preview

7 Principle of Supply Chain Management

Better Essays

7 Principles of Supply Chain Management

1. Introduction

Before we are to analysis this article, first let us clarify something before we start .In this article, it states the 7 principles of supply chain management and its importance in practical ,many of us must have a question, what is a supply chain management and why is it important for a company today ?

Supply chain management (SCM) is the process that is used by a company to ensure that its supply chain is efficient and cost effective. They are aiming at provide the highest degree of customer satisfaction at the lowest possible cost through management of material and information flow in the supply chain .It requires the commitment of supply chain partners to work closely to …show more content…

So what is variability? Variability is basically the difference between what we expect from something and what actually happens. It is the statistical distribution of outcomes one can expect from a process. Another is to simultaneously provide high levels of responsiveness and efficiency. In order to maximize sales and profits, companies may choose to use different methods to serve customers .Some products within a portfolio could be served through an efficient supply chain while others are served through a responsive supply chain. For example, a chip company manufacturing two different types of chips which are normal one and high-tech chips .company may deliver their normal chips through efficiency supply chain and deliver their high-tech chips through highly responsive supply chain. This is what we can understand as segment products through its features .One segment is for normal products which are predictable and another for high-tech products which is unpredictable .Company can through monitor the different segments to set different forecasting and stocking policies.

In the 1990s Dell revolutionized both the computer industry and supply chain management with its direct-to-consumer business model. For the past several years, however, the company

Get Access