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…

Through this transformation, Dell has saved US $1.5 billion in operational costs1 and has moved to the number two spot on Gartner's "Top 25 Supply Chains" list.
Dell is one of a number of enterprises that are benefiting from supply chain segmentation, a process by which companies can create profitable one-to-one relationships between their customers and their supply chains. Under this model, different customers associated with different channels and different products are served through different supply chain processes, policies, and operational modes. The goal is to find the best supply chain processes and policies to serve each customer and each product at a given point in time while also maximizing both customer service and company profitability.

Principle 2: Customize the logistics network to the service requirements and profitability of customer segments.

Logistics networks configuration is such kind of problems concerning with the number and site of warehouses and manufacturing plants, allocation of customer demand, distribution of warehouses to production plants along the whole process of material flow .Ideally, the best configuration must be able to deliver the goods to the customers within the shortest period of time meanwhile at the lowest cost.
The objective of design or reconfiguration of the logistics network is to minimize annual system wide cost subject to a variety of service level requirements.

In today’s