Logistics and supply chain are two different categories. At present, there are basically three views on the international understanding of the supply chain:
- The concept of supply chain is an extension of the concept of logistics
- Logistics and supply chain is the same thing
- Related enterprise business, integration and integration of resources
We believe that the above views in some ways reflect the understanding of the supply chain, and from a particular point of view, there are reasoning. However, we are more inclined to think that supply chain is different from logistics, and supply chain is not just an extension of the concept of logistics, but supply chain is closely related to the integration of enterprise's business, so we are more inclined to the third point of view.
Supply chain management should actually include the integration between the functional departments within the supply chain organization and the integration between the upstream and downstream organizations in the supply chain, and the content of the integration includes the business flow, logistics, information flow, etc., and the object of the integration has the resources, organization, business, process, etc., so the concept of supply chain is more extensive than the concept of logistics.
Any software is the embodiment of management ideas. Supply chain management as a new management idea, its software function itself will be different due to various management schools of understanding of supply chain management itself. In order to better understand the supply chain management software itself, we will be with the supply chain planning function of a class called the supply chain management software in the broad sense, "supply chain implementation + traditional inventory" is defined as the narrow sense of the supply chain management software, the specific content and the relationship with the ERP is shown in Figure 1.
System structure and model
SCOR (Supply-Chain Management) is a system of supply chain management software that can be used in the supply chain. p>SCOR (Supply-Chain Operations Reference-model) is the first standard supply chain process reference model, is a supply chain diagnostic tool, covering all industries. SCOR enables enterprises to accurately communicate supply chain issues, objective evaluation of its performance, to determine the performance improvement goals.
1. Supply Chain Operations Reference (SCOR)
Process reference models typically include a set of process definitions, metrics, and benchmarks to help companies develop strategies for process improvement.
SCOR is not the first process reference model, but it is the first standard supply chain reference model.
The SCOR model consists of four main components: a general definition of supply chain management processes, benchmarks of the performance metrics corresponding to those processes, a description of the supply chain's "best implementation," and information for selecting supply chain software products.
The SCOR model can be divided into three levels of process definition, each of which can be used to analyze the operation of an enterprise's supply chain. Below the third level, there can be a fourth, fifth, sixth and other more detailed process description levels specific to each enterprise, the process definition in these levels are not included in the SCOR model (see Figure 2, Figure 3).
The first level of the SCOR model describes five basic processes: planning (Plan), purchasing (Source), production (Make), shipping (Deliver) and returns (Return). It defines the scope and content of the reference model for supply chain operations and establishes the basis for the competitive performance objectives of the organization.
2. Technical Pillars
There are two technical pillars to realize SCM: Integration and Coordination. The collaborative function of the supply chain is based on three technologies: 1) modern information and communication technologies; 2) process calibration (benchmarking) - the operational effectiveness of the industry's best-practice companies as a benchmarking template, the implementation of supply chain transformation of the later to this template; 3) advanced planning and scheduling technology (Advanced Planning and Scheduling, APS), and the use of the technology to achieve SCM. Planning and Scheduling (APS). APS is capable of unifying and coordinating inter-enterprise long, medium, and near-term planning, and is the core of SCM.
The core of APS is based on mathematical algorithms or solutions that have been proven over time. However, there is no single technique used in APS, and the specific algorithms applied (such as linear programming, mixed integer programming, inference, theory of constraints, and simulation) depend on the type of problem to be solved.APS downloads data from the ERP system to a dedicated server for memory-resident processing, and implements iterative calculations of the plan or evaluates the options until a feasible or essentially profitable plan or schedule.
3. Functional description of supply chain management software
Currently referred to as the broad supply chain management software SCM, in accordance with the process of supply chain inter-organizational planning, scheduling, and supply chain plan execution and control, focusing on the optimization of the entire supply chain and the supply network, as well as throughout the entire supply chain plan implementation. Good SCM software vendors offer suites that include all business processes parallel to manufacturing business processes from order entry to product delivery, including forecasting, supply chain and production planning, demand and distribution management, transportation planning, and various forms of business intelligence.
Logistics/Supply Chain Software Selection Criteria
The development of the logistics industry has reached a stage where modern logistics information systems have become an indispensable element of enterprise logistics management and operations. Foreign research organizations predict that by the end of 2002, China's IT industry and e-commerce market will reach 15 billion U.S. dollars, the supply chain management software and services market will also reach 4 billion U.S. dollars. In fact, there is no IT system support has become an important symbol of modern logistics operations. Many enterprises in the choice of third-party logistics service providers often take it as an important prerequisite. Therefore, the enterprise choice of logistics IT system, rather than a kind of information technology selection, rather than a kind of enterprise management mode and market competition strategy selection.
Generally speaking, the establishment of logistics/supply chain management system has two paths: one is the development of tailor-made; the second is the introduction of integrated systems. As we all know, the premise of the tailor-made development of logistics IT system is the design of the logistics operation process of the enterprise; the introduction of the integrated system also often requires the enterprise to change the existing logistics operation process. Therefore, no matter which way to go, the enterprise to establish logistics IT system is to determine the premise of its logistics operation process.
1. Path Selection
As mentioned earlier, the logistics operation process design or reengineering based on two: one is the customer's logistics service needs; the second is the enterprise's logistics management model. The former is the system goal, but may lead to changes in the location, layout and structure of the enterprise logistics system such as distribution centers, which in turn leads to changes in the process. The latter is the means of service, which is the method of configuring the logistics service resources of the enterprise to meet customer demand. Such as inventory level control, inventory layout and structure configuration, inventory availability priority sorting, the choice of different modes of transportation and so on. Obviously, the same enterprise when it adopts different marketing channel structure, or distribution, or direct sales, or distribution and direct sales combined, when it uses different logistics management model, or centralized, or decentralized, or hierarchical, or outsourcing, its logistics operation process and the corresponding logistics IT system - data centralized storage or data The hierarchical storage of data is not the same.
In fact, after the customer demand is determined, the enterprise's logistics management model will play a decisive role in the process design. At this point, the design of logistics operation process has actually been transformed into a customer service demand and the matching problem of enterprise service capability.
It must be noted that, in practice, people tend to pay attention only to the enterprise's logistics management model and ignore the customer's specific logistics service needs, so that the design of the logistics IT system has lost the most fundamental basis. As a result, it is often not possible to establish a direct knowledge relationship between the information in question and customer service. As a result, the establishment of the logistics information system is either too idealized and inapplicable, or is the desktop of the enterprise's existing logistics operation and management model and ledger. The computer screen is filled with a large number of incomprehensible operational and statistical data, in fact, with the improvement of customer service level and enterprise logistics management does not have any direct relationship. The regulation and control of the enterprise logistics operation process or to rely on the experience of managers, or also to the relevant information for secondary or tertiary processing. Therefore, many enterprises in the logistics IT system after the operation often feel that its openness and flexibility and even the applicability of the lack of it is not surprising.
How should an enterprise's logistics management model be chosen? The answer is: to meet customer needs as the goal of the enterprise's competitive strategy. Or total cost leadership, or differentiated services, or specialization strategy (focus on a point). For many small and medium-sized traditional logistics enterprises in transition, it may be wise to choose the specialization strategy.
How is an enterprise's competitive strategy chosen? The answer is: it is determined by a company's growth strategy. Competitive strategy to solve the problem of survival and development of enterprises in the established market, while the development strategy to solve the problem of enterprise market entry and exit and development direction. Logistics IT system investment belongs to the enterprise's long-term strategic investment, so before the design and introduction of logistics management information system, the right approach often requires companies to develop strategic development planning.
So, how is the development strategy of the enterprise to choose? The answer is: by the market, i.e., customer demand.
So, in the final analysis, the design of enterprise logistics IT systems must be based on customer service needs as the basic basis.
The return on investment in logistics IT systems not only includes the reduction of operating costs, operational efficiency and improve customer service levels, but also includes the acquisition and accumulation of logistics management knowledge.
2. System selection should pay attention to several issues
To have a clear market positioning such as industry positioning, product positioning or customer positioning. To have a clear service orientation such as warehousing services, freight services, freight forwarding services, supply services, distribution services or supply chain integration. In the market positioning, not only to examine the customer enterprise, but also to examine the customer enterprise belongs to the industry development trend, to consider the customer's customers and their suppliers of suppliers.
The existing logistics operation process and value chain of the enterprise itself should also be carefully analyzed to find out what needs to be improved the most.IT system should be established from the link with the most potential for return on investment to cut in, rather than blindly blooming all over the place. Comprehensive IT systemization without strategy and focus does not lead to overall service level and service profitability improvements, and can have negative impacts on investment and implementation.
Together with the customer, it is important to agree on logistics service objectives, define the enterprise logistics management model, and mechanisms for information sharing. This is particularly important for third-party logistics service providers. Without mechanisms for interaction, there is no sharing of information, much less a high level of logistics services, and no third-party logistics.
The structure of the system should be open and expandable. If you want to transform the current warehouse into a value-added service center, the configuration of the IT system, at least the warehouse management system and business management system, but also configure the bar code printing system and wireless terminal identification system and so on. However, it must be based on the enterprise's logistics development strategy, but also consider the economic life of the information technology concerned. To prevent for the reserved function interface and purchase of redundant equipment or cause capital sinking.
To carefully examine whether the system supplier has the design experience of the industry or similar enterprises, the supplier designed the system is currently used how, is not in the enterprise's existing management information platform can operate. Be sure to visit the supplier's previous customers.
After the market and service positioning, there should be a clear investment budget.
The system vendor should have a commitment to the time it will take for the system to go from installation and commissioning to normal operation. A survey shows that, even in the United States, ERP system commissioning operation generally have to use 20 months or so, TMS commissioning generally l0 months, supply chain management system commissioning generally have to 18 months. EDI system commissioning generally have to 10 months. Enterprises should anticipate the conversion of the old and new management and operation modes and their possible impact on customer service.
Enterprises should be prepared for change, especially in service concepts and corporate culture. Consideration should be given to using a standardized bidding process. Where necessary, relevant consulting firms can be engaged to help with strategic planning and selection of appropriate IT system vendors.
In short, the application of information technology in logistics management is the process of enterprise logistics management model and customer service needs to match the intellectualization process.