Many cross-border e-commerce companies are in a dilemma. To outsiders, they are big companies as they grow bigger and bigger, but in reality, they are stuck in a vicious circle where their turnover is getting bigger and bigger, but their profits are getting smaller and smaller. Or, they are profitable on paper, but all of it is “earned” into inventory. This is ultimately due to poor supply chain management. Enterprises have three pillar functions: R&D (product management), marketing (demand management) and supply chain (supply chain management). For enterprises, R&D means designing a good product; for cross-border e-commerce enterprises, R&D means choosing a good product and selling it at a good price through cross-border marketing. The supply chain produces products at a suitable cost and speed and then distributes them. Whether it is a production-oriented cross-border e-commerce enterprise or a circulation-oriented cross-border e-commerce enterprise, the supply chain is one of the three pillar functions of the enterprise, and it has a significant impact on the operating profit margin and capital turnover rate of the enterprise.
What is supply chain management?
Many people confuse supply chain management with logistics management. Simply put, supply chain management means that buyers buy things in, production operations process them to increase their value, and logistics distributes them to consumers. These three are the execution functions of the supply chain. The execution function operates under the guidance of the planning function, that is, buyers follow the instructions of the plan: what to buy, how much to buy, and when to buy; production follows the instructions of the plan: what to process, how much to process, and when to process; logistics follows the plan Instructions: what to deliver, how much to deliver, and when to deliver. In other words, the supply chain is driven by the planning function and executed by procurement, production, and logistics. This is true in leading enterprises, and it is also true from the supplier’s supplier to the customer’s customer, which is closely linked.
The supply chain runs through the entire process of enterprise value-added. It has two main internal elements: product management (design) and demand management (marketing). On the one hand, the supply chain supports product management, that is, developing good products; on the other hand, the supply chain supports demand management, that is, selling at a good price.
The supply chain is from the customer’s customer to the supplier’s supplier. Supply chain management is the integrated management of the product flow, information flow, and capital flow throughout it to maximize consumer value and minimize supply chain costs.
In general, supply chain management can be summarized in three sentences: supply chain management, R&D, and marketing together constitute the three core functions of an enterprise; supply chain management includes three major areas: procurement management, operations management, and logistics management; supply chain management is the integrated management of the three flows of product flow, information flow, and capital flow.