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"Sales do not create value, procurement creates value." This is the view of a well-known American professor. In his view, the farther away from the final product, the greater the contribution, such as design, R&D, procurement, etc., sales are the nearest to the product, it only realizes value, and if the purchase can save the cost, it can be converted into 100% profit.
On December 16, at the 2009 "Scientific Development and Win-Win" Supply Chain Forum held by Nanjing Iveco, Dai Ding, vice president of the China Federation of Logistics and Purchasing, gave this example. In the context of the financial crisis, this view is quite revealing. The current market demand is reduced, sales are sluggish, and it is difficult to realize product value through sales, and the potential for excavating the supply chain is undoubtedly more practical.
High-cost supply chain engulf profits
Why is it realistic?
First of all, the financial crisis has swept the world, and the Chinese auto market can hardly escape its impact. Demand is difficult to shake at present, but only from the supply, this means that companies must tap potential from within, must reduce costs, must work closely with partners in the entire supply chain, in order to survive in the harsh market competition, and can live Better.
"Supply chain costs account for 34% of Nanjing Iveco's total cost." Zhou Weili, general manager of Nanjing Iveco, told Commercial Automotive News. "This is relatively high, and the cost of foreign companies' supply chains only accounts for more than 10%," commented one industry insider. Just because of the high, it means that there is still a lot of room for optimization in the supply chain, and there is still a lot of profit that can be tapped. This will be reflected in the continued decline in costs.
In the interview, Zhou Liang once again quoted the iceberg phenomenon that determines the competitiveness of products: Only the tip of the iceberg floats on the surface of the sea, and a large group of icebergs under the sea. The former is the competition of products in the market, while the latter is the competition of core competitiveness and supply chain. The former can be imitated, and the most direct method of competition is the price war; the latter is difficult to imitate, "and the real competition is under the sea."
In the current severe market environment, this competition is more directly reflected in the competition of costs and benefits.
This can also be seen from the theme of Nanjing Iveco's two supply chain seminars. In the supply chain management seminar organized by Nanjing Iveco at the beginning of the year, internationalization became a frequent word among participants. Nanjing Iveco's goal is to build a world-class commercial vehicle company, which naturally cannot be supported by an international supply chain.
At the forum, "Combination and win-win" has become the theme of the conference, establishing closer collaboration with suppliers, and achieving "win-win" with "sweetheartedness". It is a countermeasure to overcome the gloomy period of the market together. .
It's not just price reduction
“To benefit from the supply chain is a general trend, but the benefit is not simply equal to reducing costs.†Zhou Liang said: “We do not simply require suppliers to lower prices, but to dig out profits that companies and suppliers have not obtained. If you do not dig out this part of the profits that have been wasted, even if a company asks suppliers to lower prices, it will be difficult for them to come down."
What is this wasted profit in the end?
The supply chain can be divided into order management (sales), supply management, procurement and logistics. Only from the perspective of logistics management, domestic companies have many common problems.
Gui Longming, deputy general manager of Nanjing Iveco, listed the following items: First, the vast majority of suppliers who go from the supplier to the external warehouse of the vehicle factory and from the supplier directly to the buffer area of ​​the vehicle manufacturer are responsible for the transportation of the parts themselves. , The enterprise material management department cannot track the delivery situation. Second, the supplier uses different packaging formats according to the type of components and cost, uses different specifications of the delivery vehicles, and arranges parts delivery according to the needs of the vehicle manufacturer. Adjustment of material loading, low vehicle utilization rate; Third, most parts are delivered by warehouses, only a few Spare Parts are directly supplied, warehouse costs are high; fourth, some suppliers are in order to supply timely Unnecessary warehouses have been rented near the entire vehicle plant, increasing costs.
It is precisely in the past year that improvements have been made to issues such as the above supply chain, Nanjing Iveco’s cost has dropped significantly. “By continuously optimizing the supply chain, we will be able to reduce the cost of 5% each year, and through the superposition and deepening of results, we will also exert scale effects,†said Zhou Liang. This kind of profit is not exclusive to Nanjing Iveco. The supplier also obtained technical support from the vehicle manufacturer through supply chain optimization and improved long-term operation and management capabilities. "This year, 27 suppliers received our technical support." Zhou Liang said.