enochmcbride

October 19, 2010

Important that the structure, not quantity

Filed under: Uncategorized

In systems engineering, the well-known optimization theory asserts that the stability of a complex system, the most important structural, rather than the number of its members.

This view also applies to the supply chain structure and business strategy on the choice of suppliers.

Chinese enterprises, the supply shortage in the supply from the rich in the process of purchasing a large head and have too much experience. Once upon a time, buyer preferences determine the fate of suppliers. When the procurement of fertilizer turns round the time difference, the same long supply of materials is not surprising.

Excluding buyer's subjective preferences, a historical look at this stage, the multi-supplier strategy seems understandable. In the traditional sense of supply, the first task is to ensure the supply, then price, quality, and management costs. From the buyer's point of view, more providers as natural selection is a surefire plan. No one wants to just put the eggs in one basket.

Rather than uncontrolled breeding corruption in addition to long procurement, the procurement and management of difficult cases to increase the quality of fluctuations will affect the entire production and after-sales service, and even the whole industry chain system, leading to a decline in competitiveness and corporate reputation.

Therefore, the last few years, more Chinese companies have learned from Europe and the United States counterparts and begin implementation of the strategic sourcing program.??? establish procurement assessment committee and a series of rigorous selection process, companies enter into with the successful supply of a package of strategic sourcing Xie Yi, corporate commitment to successful supply business from procurement Zhi similar materials, while the suppliers in the access to long-term major clients, agreed to in Jiage , delivery and quality ensuring the interests of upstream manufacturers.

As a result, the structure of supply and demand chain from the clutter of the jungle into interlocking chain. This is certainly one to one ratio of the supply chain structure, long procurement of advanced, but not a solid structure, because the chain link of the fracture will have a devastating impact throughout the chain.

The most famous case is the beginning of 2001, Ericsson as a core mobile phone chip supplier by only a few weeks out of stock factory caught fire, resulting in a large number of orders can not be shipped worldwide, eventually forcing its withdrawal from the cell phone manufacturing industry.

However, a revelation is that the Nokia company also suffered the same blow, but the first time Nokia launched a prepared crisis management plan, by changing the cell phone circuit design, enable the alternate suppliers, through the difficulty.

Look at the whole industrial chain, one to one single-chain structure of the natural forest structure than the one to many better benefits and higher efficiency. But when the crisis comes, cross-shaped bifurcation, alternative supply chain structures can be replicated, is the real vitality of a structure. It's like maintaining the DNA double helix of life, any period of the damage, the chain will be through the body's own mechanism for DNA repair. (As shown). Use of DNA structure in the supply chain, Nokia by rapid repair of damaged its supply chain that some escaped unharmed, while Ericsson because of the single-chain structure was eliminated.

In fact, China's mobile phone industry has taken the lead into the DNA structure of the industry chain integration times. Today's mobile phone industry, there is no license sales, a marketing, not production, not design, manufacturing, manufacturing plant with the phone homogeneous set of procurement are outsourced to specialized trading companies to execute cross-border purchases. This ensures that any industrial chain broken chain, can quickly find a replacement chain.

A problem in the global economy of today, the game industry is quietly changing the rules to promote structural changes in the supply chain. Forest structure, single-chain structure and DNA structure in the industry driven by competition and market evolution are little by little.

Today, Chinese enterprises, more and more anti-dumping and other industrial chain risk, need to risk management, cost control and supply efficiency with the balance. DNA structures is the result of evolution.

So how to build a DNA structure of enterprise supply chain structure?

AMT through many years of management consulting practice and business management studies, best practices that include at least the following:

The supplier management at different levels. Generally divided into strategic suppliers, support providers and substitute suppliers, according to the total purchase to the levels assessed in accordance with 7:2:1.

Strategic suppliers, manufacturers by upstream suppliers to downstream acquisition of shares or help to stabilize the supply of key equipment, the purpose of eliminating bottlenecks. This interdependence, so that DNA structure is more solid but lacking in professionalism and flexibility.

With information technology tools for dynamic management of suppliers. The establishment of continuous assessment, examination and selection mechanism, not just a one-time behavior.

The establishment of regional full-time department or company, the so-called “global procurement center.” This reflects the scale effect of transnational corporations and large enterprises is particularly important. Within the selection of suppliers in the global providers, and selected business intelligence providers have strict vetting procedures, requested its the size, quality system, Xinxijitong Jianshe, downstream supply chain, warehousing and logistics distribution and other aspects of a comprehensive ???.????????????????????????????????????????????????????????br />
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