Find the problem: transaction costs

Example: A Japanese company uses a fax machine to confirm orders

In China, people talk about the cost, in addition to the purchase price, think of production, warehousing, transportation and other expenses, transaction costs are often ignored. First, this kind of cost is invisible cost; second, the labor cost is low, does not stand out

Solution: e-commerce and business relations

（一）电子商务

1、通过信息系统来自动化以前需要手工完成的任务。

Order management: requisition, order generation, order placing, documentary, reminder, acceptance, payment

E-commerce processing: the Demander online application, the approver online approval, purchase requisition into ERP;

After the ERP is running, the order is automatically generated and transmitted to the e-commerce system;

Suppliers log in to the e-commerce system to confirm the delivery, quantity and unit price online;

Suppliers feedback to the ERP system online, if it matches the demand date, quantity, unit price, no human intervention is required, otherwise remind the buyer to deal with the exception;

Purchase requisitions, purchase orders, and transaction orders are automatically reconciled through the information system, and the supplier is automatically paid when the account period expires

2, the level of e-commerce applications is low, people do information systems do, in addition to the cost of labor costs, the greater loss is the opportunity cost

The purchasing team is too busy with complex order processing to manage the relationship with internal customers and suppliers

(1) It is manifested in demand management, after demand management, once implemented, it becomes an urgent need; Before the demand is generated, it is impossible to positively affect the demand, and the supplier information cannot be fed back into the design in time, and the opportunity to optimize the design is lost

(2) Manifested in supplier management, limited resources invested in strategic sourcing, supplier selection is not in place, affecting operational problems; The overall performance management of subsequent suppliers is not in place, resulting in more order-level problems

(2) business relations

1, business relationship is not smooth, short-term relationship-oriented, increased uncertainty, increased transaction costs

2. Research: Comparison of average profit margins of suppliers in the United States and Japan

U.S. customers and suppliers are short-term relationships

Japanese customers have a long-term relationship with Japanese suppliers

Conventional wisdom: short-term relationships, more competition, U. S. suppliers should be more reasonable prices, make less profit

Long-term relationship, less competition, the Japanese quote should be more unreasonable, make more profits

The study finds the opposite: U.S. suppliers offer higher average profit margins to their customers, and because of uncertainties, they need to offset the corresponding pink lines with higher profits; Japanese long-term partnerships dominate, less supplier uncertainty, small profits, quick turnover, lower prices

3. In the supply chain, the key partner is the marriage relationship, the more stable, the lower the cost

三、结论：

Low level of local enterprise information, short-term relationship-oriented, high business costs.