Discussion on Rationalization of Overall Inventory in Automobile Supply Chain

The explosion of a warehouse of Ruihai International Logistics Co., Ltd. (hereinafter referred to as Ruihai) in Tianjin Dongjiang Bonded Port Area on the late night of August 12 was distressing. At the same time, many people questioned: Why is the residential area less than one kilometer around the warehouse where dangerous chemicals are stored? Where should the hazardous chemicals warehouse be located?

According to an expert from a city planning institute affiliated to the Ministry of Housing and Construction, for the storage of dangerous chemicals, the location of the warehouse should first depend on whether it conforms to the overall urban planning and whether the site can be used to store these substances. At the same time, the site selection must undergo a certain environmental impact assessment, and the safety impact assessment should be carried out for those who identify the storage material as a dangerous goods warehouse.

According to the expert's analysis, from a procedural point of view, the various procedures of Ruihai should be implemented. The question is whether the conclusions of these evaluations are reliable.

In the morning of August 13, Green Net Environmental Protection Wechat published Emergency Investigation: Summary of Tianjin Ruihai Logistics Environmental Assessment Documents, which was accepted by Tianjin Environmental Science Academy. A brief copy of Ruihai Logistics Environmental Assessment was attached. According to the conclusion of public participation in the environmental assessment document, it was noted that according to 128 questionnaires collected, 100% of the public believed that the project was located in Beijiang Port. In the area, the location is suitable. The second announcement of Ruihai Logistics on May 24, 2013 shows that "most of the materials involved in the proposed project are dangerous and flammable materials, and there are certain environmental risks in the process of material transportation and storage. On the premise of taking precautionary measures and formulating corresponding emergency plans, the accident risk is within acceptable scope. The conclusion is that the environmental constraints can be obtained on the premise of strictly implementing the "three simultaneous" system in the process of construction and operation and implementing various environmental protection measures and suggestions put forward in the EIA. Overcoming it, from the perspective of environmental protection, the construction of the project is feasible.

However, many of the people living nearby said they were not involved in such a survey and said they would definitely not like to have a dangerous chemical warehouse at their doorstep. So whether the impartiality of EIA is problematic or not, we need to put a question mark on it.

At present, the logistics of most automobile manufacturing enterprises has entered the mode of large logistics or large supply chain, that is, logistics or supply chain should consider four business modules: procurement logistics, production logistics, sales logistics, waste logistics and so on. Logistics practitioners in the automotive industry have devoted a lot of effort in the past decades. There are many excellent articles on automotive logistics, and this article will not be repeated. I will share with you some ideas about logistics supply chain in automobile logistics.

Predicament and Solution of Inventory in Automobile Supply Chain

After years of development, logistics in China's automobile industry has passed the initial stage of vague consciousness, unclear action policy and developed into a very mature logistics system. However, with the advancement and implementation of industrial 4.0 and China's manufacturing 2025 strategy, we are surprised to find that the automobile logistics we have been proud of is in the original. There are many blind spots in process monitoring. There is still much room for improvement in the whole process tracking of the supply chain and the whole process monitoring of the sale of commodity vehicles. This paper will discuss the establishment of process monitoring/reasonable inventory (which can be zero inventory) in the automobile logistics supply chain.

For supplier delivery of purchasing logistics, the general mode of automobile industry is to promote zero inventory strategy, which derives management means such as VMI. In fact, the core content of this strategy should be to ensure production and control inventory according to locked plan and reasonable forecast and good transportation, but plan in the specific implementation process. Instability and inaccuracy of prediction and the blank of transportation process monitoring lead to difficulties in promoting this model. Therefore, smart logistics practitioners in the automotive industry have invented the concept of local intermediate storage, invented the concept of building factories around spare parts. In fact, intermediate storage is to transfer the inventory and site pressure to suppliers, and the peripheral parts. Only factories with large capacity can be built, and there are many restrictive factors. The practice of building factories around storage and spare parts is essentially against the original intention of zero inventory.

Personally, I think that to form a reasonable inventory in supply chain, we need to form (zero inventory) mainly through the following aspects:

Forming a stable sales forecast.

The market is ever-changing, and it is impossible to require ever-changing market forecasts, but they are always the same. There are always rules to follow. We need our salesmen to improve the accuracy of sales forecasts as much as possible according to historical data and market development.

2. Formation of "go up, go down" execution + material support system

Generally speaking, it is based on sales forecasting to carry out reasonable production forecasting and processing analysis, to form relatively stable production locking and forecasting plan, and then supply chain manages inventory allocation according to forecasting combined with actual management situation. I personally don't advocate transferring inventory pressure to suppliers, and I hate the situation of product switching after the main plant transfers inventory to suppliers without considering the supplier's inventory. However, in the current situation, whether local or supplier's, the appropriate inventory should be backed up according to the inventory allocation in the supply chain of the main plant. To ensure delivery, this kind of inventory needs the supply chain managers of the main plant to negotiate with the suppliers and combine with the independent management of the suppliers. It can be determined according to the attributes of the parts and the actual situation of the suppliers, such as the universality, value, supplier's supply capacity, supply radius, procurement cycle and so on. In addition to individual parts with long purchasing cycle, the general spare parts backup inventory should be raw materials rather than finished products.

3. Information supervision in the whole process.

Sales, production, material supply and inventory control is one of the challenges faced by manufacturing enterprises. Different enterprises have different solutions. At present, the consensus is to promote information transparency, implement information sharing and avoid the effect of supply chain expansion. Many enterprises integrate supply chain information sharing method is to connect downstream sales information with plant internal ERP system and other information. At the same time, establish e-commerce platform or implement the extension of ERP/MES system to share enterprise internal information with upstream supply chain. This method solves many problems, but the information sharing of the whole industry chain/supply chain can not be realized because of the mode limitation. The emergence of cloud provides a new opportunity for enterprises to integrate the information of industry chain/supply chain. More and more enterprises are changing from ERP system as the core to decomposing the functions of ERP and establishing the persistence to connect the physical layer with the information layer. With the bank system as the core, some ERP functions are placed in the cloud (involving enterprise secrets, some ERP functions are still operating in the enterprise). The convenience of information sharing is greatly increased (of course, the problem of information security has become increasingly prominent, which is also the key problem to be solved in network information security).

4. Research and Development Platform and Modularization to Increase the Universal Ratio of Parts and Components

This part is the strategy of the whole company. As a logistics supply chain department, it can only provide reference in the actual operation, and generally has not too much decision-making power.

There is a mode that has been running for many years. Although there are different praises and criticisms, I think it is more desirable. That is remote MILK RUN or integrated loading. Here we are talking about remote MR (MR only straightens out the last few kilometers without requiring suppliers to set up factories or warehouses near the main plant). To solve the supply chain inventory problem, remote MR is more conducive to the realization of the whole process supervision of the supply chain, but this mode needs to have a considerable flow of logistics, which can not be implemented by ordinary enterprises.

In order to rationalize the supply chain inventory (which can be zero inventory), it is important to form a whole-process monitorable information transmission system combining sales, factories and suppliers. In the case of unstable sales and production plans, we can improve the predictability of the supply chain through historical experience and actual situation, monitor the whole process and ensure delivery (appropriate time). Proper materials, appropriate locations, appropriate ways) and inventory control, intermediate storage and surrounding plant construction can be used as auxiliary. But at present, there is a lack of overall process supervision, such as the lack or incompleteness of the supervision of the supplier's inventory and material transportation process, such as how many materials are in the supplier's office, how many materials are in transit, where are they located, and so on. We need to have a means or tools to share the information of everyone and form the competitiveness of the supply chain. In this area, I think OTMS company's full chain transport information collaboration platform is more reasonable, which is very helpful for the allocation of supply chain resources in the automotive industry.

The current competition has already entered the whole supply chain competition from a single enterprise competition, who can enhance their supply chain competitiveness, will occupy a dominant position in the future competition (of course, competition from the enterprise to the supply chain, because of the intertwined supply chains, in the competition more reflects cooperation). Transparent and fast transmission of information is one of the means to guarantee the competitiveness of supply chain, which requires our joint efforts.