Supply Chain Procurement Management Strategy in the Era of Revolution

The advent of the era of VUCA (Volatility, Uncertainty, Complexity, Ambiguity, Ambiguity) and the current epidemic are undermining the global supply chain layout. Countless companies are facing material shortages, suspension of production, The threat of closing or even bankruptcy. Sara She, head of indirect procurement and logistics in PerkinElmer Asia Pacific, has more than 10 years of experience in supply chain procurement and logistics management for medical device manufacturing companies. She has extensive experience in logistics, warehousing, and supply chain procurement. Actual combat experience. In this issue, she combines her years of experience in logistics, procurement and supply chain management to share the knowledge of supply chain procurement management in the turbulent era from the shallower to the deeper. ——Haizhi Online Recommendation

2020 is a very special year for all walks of life. The procurement industry is particularly obvious. It has not only encountered an unprecedented supplier resumption problem, but also encountered global cargo transportation and logistics problems. The epidemic not only tested the basic skills of purchasers, but also sounded a wake-up call for everyone: crisis may arise at any time, how to quickly respond to emergencies?

Take precautions early and plan for the long term in peacetime. Sara She pointed out that collecting data, sorting out the supply chain context, and drawing a supply chain network diagram before the arrival of the crisis can help companies make arrangements in advance and calmly deal with various uncertainties.

Four Elements of Supply Chain Network Diagram

The supply chain network diagram refers to the overall layout diagram of the suppliers and all related materials required by the organization’s business. Many companies have scattered suppliers, but relevant information is scattered and fragmented. The supply chain network diagram can gather all fragmented information and form a relatively complete supply chain management system through systematic sorting. Sara She believes that the supply chain network diagram mainly includes the following four elements.

First, the geographic location of the supplier. For companies, a superior geographical location can not only reduce logistics costs, but also has a great impact on inventory. If the unit price of purchased items is higher and the demand is greater, the closer factories are easier to manage and are conducive to emergency situations.的处理。 Treatment.

Second, the supplier’s supplier. Choosing a good supplier is an important guarantee for the normal production and operation of an enterprise. If the procurement of key parts is involved, not only should the core supplier be evaluated, but also the risk index of the second-tier or even the third-tier suppliers should be examined, and try to avoid shortages. Goods, unqualified goods and other issues have caused losses to the enterprise.

Third, transportation routes. The successful delivery of products must be inseparable from strong logistics. Whether it is transporting parts from the supplier to the terminal factory or the final product to the end customer, only when these intricate routes are interconnected and shared, can it be clear. Choose the most convenient route to reduce transportation costs. By doing this, resources can be quickly deployed in the face of a sudden crisis, and operations can be restored as soon as possible.

Fourth, the main market for raw materials. During the epidemic, many small and micro enterprises collapsed due to rising raw material prices, sudden increase in cost pressure, and inability to operate capital flows. Keeping an eye on the market dynamics and price trends of product raw materials at any time can make purchasing decisions more accurate and insightful, and can also adjust strategies in time to avoid supply chain disruption.

Importance of supply chain network diagram

Many people say that the form of competition in the 21st century will be the competition between the supply chain and the supply chain. Sara She believes that the supply chain network diagram is an important support for improving the competitiveness of the supply chain. It can visually transform various complex, dynamic, and cross-cutting information, improve the procurement management capabilities of suppliers, and optimize the enterprise’s resource allocation.

First, source supply guarantee. During the inquiry process, you can quickly understand the changes in the company’s assets, markets, and funds with the help of the supplier network map, improve supplier management efficiency, and provide protection for finding core suppliers.

Second, logistics and transportation guarantee. In the logistics process, not only can efficiently select logistics companies based on the supply chain network diagram, grasp the dynamics of the logistics transportation process, and ensure transportation safety, but also help the purchaser to quickly advance the tasks such as customer ranking, transportation method ranking, and logistics price ranking.

Third, disaster crisis response. In the face of emergencies, the supply chain network diagram can help purchasers quickly understand the entire supply layout and all transportation contexts, and speed up the elimination of the negative effects of emergencies.

Fourth, subcontractor management. In the past quality accusation link of sourcing sourcing, it may only check the status of the core suppliers, but ignore the status of the subcontractors. Once the subcontractor has a crisis, it may affect the delivery of the entire project. Using the systematic process of supply chain network diagram can grasp the specific situation of all subcontractors in real time.

The challenge of laying out a supply chain network diagram

All the good things in the world have to pay a price, and the process of drawing a supply chain network diagram is also challenging. Sara She believes that there are mainly the following three difficulties.

First, the cost price. How does a supply chain network diagram that gathers a lot of information go from 0 to 1, from 1 to N? Not only need to invest a lot of energy in the early stage, but also need to constantly update, supplement and improve in the later stage. Therefore, the support of human resources is essential.

Second, occasional events consume resources. In order to deal with occasional events and consume a lot of resources to make a picture, many people think that the price is not high. Therefore, how to get support from leaders or other departments is also one of the main challenges.

Third, obstacles to the organizational system. In the process of making a supply chain network diagram, there will be inter-departmental exchanges and cooperation between multiple departments, and each department may have different ideas. Therefore, the running-in between the various organizational systems has also formed a major obstacle to the drawing.

Key points of supplier risk assessment

First, analyze the source of purchased materials. Most purchasers will use the Karajek matrix to divide suppliers into 4 dimensions according to the benefits and risks, namely leveraged suppliers, key suppliers, daily suppliers and bottleneck suppliers. How to locate different types of suppliers and effectively manage them?

◎Leveraged supplier. When encountering leveraged projects with large expenditures but low risks, the needs of different business units of the group can be integrated for bidding, and the bidding process can be improved by establishing a standard operating system to facilitate overall cost reduction and business management.

◎Key suppliers. Key suppliers are often involved in the core business of the company and have high expenditure risks. They can reach a win-win alliance with suppliers through strategic negotiations. At the same time, key processes can be professionally outsourced to reduce risks.

◎Daily supplier. Usually manifested as small batches, multiple varieties, scattered demand, you can select a more reliable platform supplier for integrated procurement. This not only solves daily management problems, saves time and costs, but also obtains professional services provided by the platform.

◎The bottleneck supplier. Usually manifested as high-risk but low-cost demand, there is a lot of uncertainty. For example, masks during the epidemic, which were originally only spare parts in small demand, suddenly became core demand, because supply exceeded demand and became a bottleneck product. When encountering this kind of demand, the method that can be adopted is to integrate resources and establish industry associations with other purchasers to share resources.

Second, the supplier qualification assessment. Usually, purchasers will evaluate the qualifications of suppliers by establishing a balance point method, annual assessment, etc., but different suppliers have different dimensions, so purchasers must also consider quality dimensions and customer service under the pressure of price costs. Dimensions and other aspects. The supplier’s warehousing plan layout and distribution system will also directly affect the production efficiency of the enterprise. Logistics transportation planning, early warning systems, positioning systems, etc. play a decisive role in supplier management, so it is necessary to evaluate the supplier’s overall ability.

Third, supplier risk assessment. Regular use of big data to conduct risk assessments on suppliers can not only make trend predictions in advance and timely adjust strategies, but also improve the supply chain network diagram and improve internal operating efficiency.

Fourth, alternative suppliers prepare plans. Whether it is a crisis or a change, only by preparing ahead of time can you get through it safely.

Sara believes that in the entire supplier management process, whether it is for supplier qualification assessment or risk assessment, it must be clear that the relationship between the buyer and the supplier is equal, and the two parties grow together, establish a relationship of trust, and achieve a win-win situation. Is the best supplier management route.

Wide sea diving, sky high the birds to fly. In the future, professionals in the procurement supply chain will never be a small role. Only by identifying their own career positioning, improving the professional hard power of the supply chain, and always maintaining a sense of crisis can they create value for the company in this environment of increasingly fierce supply chain competition. Win development space for yourself.