How To Manage Franchising Supply Chain

　　 Supply chain It refers to the network composed of suppliers and customers, and all business operations are located in this network. The contents of supply chain management include the rational management of supply chain, real-time management of suppliers, information support, manufacturing, inventory control, procurement logistics, user needs and performance evaluation. In the specific environment of franchising system, the implementation of supply chain management will also face the same task.

Franchising has a notable feature that more than 90% of the goods are supplied by the headquarters, so that the franchisee can play the advantage of bulk purchase, and the franchisee can get lower price than the purchase itself. At the same time, the franchisee can control the quality of the franchisee's supply, not only because the quality problem of a franchisee affects the reputation of the whole franchise system, but also can effectively control the franchisee's daily business activities, so as to ensure that the franchisee's royalty is extracted. This is a pattern that is mutually beneficial to both sides. Therefore, how to manage the supply chain in the franchise system becomes a very important content in the management of the franchise system. Because the specific content of the supply chain of franchising system serving different industries is different, the content of supply chain management is also different. Here we mainly discuss the following aspects of franchising supply chain management:

　　 Supply chain user demand Administration

There are two ways of operation of the general supply chain: one is the "push" operation. It takes the manufacturer as the core, usually the manufacturer forecasts the customer's demand with the order received from the retailer, and the product is gradually pushed from the distributor to the user. It is characterized by high inventory in the entire supply chain, unable to respond to changes in customer demand in a timely manner, low service level, but playing the role of economies of scale. The other is the "pull" operation. It uses the end-user demand as the driving force to exchange data quickly and respond to specific orders. Compared with the push mode, its system inventory has been greatly reduced and its operating cost has decreased. WAL-MART, a large retailer, uses the "pull" mode of supply chain operation. In recent years, the push pull hybrid supply chain mode has also appeared. In his early stage, he adopted the push strategy based on the long-term forecast, and other stages adopted the pull strategy based on the actual customer demand.

In order to better manage user needs, franchisees should determine the principles, methods and procedures of user demand information collection, analysis, decomposition and transmission according to the characteristics of their industry and their status. In addition, franchisees should also establish a sound information management system to ensure timely, accurate and smooth flow of user demand information in the supply chain. China's franchising system is mainly based on retail, catering and service industries. It is very important to pay attention to the service level and respond quickly to users' needs. Therefore, most of the supply chain management adopts the "pull" mode of operation. Concessionary enterprises attach great importance to customer relationship, but the service level is still not high. There is a certain gap between the hardware (advanced information management system) and software (the overall quality and management level of personnel) and international standards.

　　 Suppliers in supply chain management Administration

The strategic partnership between franchiser and supplier refers to the agreement relationship that they share information, share risks and make joint profits under certain conditions. This relationship should focus on the following aspects: let the supplier understand the franchisee's production procedures and production capacity, so that the supplier can clearly know the time, quality and quantity of the products or raw materials required by the franchisor in the franchise system, and provide the supplier with his own business plan, business strategy and corresponding measures to make the supplier clear the responsibilities of both sides so as to achieve a win-win goal. It can be seen that the strategic partnership between franchiser and supplier emphasizes the cooperation and trust between the two sides.

Supplier relationship management in China's franchising system is not satisfactory, mainly due to the relatively small number of supply chain management departments. The standard of choosing suppliers is still mainly based on price, and it is difficult to tend to comprehensive evaluation. Moreover, the level of IT application needs to be strengthened. In short, the seamless cooperation between franchisees and suppliers will take a period of time in China's current situation.

　　 Logistics distribution management in supply chain

When franchisees manage the logistics distribution of franchising system, they can make use of four types of distribution: supplier direct distribution, franchising system own distribution center, social distribution center and common distribution center. These four types of distribution centers have advantages and disadvantages for the logistics distribution of the franchise system. Because the supplier's direct distribution is limited, its usage is rare. The advantage of the distribution center of the franchise system lies in the fact that the information transfer links of users are few, and it is not easy to distort. The franchiser can manage them directly, without the cost and efficiency reduction caused by principal agent. The disadvantage is that the investment is too large to meet the needs of the development of the franchise system. Franchisees may lack competitive advantage in logistics and distribution, resulting in a waste of cost and efficiency. The advantage of the distribution center of social division of labor is the high efficiency and cost savings brought by expert services, and the distribution center can be increased at any time according to the needs of franchise development. The disadvantage is that the links of user demand transfer increase, which is likely to lead to distortion of information; principal agent is difficult to control cost and efficiency. A common distribution center is a collaborative distribution mode that facilitates mutual operation between franchising enterprises and distribution enterprises, which is conducive to the rational mutual use of enterprises' limited resources, reducing distribution costs and improving service levels. Joint distribution is often a long-term cooperation between enterprises, which is constrained by contracts and shared risks.

When deciding which type of distribution center is used, the franchisor must take into account various factors, including the size of the franchisor, the management capability, the competitive advantage of the logistics distribution, the difficulty and cost of finding the appropriate logistics distribution service providers, the difficulty and cost of transferring information to the service providers, and the demand for the development of the franchise system. If the franchisor decides to use the social distribution center, because the distribution center is actually a logistics distribution service provider, all franchisees' management of the social distribution center is actually part of the supplier management. Secondly, because the franchisee can take different delivery strategies for different goods, he may use two, three or four types of distribution centers at the same time. Third, as the logistics and distribution includes many aspects, such as procurement, selection, storage, sorting, dismantling, repackaging, monitoring and labeling, and matching commodities, the franchiser can also decide to use different types of distribution centers to provide professional services for different links.

According to the survey, the proportion of logistics outsourcing in our country's franchise system is increasing, that is, the social distribution mode is increasing. This shows that the role of the third party logistics in the supply chain is becoming more and more important. However, most small franchising enterprises and logistics service providers are mostly short term cooperation, and the real partnership has not yet formed.

　　 Information management in franchising supply chain management

The information management in the supply chain management of franchising is mainly the management of information needed to decide the quantity of goods purchased. Commodity purchase is generally divided into first batch purchase and daily purchase. The first batch of procurement refers to the first batch of purchases of newly listed products, and the daily purchase refers to other procurement activities besides the first purchase. It is very important for the first batch purchase of the best seller to determine the right quantity of purchase, and the prudent purchasing principle should be applied. There is usually a lot of information to support the determination of the daily purchase volume. The franchisor headquarters can determine the amount of daily purchases according to the user information feedback from the various franchised stores and the number of orders from various franchised stores. Many franchising systems use effective order management systems. For example, 7-11 of the most successful is the $200 million information system, which can monitor inventory and track customer preferences. Through satellites, the company sends commands to various distribution centers and manufacturers. Sales of specific commodities can be calculated on any day of the day and any day of the week. As a result, 7-11 convenience stores can supply 3 stores a day, and an order can be completed within 8 hours. This makes the store's stock very little and keeps the product fresh.

The characteristic management system usually chooses the central procurement system for more than 90% of the commodities. The franchised stores transmit the sales information and inventory sales information and inventory information to the headquarters timely, accurately and categorisally. The headquarters carries out a continuous analysis of the purchase, sale, withdrawal and adjustment of the commodities, so that the variety, structure and quantity of the purchased goods meet the needs of each branch's purchase and sale. It can be seen that although the central procurement system has brought about centralized bargaining and reduced the procurement cost of goods, it has also put forward higher requirements for internal business cooperation, information transmission and commodity distribution.