Discussion on inventory cost control of enterprises under supply chain management system

Discussion on inventory cost control of enterprises under supply chain management system

Cost control in business process is very important for every enterprise, and inventory cost is one of the most important components of supply chain cost, which usually exceeds 30% of the total cost, and the key part of enterprise management is inventory cost control. Every enterprise can take effective ways and means to control and manage inventory, improve profits and control costs. In view of this, this paper takes the inventory cost control of enterprises as the research object, first analyzes the inventory cost control of enterprises under the supply chain management system, and then finds out the composition of enterprise inventory cost under the supply chain management system and the ways to control enterprise inventory cost.

Supply chain management; Keywords; Inventory; cost control

First, the concept of enterprise inventory cost under supply chain management

From the concept of ExtendedProduction to the supply chain, the supply chain in modern management education is defined as: around the core enterprises, through the control of capital flow, logistics, business flow and information flow, from purchasing raw materials to manufacturing intermediate products and final products, and finally delivering related products to consumers through the sales network, connecting distributors, retailers, manufacturers and suppliers with a complete functional network chain structure. Supply chain is divided into external supply chain and internal supply chain. External supply chain refers to the supply and demand network composed of retailers, raw material suppliers, consumers, manufacturers and storage and transportation companies that participate in the production and circulation process outside the enterprise. Internal supply chain refers to the supply and demand network composed of warehousing department, sales department, purchasing department and production department that participate in the internal circulation and product production of enterprises. The purpose of inventory control of enterprises is to keep the balance between profit level and the responsiveness of the whole supply chain, so that the whole supply chain can reach the lowest operating cost. Therefore, for every node in the supply chain, under the demand of ensuring sales and supply, we must achieve the lowest inventory cost and pursue the most economical inventory quantity, which requires effective management and control of inventory.

Second, the composition of enterprise inventory cost under supply chain management

In modern warehousing management, inventory refers to all resources that are idle and have economic value and are used for the future. It is used to prevent production from being interrupted due to lack of parts and play a balancing role. Its advantages are improving service quality, preventing material shortage and saving ordering cost. The disadvantage is that there will be some inventory costs and a lot of capital occupation. Among the production costs of enterprises, inventory cost is the most important in the supply chain cost, accounting for more than 30% of the total cost. Inventory cost control is an important part of enterprise management, which is mainly composed of transaction cost, shortage cost and inventory holding cost.

Third, the importance

Traditional enterprise inventory management thinks that the more inventory, the better enterprise benefits and the more corresponding resources, while many modern enterprises have different requirements for inventory, hoping to achieve zero inventory cost, which can not only reduce storage costs, but also improve the utilization efficiency of enterprise capital flow. As one of the core competitiveness of modern enterprises, inventory cost control plays four main roles in supply chain management: first, inventory cost control of enterprises will reserve needed materials in time when material prices fall, thus reducing material costs; Second, effectively controlling the inventory cost of enterprises will maintain the production scale and quantity of enterprises and will not affect other departments; Third, it can control the time difference between different sales, production demand and supply, reduce the storage cost of enterprises, and will not affect production and sales; The fourth is to prevent the occurrence of missing parts. Therefore, modern enterprises attach great importance to inventory cost control. In the current enterprise management activities, the choice of suppliers should be fully considered. An excellent supplier will greatly reduce the inventory cost, speed up the production progress and improve the management level. In this regard, under the supply chain management system, enterprises should investigate product prices, product quality and whether suppliers can provide products in time. These three aspects are very important and indispensable.

Fourth, the enterprise inventory cost control measures under the supply chain management system

(A) let suppliers manage inventory

VMI is the abbreviation of VendorManagedInventory, which is translated as "consignment" in Chinese. VMI is that the manufacturer lets the supplier manage the inventory, and there are two modes. One mode is that the production enterprise stores materials in the supplier's warehouse, which can save the storage cost and storage management expenses of the production enterprise. The other mode is that the supplier stores the materials in the warehouse of the production enterprise, which can not only ensure the timely supply of production, but also save the warehouse management cost of the supplier; Under the condition of equality and mutual benefit, VMI can reduce the overall inventory of supply chain, and the key consignment materials will be put into storage after production and collection, which can delay the payment cycle of materials. This new inventory management method greatly improves the response speed of the whole supply chain through cooperation with suppliers.

(2) Simplify the supply chain and achieve precise management.

The length of the supply chain determines the length of the supply cycle, so the inventory of the supply chain will be affected. Dell's supply chain management has always been a global model. There is no intermediate link in its supply chain, and the products are directly sold to customers through e-commerce, so the funds can be withdrawn quickly, and the production runs normally when the cash flow is sufficient, and there is no need to advance funds. The cash flow cycle is -24 days. In addition, because there is no intermediate link to reduce operating costs, such an efficient e-commerce model enables service providers, suppliers and Dell to form a profitable and complete supply chain.

(C) the establishment of information communication and supply chain early warning mechanism

2 1 century is an era of knowledge explosion, and the outstanding feature of this era is the extremely rapid development and dissemination of information. In this era, the intangible wealth of modern enterprises belongs to information communication. Therefore, it is necessary for contemporary enterprises to enhance their own immunity, strengthen their crisis prevention ability, constantly optimize the financial management environment, establish a sound information early warning mechanism, nip the crisis in the bud, and establish an early warning mechanism with suppliers.

(D) Performance management of suppliers

The original intention of controlling inventory is to reduce the influence of uncertain factors in the supply chain. The more effective the performance appraisal of suppliers is, the more conducive it is to effectively reduce inventory. For example, suppliers with good quality must purchase more than those with quality problems; If the supplier's order point is set lower and the production cycle is shortened, then the inventory can be greatly reduced; If the delivery is very punctual, don't set up too much safety stock. This will not waste resources.

Rational utilization of external resources through production outsourcing.

The so-called production outsourcing is actually outsourcing some non-core businesses that should be handled by internal personnel to professional service providers, so as to make full use of the best external professional resources and achieve the fundamental purpose of improving efficiency and reducing costs. In essence, production outsourcing can make professional enterprises do professional things, thus saving enterprises more energy to invest in their own relatively proficient product research and development and sales, thus helping enterprises to better improve economic benefits and promote the sustainable development of enterprises.

Verb (abbreviation of verb) conclusion

Controlling inventory is a double-edged sword for enterprises. On the one hand, to reduce a large amount of funds of enterprises and reduce the cost of inventory management, the less inventory is required, the better. On the other hand, enterprises should ensure the smooth production process and require sufficient inventory; How to coordinate this contradiction is an important issue for enterprises to control inventory costs. This paper discusses the composition, importance and control measures of inventory cost, and analyzes the research scheme of inventory cost control under the current enterprise supply chain management environment. However, the inventory cost control of enterprises under supply chain management is a complex system engineering, and there are more problems that need further study by experts and scholars in depth and breadth.

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