In fact, the problem of supply chain can not be completely attributed to the lack of communication between enterprises. Most enterprises communicate with each other, and there is also information interaction within enterprises. But the problem is that because there is no way to see the whole chain clearly, the communication between them is often inefficient or ineffective; Even communication based on local interests may lead to more mistakes. In order to define this kind of problem more clearly, the author thinks it may be more appropriate to compare this phenomenon to "barn effect". Do you remember the phrase "the dragon sees the head but doesn't see the tail"? Yi Long wears clouds, elusive, unpredictable. It's hard to see the whole picture, even more difficult to control.
There are many reasons for the "dragon effect". First of all, the longer the supply chain process, the more obvious the "dragon effect". The author has done supply chain diagnosis consultation for the largest enterprise in a domestic electronic component sub-industry. Regardless of the complexity of its external supply chain (for example, some customers are both customers and suppliers, and some suppliers are suppliers designated by customers, etc.). ), its internal production process alone is a real "dragon". When materials flow in different workshops, there are always more than 40 processes to be completed, including chemical, physical, automatic and manual, which is dazzling. In order to facilitate management, the company integrated and divided the process, and divided more than 40 processes into six workshops, which were managed independently by different workshop directors. In order to coordinate the production plan of each workshop, the factory also set up a separate planning department to coordinate and manage the overall plan. However, due to the long process, the planning department can't take care of both ends, so it can only delegate the overall plan to each workshop, and the workshop director can judge and adjust it by himself. In this way, either workshop A can't finish the task due to lack of materials today, or workshop B has nothing to do after overfulfilling the task. Every department quarrels every day and the planning department has nothing to do. It can only see who is stronger and make adjustments according to whose opinions. So the plan is changing every day, and the battle is getting more and more fierce. In order to alleviate this contradiction, all departments decided to solve the problem by "brainstorming" and "brainstorming", increasing input and output and raising inventory water level. Although the contradiction between workshops has decreased, the inventory turnover rate is getting worse and worse. This is typical: the direction is wrong, the harder you work, the more wrong you are! So, how to eliminate the "dragon effect" caused by the long supply chain process? There are many methods, such as adopting TOC for bottleneck management and establishing S& etc. OP process, etc. We will gradually expand it in the following chapters, so we won't repeat it here.
The wider the geographical distribution of the supply chain, the more obvious the "dragon effect". In my spare time, I have trained for some national or multinational enterprises. Although all the students come from the same company, they work in different areas. When discussing in class, we often find that they have different names for the same process. For example, some logistics centers are called "logistics centers", some are called "distribution centers" and some are called "performance centers". Everyone has his own words, and it is particularly difficult to communicate. In fact, it is not difficult to solve this problem. In trans-regional large enterprises, it is necessary to establish a standard vocabulary of enterprises. All departments can initiate and submit new word definitions, which will be released after being confirmed by the Standards Committee. Every employee of the company can inquire through the company's intranet.
The finer the division of labor in supply chain, the easier it is to produce "dragon effect" We all know the so-called "big enterprise disease", the internal organization of the enterprise is bloated, the organizational structure is criss-crossed, and the multi-head management leads to employees being at a loss. In order to solve these problems, some enterprises adopt the so-called "matrix management mode", in which employees are managed by department managers and are responsible to project managers. The project manager's goal is to complete the project on time according to the company's requirements, while the department manager hopes that the new process of project establishment can meet the interests of the department. When there is a conflict between the two, it depends on who has the loudest voice, who is stronger and whose "background is harder"! There are no advantages or disadvantages in organizational structure, and some enterprises are mainly "flat and centralized", such as Apple; Some enterprises focus on "borderless and decentralized", such as Li & Fung. Successful enterprises have their own unique organizational structure model. However, no matter what kind of organizational structure, we should pay attention to avoid the "dragon effect" in the supply chain because of too fine division of labor.
Having said that, readers may feel that this "dragon effect" is quite similar to the "bullwhip effect" we often say, and it is true, but more accurately, the "bullwhip effect" is a manifestation or result of the "dragon effect". "Bullwhip effect" refers to the fact that when the information flow in the supply chain is transmitted from the end customer to the original supplier, the information is distorted and gradually enlarged due to the inability to effectively enjoy the information, resulting in more and more fluctuations in demand information. The "dragon effect" is due to the long process, too wide geographical distribution or too fine division of labor in the supply chain, which makes the visibility of the supply chain low and the coordination difficult, thus losing control of the supply chain. This kind of out-of-control is sometimes manifested as "bullwhip effect" and "demand amplification", sometimes as high cost of supply chain management and communication, and sometimes as supply chain risks such as sudden interruption of supply.
Even the enterprises with the best supply chain operation are trying their best to fight against the "dragon effect", because no one dares to clap their chests and say, "Our enterprise knows the supply chain like the back of its hand, not bad!" . The author believes that this kind of confrontation should start with increasing the "visibility" of the supply chain. This is also one of the tasks of supply chain architects, that is, to ensure that the supply chain we design is first "visible" and then "controllable" and "reliable". If you can't see the whole picture of the dragon clearly, how can you control it well?
There are many ways to improve the visibility of the supply chain. For example, in order to solve communication problems, many enterprises have established cross-departmental and cross-enterprise communication platforms. However, the organizational structure of this communication platform should conform to the thinking of supply chain, that is, end-to-end management thinking. If some enterprises set up a so-called "big supply chain department", they will take out functional departments such as "procurement", "production" and "planning" and report directly to the supply chain director. On the surface, it seems that this method can strengthen the communication between departments and manage the supply chain well. But the problem is that if sales and market are still isolated, the so-called "big supply chain department" often discusses the operation of supply chain behind closed doors, lacking the participation of sales and market departments, and lacking the understanding and analysis of customers and market needs. This is like water without a source, a tree without a root, and a dragon without a head and a tail. No matter how sophisticated the supply chain planning is, it is useless.
Many people think that using some advanced information system tools, such as RFID, GPS and mobile Internet, can greatly improve the visibility of the supply chain. However, no matter how powerful the information system is, it must be based on perfect and reliable processes and guarantees in order to play a powerful role. It is our supply chain architect who has rich experience and knowledge in supply chain that has established these processes. To give a simple example, suppose we want to associate system data with suppliers. In order to improve the efficiency of data transmission, IT architects may choose to package data and transmit it at certain intervals instead of real-time data transmission. Therefore, the visibility of the supply chain may be affected. Therefore, supply chain architects should put forward clear requirements of "real-time data transmission" to IT architects to ensure the visibility of data transmission. Without an understanding of system and process architecture and some experience in supply chain architecture, architects cannot solve these "small" but often fatal problems.
The "dragon effect" is caused by the endogeneity of supply chain, which brings a series of problems and challenges to supply chain managers, and also brings opportunities for excellent enterprises to surpass their competitors. Excellent enterprises use different methods and tools and experienced supply chain architects to continuously reduce the adverse consequences caused by the "dragon effect" and thus continuously improve the performance of the supply chain. Only enterprises that can control this "dragon" are the best in the supply chain competition.