Supply chain inventory management analysis report

Supply chain inventory management analysis report

With the development of economy and the change of environment, the competition among enterprises has changed into the competition among supply chains. In supply chain management, the optimization of inventory management mode has become a key link that restricts the performance of supply chain. This paper introduces the basic concept and core idea of supply chain management and the inventory problem under the supply chain environment. Aiming at the problem of supply chain coordination inventory, this paper studies the related contents of supply chain management inventory, consignment inventory management, joint inventory management and third-party logistics management inventory, and on this basis, discusses the traditional inventory management model, reorder level and integrated inventory management model. These studies provide effective theoretical support for the formulation of supply chain inventory coordination in practice and lay a good foundation for the in-depth application of supply chain inventory coordination theory in economy.

Keywords: supply chain management; Inventory coordination; Virginia Military Institute (short for Virginia Military Institute)

I. Introduction

Warehouse is an important part of logistics center. For frequently used materials, ministry of materials and equipment will purchase and store them according to the principle of economy, and manage the material inventory. Traditional inventory management mainly focuses on the internal inventory control of enterprises, and often determines the economic order quantity and order point with the goal of optimizing the total inventory cost of a single enterprise, without paying attention to the coordination and cooperation of supply chain. This local optimization management mode leads to poor logistics in supply chain, increased cost and lack of competitiveness of enterprises and their supply chain. The theory of supply chain management gives new meaning to inventory management, which emphasizes looking at inventory problems from the perspective of the whole supply chain and system, which makes inventory management under the supply chain environment different from traditional inventory management. The close cooperation between commercial organizations in the supply chain in inventory and material circulation will bring many benefits to all organizations. It can not only improve the accuracy of planning and the productivity of resources, but also improve the speed of material circulation and provide better customer service.

Second, the supply chain inventory management overview

This part summarizes the basic concepts and core ideas of supply chain management, and analyzes the concept and development of inventory management.

1. Overview of supply chain management. Supply chain management (SCM) was first proposed by Michael. Porter published 1980 in his book Competitive Advantage. 1986 CLM logistics management Committee defines supply chain management as: supply chain management is a kind of logistics management about external customers and suppliers. After years of research and practice, although the definition of supply chain management has not been unified, its basic functions and conceptual framework have been recognized by everyone. In the fields of marketing, economics, operational research, management science, operation management and logistics, people have done a lot of related research on supply chain management from different angles. First of all, the main body of the supply chain is the members of the supply chain: functionally speaking, all members of the supply chain can be suppliers, manufacturers, retailers, third-party logistics companies and retailers; In the trading relationship, each member can be a buyer, a seller and a transportation contractor; From the point of view of power or position in the whole supply chain, it can be divided into leaders and followers. Power is mainly reflected in the control of the following aspects, such as inventory decision-making, pricing, capacity allocation of promotional activities, use of information technology and enjoyment of * * *. Followed by channels. Channel is the flow path of products, information and capital, connecting all members in the supply chain. The structure of the channel includes the connection shapes between members, such as several contractors, distribution centers and their geographical locations. Finally, the product. In a supply chain management research model, many products may be involved, and the relationship between these products can be alternative and complementary, while the relationship between generations of the same brand product series is more complicated, which will affect production, inventory, pricing and promotion decisions. In addition, if the product life cycle is divided into several periods, the demand, price inventory, promotion and other factors in each period will affect the decision-making in other periods.

2. Overview of inventory management. Inventory management, as a classic problem in the field of logistics and supply chain management, can be traced back to the problem of how much cash banks have to keep circulating at the end of 19. Through research, people have found a simple formula to calculate the cash on hand. In 19 15, Harris applied this idea to the general problem of material storage and established the classical formula of EconomicOrderQuantity (EOQ). In the 1990s, the global market competition became more intense, and the logistics and warehousing costs increased. Enterprises are facing great challenges in reducing costs, improving quality, improving production efficiency and customer service level. Commercial organizations in the supply chain increasingly realize that the ability to meet the needs of end customers depends on the coordination and cooperation of the whole supply chain. As Christopher said in 1996, "today's commercial competition is actually the competition between supply chains, not the competition between companies." Any uncertain factors in the supply chain will make each commercial organization in the chain hold a high level of inventory to ensure its ability to cope with demand. Raising the inventory level will inevitably lead to an increase in costs and slow down the response of the supply chain to changes. Therefore, scientific inventory control has become the main means of inventory management. The theory of supply chain management gives new meaning to inventory management, which emphasizes looking at inventory problems from the perspective of the whole supply chain and system, which makes inventory management under the supply chain environment different from traditional inventory management. In supply chain management, procurement cost, transportation cost, inventory cost, manufacturing cost and other costs and expenses are interrelated. Therefore, in order to achieve effective supply chain logistics management, each member enterprise of the supply chain must be regarded as an organic whole, and the physical supply logistics, manufacturing assembly logistics and physical distribution logistics must be highly balanced. While achieving the goal of supply chain logistics management, the inventory of the whole supply chain is controlled at the lowest level. The goal of minimizing the total inventory depends on the optimal control of the inventory level and inventory change of the whole supply chain, rather than the minimum inventory level of a single member enterprise. The close cooperation between commercial organizations in the supply chain in inventory and material circulation will bring many benefits to all organizations. First of all, it can bring less urgent operations with a lower inventory level, improve the accuracy of planning and the productivity of resources, and achieve better scale gains; Secondly, cooperation in inventory and logistics will make logistics faster, more reliable, shorter preparation period and better customer service provided by fast delivery. All kinds of commercial organizations are constantly seeking ways to improve their operation level in order to win competitive advantage.

3. The characteristics and significance of supply chain inventory management. Traditional enterprise inventory management focuses on optimizing single inventory cost, and determines economic order quantity and order point from storage cost and order cost. Inventory management in supply chain involves not only many departments within enterprises, but also many external enterprises. It extends from the functional management of internal departments to the inventory management among enterprise groups. There are many differences between inventory management in supply chain environment and traditional enterprise inventory management, which are mainly reflected in management performance evaluation index, management starting point, management ideas and methods. To sum up, inventory management under the supply chain management environment has the following characteristics:

3. 1 The goal of inventory management in the supply chain management environment is to pursue the optimization of global inventory in the supply chain. According to the integrity and systematicness of supply chain, supply chain management pursues the overall interests of the whole supply chain. Therefore, inventory management should not only pursue the lowest cost of a single inventory point of each node enterprise, but also coordinate the inventory activities of each node enterprise to minimize the inventory cost of the whole supply chain.

3.2 Information sharing provides strong support for supply chain inventory control. The development of modern information technology makes supply chain inventory control more effective. In order to increase the information enjoyment of the supply chain, the global supply chain information system based on the Internet and EDI technology provides a guarantee for the rapid information transfer between enterprises. The inventory coordination mechanism of supply chain determines the efficiency of inventory cooperation among enterprises and is the core issue of supply chain management. A good inventory coordination mechanism can not only mobilize the enthusiasm of cooperative enterprises and realize the overall interests of the supply chain, but also maximize the comprehensive competitiveness of the supply chain. With the development of economy, the market has changed from local scale to global scale, and the regional economy confined in a narrow area due to high information cost will be unified into the global market. The research of supply chain management is of great theoretical and practical significance for China enterprises to change their management mechanism and management mode, improve their ability to adapt to internationalization strategy and enhance their survival and competitiveness in the international market. As the core problem of supply chain research, inventory management research will be more prominent, and this field will become a more valuable and practical research direction.

Third, use the supply chain to coordinate inventory.

A coordinated supply chain relationship can cope with the uncertain changes in demand, reduce inventory costs and improve the return on assets. However, the supply chain system includes many commercial organizations, which are usually independent economic entities. When suppliers and retailers make production and inventory decisions, EOQ models often maximize their own interests and ignore the overall interests of the entire supply chain. The key of supply chain management is to establish a coordination mechanism, integrate the goals of supply chain members and coordinate their decisions to optimize the performance of the system. Supply chain coordination involves different coordination issues, such as strategic cooperation and coordination among supply chain members, production coordination, information coordination and inventory coordination in planning and operation. Different coordination contents in each coordination problem often need different coordination models. For example, the problem of production coordination mainly studies the production plan and logistics plan for the whole supply chain. The former mainly adopts the method of establishing production scheduling model, while the latter mainly adopts the method of establishing distribution model. Information coordination includes coordinating the following information: inventory, sales data, order status, sales forecast and production/distribution plan. The inventory coordination model established for inventory coordination mainly includes supplier management inventory, consignment inventory management, joint inventory model and third-party inventory management in supply chain management, aiming at overcoming the demand amplification caused by the independent inventory control model of each node enterprise in the supply chain system.

1.VMI。 VMI management system refers to VendorManagedInventory, which is one of the ways of continuous replenishment. The so-called "continuous replenishment" means that suppliers and retailers establish a cooperative relationship, both of which enjoy the retailer's inventory data and sales information as well as the current inventory level, and the supplier replenishes the retailer according to these data and information and the preset inventory level. In the environment of continuous replenishment, suppliers no longer passively execute retailers' orders, but actively replenish or propose orders for retailers, thus reducing replenishment costs, improving supply speed and accuracy, and reducing inventory levels. Under the supply chain environment, users' demand for personalized products increases, which leads to the increase of product types, product diversification and serialization, which leads to the increase of inventory level, inventory cost and management difficulty. The traditional inventory management has caused the backlog of inventory in the supply chain and reduced the overall interests of the supply chain. In this case, new inventory management methods are needed to manage inventory scientifically and coordinate the overall interests of the supply chain. Supplier management of inventory objectively requires enterprises to cooperate closely on the basis of mutual trust, reach an agreement on the concept and clarify their respective responsibilities and obligations; All enterprises are required to take a positive attitude in cooperation, so as to reduce the inventory cost with the ability of quick response, so that all the participants can get more benefits than those without cooperation, so that the generation of vendor managed inventory is inevitable, and the generation, development and application of supply chain management and other related theories have accelerated the development of vendor managed inventory.

2. Consignment inventory management. Entrusted Inventory (CS) is an inventory management theory under the supply chain environment. It means that the supplier stores the goods in the warehouse of the manufacturer or retailer. Before the goods are used by manufacturers or retailers, the ownership of the goods belongs to the suppliers, and the manufacturers or retailers only pay the fees when using the goods. Since 1990s, with the development of computer network, information, communication and other technologies, the world has entered the network era with the Internet as the carrier. In the network era, the information exchange within and between enterprises is extremely convenient, which creates conditions for the application and promotion of CS model based on continuous information exchange. On the other hand, as the world enters the buyer's market, the channel power of the market gradually shifts to the downstream of the supply chain. In order to reduce the risk, manufacturers in the downstream of the supply chain can rely on their own channel strength to let suppliers adopt CS, which is more beneficial to their own inventory. In real life, CS model has been very common and widely used in all walks of life. For example, many manufacturers (IBM, Dell, Philips, Haier, Changhong, etc. Require suppliers to store spare parts and raw materials for production in their own warehouses, and then settle accounts with suppliers after use; In fact, all kinds of drinks, foods, cigarettes and alcohol stored in many hotel rooms are also a CS method. According to the survey, 90% hospitals have adopted some form of CS to some extent. Even e-commerce websites (such as eBay, Amazon.com, AOL, Alibaba, Taobao, Yi Bei, etc. Adopt a consignment contract; In addition, in the retail industry, although large supermarkets (such as Wal-Mart, etc. Only VMI mode is adopted, and some people assert that CS represents the future of retail industry.

3. Joint inventory management. Although VMI has been proved to be an effective inventory management scheme, the level of cooperation between suppliers and retailers in VMI is limited, and successful VMI requires a high degree of trust among enterprises. Downstream enterprises only need to help upstream enterprises make plans, so that downstream enterprises can achieve zero inventory, and the inventory of upstream enterprises is greatly reduced, but this undoubtedly increases the risk of suppliers. Different from the decision-making agent mode of VMI integrated operation, Joint Inventory Management (JMI) is a risk-sharing inventory management mode. Simply put, joint inventory management is a joint inventory management model based on the coordination center. Joint inventory management is an effective method to solve the demand amplification phenomenon caused by independent inventory mode in supply chain system, greatly improve the supply level and operation efficiency of supply chain and improve the synchronization degree of supply chain. It is an inventory management mode to improve the synchronization degree and risk sharing of supply chain through the joint and coordination mechanism among supply chain members. Joint inventory management emphasizes that all node enterprises participate at the same time and jointly make inventory plans, so that every inventory manager in the supply chain can keep the expectations of inventory managers between two adjacent nodes of the supply chain consistent from the perspective of mutual coordination, eliminate demand variation and amplification, and make full use of supply chain resources. In the supply chain environment, the implementation of joint inventory management needs an effective coordination management mechanism. In the coordination management mechanism, the cooperative goal of the supply and demand sides is established, and on this basis, the coordination control mechanism of joint inventory is established. The joint inventory management center makes decisions on demand, ordering and supply, and coordinates the interests of both parties. At the same time, it is necessary to establish a fair benefit distribution and incentive mechanism. Secondly, relying on modern information system, make full use of EDI (ElectronicDataInterchange) platform or e-commerce system of supply chain node enterprises, and integrate barcode technology, POS system and automatic order processing system. In the information system, it is necessary to enjoy and obtain information transparently and timely. The benefits that JMI can bring to enterprise inventory management are as follows:

(1) information advantage. Information is an important resource for enterprises, and the lack of information communication is also the main reason for other inventory management problems. By establishing the strategic partnership between upstream and downstream enterprises, JMI realizes the information sharing of inventory management among enterprises. This not only ensures that the upstream enterprises of the supply chain can obtain the market demand information timely and accurately through the downstream enterprises, but also enables all activities of each enterprise to be carried out around the changes of customer demand.

(2) Cost advantage. JMI realizes the integration of inventory management from distributors to manufacturers to suppliers, so that all three parties can purchase on time (that is, purchase the right items in the right quantity and quality at the right time and place). Just-in-time procurement can not only reduce inventory, but also speed up inventory turnover and shorten the lead time of ordering and delivery, thus reducing the procurement cost of enterprises.

(3) Logistics advantages. JMI breaks the traditional fragmented inventory management situation and embodies the integrated management idea of supply chain. JMI emphasizes that all parties participate at the same time, * * * make an inventory plan and * * * share risks, which can effectively eliminate excessive inventory and "bullwhip effect".

(4) Advantages of strategic alliance. The implementation of JMI is based on the full trust and cooperation of all parties. If JMI wants to run smoothly and effectively, distributors, manufacturers and suppliers are indispensable. We're all in the same boat. Therefore, the effective implementation of JMI not only strengthens the contact and cooperation between enterprises, but also ensures that this unique cooperation mode between enterprises brought by inventory management will not be easily imitated by competitors and bring competitive advantages to enterprises.

Generally speaking, joint inventory management is an effective method to solve the demand amplification phenomenon caused by the independent inventory operation mode of each node enterprise in the supply chain system and improve the synchronization degree of the supply chain. It emphasizes that both parties should participate in the inventory plan together, so that every inventory manager (supplier, manufacturer and distributor) in the supply chain can keep the expectations of inventory managers between two adjacent nodes of the supply chain consistent from the perspective of mutual coordination, thus eliminating the phenomenon of demand variation and amplification. The determination of the demand of any adjacent node is the result of coordination between the supply and demand sides. Inventory management is no longer an independent operation process, but the connection and coordination between supply and demand.

Fourth, the mode

1. Model assumption. (1) There is only one buyer (she) and one seller (he) in the supply chain, and only one product is produced. (2) The buyer's order is in bulk. The batch she orders each time is Q, the cost of each order is A, and the annual demand speed of the product is D. (3) The seller's production speed is limited, and it is also carried out in batches. The batch he produces each time is mQ, the preparation cost of each production is M, and the production speed of the product is also certain, but p(4) the inventory holding cost of the buyer and the seller is directly proportional to the quantity and time of the product in inventory, so that the inventory holding cost of the buyer and the seller per unit time is hb and hv respectively. (5) The unit transportation cost remains unchanged and will not be considered.

2. Storage strategy. (1)t-cycle strategy: replenishment once every T-cycle, with the replenishment quantity of Q. (2)(s, Q) strategy: continuous inventory, once the inventory level is less than S, an order will be issued immediately, with the order quantity of Q; If the inventory level is greater than or equal to s, the order is not ordered. S is called the order point inventory level. (3)(s, S) strategy: continuous inventory, once the inventory level is less than S, the order will be issued immediately, and the order quantity is S-S; Even if the inventory level at the time of ordering reaches S, the order will not be placed. (4)(T, s, q) strategy: take inventory with cycle t, and other behaviors are the same as (s, q) strategy. (5)(T, s, s) strategy: take inventory with cycle t, and other behaviors are the same as (s, s) strategy.

3. Traditional inventory mode. Traditional inventory management often aims at optimizing the total inventory cost of a single enterprise to determine the economic order quantity and order point, so here we give the EOQ formula with the buyer as an example.

4. Reorder the levels. Under the condition of constant demand, it is meaningless to transfer inventory from one inventory cycle to another. The goods under each order should arrive when the existing stock is just used up. To do this, it is necessary to go from the next order to the delivery cycle before the goods need to be replenished, otherwise there will be shortages.

5. Integrated inventory model. The integrated inventory model takes into account the joint economic lot size that minimizes the total cost of the supply chain system, breaks the traditional fragmented inventory management model and embodies the integrated management idea of the supply chain. A joint economic batch solution model (Hill( 1999)) is given below to minimize the total cost of a supply chain system consisting of a single buyer and a single seller.

Verb (abbreviation of verb) conclusion

The development direction of modern logistics is modernization, systematization, rationalization and high efficiency. No enterprise can avoid the problem of how to optimize its logistics system or the operation of its logistics subsidiaries. In order to achieve effective supply chain logistics management, all members of the supply chain must be considered as an organic whole, inventory information should be managed centrally, and material accounts should be established through ERP information platform to achieve high transparency of inventory. Gradually adopting strategies such as supplier management inventory and supplier agreement inventory will help to reduce inventory costs and improve the competitiveness of enterprises. As we all know, as an extended enterprise, inventory management is more important in its operation, because inventory not only affects the cost of a node enterprise, but also restricts the comprehensive cost, overall performance and competitive advantage of the supply chain. Therefore, enterprises should consider their own inventory management strategies from the perspective of cooperation among enterprises in the supply chain, so as to promote the evolution of inventory management ideas and methods in the supply chain and ultimately improve the inventory management efficiency of the whole supply chain. Although the related theories and coordination methods of supplier management inventory are mature, there are still many problems, such as the information technology platform, trust mechanism and strategy of supplier management inventory implementation, which need further study. The coordination of supplier management inventory under different circumstances deserves further study; The coordination mechanism of supplier management inventory needs to be further expanded, and the empirical research of coordination mechanism needs to be further enriched; Systematic research on supplier management inventory and procurement, production, sales and transportation needs to be strengthened. This paper discusses the basic concepts and related theories of supply chain inventory management, studies the related contents of supply chain management inventory, consignment inventory management, joint inventory management and third-party logistics management inventory, and discusses the traditional inventory management model, reorder level and integrated inventory management model on this basis. Finally, the paper makes a case study of Seagate's VMI inventory management model, and combines theory with practice to demonstrate the scientificity and feasibility of supply chain coordination inventory.

References:

[1] Kang Yongxing. Research on coordination and optimization of supply chain inventory [D].2006. Tianjin University.

[2] Huo Xiaojun. Research on Logistics Reform of Electric Power Industry [D].2005. Tianjin University.

[3] Gu. Research on warehousing theory under modern logistics concept [D].2000. Shanghai Maritime University.

[4] Zhao Yanqin, Zhang Shaowen. Summary of inventory model research under supply chain conditions [J]. Cooperative economy and technology. 2006.4438+0 1: p32-33。

[5] Ren Minxian. Research on supply chain inventory coordination [D].2004. Jilin University.

[6] Liu Yongsheng and Li Minqiang. Research on inventory coordination strategy of supply chain [J]. China Management Science.2004.4: P49-54.

[7] Xia Zefang. Research on supply chain inventory management decision [D].2006. Shanghai Jiaotong University.

[8] Liu Pengfei. Research on Vendor Managed Inventory and its Coordination [D].2008. Central South University.

[9] Xu Binbin. Research on VMI integrated inventory model before and after the introduction of third-party logistics [D].2009. Huazhong University of Science and Technology.

Zhang Huiying. Research on coordinated management of supply chain inventory under uncertain demand [D].2003. Tianjin University.

[1 1] Shanghai electric power company. Research and Application of Standardization Method of Material Coding in Shanghai Electric Power Company (20 10 1).

[12] Luo Shouan. Research on Supply Chain Logistics Management of Anhui Electric Power Construction Company. 2008. Hefei University of Technology.

;