Based on the strategic perspective of the relationship between the cost of the supply chain

[Abstract] In recent years, relationship marketing research in the academic setting off a boom, the value of the relevant relationship, relationships, cost studies also gradually get attention. This paper attempts to study on a strategic level on the relationship between the cost of the supply chain sources and strategic improvements by reducing the supply chain assembly would maximize profits, and enhance the competitiveness of enterprises.

[Keywords:] relations costs; strategic perspective; supply chain costs; Value Chain Analysis

1 Introduction

In the international market, demand-led technology and information technology revolutionized situation, cross-organizational management, supply chain model emerged. This new organization when conducting costing, breaking the traditional organizational boundaries, restrictions, requirements beyond the spatial extent of individual enterprises, the formation of a system so that chain to a complete measurement. Stefan Seuring (1999) proposed that in the supply chain management considers only the cost of the enterprise is not enough, he will be the cost of the supply chain cost is divided into three levels: direct costs, operating costs and transaction costs. Which focuses on the internal direct costs and operating costs of research and calculation methods have been becoming more and more mature, and beyond the boundaries of the firm transaction costs mainly study the relationship between enterprises and behavior research in this area there is a great development space. Because the relationship between enterprises can indirectly affect the way the size of transaction costs, and achieved good relationship itself will increase their costs, so the cost of the contents of relations introduced by scholars of the three-level model Seuring. Currently, the study focuses on the relationship between the cost of customer relationship management, and other related fields of relationship value, and rarely from the perspective of strategic cost management system to conduct research on the relationship between the cost. This article will stand firm strategic cost management perspective and from the perspective of value chain analysis, cost analysis affect the relationship of the main factors, seeking to reduce the cost of corporate relations ways and means to ensure cooperation between the total transaction costs can be reduced and eventually Every business benefits, in order to achieve win-win situation and the goal of maximizing corporate profits. Do not blindly pursue a cost reduction, but stood the height of corporate strategy cost management, cost management strategy embodies the idea of ​​titles of papers.

2 Cost concept proposed relationship

Ravald and Gronross (1996) pointed out that the relationship between costs should include direct costs, indirect costs, and psychological costs. Direct costs are those relationships between customers and suppliers to establish the costs incurred; indirect costs due to products not normally be effective as a result of cost; psychological cost refers to the customer relationship can cause problems due to fear and can not focus on other work pressures caused . As mentioned earlier, the cost of the transaction costs between refined from, and transaction costs Transaction costs can be divided into broad and narrow transaction costs. For all transaction cost incurred costs, including maintenance relationship is called generalized transaction costs; rather narrow transaction costs refer only to two or more parties during the transaction costs incurred. Tongji University Professor Lei Xinghui be generalized transaction costs other than transaction costs, in addition to the cost of narrowly divided into relations costs. He pointed out that those are usually in order to obtain, maintain and develop business relationships and supply chain cost consuming called relational costs, the cost of this part of the supply chain as the transaction costs of quality assurance activities, it can create value and in turn influence as a supply Chain indirect activity transaction costs. Value analysis from the perspective of the trading activities not directly increase the value of the product or service, its value can be reflected in the indirect value value activities and quality assurance activities. Indirect value activity is defined as the direct value-added supply chain ready to run in every case where the transaction value activities; quality assurance activities is as transaction value increased business relationships change, and the relationship between good corporate in turn, can reduce the transaction costs of value activities. Quality assurance activities in the value of transaction costs is the relationship between costs. Seuring (1999) proposed three-level model of supply chain costs include direct costs, operating costs and transaction costs. Direct costs per unit of production is caused by the product, including raw materials costs, labor costs and machine costs, the prices of raw materials and labor costs are determined. Operating costs by those not directly associated with the product, but the production and delivery of related management activities caused due to the company's organizational structure and the resulting costs. Transaction costs, including supplier and customer information processing and communication for all costs incurred. Based Seuring proposed three-level model of supply chain costs and Professor Lei Xinghui subdivision on transaction costs, draw the supply chain cost structure framework (Figure 1).

3 Strategic Perspective relationship between supply chain cost analysis

Strategic cost management refers to the management staff will be placed in strategic management cost management broad space, using specialized methods to provide enterprise itself and its competitor analysis data, from a strategic perspective of the enterprise and its related parties cost behavior and cost structure analysis strategic management for decision-makers to provide information services management activities. Strategic Cost Management typically include value chain analysis, cost driver analysis and supply chain cost management and other content.

Seuring (1999) proposed including supply chain costs three level model and product - relationship matrix conceptual framework for supply chain costing in theoretical circles has been widely recognized. Products - relationship matrix used in Figure 2.

As can be seen from Figure 2, the impact of transaction costs and the biggest factor is the product and supply chain network structure in product design, product and network structure determines which products and services, and related partner selection and other basic decisions. The design of the supply chain of products and services through different products to select different supply chain to influence their transaction costs. However, the supply chain costs of product design focus is still operating costs, because most of the direct costs of these decisions are made the decision. Therefore, our main research products and network structure, the study of selected relevant partners.

Value chain analysis is the core of enterprise strategic cost management and hub. Therefore, this article from the perspective of value chain analysis, cost analysis of the main factors affecting the relationship. Value chain analysis including internal value chain analysis, outside the enterprise value chain analysis and industry value chain analysis. Outside the enterprise value chain analysis, which can be further divided into: supplier value chain analysis, value chain analysis of buyers and competitors' value chain analysis (Figure 3).

Because the relationship between costs arising primarily from the business rather than the enterprise, doing value chain analysis focused outside the enterprise value chain analysis and industry value chain.

3.1 outside the enterprise value chain analysis

Refers to outside the enterprise value chain analysis, looking outside the enterprise and eliminate non-value-added jobs, improve value-added operations activities.

(A) vendor value chain analysis. The lower the ability of suppliers, companies need more frequent with suppliers signed a strict contract between the higher the cost. Enterprises should assess the value chain and its suppliers and enterprise value chain linkages between rationality and to take corrective action strategy: ① select the best supplier as a partner. Assess each supplier wishes to become team members, and those willing to reduce costs and create greater value for suppliers to establish relationships with those who have no intention of gradually established supplier relationships with suppliers to share the cost savings as an incentive, while striving to beyond direct suppliers and their suppliers are also included. ② value chain system through backward integration of suppliers to implement mergers, reduce business with suppliers direct relationship between cost, in order to enhance cost competitiveness. ③ The most economical contact information, in order to achieve supplier value chain and the value chain reasonable docking, thereby reducing corporate relationships with suppliers cost. ④ exploit economies of scale, the use of centralized purchasing and distribution center. Such as a specialized international company can supply, trading companies, will global sourcing needs of each company summary, the use of market volatility, using the form of futures or spot purchases. This is to make the company a dominant position in the bargain, they can take advantage of lower market relations costs. Incoming materials through the supply chain management to shorten lead times, reduce procurement costs and operating expenses to reduce the relationship between costs and enable suppliers are also involved in product design, material receipt and payment procedures in the past, in order to achieve cost minimization.

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(2) buyers value chain analysis. In order to form a stable sales channels of strategic partnership, businesses cope with buyers value chain analysis, so as to enhance corporate value chain and value chain linkages between buyers rationality. Specific improvements can adopt the following strategy: ① contact using the most economical way to achieve the buyers of the value chain and enterprise value chain reasonable docking, thereby reducing the enterprise and the psychological relationship between buyers cost. ② help buyers improve the value chain in order to save its operating costs, thereby reducing the final consumer through the purchase cost of the entire value chain to reduce the total cost. For example, to help manufacturers build products supermarket booth, the use of the supermarket channel promotional products, marketing products in order to reduce the company's promotional costs; or enterprise to help users to adjust the process, the rational use of the company's products, customers can either remain stable, increase customer conversion costs, but also allows businesses to be kept informed of the views of customers and future needs, reduce service costs and the costs of market research. You can also set up a supply chain management team, analyzing order data, found that the seasonal and cyclical trends, product mix and order data through electronic communication with customers orders and inventory system to keep abreast of the situation and increase the reliability of data, thereby enhancing product value and reduce costs. ③ forward through the value chain integration, on the implementation of mergers and buyers, and buyers reduce the direct relationship between cost, in order to enhance cost competitiveness. ④ consider replacing buyers to seek the lowest distribution costs.

(3) competitors' value chain analysis. Competitor's value chain by analyzing and comparing competitors how to build enterprise value chain marketing channels, to carry out cost benchmarking study, the cost of taking the relationship to eliminate weaknesses, create strategic action between the cost advantage. Competitors through value chain analysis, we can understand the competitive cost structure, etc., evaluate competitors rational and scientific value chain, thus based on the actual situation of their enterprises learn from competitors' strengths cost strategy.

3.2 Analysis of the industry value chain

Industry value chain analysis refers to the enterprise's industry value chain analysis, to find and eliminate non-value-added jobs in the industry, improve value-added operations activities. On key suppliers, buyers and competitors of value chain analysis, based on industry value chain system efficiency to create synergy competitive advantage through strategic alliances, brand alliances, technology alliances and other strategic means to deepen and industry value chain upstream and downstream enterprises relations, reducing the value chain upstream and downstream enterprises relations costs, thereby increasing the profitability of their products or services, and competitive advantage.

4 Relationship cost studies in the application of Baosteel

Before the introduction of the concept of cost relationship before, Baosteel've got this idea. The supplier of choice, Baosteel strategically selected partners, to establish long-term stable supply relationships, and fully mobilize the enthusiasm of suppliers to encourage them to continuously improve product quality and use features for truly achieve 'win-win', Baosteel and strategic partners a cost improvement proposals put forward to promote cross-enterprise cost optimization measures such as the implementation of functional refractory Baosteel pricing, more than two sides approved life products accounted for 25%, greatly reducing the cost of Baosteel, but also to suppliers brought benefits, so that supply and demand sides to achieve a real sense of the win. Meanwhile, the long-term trust and cooperation instead of short-term contracts, to avoid the risk of the enterprise, reducing the cost of corporate relations.

In the value chain buyers, Baosteel also integrated supply chain downstream resources. June 2003, Baosteel and FAW Group signed a cooperation agreement in general, the two sides agreed on the supply of steel, steel use, technology development, steel processing, logistics management and other aspects for further all-round cooperation; Meanwhile, Baosteel also to the high-end automotive supply chain Parts extend the area, these initiatives will greatly reduce the cost of Baosteel trading relations, so as to enhance overall competitiveness.

5 Conclusions

(1) In an increasingly competitive today, cost competitiveness has become the core competitiveness of enterprises, but only based on the enterprise internal value chain cost reduction is not enough, companies should take a strategic height, not the blind pursuit of particular costs reduced, while the enterprise value chain analysis of the external costs and maximize the value chain the lowest total cost, to maximize profits.

(2) In this paper products - relationship matrix analysis, we found products and network structure greatest impact on the relationship between the cost of the further use of value chain analysis tools were analyzed enterprise with suppliers, buyers, competitors, and the relationship between the cost of the industry, and proposed to reduce the cost associated relations strategy.

(3) Finally, through the supply chain, value chain integration in a more prominent Baosteel Group on real case analysis to further clarify the relationship between the cost can be reduced to propose initiatives.

(4) The author believes that the future business relationships in the specific cost of the study, but also from the point of view of cost drivers structural factors that affect the cost relationships and execution factors, further ways of reducing relations costs.

Main references

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