7 Vital principles of Supply Chain Management | Distance MBA in SCM | Supply Chain Managament Course - PowerPoint PPT Presentation

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7 Vital principles of Supply Chain Management | Distance MBA in SCM | Supply Chain Managament Course


Know the 7 important principles of supply chain management to manage the production cycle efficiently in such way that operations are optimized. – PowerPoint PPT presentation

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Title: 7 Vital principles of Supply Chain Management | Distance MBA in SCM | Supply Chain Managament Course

7 Vital principles of Supply Chain Management
  • 7 Vital principles of Supply Chain Management
  • Supply chain management refers to the process of
    efficaciously managing the operations, production
    and the flow of goods and services from their
    point of origin to their point of consumption.
  • It involves inventory management, procurement,
    ensuring effective distribution system,
    maintenance of resources, finance management, and
  • In several companies, there is a dire need for
    those candidates that can manage the production
    cycle efficiently in such a way that operations
    are optimized to maximize the speed as well as
  • To achieve this, there are 7 vital principles of
    supply chain management that needs to be followed.

  • 1.   To adjust the Supply Chain catering to the
    needs of the customers
  • The major goal of any supply chain manager
    should be to focus on the needs of the
    customers.  In order to understand the needs of
    the customers, different customers can be divided
    into different groups and this process is termed
    as segmentation.
  • The people can be divided on the basis of trade,
    sales volume, profitability, and supply channel.
    A supply chain manager should have the skills to
    even predict customers need.
  • 2. Customize the network of logistics
  • When the customers are divided into groups or
    segments on the basis of the service needs, the
    network of logistics should also be customized
  • The design of the entire network of logistics
    totally depends on the customers.

  • 3. Align demand planning with market trends
  • The supply chain practitioners are trained to
    share their demand data with the partners whom
    they are trading with so that no unnecessary
    stocking of products is found.
  • The demand forecast can be made by gathering
    data from different retailers and analyzing
    previous sale data. To ensure optimal resource
    allocation, the demand planning should align with
    the market signals.
  • 4. Differentiate products that are closer to the
  • Assembling goods and making them available at
    the places where their demand is more is
    germane.  It is also essential to offer variety
    to the customers. It can be brought by packaging
    the goods in attractive coverings or changing
    some features of the products. Standardization is
    also vital.
  • It helps to reduce the cost of the product as it
    is interrelated with the economy of scale. Hence,
    standardization should also be considered along
    with differentiating products.

  • 5. Outsourcing strategically
  • Outsourcing is a principle that saves time.
    However, outsourcing should be done properly to
    witness the desired results.
  • The best strategy of outsourcing is that always
    outsource those jobs for which you or your team
    members have less competency. Never outsource the
    job related to your niche.
  • 6. Develop a supply chain-wide technology
  • Automation is the need of the hour, and software
    like ERP can streamline the supply chain
    processes. Technology can be used in supply chain
    management to achieve optimal efficiency and
    ensure top-notch quality.
  • It is essential to understand the deficiencies
    in the processes in order to determine the right
    kind of technology needed for the organization.

  • 7.  Adopting Financial Metrics and Service
  • The collective success in reaching end-users
    should be measured with respect to some financial
    metrics.  Usually, ABC concept or aka
    activity-based costing is imposed to detect
    customers profitability. These measures can be
    used to drive appropriate improvements.
  • These 7 vital principles of supply chain
    management ensure that every process is managed
    effectively. A PGDBA in Supply Chain Management
    is equivalent to an MBA degree. The course is
    offered in online mode by one of Indias top
    distance education institute, MIT School of
    Distance Education.
  • The course accentuates all these vital
    principles so that the candidates can have a
    blooming career in the sector.
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