How tire companies benefit from the supply chain

In recent years, "supply chain" is a familiar and unfamiliar term for many rubber companies. Everyone is talking about "benefit to the supply chain", but how to become a topic that many companies face, even some companies now It also understands the supply chain and equates it to procurement or logistics .

The concept of the supply chain has evolved from the concept of expanding production. The definition of the supply chain by the American Supply Chain Association is: "The supply chain encompasses all efforts involving the production and delivery of end products and services, from supplier suppliers to customers. Customer, supply chain management includes management of supply and demand, procurement of raw materials, spare parts, manufacture and assembly, storage of items and inventory, order entry and management, channel distribution and final delivery users.”

This shows that the supply chain is a systematic concept that covers suppliers, manufacturers, warehouses, distribution centers and channel providers. The value of the supply chain is self-evident. In 2001, the world’s authoritative “Fortune” magazine listed supply chain management as one of the most important four strategic resources in the century. With the rise of e-commerce, how to seize the tide to break through supply The bottleneck of the chain has become a weapon to seize the commanding heights of the industry.

"Spying for Leopard" Type Supply Chain Management

Since China’s accession to the WTO, China’s huge consumer market has attracted many well-known international companies in the rubber-related industries, such as Goodyear, Michelin, and Cabot, to expand their business in China. This has brought fierce competition and pressure to domestic companies. . Domestic companies therefore began to pay attention to and attach importance to supply chain management and invest in supply chain business. However, many industry companies have focused their attention on a certain part of the supply chain, such as procurement and logistics, and lack of production of raw materials from upstream suppliers and their own internal production. Process, downstream warehouse distributors, carriers, retailers and other aspects of the overall planning.

At present, many companies' purchasing departments mainly choose suppliers based on their price levels. Although such low-cost purchases have achieved certain economic benefits in the short term, there may be a risk of product quality failure, which may increase the cost of testing products for companies. Consumer claims are even the loss of pressure. Many companies in the industry have also exposed some problems with their purchasing models. For example, the purchasing department and other departments are usually independent and separated from each other and lack of coordination. This has led to an increase in the number of purchases or over-procured purchases caused by temporary changes in the production plan. Warehousing and logistics costs.

In addition, in terms of logistics and warehousing, many companies lack the talents of logistics management to conduct effective real-time monitoring and coordination of corporate logistics. Nowadays, sales of many rubber companies' products have been transferred to third-party logistics companies. In addition to quarterly purchases, there are often cases of “dissatisfaction with vehicles at the time of arrival and empty vehicles at the time of departure”, wasting logistics costs. Some companies have overemphasized the growth of output and neglected the construction of logistics facilities. For example, the storage capacity and output of a tire factory in Guangzhou is seriously out of balance. A large number of leasing warehouses, raw materials and products are often transshipped in the factory area, resulting in storage costs and logistics costs. increase.

In addition, for most small and medium sized tire and rubber products companies, sales regions are widely distributed, but the number of units sold is small. Therefore, many regions cannot form complete vehicle shipments, and often use a zero-load method, which not only increases transportation costs, but also Reduce the timeliness of arrival.

In fact, this kind of “inspection” management method is only covered by the extensive management of the “supply chain” coat, which is contrary to the concept and original intention of supply chain management. Many companies have not yet introduced a market environment that leads from a production-oriented market environment to a customer-oriented market environment. The change will result in a weakening of the competitiveness of the enterprise and even lose the original customer base and market.

How to solve supply chain problems

The supply chain is a systematic project that involves the whole body. According to the different conditions of different industries, the focus will be on different aspects.

Jiang Hongfeng, chief representative of the China Supply Chain and Production Operations Association in China, once stated that the supply chain is oriented by supply and demand and value. Enterprises should pay attention to the entire supply chain's profit output. Before this, it is necessary to accurately position the future development. “More, faster, better, and provincial are all important, but companies should focus on them. Focusing on more, we must expand sales and increase production capacity; if we are quick, we must reduce the approval process; if we are good, we must focus on products. R & D; to save, we must strictly control the cost or fight the price war."

For procurement, cost-effectiveness is the best choice. It is necessary to find a balance between quality and cost to ensure the lowest total cost. In simple terms, it is a change from a simple purchase to a "reasonable purchase," that is, at the right time, at the right price, with the right quality, and through the right suppliers to buy the right raw materials.

A rubber company can establish a supplier database system and view each business within the company and other nodes on the supply chain as a whole, forming a relatively stable and multi-layered supplier network. In this way, the most suitable suppliers can be selected based on quality and cost, and through the unified management of capital flow, logistics and information flow, to achieve the best match between total cost and total efficiency in the procurement process.

Compared to the buying and selling relationship between buyers and sellers under traditional conditions, the supply chain underscores a win-win partnership. Manufacturers choose long-term sustainable suppliers to help them reduce costs, improve quality and improve Efficiency replaces simple economic interests with trust and cooperation. Logistics is an important node to undertake procurement production and sales, and also a basic link of supply chain management. Industry enterprises should introduce professional logistics talents, and reasonably lay out the logistics network according to the actual production and warehousing of the company in order to achieve maximum benefit and cost optimization.

At present, third-party logistics companies have become increasingly attractive in China and become the first choice for more and more rubber companies. They can perform related order review, classification, and other processing according to the customer's delivery request, and arrange the goods to and from the warehouse according to the order. Develop a distribution plan for distribution. At present, the development of third-party logistics in China is still in its infancy. Therefore, when selecting a logistics partner, it is necessary to fully consider the factors such as the service scope, geographical coverage, and core capabilities of the logistics according to the company’s production and warehousing, and outsource the company's logistics. With professional strength, logistics management will be extended to upstream suppliers, subordinate agents, and their secondary networks, so that logistics can meet the company's long-term development, while rubber companies can also focus more on product development and improve the company's core Competitively.

Supply chain management under e-commerce

In the Internet era, the rise of e-commerce triggered profound changes in corporate marketing, management, production, and logistics. It also brought some innovations to supply chain management. The e-commerce supply chain management (e-SCM) has become an emerging field. The advantages of the Internet, which is fast and geographically unrestricted, make supply chain management more scientific and efficient.

Many large foreign companies already have their own e-commerce supply chain management systems, such as Dell, GM, and Ford. Companies such as Manugistics and Agile Software have also provided e-commerce supply chain solutions. There are also some well-known domestic companies such as Haier. Huawei and Huawei are actively exploring the supply chain management based on e-commerce.

Zhang Ruimin, CEO of Haier Group, once said that the most important concept of supply chain management is the company's core business and competitiveness. Based on the Omnibear Optimization Management Law (OEC Management), Haier established three order processing systems for logistics, business flow, and capital flow, and completed all aspects of connecting home and abroad, through procurement, design, production, sales, and finance. The computerized information management system project realizes the zero distance between manufacturers and consumers. Haier uses three JIT (Just In Time) JIT purchases, JIT feeds, and JIT delivery. Haier spends more than 150 million yuan each year on its purchases. All use B2B online procurement with ERP as the back office, open bidding, and online payment. The entire procurement process is transparent and can be tracked in real time.

Haier’s computer network is networked with suppliers all over the world. The company can check the inventory of the company’s supply in Haier and pay the bills on the Internet. It can automatically feed materials according to the amount of the contract, thus minimizing the procurement cycle. After distribution and integration, the logistics department can use the ERP information system for batching according to the production plan on the next day. According to the kanban management, 4H (4 hours) feeding to the station system will be implemented, so that the inventory area will be reduced by two-thirds, and the inventory fund will be reduced by half. . In terms of storage and transportation, a nationwide distribution network was established to achieve 8 hours of delivery in central cities, 24 hours in the region, and within 4 days of the country. Haier's supply chain management resulted in a 90% reduction in sluggish materials, a 200,000-square-meter warehouse area, and a 63% reduction in inventory funds, which achieved the optimal total supply chain costs.

Haier's model has provided a good start to the manufacturing industry's Internet supply chain management. Rubber Valley's natural rubber spot trading center is a beneficial attempt in the rubber industry. It integrates business flow, logistics, information flow and capital flow into natural rubber. All parties in circulation provide a series of one-stop supply chain solutions such as transaction, settlement, settlement, inspection, warehousing, logistics and financing. As a traditional industry, rubber tire companies are gradually merging into the Internet tide. In addition to such platforms as natural rubber trading centers, enterprises in various industries can establish their own supply chain management platforms, and forecast demand, raw material supply, and production. Status, logistics and warehousing, and other data and conditions are recorded so that all departments of the supply chain can grasp information in a timely manner and adjust the direction of operations.

Under the tide of this era, industry and enterprises can do a good job in supply chain management and fully reduce the unnecessary losses in the supply chain process. “To the benefit of the supply chain” will drive the virtuous cycle of the company and the industry as a whole.

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