Study On Optimum Supply Chain Cost Base On Retail Company

As economic globalization of the sustainable development of the increasingly fierce market competition, meanwhile finance crisis and recession start from the end of 2008 causing the purchase power is going down, and the retail industry has entered a meager profit era, so the supply chain cost is facing severe challenges. Many enterprises have to control and reduce supplier costs in order to continuously enhance the competitiveness of their products. However, the implement of controlling the total supply chain cost, due to the lack of overall supply chain concept, excessive pursuit of the lower purchase price, leading to the rise in other costs in return, is the bottleneck for reaching a corresponding result. So it is important for the retail to construct a reasonable supply chain cost management model under such a new operating situation.We hereby discuss the currently the supply chain cost management theory from both international and domestics. We identify the key factors which have directly influence on the whole supply chain cost of retail company IK via value chain method and Activity-Based Costing method. We have study on current IK supply chain setup and find out the root causes which lead the high inventory cost. Base on these root causes we planed the specific activities include safety stock structure, at same time, we identify the sensitivity of five main factors which construct the safety stock. We built the safety stock simulation tool to simulate the influence from each factors. We also come up with the solution which could solve the overstock, which is caused by low accuracy of forecast, of news, out going and running articles. We apply Unary Linear regression model, dummy variables in forecasting model, nonlinear regression analysis model, time series forecasting method, and combination forecasting to the optimum forecasting accuracy.Beside optimum of storage cost, we work out the solution to solve the high transportation cost which is caused by long distance from purchase site to selling point. The solution includes application of direct supply, combined supply, at same time, we implement supply cluster, co-loading, milk run mode to improve the transport cost and reach the satisfied result. I have been working in the supply chain of retail industrial for years. So the result of the improvement of storage cost and transport cost were proved by the total supply chain cost in the new coming year performance review. And it benefit IK to get the strengthen position in the competition of retail industry.