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

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7 Vital principles of Supply Chain Management
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• 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
  marketing.
• 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
  accuracy. 
• To achieve this, there are 7 vital principles of
  supply chain management that needs to be followed.

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• 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
  accordingly.
• The design of the entire network of logistics
  totally depends on the customers.

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• 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
  customers
• 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.

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• 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
  strategy
• 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.

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• 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.