem, but the actual work, with the source of procurement, C is a top priority, the same will lead to Q, D, S bad situation.
Also related to the cost of production management, because from the SCOR (supply chain operation reference model) point of view, manufacturing is also part of the supply chain management.

    In order to control C, cost, manufacturing may be sacrificing I, inventory, which is more difficult to do one of the reasons supply chain management - in reality, C vsI, supply chain management and production operations has been the focus of the struggle.

    The so-called I, inventory, including two meanings, one refers to the inventory itself, such as raw material inventory, finished products, semi-finished products inventory, as well as suppliers, customers wher the inventory; I another means delivery (D, delivery) , That is, the transfer of inventory, such as the supplier to deliver the product to you, the supplier is actually the inventory transfer to you, you deliver products to your customers, it is nothing more than to transfer your inventory to customers there.

    Therefore, the so-called inventory control, not only refers to the control of the number of stocks themselves, the value of how much it has a timely delivery problem, think about it, in fact, is the same thing, at the right time, hold the appropriate quantity, delivery It should not be a problem, inventory can also be controlled.

    Ideally, the so-called 5R, the right product, at the right price, at the right time, in the right amount, reaches the right place. But this is "ideal" because with the customer demand fluctuations, changes in the challenges of growing, this so-called "inappropriate" contradictions will become increasingly prominent, inventory problems will be more and more big , Inventory control in the entire supply chain in the position is also more and more important.

    Inventory is often the product of a plan, from a comprehensive inventory management point of view SCOR, we will find that we plan is the inventory (need to purchase, how much production), according to plan procurement is (raw materials) inventory, according to the plan is produced (Finished products, semi-finished products) inventory, according to plan to deliver out (finished) inventory transfer.

    However, in fact, from the implementation point of view, inventory is the time (T-timing) and the number (Q-quantity) of a misplaced problem. Plan no matter how good, the implementation is not in place, that inventory is still a lot, so the formation of I and C is inseparable.

    There is no free lunch under the sun, the cost of C deduction is too tight, it will inevitably lead to poor control of inventory I, although the emergence of I and customer demand changes have a great relationship, but this is no way things, otherwise, supply chain management There is no need to exist.

    This is why many customers ask me why my "comprehensive inventory management audit" which also includes the source of procurement and business things, such as T & C (terms & conditions contract terms) with the sluggish responsibility of suppliers, payment terms And so on, because C has a great relationship with I, although we say that a good plan, including demand planning, production planning, procurement plans, inventory planning, etc., is the soul of the entire supply chain management, which is inventory control , The timely delivery of the key, however, the cost of impact (service) implementation, and the implementation of the results, the ultimate formation of inventory holding costs.

    Therefore, C, including I, I inside, including C, C vsI intertwined mixed together, that is, supply chain management to do.

    Finally, a simple summary, I is a T (timing, time) + Q (quantity, quantity) problem, C is a M (money, money), T, Q, M form I, C, information flow Flow, materials flow, cash flow, which is commonly referred to as supply chain management.