7 Principles Of Supply Chain Management: Key Factors For Improved Productivity And Business Operations Essay.

Key Principles of SCM

Question:

Explain the purpose of the author or the article, ‘The 7 Principles of SCM’.

The article 7 Principles of Supply Chain is one of the most famous and recognized articles which explain the key supply chain management principles and help the managers to decide that in what particular manner the organisations must proceed. The article discusses the most significant seven principles of supply chain. The first most principle of SCM is to segment the customers on the basis of the services which are required by the various groups and there must be adaptation of supply chain for serving those segments in a profitable manner (Anderson, Britt and Favre, 2007). The second key principle of SCM is to customize the logistics network to the effectiveness of the various customer segments and the service requirements of those customer segments. The third principle is to listen to the various market trends and have an adequate demand planning in accordance with that across the supply chain by ensuring regular resource allocation and forecasts. The fourth principle is to have product differentiation must speed up the conversion across the supply chain. The fifth principle of SCM is to manage the sources of supply in a strategic manner to decrease the overall cost of the services and the materials (Anderson, Britt and Favre, 2007). The sixth principle of supply chain management is to advance a supply chain extensive technology based strategy which supports the various levels of decision making and can offer a more perfect view of the flow of information, services and the products. The last and the seventh principle is to adopt the performance measures which are channel crossing to measure the overall success to reach the end-user in an efficient and effective manner. The key objective of the article is to understand the principles of the supply chain management so that the managers can have a better and improved supply chain and the organisational can attain an improved level of productivity and successful business operations (Touboulic and Walker, 2015). The one of the most important and interesting aspects of the article is that it suggest the importance of aligning the investments of the company in respect with the customer relationship. It will help not only the companies but the managers to reap the maximum profits from the most lucrative sector through customization and prioritization (Wisner, Tan and Leong, 2014). The next interesting aspect of the articles in my opinion is that the organisations must have their emphasis in managing the sources of the supply in a strategic was so that the overall costs of the materials can be reduced (Crandall, Crandall and Chen, 2014). In my opinion it is significant because of the fact that it will help the companies achieving high profit margin as well as can sell the products at a more competitive rate and can fetch the attention of the customers. Thus, it is essential that the cost of supply must be managed and reduced to gain more competitive benefits and also involve the suppliers in gain-sharing arrangements so that they can also supply at low rates (Qrunfleh and Tarafdar, 2014).

Listening to Market Trends

From the overall reading and the analysis, it has been observed that the article is a conceptual work which means that it relates to some theoretical aspects and abstract ideas. It is usually used by the thinkers, researchers and the philosophers for reinterpreting the existing theories or concepts or developing new concepts. Opposite to the empirical method, the article does not destroy the already established concepts ad theories but rather extend the already exiting theories md offer some more concepts and knowledge to the existing ones. The other key reason behind describing the articles as a conceptual work is that it is based upon the conceptual framework and there is exploration of the already researched theories ad initially collected responses. It is the next or the aligned phase which highlight a more detailed insight of the concept (Stadtler,  2015).  

There is various other writer or researchers who have worked on the topic of supply chain and supply chain management. Some of the researchers have a similar view point whereas some of the theorists develop diverse theories and notions in explaining the significance of supply chain management. According to Janvier-James (2012) in the article “A New Introduction to Supply Chains and Supply Chain Management: Definitions and Theories Perspective” has described a different understanding of supply chain and supply chain management by highlighting a number of theories and definitions developed by various other researchers. In this article it is explained that the key aim of supply chain management is at managing and examining the supply chain networks. The basic concept behind this is to save huge cost and develop better and improved customer service. One more significant objective of the article is to enhance the competitiveness of the organisation in the international marketplace (Janvier-James, 2012). One of the other article “Reframing supply chain management: a service-dominant logic perspective” developed by Lusch (2011), has a diverse view point in respect with the supply chain management as according to the article the supply chain is seen as a new concept i.e. of a service dominant perspective where the key focus is on the service delivery. The article also has a sort of similarity in respect with the technological aspect as it is discussed that information technology is just like a nerve system for supply chain management which enable the corporation to have a more responded and improved sense towards each other. This is one of the similar aspects which both the authors have demonstrated that there is a vital role of information technology in the achievement of effective supply chain. Another article which can be seen as an extended view of the given article is “An Organizational Theoretic Review of Green Supply Chain Management Literature” framed by Sarkis, Zhu and Lai (2011). In this article, the key emphasis is led upon converting the supply chain into green supply chain and has an improved green supply chain management principle. The key objective of GSCM is to deliver the services and the products from the manufacturers and the suppliers to the end customers by the means of cash flow, information flow and material flow in respect with the environment. The article holds high level of significance as GSCM support the organisations in gaining a competitive benefit and attracting new customers. The author also explains that GSCM improved efficiency, reduces cost, decrease the risk and also improves the financial performance. Thus, it can be stated that different authors have a different view point and all the theories and concepts have their respective significance in the literature (Fahimnia, Sarkis and Davarzani, 2015).

Product Differentiation and Source Management

There are also some of the future recommendations which can help in developing a more helpful literature from the organisational perspective. It is recommended that the theorists must have high emphasis on green supply chain management. Due to continuously increasing industrialization and business activities, there are a lot of negative impacts posed on the environment and thus the supply chain must be eco-friendly. It is also recommended that there is a vital need to follow the principles of SCM for achieving better results, enhanced productivity and increased customer satisfaction (Touboulic and Walker, 2015).

From the article there are a number of learning which I have gained from the article such as one of the most important learning is that to succeed in any business, it is essential that there must be high emphasis led upon the customer needs and accordingly segmentation must be performed. It is learn that at the time of segmentation on the basis of service needs of the customers, there must be tailored and customized the various logistics networks for serving varied segments but in my opinion this principle does not stand true at all times as for instance, if a person is a contract manufacturer in China, then there may me some other logistics networks for varied customers. Every single customer in EU or US may have a control on the ray material source and ask to offer dedicated production lines and nominate third party lines organisations and sea carriers. Thus, the logistics network design is somewhat an initiative which is driven by the customer only (Roh, Hong and Min, 2014). Another learning gained from the article is that the companies must outsource the business operations and business activities in a strategic manner as the key factor behind this discussion is that the companies must strategically think and should not outsource the core competency as it might be risky for the growth and competency of the organisation. This is one of those learning which is very helpful in the future business transactions (Heckmann, Comes and Nickel, 2015).

There are various things of the article which I have liked as well as detest. Some of the things or the key points which I have liked include that the article has also highlighted the huge investment of time and capital in achieving an effective supply chain management (Anderson, Britt and Favre, 2007). The author also mentioned that the supply chain management is an extensive undertaking and there is a huge impact upon the financials of the company as well as on the income statement and the balance sheet. And all the efforts can’t result back or pay off overnight and it is necessary that there must be maintained appropriate balance in the management to fulfill the future needs of the business. And for this, it is essential that there must be performed advance planning. The plan should be in context with expected financial results, leadership and funding. The advance planning supports the companies in forestalling conflicts over the priorities and has a focused management to gain benefits. The one of thing detested is that in the article it is emphasized to have complete focus on the needs of the customers but it is realized those in present days, considering and focusing on the need of the customers is not enough (Monczka, et al., 2015). The key reason is that there are many a time when the customers even don’t know that what actually they require or need till the time there are competitors in the market who offer anything different. For instance, in the year 2011, there was a program launched by Amazon called Amazon Prime where the customers started getting a discoubted 1-day shipping and free 2-day shipping of the ordered things. But presently also individuals have a discussion over this to understand the basic sense of this program but there is one thing that there are more and more customers who turn to Amazon. The key lesson behind this is that the companies must anticipate the needs of the customers too. There are various other things which questions can be raised such as there has been emphasized to have a differentiation strategy but in my opinion there must also have focus on standardization as for example in the labeling and packaging of the products if there will be take use of a single SKU then it can help in cutting down the cost instead of taking use of different SKUs for differ nations and thus standardization can also consider as one of the strategy for effective supply chain management (Waters and Rinsler, 2014).

Conclusion

The paper concludes that the article, “7 Principles of Supply Chain Management” is a very helpful article in terms of gaining an adequate knowledge of the supply chain management. From the article review and the various insights and discussions, it can be concluded that there are various other authors who have a similar point of concern with some extended viewpoints. It can also be concluded that it is the peak time when there must be posed high level of emphasis on greens supply chain management and the principles of SCM must be used by considering the present market conditions

References

Anderson, D.L., Britt, F.F. and Favre, D.J., 2007. The 7 principles of supply chain management. Supply Chain Management Review, 11(3), pp.41-46.

Crandall, R.E., Crandall, W.R. and Chen, C.C., 2014. Principles of supply chain management. CRC Press.

Fahimnia, B., Sarkis, J. and Davarzani, H., 2015. Green supply chain management: A review and bibliometric analysis. International Journal of Production Economics, 162, pp.101-114.

Heckmann, I., Comes, T. and Nickel, S., 2015. A critical review on supply chain risk–Definition, measure and modeling. Omega, 52, pp.119-132.

Janvier-James, A.M., 2012. A new introduction to supply chains and supply chain management: Definitions and theories perspective. International Business Research, 5(1), p.194.

Lusch, R.F., 2011. Reframing supply chain management: a service?dominant logic perspective. Journal of Supply Chain Management, 47(1), pp.14-18.

Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.

Qrunfleh, S. and Tarafdar, M., 2014. Supply chain information systems strategy: Impacts on supply chain performance and firm performance. International Journal of Production Economics, 147, pp.340-350.

Roh, J., Hong, P. and Min, H., 2014. Implementation of a responsive supply chain strategy in global complexity: The case of manufacturing firms. International Journal of Production Economics, 147, pp.198-210.

Sarkis, J., Zhu, Q. and Lai, K.H., 2011. An organizational theoretic review of green supply chain management literature. International Journal of Production Economics, 130(1), pp.1-15.

Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Touboulic, A. and Walker, H., 2015. Theories in sustainable supply chain management: a structured literature review. International Journal of Physical Distribution & Logistics Management, 45(1/2), pp.16-42.

Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.

Wisner, J.D., Tan, K.C. and Leong, G.K., 2014. Principles of supply chain management: A balanced approach. Cengage Learning