Principles of Supply Chain Management -
building foundation for long term advantage

 

 

Successful Supply Chain Management is a complex proposition. Within a broad supply chain management there can be a number of small supply chains which need to be managed. Each chain is unique for the given player.

The stake for the different players is extremely high making it imperative for the partners - including suppliers, manufacturers, distributors and customers behave as if they are part of the same company. This way only they can enhance performance significantly across the chain.

Having as the main concern a win win situation for all the partners involved in the chain leads us to recognise and adhere to the following principles of Supply Chain Management :

Customer is the king : Your operations are meaningless if you don't meet their requirements. In a chain , your customer may be the supplier to some other customer. As such its requirement may be a certain quantity of material to be delivered in a particular time period. Thus begin with the customer.

Management of Logistics : It requires great planning and impeccable execution across the whole chain.
It involves determination of locations for distribution, management of inventory, transportation etc besides laying down clear performance measurement criteria for maintaining the standard of services.

Customer Management : This needs to be properly organized so that the customer gets the desired service. It may require aligning all the supply chains under your command so that their combined output meets the specific demand of the customer.

Process integration : It is the most vital part, the fulcrum on which success of the whole Supply chain exercise rests.

For its success it requires real time information sharing among the chain partners and planning together for aspects such as forecasts etc. across the chain.

Leveraging of Manufacturing and Sourcing : It is not possible for the firms , even in a  supply chain environment to manufacture in-house, everything that is required across the chain. Instead, outsourcing, lean manufacturing, Just in time (JIT) etc need to be followed.

All these need proper linking with each other to produce the desired effect.

Strategic alliances and relationship management : Every chain partner shall look from its own perspective in a supply chain leading to strategic alliances across the chain. Once formed these partnerships need to be developed through effective relationship management

 

 

Develop performance measures : Performance measure are basically development of standards of performance and method for their measurement across the chain so that suitable action can be initiated to see that the performance of the entire chain remains optimum.

To sum it up the principles of supply chain management revolves around customer and chain's efficiency in satisfying the customer.

 

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