"All competition, in essence, is supply chain competition."  So what exactly is a supply chain?                                                                                   

Simply, it is a chain that provides customer value.                                                                                                                                                                     

From the above, we can find that the word "supply chain" is not something that is far away from us in the cognition of many people, nor is it the work of purchasing. It is the thinking of the actual operator of an enterprise on the business model, as well as the continuous improvement of benefits and efficiency.                                                                                                                                                                      

What is the total supply chain cost:                                                                                                                                                                                                                                    

1. Procurement cost: Reduce the cost at the source of design and process, and reduce the procurement cost by optimizing the process and managing sub-suppliers.

2. Chain cost: 1) Extravagant mold opening; 2) Not planning the cash flow; 3) Failing to place an order; 4) Lack of coordination;

3. Transaction costs: 1) the cost of searching information; 2) Cost of negotiation and decision-making; 3) Contract cost; 4) Supervision costs; 5) Enforcement costs for breach of contract; 6) Conversion cost;

Supply chain management is to optimize the operation of the supply chain and make the supply chain from purchasing to satisfying the final customer with the least cost. Supply chain management is to coordinate the internal and external resources of the enterprise to jointly meet the consumer demand. When we regard the enterprises in each link of the supply chain as a virtual enterprise alliance, If any enterprise is regarded as a department in the virtual enterprise alliance, the internal management of the alliance is supply chain management.

But right now, it's imperative to upgrade for one simple reason: in the marketplace, making money is more important than saving money; When the market is down, saving money is more important than making money. What's more, purchasing and supply chain management are not just about saving money.

To achieve value improvement, it is nothing more than "left" to develop a good product and "right" to have the ability to sell the product at a higher price, and the ability to dig deep into the middle of the production, allows the product to be cheaper and faster delivery (focus on production and operation management to achieve cost reduction and speed up the supply chain).