The supply chain talks about money hurt feelings, not talking about what money to talk about?

The supply chain management, whether it is the procurement staff, planners, warehousing and transport personnel, will never open a headache, that is, "money."

For example, the purchase should be "forced" year after year plans to reduce costs, because the S&OP meeting in demand or supply does not meet the financial and budget management and nerve racking, even the warehousing and transportation are endowed with the continuous optimization of cost index, not hired for inventory management in the inventory how extraction and processing impairment.

I go back to work and life, the author in the early days of the supply chain, whether it is once the transportation suppliers of raw materials procurement, management, materials planning or import and export operation, key performance index is down, so that once my colleagues and I think it is almost the cost of procurement and supply Chain Department of most companies all.

So in fact, what do you think about the phenomenon of money crossing in the supply chain, and the people in or out of the line?

Some time ago, the author in the "comparative" capability of supply chain management of famous electric company and the "NOKIA" counter attack ": in the supply chain with 25 strong" based on the nature of the stock to cash cycle (Cash to Cash Cycle) to evaluate the enterprise's supply chain, has aroused a heated discussion in part platform some of the messages, colleagues said excitedly, the index is too one-sided, should be made further into the index, customer perception related such as OTD, or other indicators reflect the competitiveness of enterprises; also some people said that according to the product dimension to compare etc..

When there is a part of company training, because the hotel does not live in agreement as he caused a lot of people Tucao, many people said, these years of purchasing know about prices, and a variety of room service is getting worse, like this mess now, suppliers should consider purchasing so.

It can be seen that everyone is not satisfied, everyone even feels that money talks about feelings, because too much money affects the quality of products and services, and even affects the development of the company.

Today we will analyze and analyze why we hurt our feelings in the past, now and in the future. We will continue to talk about it. Is there any possibility of breaking it?

02.Why is the supply chain talking about money at this stage

To answer this question, let's take a long talk to see how the relative authority of SCOR looks at supply chain management. The following is a detailed list of the supply chain I understand.

Though about half of the money related indicators, there are at least half the other indicators that are not directly related to money, such as delivery reliability, order responsiveness, supply chain agility and so on.

First of all, the reliability of the order, some general will be called OTD, how does this index count? Will it be compared in accordance with the customer's request or in accordance with the confirmation date of the enterprise? According to the quantity of delivery or the order line, or according to the number of orders, or the amount of the order? If the time of delivery is unmistakable but the order is damaged, is it considered? How does the breakage standard be defined? It can be said that the indicators of different companies are quite diverse. Some companies often announce that they deliver 99% time to customers in internal bulletins. Do you believe this? I don't believe it anyway.

Then said the order response, I have been in the "enterprise" in the order response ability with practice show the calculation formula and the company's orders, end to end time is not difficult to calculate, but because the cause of the customer waiting time, SCOR called Dwell Time, how to calculate? In my experience, 90% of the companies do not have the ability or awareness to count the indicators, not to mention how Dwell Time has been calculated. There are more and more enterprises are using the so-called standard lead time to make excuses, ask if you can achieve 100% of the standard lead time, supply chain each enterprise 100% follow the standard lead time, can not be ignored against unpredictable, no statistical regularities of natural calamities and man-made misfortunes of force majeure a large number of enterprises, the safety stock and set the necessary?

Finally, we supply chain agility, agility and flexibility is always politically correct words, supply chain management concept can not be fooled, how the most basic digital computing, make the enterprise agile supply chain is similar to that of someone responded quickly, what is the standard of quick response? How many enterprises are clear about the adjustment of adaptability and the degree of risk, or at least the measurement standards within the enterprise?

At the present stage, most of the indicators beyond the above money are not reliable and convincing. Even if there are scattered statistics, there will be various problems in the source, data capture and quality of data. In a word, when these indicators cannot be clearly calculated and publicized, how can you use these indicators to talk about personal performance, talk about supplier management, and talk about their own business stronger than others?

Conversely and money related indicators, on the one hand, the world each big company is basically in accordance with international or regional accounting standards for financial statistics and publicity; those who spend money, no matter wher, with what kind of currency, because what is want to spend money, cannot read can not see, unless you have my eyes. Although all enterprises in the statistical cost savings (cost saving), there is always artistry handling method, but it is reflected in the sales cost of goods (COGS), reflected in manufacturing profits (manufacturing profit) and other financial indicators, dare to fake it?

Therefore, at this stage, whether or not to hurt feelings (hurt themselves, hurt suppliers, hurt customers), money is still to talk, and is the main index. The supply chain people you like or not like, the money and only the money there.

Supply chain management starts from logistics services at the beginning, to classic logistics concepts that only know transportation and warehousing, and then focuses on procurement and supply, and then attaches importance to demand planning. Now, some enterprises are concerned about order management and end to end management.

It can be said that on the one hand, the practice and theoretical circles have never stopped exploring the management concept. Now the 5 major indicators of SCOR are beyond the previous ones.

On the other hand, Internet plus, all kinds of logistics technology, industrial automation 4 digital innovation and development, which makes the data capture, data transparency, the quality of the data is no longer a problem, combined with large data processing technology, the implementation of a transparent multi dimension index of supply chain performance will no longer be a dream.

Is there any reason for us to believe that from the concept and process, there may be standard statistics and digital guidelines in the future supply chain (such as American accounting standard GAAP)? Technically, all or part of the reliable high quality supply chain data of the same caliber of each enterprise can be widely collected and used as a comparison.

At that time, the supply chain colleagues may have more to talk about besides money. Let's wait and see.