Relationship between Logistics and Supply Chain Management

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Relationship between supply chain management and logistics management

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Chen Wen, Lingdingyang

(Shanghai Customs University, Shanghai 2 10204)

Supply chain management is an effective way and a new management mode for enterprises to adapt to global competition after entering the 2 1 century. This paper expounds the integration and coordination of enterprise resources at all nodes from the perspective of the whole supply chain, emphasizing the cooperation of strategic partners, the integration of information resources, rapid market response and creating value for users.

Supply chain management; Keywords; Logistics management; Value added chain

China Library Classification. F270 Document ID number A1007-7723 (2006) 04-0035-02

First, the concept of supply chain

In the early view, supply chain is a process within manufacturing enterprises, which refers to the process of transferring raw materials and parts purchased from external enterprises to retailers and users through activities such as production conversion and sales. The traditional concept of supply chain is limited to the internal operation level of enterprises and pays attention to the utilization of resources of enterprises themselves.

Later, the concept of supply chain paid attention to the connection with other enterprises and the external environment of the supply chain, and thought that it should be "the process of transforming raw materials into products and then to end users through the processes of manufacturing, assembly, distribution and retail of different enterprises in the chain", which was a broader and more systematic concept. Stevens of the United States believes: "Controlling the flow from suppliers to users through value-added processes and distribution channels is the supply chain, which starts from the supply source and ends at the consumption end." Evens believes: "Supply chain management is a model that connects suppliers, manufacturers, distributors, retailers and end users into a whole through feedforward information flow and feedback logistics and information flow."

Recently, the concept of supply chain pays more attention to the network chain relationship around the core enterprises, and the understanding of supply chain has formed the concept of network chain. Harrison further defines the supply chain as: "The supply chain is a functional network that purchases raw materials, transforms them into intermediate products and finished products, and sells the finished products to users." On the basis of research and analysis, we can give a definition of supply chain: supply chain is around the core enterprises, through the control of information flow, logistics and capital flow, starting from purchasing raw materials, making intermediate products and final products, and delivering products to consumers through sales networks. Connect suppliers, manufacturers, distributors, retailers and end users into a whole functional network chain structure model. It is a broader enterprise structure model, including all participating node enterprises, starting from the supply of raw materials, through the manufacturing, processing, assembly and distribution processes of different enterprises in the chain, and finally to the end users. It is a material chain, an information chain and a capital chain connecting suppliers and users, and it is a value-added chain. Due to the process of processing, packaging and transportation, materials increase their value in the supply chain, which brings benefits to related enterprises.

Second, the concept of supply chain management

Supply chain management is an integrated management idea and method, which performs logistics planning and control functions from suppliers to end users in the supply chain. Supply chain management is not another name of supplier management, but a new management strategy, which integrates different enterprises to increase the efficiency of the whole supply chain and pays attention to the cooperation between enterprises. At the earliest, people put the focus of supply chain management on inventory management as a buffer to balance limited production capacity and adapt to changes in user needs. It seeks the balance between the cost of fast and reliable delivery of products to users and the cost of production and inventory management through various coordination means, so as to determine the best inventory investment. Therefore, its main task is to manage inventory and transportation. The current supply chain management regards all enterprises in the supply chain as an inseparable whole, which makes the functions of procurement, production, distribution and sales shared by all enterprises in the supply chain become a coordinated development organism.

Third, the content of supply chain management

Supply chain management mainly involves four main areas: supply, planning, logistics and demand. Supply chain management is guided by synchronous and integrated production planning and supply chain management.

With the support of various technologies, especially relying on Internet/Intranet, it is implemented around supply, production and operation, logistics (mainly referring to manufacturing process) and meeting demand. It mainly includes the planning, coordination and control of materials (spare parts, finished products, etc.). ) and information from suppliers to users. The goal is to improve the user service level and reduce the total transaction cost, and seek a balance between the two goals (these two goals are often conflicting). Supply chain management also includes the following main contents: partner relationship management, strategic suppliers and users; Demand forecast and planning of chain products; Design of supply chain (evaluation, selection and positioning of global node enterprises, resources and equipment, etc.). ) integrate supply chain management synchronization, integrate production planning, and provide various technical support for production logistics needs; Material supply and demand management within and between enterprises; Product design and manufacturing management, integrated production planning, tracking and control based on supply chain management; Customer service and logistics (transportation, inventory, packaging, etc. ) Management based on supply chain; Management of inter-enterprise capital flow (exchange rate, cost and other issues); Interactive information management of supply chain based on Internet/Intranet, etc.

In the competitive environment of the global market, it is impossible for any enterprise to become a leader in all businesses. Only by combining other upstream and downstream enterprises in the industry can we establish an industry supply chain with closely related economic interests and complementary advantages, make full use of all available resources, adapt to the competitive environment of socialized mass production, and thus enhance market competitiveness. Therefore, the internal supply chain management of enterprises has been extended and developed into the industrial chain management of the whole industry, and the management resources have also been extended from internal expansion to the outside.

In this process of supply chain management, firstly, an interlocking supply chain is established in the whole industry, so that multiple enterprises can realize coordinated operation under the overall management. Incorporate the scattered plans of these enterprises into the whole of supply chain planning to realize the sharing of resources and information, thus greatly enhancing the overall advantages of the supply chain in the big market environment, enabling each enterprise to obtain the cost advantage with the minimum individual cost and transform it into the original cost advantage, and obtain the demand information of the final consumer market in time, so that the whole supply chain can keep up with the changes of the market. 2 1 century, market competition will evolve into such competition among supply chains.

Secondly, establish business-related dynamic enterprise alliance (or virtual company) among market, processing/assembly, manufacturing and circulation. That is to say, multiple enterprises unite to complete the task of providing goods or services to the market, and connect these enterprises into a network through information technology, so as to provide goods and services to the market more effectively and complete the market functions that a single enterprise cannot undertake. This not only enables each enterprise to maintain its own individual advantages, but also expands the scope of its resource utilization, so that each enterprise can enjoy other resources in the alliance. For example, the circulation link is a bridge connecting the manufacturing and circulation fields and plays an important role in connecting the preceding with the following. Taking it as the core can make the connection between supply and demand closer. In developed countries with market economy, in order to speed up the circulation of products, distribution centers are often taken as the core, connected with the production and processing fields, connected with wholesalers, retailers and supermarket chains, and enterprise alliances are established, which are brought into their own supply chains for management, giving play to the connecting role, planning and calling the overall resources most effectively, realizing the cross-industry, cross-regional and even transnational operation of their business, and responding quickly to the needs of the big market. Under its function, the products in the supply chain can be produced in time, delivered in time, delivered in time, and delivered to the final consumers in time, so as to quickly realize capital circulation and value-added of the value chain.

This generalized supply chain management has dismantled the enterprise's fence, connected the independent information islands of each enterprise, and established a kind of cross-enterprise cooperation, thus pursuing and sharing market opportunities. Through the Internet, e-commerce integrates the past fragmented business processes, covering the whole process from suppliers to customers, including raw material suppliers, external processing and assembly, manufacturing, sales and distribution and transportation, wholesalers, retailers, warehousing and customer service, and realizes the transformation from the production field to the circulation field.

Fourthly, the relationship between logistics management and supply chain management.

As the source of modern supply chain management, logistics management is also an important part of supply chain management, which is very different from traditional logistics management. Therefore, to understand the essence of supply chain management and the role of logistics management in supply chain management, we must understand the formation and development of logistics management.

Before the emergence of logistics management, enterprises did not have an independent logistics management business department, but were only regarded as part of manufacturing activities. In 1980s, the concept of integrated logistics appeared, which integrated the input and output logistics management of enterprises with some market and manufacturing functions. Supply chain management (SCM) is a new management model that appeared in 1990s, and then the concept of integrated supply chain appeared, seeking business opportunities through logistics coordination with other supply chain members.

Logistics refers to the material transfer activities between enterprises within the supply chain (excluding internal production activities). Modern enterprise logistics management unifies the two fields of production procurement and distribution, forming a logistics supply chain, which is the meaning of modern logistics management. Therefore, some people abroad think that supply chain management is actually an extension and expansion of logistics management. From the social point of view, logistics can be understood as all the activity networks that provide goods and services to the final consumers, that is, supply networks. And the supply chain is one of the channels, which is associated with several different management concepts:

Supply management: such as purchasing, inventory, transportation, order processing, etc. , related to the supplier's business, dealing with various business activities between the enterprise and the supply market, but excluding suppliers.

Logistics: refers to the material management and information management that reach the end users through distribution channels.

Logistics management: dealing with the most direct users of the enterprise, mainly a class of users, not involving the business relationship between the second class of users, selling products to users, not indirect users.

Material management: refers to the middle part of supply chain logistics and information flow. Including procurement, inventory management, warehousing management, production planning and control, distribution and distribution management. That is, from the procurement and production of raw materials to the delivery of products to users (first-class users), excluding suppliers, distributors and suppliers' end users.

Supply chain management: it is a broader cross-enterprise management than material management. It grasps the needs of end users from a strategic perspective, and obtains the best results in terms of cost, time, efficiency and flexibility through effective cooperation among enterprises. Including all activities from raw materials to end users, is the process management of the whole chain.

V the position of logistics management in supply chain management

It is generally believed that supply chain is the unity of logistics, information flow and capital flow, so logistics management naturally becomes an important part of supply chain management system. What is the difference between supply chain management and logistics management? Generally speaking, supply chain management involves manufacturing problems and logistics problems, and logistics involves non-manufacturing problems of enterprises. The main differences between the two are as follows:

1. Logistics involves the flow of raw materials and parts between enterprises, but does not involve the activities of manufacturing process;

2. Supply chain management includes logistics activities and manufacturing activities;

3. Supply chain management involves the whole logistics value-added process from raw materials to products delivered to end users. Logistics involves the process of value flow between enterprises and is a joint management activity between enterprises.

Logistics management plays an important role in supply chain management. This can be examined through value distribution. The logistics value (the sum of purchasing and distribution) accounts for more than half of the whole supply chain value in various products and industries, while the manufacturing value is less than half. In consumable consumer goods and general industrial products, the proportion of logistics value is greater, reaching more than 80%. It shows that the supply chain is a value-added chain process, and the logistics process should be effectively managed to improve the value-added level of the supply chain. Logistics management is no longer the traditional problem of ensuring the continuity of production process, but should play an important role in supply chain management: creating user value and reducing user cost; Coordinate manufacturing activities to improve enterprise agility; Provide user service and shape corporate image; Provide information feedback and coordinate the contradiction between supply and demand.

In order to achieve the above objectives, the logistics system should deliver goods on time, improve delivery reliability, improve response ability and reduce inventory costs.

Conclusion of intransitive verbs

The change of modern market environment requires enterprises to speed up capital turnover, quickly transmit and feed back market information, constantly communicate the relationship between production and consumption, provide low-cost and high-quality products, produce customized products to meet customer needs, and improve user satisfaction. Therefore, only by establishing an agile and efficient supply chain logistics system can we meet the requirements of improving the competitiveness of enterprises. Supply chain management will become the core competitiveness of enterprises in 2 1 century, and logistics management will become the main component of the core competitiveness of supply chain management.

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[3] Wang Jian. System Construction of Modern Circulation Center [J]. China Circular Economy, 2003, (12).