On logistics management under the supply chain management system
Abstract Supply chain management is an effective management method, and logistics management is an important part of supply chain management. Logistics is the physical activity between material entities from producers to consumers in order to realize the value of goods. Logistics management under the supply chain management system is a logistics system under unified planning. It has the management characteristics of the supply chain and shows the advantages of integration, which further brings the agility of the logistics system and more effectively improves the operation of the enterprise. Efficiency makes it possible for enterprises to create greater profits. This article first explains the basic concepts of supply chain management and logistics management, analyzes logistics management under the supply chain management system, and explains the issues that should be paid attention to.
Keywords supply chain management, logistics management, supply chain logistics system
In the 1980s, as logistics integration shifted from the integration of intra-enterprise logistics activities to the integration of logistics activities between different enterprises across enterprise boundaries, Collaboration, the concept of Supply Chain Management (SCM) emerged at the historic moment. Those who can truly understand and take the lead in proposing the concept of supply chain management are some of the world's top companies with rich logistics management experience and advanced logistics management levels. In the process of studying corporate development strategies, these companies found that in the face of increasingly fierce market competition, it is no longer enough to rely on the strength of one company and one product to gain an advantage. The company must cooperate with raw material suppliers, product distributors and third-party logistics services. Only by forming a lasting and close alliance and jointly building a high-efficiency, low-cost supply chain can we calmly face market competition and achieve final victory.
1. The concepts of supply chain management and logistics management
1. The concept of logistics management
Logistics management can be divided into narrow and broad senses. Logistics management in a narrow sense refers to activities such as material procurement, transportation, warehousing and distribution. It is a material circulation activity between enterprises. Generalized logistics management includes the material transformation process in the production process. Based on this generalized logistics management, supply chain management is often considered to be logistics management. Logistics management and supply chain management are similar, but there are obvious differences in management scope, management perspective, and internal relationships within the organization. It can be seen that supply chain management originates from logistics management. Logistics management is an important part of supply chain management. The effectiveness of supply chain management largely depends on the management and operation of logistics operations such as procurement, transportation, warehousing and distribution. situation. Therefore, logistics management is the premise and foundation for supply chain management to achieve overall effectiveness.
2. The concept of supply chain and supply chain management
The supply chain is centered around the core enterprise, through the control of information flow, logistics, and capital flow, from the procurement of raw materials to the manufacturing process. Products and final products are delivered to consumers through a sales network, which is a functional network chain structure model that connects suppliers, manufacturers, distributors and retailers to end users.
Supply chain management means that people use the planning, organizing, commanding, coordinating, controlling and motivating functions of management to control product production and The process of rationally regulating the logistics, information flow, capital flow, value flow and business flow involved in each link in the circulation process in order to achieve the best combination, maximize efficiency, and provide customers with maximum value at minimum cost.
Supply chain management is to effectively integrate suppliers, manufacturers, warehouses and stores in order to minimize system costs while meeting service level needs, and to put the correct quantity of goods at the correct location. A method of delivering goods to the right place at the right time. Supply chain management takes into account every party that has an impact on costs and plays a role in meeting customer needs, from suppliers, manufacturers, warehouses, distribution centers to retailers, and even suppliers' suppliers and customers. Customers, the purpose is to improve efficiency and reduce costs.
Supply chain management expands the scope of enterprise management from a single enterprise to the entire supply chain and effectively manages it. Through information sharing, it minimizes the possibility of missed sales opportunities, reduces inventory in the entire supply chain, and reduces operations. costs, shorten delivery times, improve cash flow, and minimize the risk of changes in market demand.
2. The application of logistics management under supply chain management
1. The inevitability of the application of supply chain management in logistics
The logistics system is a social system. There are many factors that restrict its development: customer situations and environmental conditions in different consumption areas, distribution links, logistics costs, inventory control, etc. Supply chain management applied to logistics is a logistics system under unified planning, which has the management characteristics and integration advantages of supply chain. The idea of ??"business process reorganization" in supply chain management greatly improves the ability to quickly reorganize operation processes, promotes the agility of the logistics system, and provides opportunities for the supply chain logistics system to further reduce costs and refine operations by eliminating parts that do not add value. Basic protection.
The supply chain is a whole, and cooperation and coordination are important features of supply chain management. The logistics system in this environment also needs to be seamlessly connected, and its overall coordination should be strengthened. For example, transported goods must arrive on time so that customer needs can be met in a timely manner. The cooperation of the supply chain will only be enhanced if the purchased materials cannot be blocked on the way. Therefore, a high degree of coordination of the supply chain logistics system is a prerequisite for ensuring the success of the supply chain.
Logistics management mainly focuses on the functional integration within the enterprise, while supply chain management treats all node enterprises in the supply chain as a whole, emphasizes the integration between enterprises, and pays attention to the mutual interaction between enterprises. association. Logistics management is a planning mechanism, while supply chain management is a negotiation mechanism, an open system that coordinates and shares "demand and inventory" information to reduce or eliminate buffer stocks among supply chain members. The concept of supply chain management is more than a simple extension of logistics. Logistics management mainly focuses on the optimization of "flow" within the organization, but for supply chain management, it is not enough to simply recognize the importance of internal integration. Therefore, the application of supply chain in logistics not only optimizes the traditional logistics system, but also makes the logistics system develop to a higher level, making the logistics branch chain larger and wider, so that supply chain management can achieve the best effect.
2. Characteristics of logistics management under the supply chain management system
Logistics management is an important part of supply chain management, and its distinctive feature is integrity. Information transmission in the supply chain management process is very important. Information transmission is carried out step by step among enterprises. Information deviations will also become larger step by step along the direction of transmission. Information distortion will inevitably occur and the utilization rate of information will decrease. In addition, logistics management in general environments lacks the concept of overall planning. Each organization in the chain only cares about its own resources (such as inventory), and there is little communication and cooperation between them. This often leads to a continuous increase in inventory on the one hand, and an inability to meet market demand when it arises on the other. As a result, corporate inventory costs are very high, and companies miss market opportunities due to poor logistics systems. Under the supply chain management system, there is a strategic cooperative relationship between each link, with consistency of interests. Information exchange among all parties is not limited by time and space. The flow of information increases, and the information transmission method is networked. In turn, all parties It improves the level of information sharing and avoids information distortion. In addition, logistics management under the supply chain management system also has the following characteristics.
(1) Improved the rapid response capability of the logistics system. Supply chain management uses the Internet as a technical support, and its member companies can obtain and process information in a timely manner, further reducing the cost of the supply chain's logistics system by eliminating procedures and time that do not add value, and providing a basis for realizing its agility and precision operations. Assure.
(2) Improved the seamless connection of the logistics system. Seamless connection is a prerequisite for the coordinated operation of the supply chain. Without the seamless connection of the logistics system, customer needs cannot be met in a timely manner, material procurement is blocked midway, etc., resulting in an increase in tangible and intangible costs that will cause the supply chain to The value of the chain is greatly reduced.
(3) Improve customer satisfaction.
Under the supply chain management system, companies can quickly grasp the existing and potential (general and special) needs of customers, so that the company's supply activities can change according to market demand. In this way, enterprises can supply goods or services to customers faster and more economically than competitors, which greatly improves service quality and customer satisfaction.
(4) Diversification of logistics service methods. With the continuous development of modern information technology and logistics technology, logistics service methods are increasingly showing flexible and diverse characteristics. In order to adapt to the requirements of international operations, international logistics occurring between different countries, third-party logistics companies specializing in logistics services, distribution centers for joint inventory management, etc. have emerged.
3. Functions of logistics management under the supply chain management system
(1) Inventory management. Inventory management shortens the ordering-transportation-payment cycle, accelerates inventory turnover, reduces and eliminates out-of-stock events, and is conducive to the coordination and operation of the entire supply chain.
(2) Order management. Ordering is the process of issuing orders to suppliers, which mainly includes supplier management, order contract management and purchase order management. Through supply chain management, companies can use distribution documents to formulate plans for the entire replenishment network, automatically issue order orders to the supply chain, establish long-term relationships between suppliers and buyers through contract management, and deliver purchase orders to suppliers by checking order quantities and Make payment for goods received.
(3) Distribution management. For materials entering the distribution center, the management process mainly includes the following aspects: distribution demand management, physical inventory management, transportation fleet management, labor management, etc.
(4) Warehouse management. In addition to general services such as the reception, acceptance, coding, storage of inbound goods, and the sorting, shipment, and distribution of outbound goods, warehouse management also includes services such as agency purchasing and sales, entrusted transportation, circulation processing, and inventory control.
4. How to coordinate the relationship between supply chain management and logistics
Logistics is an important part of the supply chain and runs through the entire supply chain, connecting all links in the supply chain and becoming The link between business cooperation. In the process of formulating a supply chain logistics strategy, the following issues generally need to be paid attention to: customers must be segmented, and corresponding customer service levels must be determined for different types of customers, such as order cycles, transportation methods, inventory levels, etc.; customers must be segmented according to sales conditions. Products are grouped, and different strategies can be adopted for each category of products. Order entry, order execution and delivery processing account for a large proportion of logistics activities. Therefore, technology and management are needed to make the logistics process of the entire supply chain more efficient, especially for the interfaces between member companies. Through integration, redundant work can be eliminated. flow and improve logistics efficiency. Each member company should achieve accurate forecasts and information sharing by improving cooperative relationships and using modern management methods and technologies, thereby reducing the negative impact of uncertainties.
Supply chain and logistics are closely related. At this stage, how to coordinate the relationship between logistics and supply chain has become an important research topic in the management direction. Only by coordinating the relationship between logistics and supply chain can enterprises configure and regulate in a more orderly and targeted manner, apply a management model that is more suitable for enterprise development, and enable enterprises to obtain greater benefits.
3. Summary
The application of supply chain management in logistics has been widely recognized, such as Wal-Mart's sales and distribution system plan, Nestlé Taiwan and Carrefour's VMI plan, etc. Logistics in a supply chain management environment is more effective and efficient. Enterprises establish a new enterprise management model through logistics in a supply chain management environment, which overcomes the shortcomings of traditional logistics, is more suitable for enterprise development, and can reduce costs and create profits for enterprises.
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