First, the bullwhip effect-a new problem of inventory management in supply chain
During the operation of the supply chain, it is found that the customer demand of some commodities is relatively stable and has little change, but the upstream suppliers often maintain a higher inventory level than the downstream suppliers. This phenomenon was discovered when Procter & Gamble investigated the order of its product "diapers". The retail volume of this product is relatively stable with little fluctuation. When dealers place orders with Procter & Gamble, the fluctuation of their orders is far greater than the fluctuation of retail volume. When Procter & Gamble places an order with its suppliers, the order changes even more. This phenomenon is called "bullwhip effect" because with the rise of supply chain, demand fluctuates more and more.
Under normal circumstances, retailers place orders with wholesalers according to their own forecasts of customer demand. Because of the lead time, the retailer added a safety stock on the basis of considering the average demand, which made the variability of the retailer's order greater than the variability of the customer's demand. Wholesalers place orders with manufacturers after receiving orders from retailers. If the wholesaler can't know the actual data of customer demand, it can only use the orders already issued by the retailer to predict, so the wholesaler adds a risk inventory on the basis of the average order quantity of the retailer. Because the change of retailer's order is obviously greater than the change of customer's demand, wholesalers are forced to hold more safety stocks than retailers in order to meet the same service level as retailers. By analogy, the fluctuation range of manufacturers or suppliers is getting bigger and bigger. Although the customer demand of the final product is relatively stable, the order quantity of retailers, wholesalers, manufacturers and suppliers is becoming more and more changeable, which leads to excessive inventory, increases the inventory cost of the supply chain, and it is difficult to match the supply and demand, which can not achieve the goal of reducing inventory in supply chain management.
Bullwhip effect is the characteristic of supply chain inventory management. Traditional inventory management methods can not solve this problem well, only innovative supply chain inventory management methods can solve it. Bullwhip effect can be reduced by the following four measures:
(1) to realize information sharing. Because the bullwhip effect is mainly generated by forecasting orders rather than customers' demands at all stages of the supply chain, and the only demand of the supply chain is to meet the needs of end customers, if retailers and other supply chain members * * * enjoy POS data, each member can respond to the changes of actual customers' demands. Therefore, sharing POS information in the supply chain can make a more accurate forecast for each stage of the supply chain according to customers' requirements, thus reducing the variability and bullwhip effect of demand forecast. At the same time, implement * * * same forecast and * * same plan to ensure the coordination of all stages of the supply chain; Starting from the whole supply chain, the retailer's inventory replenishment control strategy is designed. Because retailers are related to the purchase of end customers, the key is to replenish retailers' inventory, commonly used VMI strategy and continuous replenishment strategy.
(2) improve the operation. Improve operation, shorten delivery cycle and reduce order quantity to reduce bullwhip effect. By adopting advanced communication technologies such as cow model, the information lead time of order processing and information transmission is shortened, the transportation lead time is shortened by direct transshipment, the manufacturing lead time is shortened by flexible manufacturing, and the order lead time is shortened by implementing ASN. The lead time is shortened, and the variability of demand is relatively reduced. In order to reduce the order batch, it is necessary to reduce the transportation, ordering and acceptance costs related to the fixed order cost. Electronic Order System (CAD) and EDI are used to reduce the order cost. The reduction of order batch can reduce the cumulative variation of two adjacent stages of supply chain, thus reducing the bullwhip effect.
(3) stabilize prices. Formulate corresponding price strategies, encourage retailers to order in small quantities, and reduce the behavior of buying in advance to reduce the bullwhip effect. For example, the discount strategy based on batch number is changed to the discount strategy based on total amount, that is, in a specific period (such as one year), the discount policy is formulated according to the total purchase amount, and the batch number can be reduced at one time; Implement the daily parity policy and limit the purchase amount during the promotion period to stabilize the price and reduce the pre-purchase action, thus reducing the bullwhip effect.
(4) Establish strategic partnership and trust. By establishing strategic partnership, mutual trust and information sharing, supply and demand at all stages of the supply chain can be well matched and transaction costs can be reduced. For example, if the supplier trusts the retailer's order and forecast information, he can omit the forecast link. Similarly, if the retailer trusts the quality and delivery of the supplier, he can reduce the counting and inspection links when receiving the goods. Generally speaking, trust and good relations at all stages of the supply chain can reduce repeated efforts, reduce transaction costs and lead to the reduction of bullwhip effect. Wal-Mart and Procter & Gamble; G's strategic partnership has made both sides gain good benefits and reduced the bullwhip effect.
Second, the supply chain inventory management methods
Different members of the supply chain have different conflict objectives. When the system is uncoordinated, each member of the supply chain optimizes and acts on his own, and the result is only partial optimization, which leads to repeated inventory establishment and cannot realize the overall optimization of the supply chain. In order to achieve global optimization, supply chain members should realize what is optimal for the whole system, and in order to coordinate the behavior of supply chain members, they must obtain information, and the most effective way to obtain information is to establish a strategic alliance with shared interests and risks. This win-win partnership provides a breakthrough in traditional management methods for inventory management in supply chain. There are three supply chain inventory management methods.
1. Vendor managed inventory
Vendor Managed Inventory (VMI) system, sometimes called "Vendor Replenishment Inventory System", refers to the strategy that suppliers manage users' inventory with users' permission, and suppliers decide the inventory level of each product and maintain these inventory levels. In the case of VMI, although the retailer's commodity inventory decision-making power is controlled by the supplier, it is still dominated by the retailer in the aspects of storefront space arrangement, commodity shelf arrangement and other storefront space management decisions. VMI is a supply chain inventory management method based on retailer-supplier partnership. It breaks through the traditional mode of "inventory is managed by the inventory owner", which can not only reduce the inventory level and cost of the supply chain, but also provide users with a higher level of service, accelerate the turnover of funds and materials, so that both the supply and demand sides can enjoy the benefits and achieve a win-win situation. The characteristics of VMI are:
On the one hand, information sharing, retailers help suppliers to make plans more effectively, suppliers obtain point-of-sale data from retailers, and use these data to coordinate their production and inventory activities with the actual sales activities of retailers;
On the other hand, the supplier completely manages and owns the inventory until the retailer sells it, but the retailer has the obligation to keep the inventory and be responsible for the damage or destruction of the inventory items. There are many advantages to implementing VMI. First of all, the supplier owns the warehouse, which can save the redundant ordering department, automate manual tasks and remove unnecessary control steps in the process, so that the inventory cost is lower and the service level is higher for retailers. Secondly, if the supplier owns the inventory, the supplier will consider the inventory more and manage the inventory as effectively as possible, and further reduce the total cost by coordinating the production and distribution of multiple retailers.
Thirdly, the supplier can forecast the demand according to the data of the point of sale, determine the batch number of passengers and goods more accurately, and reduce the uncertainty of the forecast, thus reducing the safety inventory and the cost of named storage and supply. At the same time, the supplier can respond to the needs of users more quickly, improve the service level and reduce the inventory level of users. In addition, the implementation of VMI should pay attention to the following issues:
(1) Trust problem. This kind of cooperation needs some trust, otherwise it will fail. Retailers should trust suppliers and not interfere with suppliers' monitoring of delivery. Suppliers should do more to convince retailers that they can not only manage their own inventory, but also manage their own inventory. Only mutual trust, communication and cooperation can solve the existing problems.
(2) Technical problems. Only by adopting advanced information technology can we ensure the timeliness and accuracy of data transmission, and these technologies are often expensive. Niu Mowang technology is used to transmit point-of-sale information and distribution information to suppliers and retailers respectively, barcode technology and scanning technology are used to ensure the accuracy of data, and the inventory and product control and planning system must be online and accurate.
(3) inventory ownership. Before deciding who will make the decision to replenish the inventory, when the retailer receives the goods, the ownership will also be transferred. Now it has become a consignment relationship, and the supplier owns the inventory until the goods are sold. At the same time, due to the increased management responsibility and cost of suppliers, both parties should negotiate the terms so that retailers and suppliers can enjoy the overall inventory of the system. (4) payment of funds. In the past, retailers usually paid one to three months after receiving the goods. Now they may have to pay after the goods are sold, and the payment period is shortened. Retailers should adapt to this change.
2. Joint inventory management
Joint inventory management is a risk-sharing inventory management model based on dealer integration. Different from VMI, it emphasizes the simultaneous participation of both parties, making inventory control plans, making the supply and demand sides coordinate with each other, and making inventory management a bridge and link between the supply and demand sides.
The traditional distribution method is that each dealer orders directly from the manufacturer according to the market demand forecast. Due to the delivery time, it will take some time for the products to be delivered to the dealers, and customers are unwilling to wait so long. Therefore, every dealer should use inventory to deal with it. At the same time, manufacturers have to save inventory to meet customer requirements as soon as possible, thus shortening the delivery cycle. Whether it is a dealer or a manufacturer, only by increasing inventory and personnel can we meet the needs of customers for sudden orders. However, due to the high price, high cost and excessive inventory of some products, it will be unaffordable for dealers and uneconomical for manufacturers. Therefore, it is impossible to meet the needs of every customer by increasing inventory, and new solutions must be found. Now, with the help of modern information system technology, this problem can be solved well by establishing an integrated dealer strategic alliance, combining the inventory of each dealer and realizing joint inventory management. Joint inventory management means that manufacturers install a computer-based information system, through which the inventory of each dealer is connected, and each dealer can query the inventory of other dealers through this system, find accessories and exchange them. At the same time, dealers reached an agreement under the coordination of manufacturers, promising to replace parts under certain conditions and pay certain rewards, which can reduce the inventory of dealers and improve the service level. Implementing joint inventory management has many advantages. For dealers, an inventory pool covering the whole distribution network can be established. An integrated logistics system can not only make the inventory of dealers lower, but also make the inventory of the whole supply chain lower. It can also quickly respond to the needs of users, transport parts more effectively and quickly, reduce the situation that dealers lose sales opportunities because of shortage, and improve service level. For manufacturers, dealers are closer to customers than manufacturers, can respond to customers' requirements better and faster, arrange financing for purchasing products and provide good after-sales service, so that manufacturers can concentrate on production and improve product quality. Experts once said: "Dealers create the image of a company, not just a company standing behind products, but a company with products all over the world." To implement joint inventory management, the following work should be done:
(1) A management mechanism for coordinating supply and demand should be established. Manufacturers should shoulder their own responsibilities, provide necessary resources and guarantees, convince dealers of their commitments, coordinate the work of their own dealers (sometimes competitive dealers), establish the same cooperation goals, and create opportunities for all dealers to take risks and enjoy resources based on the principle of mutual benefit.
(2) Establish an information sharing and exchange system. Using the advantages of EDI and POS system, barcode and scanning technology and the Internet, a smooth information system is established between supply and demand, so that all dealers can respond to users' requirements in a coordinated manner.
(3) Dealers should establish mutual information. Some dealers will doubt whether it is worthwhile to participate in such a system, especially when he has more inventory than others. At the same time, participating dealers should rely on other dealers to help them provide good customer service. At this time, manufacturers should give strong support, do more work to build trust between dealers, and let different dealers show their talents in different fields to achieve the purpose of joint inventory management.
3. Use third-party logistics suppliers to manage inventory.
Due to the limitation of resources, no company can be self-sufficient and become an expert in everything. Third-party logistics providers can provide them with efficient inventory management services to meet the needs of customers, so that suppliers in the supply chain can focus on their core business without spending too much money to build new storage facilities or lease goods for a long time, thus reducing inventory costs, providing more diversified customer services than employers and improving service quality. For manufacturers, the third-party logistics strategy is to use external resources to change the fixed cost of logistics into variable cost, gain the experience of logistics experts and new achievements of logistics technology, accept high-quality logistics professional services and provide more satisfactory value-added services for users. Third-party logistics providers act as a bridge between suppliers and users, so that both suppliers and users can eliminate their own inventory and improve the competitiveness of the supply chain. The implementation of third-party logistics should be based on contract, which is a long-term cooperative alliance. Both sides should remember that this is a third-party alliance with mutual benefit and shared risk and reward.
In a word, bullwhip effect is a new feature of inventory management in supply chain, and traditional inventory management methods can't solve this kind of problem well. Only by starting from the whole supply chain, establishing strategic partnership and realizing information sharing can we obtain accurate information of inventory level, order, production and delivery in the whole supply chain, and produce according to the actual needs of customers, thus reducing the variability of demand in the supply chain and helping suppliers make more accurate forecasts.
In addition, the inventory management within the supply chain, using innovative management methods (such as VMI) to overcome the limitations of traditional inventory management, can not only reduce the inventory level of the enterprise, but also reduce the inventory level of other partners, thus making the inventory level of the whole supply chain the lowest, the logistics cost the lowest, and enhancing the competitiveness of enterprises.