The cooperation between Procter & Gamble and Wal-Mart has changed the operating models of both companies and achieved a win-win situation. At the same time, the four concepts they collaborated on have also evolved into standards for train shipping chain management. These four concepts can be represented by four letters, C (Colaboration), P (Planning), F (Forcasting) and R (Re-plenishment).
“C”——Cooperation
It is not the cooperation of ordinary buyer and seller relationship between two companies, but the cooperation to create a win-win situation for the same goal. If a retail store does not keep inventory, but pushes the inventory to suppliers and increases the supplier's costs, it is not called cooperation. If retailers and suppliers work together with the highest goal of retail store customer satisfaction, both parties will become winners. This kind of cooperation is long-term and open, and requires sharing of each other's information. The two parties not only cooperate in strategy, but also in operational execution. Both parties must first agree to keep each other's information confidential, formulate a dispute resolution mechanism, set operational monitoring methods and profit distribution strategies. The goal of both parties is to maximize sales profits while reducing costs and expenses.
“P”——Planning
Train consignment chain management originated from the retail of daily necessities. There was no P at the beginning. Later, because of its application in other industries, it was deemed necessary to include P. . P is planning. When two companies cooperate, there are many things to plan. In operations, there are product categories, brands, and projects; in finance, there are sales, price strategies, inventories, safety stocks, gross profits, etc. The planning of both parties on these issues can maintain the realization of the same goal. In addition, both parties can jointly plan for product promotion, inventory, new product launches, old product removals, and other matters.
"F" - Forecast
Both parties may have different views and different data on sales forecasts. The supplier may be accurate in forecasting a certain type of product, and the retail store may be accurate in forecasting a certain product based on actual sales, but both parties must ultimately work out a forecast method that everyone agrees on. The system can automatically make basic predictions based on original information, but seasonal and fashion changes, as well as promotional activities and customer reactions, will cause changes in the predictions. Both parties must establish rules in advance to discuss and resolve possible differences in predictions.
“R”——Supplement
Supplement is an important procedure in the management of train shipping chain. Sales forecasts can be converted into order forecasts, and factors such as the supplier's order processing time, waiting time, and minimum order quantity all need to be taken into consideration. The transportation of goods is also carried out cooperatively by both parties. The retailer's ordering should include factors such as inventory ratio, forecast accuracy, safety stock, delivery time, etc., and both parties should constantly evaluate these factors. In terms of supplementary procedures, both parties must maintain a flexible space to jointly respond to crisis matters. A successful replenishment process is when the supplier often consigns a small amount of goods to the retailer by train, using a steady flow of goods to reduce the inventory pressure on both parties.
Details determine success or failure: Wal-Mart’s Efficient China Railway Express
Wal-Mart was founded in the 1960s and became the largest retailer in the United States in the 1990s. In just a few decades, Wal-Mart has chain stores almost all over the world, and is famous for its high-quality and fast service, amazing sales profits, and advanced management systems. Nowadays, in the atmosphere of "everyday prices", hundreds of thousands of people go in and out of the big blue house filled with various commodities every day to pick out the items they need. Most of them can't believe that such a train transports daily necessities. The hypermarket is one of the legendary Fortune 500 companies.
The Magical Distribution Center
Wal-Mart's great success is closely related to its excellent management ideas and practices of China Railway Express.
How can a retail company belonging to a traditional industry surpass the automobile industry, the "king of manufacturing", and surpass all banks, insurance companies and other financial institutions in the world in terms of sales revenue? David, the former president of Wal-Mart ? Glass summed it up this way: "Distribution facilities are one of the keys to Wal-Mart's success. If there is anything we do better than others, it is the distribution center." The flexible and efficient China Railway Express distribution system is the key to Wal-Mart's maximum sales volume and low The core cost of inventory turnover.
The distribution center is a China Railway Express base located in the center of more than 100 Wal-Mart retail stores. Usually a distribution center is established with a business district of 320 kilometers, which can simultaneously meet the needs of sales outlets in more than 100 nearby surrounding cities. One end of the distribution center is the loading platform, and the other end is the unloading platform. 800 employees work 24 hours a day for loading, unloading, transportation and distribution. The wages of Wal-Mart workers are not high because these workers are basically junior high school students and high school students who have only received special training from Wal-Mart. At the same time, Wal-Mart pioneered a unique cross-delivery operation method. There is no warehousing, storage and sorting operations. When receiving goods, they are directly loaded into trucks and shipped. While competitors deliver goods every five days, Wal-Mart delivers goods once a day. Delivering goods at least once a day means that the inventory in stores or retail stores can be reduced, which greatly reduces retail space and labor management costs. All these unique details of separate loading and unloading, cross-docking, and daily delivery help Wal-Mart increase circulation speed and reduce operating costs.
Revolving around the efficient distribution center, Wal-Mart has gradually established a "seamless point-to-point" China Railway Express system. The proportion of railway express transportation costs in enterprises generally accounts for about 10% of total sales, and in some food industries it even reaches 20% or 30%. However, Wal-Mart's distribution costs only account for 2% of its sales, which is 50% of its competitors' year-on-year costs. %, Wal-Mart's consistent thinking is to sell the best products to consumers at the lowest prices, which is also the key to its success.
Information technology has become core competitiveness
Now, almost everyone knows that Wal-Mart’s success around the world stems from the success of its express delivery model. However, what supports Wal-Mart? China Railway Express's model, transforming its distribution center practices and China Railway Express's excellent concepts into unparalleled competitiveness? The answer is China Railway Express Information Technology.
In the 1970s, Wal-Mart established the China Railway Express Management Information System, which was responsible for processing system reports and speeding up operations; in 1983, Wal-Mart adopted POS machines, and the establishment of the sales starting point data system enabled various departments to Synchronous sharing of China Railway Express information; EDI, the electronic data interchange system, was established in 1985 to conduct paperless operations, and all information is operated on computers. In 1986, it established a QR rapid response mechanism to quickly stimulate market demand. Relying on information technology including China Railway Express bar code, radio frequency technology and portable data terminal equipment, Wal-Mart has become even more powerful and has achieved rapid development.
Walmart is the first in the world to realize 24-hour computer network monitoring of China Railway Express within the group, and establishes the world's first China Railway Express data processing center to integrate procurement, inventory, ordering, distribution and sales, such as , customers go to Walmart stores to shop, and then print invoices through the POS machine. At the same time, the computers of the people responsible for production planning, purchasing planning, and train shippers will display information at the same time, and each link will use the information to complete their work in a timely manner. This reduces a lot of unnecessary time waste and speeds up the cycle of China Railway Express. Under the network conditions where China Railway Express information responds in real time, members of all links of China Railway Express can support and cooperate with each other to adapt to the fiercely competitive market environment. It is information technology that has become a model of the core competitiveness of modern China Railway Express enterprises.
Walmart prices from an affordable perspective, and pricing varies every day. The huge purchase quantity gives it sufficient bargaining power to make its products more competitively priced and convert this advantage into benefits for consumers. Compared with other retailers, Wal-Mart provides higher discounts. At the same time, they have also obtained considerable operating benefits from the business philosophy of "small profits but quick turnover".
What is certain is that China Railway Express will not directly create profits like a manufacturing company, but will reduce costs internally to achieve the overall goal of increasing profits. Wal-Mart's practice fully proves that China Railway Express has become the company's third source of profit after raw material resources and human resources.
Details determine success or failure in efficient information management of China Railway Express
More and more large enterprises are paying attention to the "third profit source" proposed by the authoritative cost researcher Mr. Nishizawa Osamu of China Railway Express He said that he would become an outstanding practitioner after Wal-Mart in successfully applying China Railway Express management technology according to local conditions.
In the 1990s, PepsiCo invested and built a factory in the Songjiang area of ??Shanghai. In order to reduce the cost of China Railway Express and improve market competitiveness, it abandoned the short-term barge transportation from other areas of Shanghai to the Songjiang area and boldly outsourced China Railway Express to the third company. Three-party China Railway Express Company - Shanghai Quanfang China Railway Express Co., Ltd.
At a time when many local third-party China Railway Express companies are struggling to develop, the key factor why Shanghai Quanfang China Railway Express has been favored by PepsiCo Group China Railway Express outsourcing is still its professional informatization of food China Railway Express management and operations. System, this China Railway Express management system is tailor-made by Brocade Information, a domestic China Railway Express train shipping chain management software train shipper. In accordance with Pepsi Food's China Railway Express requirements, Brocade Information customized, modified, debugged and improved the entire China Railway Express distribution information system, realizing digital management of warehousing and distribution, and truly realizing the automatic allocation of outbound and inbound warehouses according to rules. , realizing the early warning function of food inventory and expiration date, PepsiCo has realized real-time query on the terminal server provided by China Railway Express, and the entry, exit and storage status of China Railway Express are all under the control of PepsiCo. The cost and business losses of China Railway Express have been greatly reduced.
With the help of information technology, the China Railway Express Management System not only reduces the cost of train shippers and provides rational expectations for their production, but also enables sellers and distributors to achieve "zero inventory" and reduce Inventory backlog maximizes corporate profits. "Seamless links" run through the entire process of China Railway Express. Such an optimized system reduces the negative impact of the "bullwhip effect" on market fluctuations. In the pursuit of profit maximization, Wal-Mart chose China Railway Express, which is self-sufficient, and Pepsi chose China Railway Express, an outsourced third-party company. In the end, they both perfectly responded to the informatization of China Railway Express and received generous business returns.