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7 PRINCIPLES OF SUPPLY CHAIN

MANAGEMENT

Rolls No:21, 22, 23 and 25

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Index What is Supply Chain Management

Supply Chain Activities

7 Principle of SCM

Detailed study Differentiate product closer to the customer.

Source strategically.

Develop a supply chain wide technology strategy.

Adopt channel-spanning performance measures.

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What is Supply Chain Management ?

Supply chain management refer to the art of

managing the flow of materials and products from

source to user.

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Supply Chain Activities Sourcing and Purchasing

Conversion (manufacturing) Capacity planning, technology solution, operations

management, production scheduling, and materialsplanning (MRP II)

Distribution planning and management industrywarehouse operation

Inventory management and inbound and outboundtransportation

Linkage with the customer service, sales, promotion,and marketing activities.

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7 Principle of SCM

1. Segment customers based on service needs.

2. Customize the logistics network.

3. Listen to signals of market demand and planaccordingly.

4. Differentiate product closer to the customer.

5. Source strategically.

6. Develop a supply chainwide technology strategy.7. Adopt channel-spanning performance measures.

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4: Differentiate product closer to the customer and speed conversion

across the supply chain.

Delaying product differentiation to the last possible moment

Packaging the products at the distribution center, within the customer

order cycle .

Strengthening their ability to react to market signals by compressing the

lead time. Speeding the conversion from raw materials to finished products tailored

to customer requirements

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5: Manage sources of supply strategically to reduce the total cost of

owning materials and services.

manufacturers and suppliers must share the goal of reducing costs across

the supply chain in order to lower prices in the marketplace and enhance

margins

sound knowledge of all their commodity costs, not only for direct

materials but also for maintenance, repair, and operating supplies, plus the

dollars spent on utilities, travel, temps, and virtually everything else.

tackling the volatility of base commodity prices by indexing them

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Indexed Pricing

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6: Develop a supply chain-wide technology strategy that support multiple level of

decision making and gives a clear view of the products, services and information

Use of Enterprise-wide systems

IT systems which incorporates short term, mid term and long term Supply

chain Activities

manufacturers are now implementing "real-time" information technology

to gain store-specific performance data.

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7: Adopt channel-spanning performance measures to gauge collective success in

reaching the end user effectively and efficiently

Supply chain managers take a broader view, adopting measures that apply

to every link in the supply chain and include both service and financial

metrics.

Determine their true profitability of service by identifying the actual costsand revenues of the activities required to serve an account.

Performance measurement through common report cards.

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Thank You