Supply Chain Management
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A management style that has a history of 20 years and has helped countless industries improve overall operational efficiency is gradually taking place in the printing industry. This is the so-called "Supply Chain Management". SCM)". The executives of this type of management try to analyze and improve every step from raw material production, finished product or service manufacturing to delivery to the customer. The overall goal is to complete a perfect order (eg: what the customer wants Time to give them what they think at the right price, just the right amount) to increase the "value" for the customer, and to improve the efficiency between suppliers.
Supply chain management includes the management of demand and supply of finished products, seeking raw materials, manufacturing and assembly, manufacturing scheduling, inventory management, order entry and management, shipping, warehousing, distribution (sending), customer service and delivery to the government, etc. . The entire information system needs to monitor every activity in order to achieve this concept.
When it comes to supply chain management, the phrase “from the forest to the door” is used. Jon Ward, chairman of the industry, who is leading the use of supply chain management, explains: “There is a saying that Jon Ward, chairman of RR Donnelley & Sons Company, who is leading the supply chain management, said: The management steps are from the harvesting of raw materials or the production of ink and paper to the hands of customers. Keith Pratt, vice president of procurement at Mail-Well, which is actively pursuing supply chain management, added: "The supply chain is the integration of every process that is carried out to deliver the finished product efficiently to the end customer." He emphasized the role of "integration" in supply chain management, and what is integrating the entire supply chain?
In the past, each department in the printing house treated procurement, manufacturing, and delivery as separate, non-communicative, and supply chain management was an information-based operation that quickly responded to customer needs.
Is this method just like efficient work? Actually it is not. The efficient operation is the result of supply chain management. The supply chain management can ensure that the original materials can be delivered on time, because it can respond quickly to customer requirements. And market changes can reduce the cycle time.
"Supply chain management provides the benefits of the entire industry. Both large and small companies can reduce costs and reduce waste and waste generated by adopting supply chain management technologies. Many printers and management consultants believe that supply chain management strategies are in any future industry. Survival is decisive. An important indicator of this view is that companies in various industries have reduced their suppliers by 40% to 70%, and those who survive are the best in the supply chain."
Network advantage
Don't be surprised by the role of the Internet as an important enabler in supply chain management in the printing industry, industry consultant Craig L. Press said: "The Internet simplifies many of the steps in the supply chain, and printers can connect directly. Go to the supplier's inventory system and see what's on them and how the order is processed. Because there isn't a lot of order processing department, this will make the supplier more flexible, and the printer and supplier will go through the network. Connect, orders can be processed automatically, reducing the cost of the work steps and processing orders."
Customers used to send print orders or valuations by phone or fax, which slowed the supply chain. Now customers and printers want to use online orders to make the ordering process consistent and more efficient. At the same time, customers also want to know the progress of their work faster, and the printing company provides customers with services to check the status of their work through the Internet. Because the network ordering system reduces the cost of order processing, the required cooperation partners are also reduced. Even small companies can form stable cooperative relationships with suppliers through the network.
Not familiar with how to make good use of
Although many industries have recognized its importance to supply chain management, it is still unfamiliar to most printers. Only a few companies in the printing industry are actively adopting supply chain management strategies. The printing and publishing industry is at least 10 years behind this in the high-tech or packaging industry. RR Donnelley had a turnover of $5 billion last year, has 31,000 employees and more than a dozen production plants, making it the largest printing in North America. cause. It cut into supply chain management three years ago, when they introduced a corporate strategy that wanted to increase the productivity of the organization by 6% per year - three times that of a typical company.
Concept import
Jon Ward said: "We didn't have the concept of supply chain management until we implemented the productivity improvement program a year or two ago. We felt that there should be some room for economic value for customers and suppliers in addition to printing and binding. We I started several individual proposals on logistics and procurement, and finally realized that this is what the management consultant said in the "supply chain management."
Through the implementation of supply chain management, the company expects to save 100 million US dollars for customers and suppliers within three years.
"No company can manage the entire supply chain. All that can be done is to analyze the parts that are responsible for it in the supply chain and identify opportunities to add value to your operations, customers, suppliers and the industry as a whole."
Finally, Donnelley put into practice in the three aspects of “delivery”, “raw material analysis” and “procurement” in the supply chain. It currently sends 25% of the country's catalogues and magazines. Before adopting supply chain management, it sent prints from 40 publishing factories. They think that if the shipment and delivery work is concentrated in 4 major places, it will be compared. Well, when the delivery volume of each point increases, it can provide customers with better delivery time, higher quality delivery process and more cost savings.
Donnelley delivered the goods to the post office, which was not only more efficient but also saved postage customers with $140 million in postage. Its magazines and catalogue customers were very satisfied with such mailing services and began asking other companies to do so. For Donnelley, implementing supply chain management represents two meanings: the company must scale up and import common work and systems because they treat all of the subordinate printers as a large company rather than as a separate individual.
Paper
Another ongoing supply management program in Donnelley is a proposal to understand the actual cost of paper purchases. In the past, the printing industry bought paper on weight, but in fact the cheapest paper, the cost is not necessarily the lowest, because if Paper will consume more ink or reduce the productivity of the press by more than 20%, and the price will be much higher than that of the paper. Therefore, they use scientific measurement methods to find the actual cost of the paper.
"The printing industry has been lazy in scientific ways to understand all the factors that affect the quality of printed products. We have obtained data from paper companies and customers' supply chains to understand paper usage, performance on the press and in-plant consumption. The situation, not just how much a pound."
Shipping standardization
Donnelley and major paper mills have been developing a paper delivery model for a year and a half. The system first determines the customer's needs in the printing plant and then plans the printing plant's needs at the paper mill. It is hoped that such a model will become the standard of the printing industry and not just the standard of Donnelley. They also reorganized the procurement process, and 40 branches merged to purchase together, instead of independently purchasing separately, it is expected to reduce the procurement cost by 10% within three years, and their annual material costs are more than $1 billion.
If the plan is successful, Donnelley and his collaborators will be able to achieve significant savings. But will it lose its flexibility in the market? Ward said that it will not, although there are more rules in centralized procurement, it will not make the process slow or annoying. Supply chain management is difficult and cumbersome but it is Worth it, it can create value for customers, partners and themselves.
Spiritual food
Management consultants in the printing house and coaching supply chain management make a few suggestions for companies that want to implement supply chain management:
1. Have the highest management support
Supply chain management can't be implemented without administrative support, and the entire operation must be performed by professionally trained managers.
2. The supply chain is started by the client, not by manufacturing or purchasing
All actions taken to add value must first consider the customer and their needs.
3. Understand the actual cost
The actual total cost does not come from a single cost. If you spend a dollar per pound, if there is a problem with 15% of the things, the cost is not just a dollar. Another illusion of savings is that large purchases in order to reduce unit costs seem to be cheaper on the books, but require more inventory and storage costs. Therefore, the company's main financial staff should also join the supply chain management team.
Ken King, general manager of GATF, explained: "Buy too cheap paper may be harmful to the production department. Only the purchasing department can buy paper suitable for the printing machine, and the production department can control the production process and reduce the printing failure."
4. Clearly define the scope of the supply chain
In order to improve the process, you must understand each part and actually describe the production supply chain from raw material to delivery. Confirm that the client is included when you design and analyze the supply chain, because the customer is the beginning of the supply chain, it is important to know the customer's needs and understand how the self improves to meet the needs.
When defining the supply chain, it takes a while to carefully observe your strengths and weaknesses. If some parts are not as good or better than the competitors, then find a partner to help you. This part.
Although there are some off-the-shelf methods that can help you define and evaluate the supply chain, you don't have to go too far. It takes a lot of time to analyze the details. It is important to note that when you do the analysis, you know The value of business operations and the value that can be added to customers.
5. Responsible for the education and training of employees and suppliers
When employees and suppliers worry about the company's new proposal, the entire plan will be delayed, so help them understand what supply chain management is and what benefits it can bring to them and the company. It is also important for major suppliers to participate in the training program as many suppliers may have been trained in this type and may even improve your learning curve.
6. Accurately indicate that major suppliers can help the company's supply chain management success
A large number of non-recurring costs are often found in basic suppliers. In this regard, the printing industry can make significant progress in the supply chain by categorizing suppliers and strengthening the partnerships with selected suppliers. Selectively reduce the number of suppliers and ask them to provide more services to replace the former hostile relationship and become a strategic partner. But if you want to do this, the way to negotiate with suppliers will change, and printers and suppliers will not benefit unless there is a concession.
Mail-Well is actively engaged in business consolidation, with an average turnover of $2 billion. They are promoting so-called "corporate relationships" to suppliers, and helping their basic suppliers spend more time building closer relationships. . Mail-Well improves the information provided to suppliers, enabling suppliers to better understand the needs of the printing house and prepare them for possible future item requirements.
As a result, because Mail-Well allows suppliers to participate in production needs, the value-added partnership between the two allows Mail-Well to respond faster to the needs of the average company.
7. Supply chain management as an ongoing improvement
The implementation of supply chain management must be continuous. If you want to succeed, you should regard it as a daily routine for the company. Don't imagine that it will be effective overnight. But in contrast, profit can be maintained for a long time.
data
A study by Andersen consultants on the introduction of supply chain management companies showed significant savings in cost. Generally, it can save 6%~12% in procurement cost, 20%~40% in inventory cost, 10%~25% in operation cost, and 5%~15% in transportation cost. While almost all industries recognize the value of supply chain management, a survey in Deloitte shows that 91% of manufacturers in North America believe that supply chain management is “very important” or “very important” to their company's success. .
Niche
Several large printing houses have summarized the benefits of implementing supply chain management into two areas:
Reduced part
Costs in the supply chain and improve the management efficiency of working capital
Cycle Time
in stock
Activity cost
Waste product
Product defect
Strengthen or improve parts
Production capacity
Raw material management, workflow, finished product inventory
Transportation efficiency with supply chain partners
Customer value (generally at a lower price)
Effective product
customer satisfaction
foreign aid
If the company manager wants to know more about supply chain management, he can refer to other industry examples or use some auxiliary tools, such as Andersen consultants to provide printing-specific supply chain value assessment forms. The printing factory can evaluate their entire work and the most within four weeks. A good example to compare.
The other is a global non-profit organization consisting of more than 450 groups. Supply Chain Conference Supply Chain The Council “is responsible for creating, improving, testing and validating standards, measurement, evaluation data, best practices and software for supply chain management. They are the “Supply Chain Operation Reference” (Supply Chain Operation Reference).
SCOR) is also a good reference.
The cross-industry SCOR model includes standard job definitions, terminology and metrology, supply chain best practices and effective information available. SCOR provides a common tool for describing supply chain settings and application software for evaluating, locating and importing supply chain management.
Related links: Supply
Chain Council
Annotation:
Another new topic after "Internet" is "e-commerce E-Commerce". Most people think that selling products or services on the Internet is called e-commerce, but at best it can only be regarded as electronic commerce ( E-business or E-trade behavior, e-commerce covers infrastructure, networking equipment, software and services, so some people define e-commerce as: company or individual with company or government And individuals, using information and communication technology, in a more efficient way to complete commercial R & D, manufacturing, sales, procurement, after-sales service and administrative business operations, known as e-commerce. The theme of this article, "Supply Chain Management", is an indispensable and important part of the implementation of e-commerce. It provides a supply and demand connection between manufacturers and other enterprise systems. It quickly responds to customers' needs through the Internet and computers. Provide the products or services required by customers at the right time, at the right time, at the right price and at a favorable price, creating value for customers, suppliers and companies.