How Do I Read a Supply Chain Diagram?

Integrating corporate logistics, home logistics, non-profit organization logistics, and green logistics, we can call it a complete logistics chain or a complete supply chain. Simply put, the logistics supply chain can be understood as an organic logistics chain, starting from the product or service market demand, to meet the demand within the time frame of all economic activities involved in the logistics activities involved in the formation of a chain. The ideal state of a functional logistics chain is green logistics.

Logistics supply chain

Judging from the steps, supply chain logistics is roughly divided into three parts, procurement, production, and marketing. What we usually refer to as logistics is often limited to warehousing and transportation, and is actually only included in the production part. The three aspects mentioned above interact with each other. The market is oriented to the direction of procurement, and procurement also takes into account quality control in production.

In the current situation of increasing external pressure and companies facing survival difficulties, enterprises must pay more attention to logistics than ever before.

In the current market environment, in various types of industries, logistics

How do companies carry out logistics

Phase 1 : Reduce functional expenses to a minimum. At this stage, each person does a good job of management within the scope of their responsibility, and is directly responsible to the company's management department, and according to their requirements, makes every effort to reduce costs to the lowest possible level.

The second stage : reduce delivery costs to the lowest level. However, it must be pointed out that reducing all costs and expenses, including delivery costs, to a minimum is just an operating management principle, not a uniform code of business operation, not to mention that the lower the delivery price, the better. In fact, some manufacturers are

Cold chain logistics is a broad market for the development of the refrigeration industry, and its role in the supply chain in the economy is becoming increasingly important. With the economic activity, the north-south cargo circulation rate has increased significantly. All regions are building systematic cold chain logistics supply chains. Each large group is also improving its own supply chain system. In this way, the construction of the cold chain logistics supply chain system has become Issues that the government and companies work together.

The construction of a cold chain logistics supply chain system cannot be separated from the construction of a cold storage. Without a cold storage, there will be no cold chain logistics transportation, and there will be no cold chain logistics supply chain system storage. It will become an important task of cold chain logistics supply chain construction.

The high level of cold storage construction should become the highest target requirement in the construction of a cold chain logistics supply chain system. Only high-level freezers or refrigerators can completely meet the refrigeration and refrigerating needs of goods, and ensure that the goods are not produced in the supply chain Deterioration problem, so as to create a cold chain logistics supply chain system that allows governments and enterprises to have no worries. ^[1]

With the advent of the era of supply chain competition, logistics companies have emerged many theories to guide supply chain managers. To sum up, it is "4R"-rapid response (Responsiveness), reliability (reliability), flexibility (Resilience) and relationships (Relationships).

Quick response

In this world requiring "just in time", being able to respond to customer needs with a short time window is an important capability. Customers not only want short lead times, but also flexible and optimized customer solutions. Suppliers must be able to accurately meet customer needs in a short period of time. The key word to watch for in a changing competitive environment is "Agile." Agile means acting fast and meeting customer needs instantly. In a fast-changing market, agile is actually more important than the "long-term strategy" traditionally believed in business, because future needs are uncertain. From this we can see that planning is difficult, and sometimes even dangerous.

In the future, enterprises must drive production based on demand rather than rely on forecasting, that is, they should rely on agile to conduct transactions. To do this, it is not just the company itself that needs to work, but the entire supply chain.

2. Reliability

The reason that logistics companies have safety stock is the existence of "uncertainty". The future demand is uncertain, the supplier's ability to fulfill distribution commitments is uncertain, and the quality of raw materials and parts is also uncertain. Reliability can only be obtained by redesigning processes that affect operations. Manufacturing managers have long found that the best way to improve product quality is not through inspection but through process management. The same applies to "logistics reliability".

One of the key points to improve logistics reliability is to improve the visibility of the supply chain. Often, there is low visibility into the needs of downstream customers at the very end of the supply chain. This problem is exacerbated by the neglect of final demand by companies or the entire supply chain. Synthetic fiber manufacturers may pay less attention to the demand for garments made from the fibers they produce.

If there is any way to make the supply chain more open and make the end-to-end clear and visible, then reliability will inevitably be improved.

3. Elasticity

One of the characteristics of today's market is change. The business, economic and political environment is neither uncertain nor connected. As a result, supply chains are easily disrupted and business continuity is threatened.

In the past, the main starting point of supply chain design was minimal cost or optimal service, that is, "elasticity." Resilience involves the ability of the supply chain to handle uncertain disturbances. Many companies tend to look for solutions to reduce costs because of pressure on profits, but as a result, their supply chains are more fragile.

A resilient supply chain may not be the lowest cost, but it must have the ability to better cope with uncertain environments. A resilient supply chain has many characteristics, the most important of which is to pay more attention to where it is most vulnerable. There are other characteristics of a flexible supply chain, such as recognizing the importance of strategic inventory and selectively using idle power to handle emergencies.

4. Interrelation

Customers tend to reduce their supplier base. The phenomenon of "single resource" is generally visible, and generally thought that the benefits this can bring include: improving quality, sharing new ideas, reducing costs and jointly formulating sales and distribution plans. The phrase "the relationship between buyer and supplier should be a partner" sums it up. Companies have discovered that competitive advantage can come from a win-win model, that is, to establish good long-term relationships with suppliers. From a supplier's perspective, this relationship can automatically set barriers to competitors' involvement. The higher the interdependence between suppliers and customers, the less able competitors will be to break their chains. ^[2]