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SUPPLY CHAIN
MANAGEMENTSUCCES FACTORS
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SEVEN PRINCIPLE OF SUPPLY CHAIN
MANAGEMENT Segment customers by service needs, regardless
ofindustry and tailor service to those particular segment.
Customize the logistic network and focus intensively on
the service requirements on the profitability of
thepreidentified customer segments.
Listen to signals of market demand and plan accordingly.Planning
must span the entire chain to detect signals ofchanging demand.
Differentiate products closer to the customer, sincecompanies
can no longer afford to hold of owning
materials and services.
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Strategically manage sources of supply, by working withthe key
suppliers to reduce overall costs of owningmaterials and
services.
Develop a supply chain information technology strategythat
support different level of decision making andprovides a clear view
(visibility) of the flow of products,services and information.
Adopt performance evaluation measures that apply toevery link in
the supply chain and measure trueprofitability at every stage.
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SCM INDUSTRY BEST PRACTICES
i. Make the sale to suppliers
Control over external sources .
Be sure suppliers are on board with the benefits that theSCM to
reduce operating cost.
ii. Wean employees off traditional business practices.
When organization cannot convince people to use SCMsoftware,
employees maybe find a way continueperforming their job without
using the software.
iii. Ensure the SCM system supports the organizationalgoals.
Select SCM software that supports organizational goalsand
strategies.
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iv. Deploy in incremental phases and measure and
communicate success.
Designing the deployment of the SCM system in
incremental phases is the most success deployment
method.
v. Be future oriented.
Must scale to meet future demands.
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EXAMPLE
Dell computers offer one of the best examples of theextremely
successful SCM system. Dell highly efficient built-
to-order business model enabled it to deliver customized
computer system quickly.
Dell matches supply and demand because its customers
order computer configurations over the phone or online
(Internet). These computer configurations are built up from
components that are available. Dells strategy is to provide
customised, low cost, and quality computers that are
delivered on time. Dell successfully implemented this
strategy through its efficient manufacturing operations,
better supply chain management and direct sales model.
