Supply Chain Management - 2 X 6 tips: magic of networked thinking


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Text comes from: Supply Chain Management: Wie Sie mit vernetztem Denken im 21. Jahrhundert überleben (2015) by Erwin Langemann, published by FAZ Verlag, Reprints by friendly permission of the publisher.
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There are sorcerers, but there are no sorceries in the world of business. All the sorceries, whether from sellers, buyers, or consultants, who seem to us to be magical, have their faults.

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Erwin Langmann langmann_erwinErwin Langmann is a consultant for risk management with a focus on transport, logistics and supply chain management.

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Fascination Supply Chain Management

The world ofSCM is fascinating and magical in itself, because you can create a win-win situation through intelligent and clear analytical coordination of the possibilities of the individual supply chain participants.

Not one gain is another's loss. The magic of the SCM lies in what is truly common. Only through advantages for everyone does the common make one Sense.

6 Typical Sales Tools

By way of example, some typical tools of sales according to SCM ideas are mentioned, which actually create a common with the customer and thus new markets:

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  1. Introduction of new products, which may also be taken over in commission (consignment). Thus, the sales risk does not just remain with the restaurateur.
  2. Distributing competing products of the competitors and substituting them with own products, so that a genuine additional sale of the supporting manufacturer is created.
  3. Promotional material, which also increases the awareness of the beverage and the beverage manufacturer.
  4. Provision of equipment and technical equipment so that additional sales can be made, involving a few deductibles to be paid by the host, such as maintenance and cleaning of the equipment, greatly reduced rents for the equipment or the like.
  5. Redemption guarantees and agreements of beverages that can not be sold, because summer festivals are very strongly dependent on the weather. In the case of redemption guarantees, however, deductibles are intended to encourage the host to proactively sell.
  6. Generally assumption of risk by the manufacturer in cases where the risk for the usually weaker capitalist host would mean much higher marginal costs than for the manufacturer. In addition, manufacturers can better pool and pool the risks.

One man's meat is another man's suffering!

In our consultation, we have often illuminated the zero-sum game between supplier and restaurateur. Why is this a zero-sum game?

Because we do not have a win-win game, but instead face a classic zero-sum game equation: one win is the other's loss. The gain of the innkeeper is the loss of the manufacturer.

  • What could the seller have done better?
  • Why is this calculation not shown?
  • Why were the seller's considerations typical of an old world?
  • Why is the seller tapped into these thinking cases?

Old-fashioned sales strategies

The answer to all of these questions is: It is THE WORLD without a fundamental economic background.

It is THE WORLD without an understanding of SCM. It's old world thinking. What does THE WORLD look like in SCM?

Networked thinking in sales

The seller should have supported the host in such a way that additional sales would have been made. In other words, additional sales would have been undertaken by the catering industry, which would have added advantages for both.

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For example, it might have made sense to add a beverage tray to the additional quantity of the summer festival, namely the so-called "sell-through".

Sale instead of sale

An additional sell-through means that in fact much more is sold at the summer party than in previous years. The additional effort is not measured at the sales, because this often only leads to so-called preferential purchases of the customer.

In the world of SCM, clear advantages are being sought for all parties involved in the supply chain. Price reductions by the host could lead to more sales, and the proportion of the costs can be shared by all parties, provided the costs and risks are correctly distributed.

What we can learn

Entrepreneurs, managers and employees make every effort to reduce costs in the company. In the search for potential, there are hardly any limits to the wealth of ideas. How can supply chain management help?

In some cases, complex methods and tools from logistics management are used to generate even the last cent. But what do we learn from the practical case for Supply Chain Management? And how can we describe this success in 6 steps?

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6 steps to success

  1. Not everything planned and organized jointly by the manufacturer and the catering trade has anything to do with supply chain management.
  2. All joint activities must result in a win-win game. It must never be a zero-sum game; then you could give away the money right away.
  3. So, when something is done and planned together, it is clear that the supply chain needs to add value in the sense of the SCM concept, in terms of higher profits, better performance, lower costs, faster processes, better customer service, greater opportunities for action.
  4. The end customer must benefit from the joint activities. Cost advantages must at least partially be passed on to the end customer. Improvements in performance (such as greater product diversity, higher delivery capacity, deeper and wider range, innovative products) by the manufacturer must “reach” the final customer.
  5. You always have to evaluate what you see and what you do not see. In many cases, it is lost sales, lost profit margins, lost profits and often lost opportunities and opportunities.
  6. Together can only mean that all parties in the supply chain win. The common sense of old thinking has nothing to do with the common sense of the new thinking and acting of the SCM.

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