Research On Logistics Cost Control Of Chongqing Iron&steel Company Based On Supply Chain Management

In order to meet the Chongqing Municipal Government's call,Chongqing Iron and Steel(Group)Co.,Ltd(hereinafter referred to as “CISC”)launched the projects of energy saving,emission reduction,environmental protection,relocation and reconstruction in2007,and built a new plant in Changshou District,Chongqing,in September,2011.Iron and steel enterprise belongs to large-scale investment industry,usually accompanying huge logistics and capital flow.In recent years,due to the rising price of raw material,surplus production,and bad market demands,iron and steel enterprise enters a small profit and deficit age.To produce 1 ton of steel,it will cost 8 tons of logistics,including raw material purchasing process,interior productive process,and products distribution process.For example,it needs to transport ore,coal,alloy,and scrap in raw material purchasing process;to transport coke,sinter,molten iron,and billet in productive process;to transport steel products,byproduct,and castoff in distribution process.Nowadays,logistics cost occupies15%-30% of the whole steel productive cost in our country's steel industry,which is a very high percent,compared with the developed countries' logistics cost,which only occupies8%-10% of the whole cost.The high logistics cost makes the enterprise high cost,low competitiveness and low profit.Therefore,to introduce a supply chain management,improve efficiency systematically,reduce storage,reduce logistics cost,becomes an arduous mission for any steel enterprise in this low-profit age.With the development of steel marketization,steel consumption has entered buyers' market age.Iron and steel enterprise,as the middle part of manufacturing industry chain,plays a connecting link between the preceding and the following.The terminal customers are no longer settling for simply transportation,and bring forward rigor requirement on logistics,machining,delivery,and design even more.By studying logistics supply chain theory,this paper analyses the status quo of CISC logistics,finds its problem and difficulty,and concludes what causes the high logistics cost.Finally,using supply chain management theory,this paper puts forward effective countermeasure and method for the improving of CISC logistics.In order to fulfill the logistics supply chain theory in CISC,we need to card each productive process,find its logistics part,and integrate the former dispersive logistics to be a systematic process.And then,we will improve those inefficient,tortuous,and high cost logistics links.Steel logistics has wide range and multiple links.This paper will choose raw material purchasing process,productive process,and products distribution process of CISC logistics,which have respective characteristics,but are indispensable parts of steel logistics.By carding and analyzing CISC logistics,this paper puts forward corresponding countermeasure.By doing this,CISC improves viability itself,in order to meet various challenges,under the austere steel marketing circumstance.As an old brand of Chongqing,CISC should transform positively,enhance management,improve viability,and set a good example for Chongqing industry and all over the Country.