How to conduct supply chain analysis

How to conduct supply chain analysis

How to conduct supply chain analysis. In workplace life, suppliers refer to companies that provide raw materials, equipment and other resources for corporate production and scientific research units. , we should prepare in advance in case of emergency. Below I have compiled how to conduct supply chain analysis. How to conduct supply chain analysis 1

1. What is a supply chain?

The term supply chain vividly describes the flow of products or raw materials from suppliers to manufacturers, to distributors, and then to The process of moving the chain from retailers to customers.

The supply chain encompasses all functions that accept and meet customer needs, including but not limited to the following: new product development, marketing, manufacturing operations, distribution, finance, and customer service.

Take the system process of a convenience store as an example:

2. Supply chain goal

The goal of the supply chain should be to maximize the overall value of the supply chain. The value generated by the supply chain (ie, supply chain surplus) should be the difference between the total revenue from customers and the total cost consumed by the supply chain.

Supply chain surplus = customer benefit value - supply chain cost

3. Supply chain process perspective

The supply chain is a series of processes that occur in different links. The processes and flows between different links are composed of the following structural diagram:

Circular perspective of supply chain process

Each cycle occurs at the interface between two adjacent links in the supply chain , that is, each link has its own process, and there are corresponding interactions between links.

Push/pull view of supply chain process

Pull process: orders are executed based on customer orders

Push process: orders are executed based on predictions of customer orders

Macro processes of the supply chain in enterprises

Supply chain management books generally divide the supply chain process into the following three macro processes:

Customer relationship macro process The purpose is to generate customer demand, place orders and track the order process, including marketing, pricing, sales, order management and call center management processes.

The main purpose of the internal supply chain management macro process is to efficiently and at the lowest possible cost meet the needs generated by the customer relationship management process, including site selection and warehouse capacity planning, deciding what to hold in each warehouse products, develop inventory management strategies, and pick, pack, and ship orders.

The main purpose of the supplier relationship management macro process is to arrange and manage supply resources for different products and services, including selecting suppliers for various commodities, evaluating suppliers, and negotiating prices and delivery with suppliers Negotiating terms, sharing supply and demand plans with suppliers, and processing replenishment orders.

These three macro processes control the flow of information, product, and funds to generate, receive, and fulfill customer orders.

4. Supply chain strategic matching

Strategic matching

The company level generally has a competitive strategy and a supply chain strategy, and strategic matching means Competitive strategy and supply chain strategy must have the same goals.

Competitive strategy generally relates to a company's competitors and defines the customer needs that need to be satisfied through the company's products and services. Supply chain strategy focuses on the acquisition of raw materials, transportation of materials, operations of manufacturing products or services provided, distribution of products, follow-up services, and whether these processes are solved by the company in-house or outsourced.

Achieve strategic matching goals:

The competitive strategy must match all functional strategies to form a coordinated and unified overall strategy. Any functional strategy must support other functional strategies and help the company achieve its competitive strategic goals.

The company's different functions must structure their processes and allocate resources appropriately to successfully execute these strategies.

The overall supply chain strategy design and the role of each link must be coordinated to support the supply chain strategy.

Choose appropriate supply chain functions

Each customer’s demand will affect potential demand uncertainty. Products with different characteristics can be distinguished according to different levels of potential demand (Figure 2) , Products with different characteristics require supply chain support with different functions.

Products with low potential demand uncertainty generally have the characteristics of small varieties, large batches, and long production cycles, and require high efficiency of the supply chain;

Potential demand is uncertain Products with high reliability generally have the characteristics of diversification, flexible batch size, and short order lead time. At this time, the responsiveness of the supply chain is required to be high.

Efficiency corresponds to the Efficient Supply Chain, which is a supply chain that aims to reduce supply chain costs.

Responsiveness corresponds to the reactive supply chain (Responsive Supply Chain, sometimes also called flexibility), which is a supply chain that pursues rapid response to customers.

The most popular classifications now are: Lean Supply Chain (Lean Supply Chain) and Agile Supply Chain (Agile Supply Chain).

Efficient supply chains often adopt a push-type, that is, forecast-driven, whereby close collaboration between supply chain nodes is carried out to reduce sales, production, logistics, supply and other costs and achieve cost competitiveness.

Reactivity generally adopts a pull type, that is, an order-pull model (MTO). By improving the flexibility and speed of production, supply, logistics, and sales, we can achieve rapid response to customers' personalized and diversified needs.

When both demand and supply are stable and certain, an efficient supply chain is matched.

When both demand and supply are uncertain, an agile supply chain is matched. Agile Supply Chain (Agile Supply Chain)

When demand is determined and supply is uncertain, the matching is a risk-averse supply chain (Risk-hidging Supply Chain)

In the end, supply is determined and demand is uncertain When in doubt, what you should do is a reactive supply chain (Responsive Supply Chain) How to conduct supply chain analysis 2

1. Transform data into actionable simple insights

Network technology John Abel, chief information officer of service provider Extreme Networks, said that most enterprises have large amounts of data, which is usually stored in different systems and databases. Supply chain complexity increases because of additional data sources generated by extended partners such as outsourcing, logistics and distribution operations, he added.

"As a result, many struggle to use this data to generate meaningful insights beyond top-level metrics and descriptive statistics," Abel said. "Data analytics tools can provide deeper, actionable insights and improve The accuracy of these insights. ”

Abel said the foundation for a successful supply chain data analytics strategy includes ensuring that internal and external data come together in a structured format; focusing the results of data projects on what needs to be done Action to drive performance metrics; and ensure their results are easy to understand.

He said, "Last and most important, there is often a tendency to focus on the model used rather than the output. Because many technology leaders want to incorporate artificial intelligence into their processes. But the more important goal is is focused on generating insights that are clear, interpretable, and easily digested by business users.”

Any report or dashboard shared with cross-functional teams must be able to tell a clear story that is easy to understand. Abel said, "Otherwise, the benefits of data analysis may be eclipsed by holding lengthy meetings to explain its value."

Abel said, "This also works in reverse. While most data analysis Experts do not have in-depth knowledge of the business processes and systems that produce this data, but they often have a broad understanding of upstream and downstream processes and systems. Successful supply chain analytics projects start with a 'what does the data tell us' perspective and then drill down to understand business process.

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Collaboration between analytics teams and business users helps develop these interpretable insights that can be easily communicated across the enterprise, he said.

2. Focus Analysis on areas of differentiation

Erik Singleton, a global supply chain expert at consulting firm North Highland Worldwide Consulting, said that many supply chain companies are being overwhelmed by customer orders, project information, equipment utilization and changing transportation costs. Obsessed with data.

Singleton said, “The key these companies need to build a successful customer-centric supply chain while maximizing operational efficiency is using the right analytics to make data-driven decisions. decision making. "

He suggested that supply chain companies focus their analysis on three main areas:

One is demand planning and inventory placement. Singleton said, " By collecting millions of rows of transaction data, companies are able to conduct powerful analyzes of customer purchasing patterns. Use this data to build powerful analytics algorithms to drive inventory allocation across the supply chain, ensuring products are in the right place at the right time. Companies should focus their analytical resources on predicting demand patterns across product types, sales channels, and geographies. ”

The second area is operational efficiency. “Customer and order data enables supply chains to maximize the use of assets and labor by efficiently scheduling resources to adapt to fluctuating demand patterns,” said Singleton. Adjusting workforce planning to add resources during peak periods while scheduling maintenance of equipment/assets during off-peak periods allows businesses to maximize efficiency and reduce operating costs. ”

The third area is order fulfillment path decisions. Singleton said, “Customers expect supply chains to be more flexible and customer-centric than ever before, with products taking multiple paths to reach the end customer. Businesses need to balance multiple factors, including service expectations, shipping and fulfillment costs, and inventory levels, to determine the best method for order fulfillment. ”

Singleton said that using analytics to weigh costs and customer experience is critical to staying competitive.

3. Use real-time data to handle interruptions

Abel said , as global supply chains grow in size and complexity, it becomes increasingly difficult to manage and respond to fluctuations throughout the supply chain.

Abel said, "With data points changing rapidly, analytics are becoming increasingly difficult. and decisions are often based on outdated information, further exacerbated by the time required to effectively analyze data. To successfully navigate this, supply chain managers need to develop parallel planning systems that optimize demand and supply by leveraging advanced analytics and real-time visibility across the supply chain. "

Abel said that historically, updates were based on a specific time frame and might be shared once a day or hourly. "But the measures now are not enough, due to demand and supply," he said. Constantly fluctuates, so it's best to have system integration with major vendors to get updates in real-time. "

If a supplier changes, businesses need to understand the potential impact immediately so they can develop alternative plans to maintain commitment to customers. "Using advanced analytics on real-time data feeds empowers those managing the supply chain," Abel said. Ability to quickly model and assess the impact of potential disruptions so they can plan and execute for fluctuations in demand, supply and inventory.

Abel noted that these insights can also be used to understand the potential impact of supply chain constraints on revenue forecasts. Near real-time data on bookings, shipments, inventory levels, supplier commitments, discounts and pipeline sales opportunities. Visibility, and real-time analysis of this data, is critical to an enterprise's ability to monitor and manage revenue forecasts

"Through the use of advanced analytics and automation, these variable data inputs can be used to create revenue forecasts," Abel said. Tracking models that enable supply chain teams to react to changes in near real-time, develop contingency measures, and provide more accurate revenue forecasts.

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Supplier management and its role

Suppliers refer to enterprises that provide raw materials, equipment and other resources for enterprise production and research and development of scientific research units. Suppliers It can be either a production enterprise or a circulation enterprise. If an enterprise wants to ensure normal production and scientific research needs to ensure the uninterrupted research process, it must have a group of reliable suppliers to provide it with the necessary supplies. This shows its important position. The purpose of supplier management is to establish a stable and reliable supplier management team to provide high-quality and fast service guarantees to end customers. Good suppliers are a guarantee of high-quality and excellent supply. Suppliers are an important asset of an organization and will bring huge returns to the organization that purchases its products or services. In order to create a good supplier relationship and overcome the traditional concept of supplier relationships, supplier management becomes a very valuable tool.

Establish a new cooperative relationship between buyers and suppliers

Buyers and suppliers are two node members of the same value chain. This value chain is an organically linked whole. In this value chain, the lowest consumer requirements for cost, quality, service, etc. of products and services have become the performance management goals pursued by all participating members in the chain. Members, while considering their own interests, must take into account the interests of other members and ensure their own reasonable profits. This is the long-term solution for the development of each member in the chain. Both purchasers and suppliers must fully consider this interest criterion and establish a good cooperative relationship. . The good cooperative relationship between buyers and suppliers gradually breaks away from the traditional model and gradually forms a new relationship model that is beneficial to both parties.