Industry value chain analysis means that enterprises should look at their relationship with suppliers and distributors from the perspective of industry and strategy, and seek ways to reduce costs by using industry value chain.
The analysis of industry value chain can not only make enterprises understand their position in the industry value chain, but also enable enterprises to explore the use of industry value chain to achieve the purpose of reducing costs. This industrial value chain is also called vertical connection, which represents the relationship between enterprises and their upstream and downstream in the industrial value chain. Improving the contact with suppliers can reduce the production cost of enterprises, which is usually beneficial to both supply and demand. For example, TCL's acquisition of Thomson's color TV business in France reduced the cost of overseas sales and made its products more recognized by local consumers, thus enhancing the international competitiveness of its products. This is the application of forward integration of value chain.
According to the traditional cost management method, in the procurement stage, most enterprises adopt economic batch method, shop around and supplier bidding method. The same is true of the relationship between enterprises and distributors. Both of them focus on how to maximize their own profits, and their cooperative relationship is maintained only by contract. In this way, powerful companies can naturally make weak companies make concessions, thus achieving their own goals. Once the market relationship changes and weak companies become strong, they will in turn force their partners to make profits. This phenomenon is very obvious in the retail industry. With the rapid growth of supermarkets such as Wal-Mart and Carrefour, manufacturers began to compete fiercely for shelves, so various shelf fees and stacking fees began to appear, and retailers may also force manufacturers to participate in their promotion plans.
At present, this phenomenon is still very common, especially in China. At present, enterprises mainly put the concept of cost reduction on the internal value chain of enterprises and adopt standard cost control methods to reduce production costs. Only a few enterprises, such as Hangang, really attach importance to the management of industrial value chain.
Dr. zhang of China Academy of Social Sciences put forward the importance and application of process reengineering and ERP in his book "Value Chain Management", but only emphasized the core competitiveness of enterprises and did not involve the industry value chain. This brought huge profits to China enterprises at that time. However, in the current market environment, there is little room for reducing the internal costs of enterprises, and the costs between enterprises should be managed and reduced. At the same time, close suppliers or distributors will also provide corresponding suggestions to help enterprises reduce internal costs. The following article will take a typical manufacturing enterprise as an example to illustrate the application of value chain management in today's industry.
Second, the application of industry value chain management
(A) the premise of industry value chain management-the change of ideas
For manufacturing enterprises, the price of materials and services provided by suppliers determines the procurement cost of enterprises, and the procurement price of dealers determines the sales price of enterprises. The traditional idea is to reduce the procurement cost and increase the sales price as much as possible in order to maximize its own profits. Using this concept to manage production will inevitably lead to "zero-sum transaction". The new concepts needed in the new period and new environment are as follows:
Communication with suppliers is not to pursue the lowest purchase price and increase their own profits, but to pursue shorter production cycle, stronger market adaptability, higher product quality and higher inventory turnover rate.
Enterprises should not sell more goods to dealers, but should find ways to increase the number of goods sold to customers through dealers to maximize the profits of the two enterprises.