Whether from procurement, or production and processing, warehouse operations, distribution and transportation, etc., we can pursue the scale effect to achieve the purpose of cost reduction and efficiency.

From the cost level, the fixed costs are constant, the scale increases, only the fixed costs will be equalized, thus reducing the overall average cost. For example, the cost of transportation, if the route is the same, each delivery will incur a car out of the cost of each delivery, each time to send half a car and send a full car, the cost of equalization is completely different, and these costs will be reflected in the net profit of each commodity, so to be as full as possible in order to reduce the overall cost.

From an efficiency level, a lot of wasted movement and waiting time is essential, so it's important to create as much value as possible when that waste is generated. For example, in the e-commerce retail industry, the warehouse area is very large, but the number of SKUs in each order is small, if the single picking, picking each single picker needs to run the whole warehouse once, the efficiency is very low, which needs to be used to batch picking, a batch of orders merged together, the picker only needs to run once, can be a batch of all the orders picked, and then according to the order for the sub-seeding can be, the efficiency of the multiplier increase.

Two, automation

In the premise of cost investment can be controlled, through automation to reduce labor input, and improve efficiency. The construction of automation can be divided into system automation and equipment automation, both are a one-time investment in exchange for continuous cost reduction and efficiency, and through system operation to reduce the error rate, the underlying logic is the same.

First of all, system automation, in doing system design, we can use the system batch processing place, should minimize manual intervention. For one thing, there is a lag in manual operation, the second is prone to error, the general approach is for regular regular-type business, the system automatically handled by the irregular non-routine business, handed over to manual processing.

For example: before the company, in the OMS there is an order audit function, the previous customer service needs to verify whether each single customer notes information, if not, then the audit release, if there is, it is first in accordance with the customer's notes demand for order processing after the audit, such as the specified delivery time, delivery logistics company. Whenever a big promotion, the system efficiency is very slow, customer service audit has become the biggest bottleneck in order fulfillment, and then the technical department of the order audit function was optimized, so that there are order notes to manual audit, no notes are automatically audited by the system. In this way, the efficiency of the order audit has increased by more than 100 times. So the power of system automation is endless.

Then say equipment automation. The biggest advantage of automated equipment is that it can operate 24 hours a day without black light and without error. As a leader in intelligent logistics, Jingdong has spared no effort in its investment in automation. The most talked about is its Asia One intelligent warehouse, through the investment of automation equipment, the establishment of Beijing, Shanghai, Guangzhou, Chengdu, Wuhan, Shenyang, Xi'an and Hangzhou as the center of the eight logistics hub, to promote the logistics cost reduction of more than 50%, the circulation of more than 70% of the efficiency.

Three, process optimization

Through the optimization of supply chain processes, to find unreasonable places and be improved to reduce some unnecessary waste, to achieve the purpose of cost reduction and efficiency. Here are some ideas:

1. Process design optimization. In the production industry, the product process improvement, will be able to *** with the parts designed as a standard style, reduce the number of parts SKUs, you can achieve the goal of reducing management costs, at the same time, the number of parts becomes less, can be batch operation, the efficiency of the natural enhancement.

2. Standardized processes. Standardized management of processes can reduce training costs, management costs, system design costs, so that the supply chain is more streamlined, and problems are easier to identify and solve. For example, in different warehouses to implement the same space layout, operating procedures, management mechanisms, can greatly reduce the difficulty of warehouse management.

3. Delayed differentiation. The so-called delayed differentiation, refers to the manufacturing process to give the product personalization delayed management approach. Delayed differentiation can be differentiated needs, processes to the last link to deal with, so that the front of the link as much as possible standardization, scale, so that both standardization and scale through the cost reduction and efficiency, but also effectively avoid frequent changes in demand. A classic case is Zara's push-pull strategy, in the final market demand is not clear before, in order to reduce costs and increase efficiency, in advance in accordance with the style of mass production of undyed semi-finished garments, to be clear after the demand for dyeing and processing, to complete the final finished product processing.

4. Regularly do streamlining. Supply chain disengagement, regular combing and streamlining of bloated personnel structure, excess warehouse area, backlog of inventory, redundant links in the operation to reduce waste, ineffective waiting and redundant action to increase the scale effect.

5. Outsourcing strategy. Outsourcing some of their own unprofessional or non-core business, processes, focus on the core business. For example, the 3PL model, the enterprise will be delivered to the professional three-way logistics distribution company for distribution, than self-built logistics costs are much lower.

Four, synergy

Through the enterprise upstream and downstream synergies and synergies between internal departments, with the help of the system to achieve information **** enjoyment, you can greatly reduce the cost of communication, information processing costs, to enhance the efficiency of the flow of logistics, capital flow and information flow. For example, under the VMI (Vendor Inventory) model, through system synergy, the supplier will inventory **** enjoy to the retailer, the retailer will order and demand information synchronized to the supplier in a timely manner, through the synergistic model not only to reduce the retailer's inventory backlog, purchasing and logistics costs, but also allows the supplier to be closer to the market, access to the most real demand, reduce its forecasting and production errors, and mutual benefit.

Cost reduction and efficiency is the core objective of the supply chain, as we play the game to do the main task, guiding the direction of our work, whether engaged in procurement, operations, or product, technology positions, always grasp the main line, can make our work more in line with the actual business, less detour, itself is also in the pursuit of "cost reduction and efficiency! "