This paper discusses the cooperation mode between P&G and Wal-Mart in the United States from the recent ice-breaking relationship between Gome and Gree, and discusses the importance of establishing strategic partnership between retail suppliers in supply chain management.
Keywords; Supply chain management; Business process reengineering; Core competitiveness; strategic partnership
First, the dispute between Gome and Gree In late February 2004, a dispute broke out between Chengdu Gome and Chengdu Gree, because Gome suddenly drastically reduced the price of Gree air conditioners without notifying the manufacturers in advance;
On March 1 1, 2004, Gome's Beijing headquarters issued a "sales ban order" to Gree Air Conditioning and branches all over the country. 14, Gree also announced its complete withdrawal from Gome stores, and the two sides officially ended their partnership;
Around 2005, Gree agents in Guangzhou, Fujian, Henan and other regions supplied goods to Gome, but both sides denied reaching a cooperation agreement.
In March 2006, Dong Mingzhu, president of Gree Electric, said in a dialogue with CCTV that Gree had no contact with Gome.
In March, 2007, Guangzhou Gome and Guangzhou Gree announced that they had reached a cooperation understanding, and the two sides carried out all-round cooperation on the basis of mutual respect, thus breaking the ice.
Second, after shaking hands and making peace, the story did not end there. Gree's entry into Gome this time cannot make peace on behalf of Gome's distributors and manufacturers. Suning Appliance revealed that Gree insisted on self-built channels, which strongly contradicted the home appliance chain. At present, only through the cooperation of agents.
Gome and Suning people still insist that Gree must first "self-destruct the channel" as to whether the normal relationship between manufacturers can be restored in the future. According to statistics, Gree has built 3,500 stores, and more than 90% of its products are sold through these stores. Dong Mingzhu, general manager of Zhuhai Gree Electric Co., Ltd. has also publicly stated that some home appliance hypermarkets monopolize the home appliance market, and there is a phenomenon of "store bullying customers", which "does not conform to objective laws". On the surface, the differences between the two sides mainly stem from product prices and marketing policies, but in fact they stem from the struggle for channel control. Gome puts pressure on manufacturers by reducing purchase price, delaying payment, entrance fee and holiday promotion fee. And transfer the cost to upstream manufacturers. However, manufacturers are unwilling to lose control of the market easily, so they have to continue to maintain the original inefficient channels and carry out strategic checks and balances on Gome. As a result, the mode of cooperation was broken, and the two sides began a helpless and extremely cruel competition. Retailers and manufacturers not only increase costs, but also fail to improve efficiency and concentrate on strengthening core competitiveness. Both sides are facing a lose-lose outcome.
On the one hand, Gome, the largest home appliance chain distributor in China, and Gree, the largest air conditioner manufacturer in China, are wrestling. The cooperation, division of labor and re-cooperation between two companies that play an important role in the industry fully embodies the subtle relationship between the roles in the supply chain, and also makes the discussion of supply chain management mode become the focus of attention again.
Third, supply chain management Supply chain management through the use of modern information technology means to transform and integrate business processes and establish cooperative business partner alliances with suppliers and customers, making it possible for enterprises to effectively control and optimize the allocation of internal and external resources, thus greatly improving the competitiveness of enterprises.
The cost of a product is determined by the overall efficiency of the supply chain, and depends on whether the information between the partners in the chain is transparent, whether the logistics is smooth, and whether the capital allocation is reasonable.
Four, Procter & Gamble-Wal-Mart model The difficulties encountered by China enterprises in supply chain management are not unique.
In 1980s, there was little information sharing between American retailers and manufacturers, and the relationship between them was very similar to that in China now. The cooperation between P&G and Wal-Mart completely changed this situation. The concrete form of their cooperation is: the enterprises of the two sides are networked through EDI (Electronic Data Interchange) and satellite communication. With this information system, P&G can not only know the inventory of Pampers diapers in Wal-Mart Logistics Center quickly, but also know the sales, inventory and price data of diapers in Wal-Mart supermarkets in time. This will not only enable Procter & Gamble to make timely production and R&D plans that meet the market demand, but also manage Wal-Mart's inventory items, realize continuous replenishment, and prevent the structural opportunity cost of goods (that is, there are too many unsalable goods in inventory and the best-selling goods are out of stock). Wal-Mart, on the other hand, was liberated from the original heavy logistics operation and focused on sales activities. At the same time, based on the information obtained from Procter & Gamble through EDI, the shelf and purchase quantity of goods are determined in time, and MMI (Manufacturer Managed Inventory) system realizes automatic purchase.
Wal-Mart handed over the management right of the logistics center or warehouse to Procter & Gamble for implementation, so that Wal-Mart not only didn't have to engage in specific logistics activities, but also the two companies didn't have to negotiate the terms of each transaction (such as distribution and price), which greatly shortened the time from ordering to purchasing, warehousing, sorting and replenishment sales.
With the establishment of supply chain collaborative management mode between P&G and Wal-Mart, American retailers and suppliers began to pay attention to how to strengthen supply chain management to reduce comprehensive operating costs and improve customer satisfaction, instead of just focusing on channel control.
The enlightenment of P&G-Wal-Mart model is that both manufacturers and retailers should gradually shift their attention to product prices and marketing resources to re-engineering their own internal processes, and through the efficient operation of the whole supply chain, continuously reduce each other's operating costs, improve profitability, and finally achieve a win-win situation. The key to the success of the supply chain is that every enterprise in the supply chain concentrates on consolidating and developing its core competitiveness, making use of its own resource advantages, and through the redesign of technical processes and the reorganization of business processes, doing a good job in its key business that can be controlled for a long time, be superior to competitors and create special value, instead of focusing on how to monopolize channels and plunder resources.
Verb (abbreviation of verb) strategic partnership More and more enterprises in China have realized the importance of supply chain management and introduced the idea of supply chain management into enterprise management practice.
In the repeated transactions between manufacturers and suppliers, the ultimate pursuit is "profit". As long as both sides care about each other's long-term interests, it is the best choice for both sides to establish a strategic partnership.
Mutual trust is the foundation of the strategic partnership between reliable manufacturers and suppliers. Strong interdependence, we should formulate the same strategy and business objectives, so as to promote both sides to get the maximum benefit from long-term strategic cooperation. Establish a reasonable income distribution mechanism to stabilize the strategic partnership between the two sides; Regularly evaluate and revise the cooperation mode and effect, and lay a solid foundation for future cooperation.
It must be noted that in order to ensure that manufacturers and suppliers strictly abide by the pre-signed agreement in the transaction process, both parties must formulate a perfect contract binding mechanism, so that the defaulting party must bear the liability for breach of contract, and the high litigation cost exceeds the benefits obtained from breach of contract, so as to dispel the enthusiasm of all parties to betray the agreement.
Philology of intransitive verbs
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Zhong (School of International Relations, Guangdong University of Foreign Studies, Guangzhou, Guangdong)
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