It's kind of like baseball. Shortly after your alarm clock goes off and the coffee maker kicks on, the aroma of your favorite coffee fills the air. On the basis of sales volume or … Adapt Supply Chain to Customer’s Needs. Supply chain activities aren't the responsibility of one person or one company. The team also needs a manager to develop a game plan, put people in the right positions, and monitor success. A seller’s ultimate goal is to make the customer happy by doing the job right, which gives them a good reason to use the seller’s services again in the future. var a = "CSCM-WEB-HalfSkyscraper", These pages will help you understand and provide valuable resources to begin your career in supply chain management (SCM). })(); Since 1963, the Council of Supply Chain Management Professionals (CSCMP) has been providing networking, career development, and educational opportunities to the logistics and supply chain management community. © 2020 Council of Supply Chain Management Professionals (CSCMP). To accomplish a perfect order fulfillment, the seller has to have your preferred product available for order, process your order correctly, ship the entire order via the means that you request, provide you with an advanced shipping notification and tracking number, deliver the complete order on time and without damage, and bill you correctly. A hit-and-run play will only be successful if the base runner gets the signal and takes off running, while the batter makes solid contact with the ball. Both are needed by supply chain managers to make good decisions regarding what to buy, make, and move. Any time customers buy your stuff, they’re solving a problem or filling a need. These ideas and practices were distilled down to seven principles and presented in an article in Supply Chain Management Review, a magazine widely read by SCM professionals. Awards/Recognition. They think about the supply chain as a whole—all the links involved in managing the flow of products, services, and information from their suppliers' suppliers to their customers' customers (that is, channel customers, such as distributors and retailers). s = window.location.protocol, And that means doing it right the first time – no mulligans, no mistakes are allowed. Supply chain management starts with understanding who your customers are and why they’re buying your product or service. Doing it right the first time makes the customer happy, saves the cost of fixing errors, and doesn't require extra use of assets. (function(){ if (s == "https:"){sl="_ssl"} The businesses and supply chain professionals understand customer’s needs. Though they are more than a decade old, these timeless principles highlight the need for supply chain leaders to focus on the customer. Embracing big data is an essential principle of modern SCM, specifically real-time data which has the potential to improve the efficiency of a supply chain and negate potential risks to strategy. A two-way flow of information and data between the supply chain participants creates visibility of demand and fast detection of problems. You must attempt to deliver a “perfect order” to every customer every time. Thus, every part of the organization has a vested interest in pursuing perfection. k = "Sub%20Page%20Only", In the quest to provide quality service and satisfy customers, world-class companies along the supply chain are guided by the Seven Rights of Fulfillment. Press Releases and timely manner. We know that logistics optimization through technological innovations and data integration can make supply chains more efficient and more financially sound. The ability to meet customer requirements, for everything from coffee beans to Crocs, is built upon the expectation that everything is done correctly in the supply chain. They pursue tangible outcomes—focused on revenue growth, asset utilization, and cost.”. Supply chain management minimize the waste, cost and time consumed in the production process. If you think about it, every order needs to be executed according to these seven goals. sl = ""; Multiple people need to be actively involved in a number of different processes to make it work. Obviously, you need effective flows of products from the point of origin to the point of consumption. Many have discovered that they can keep the rope from snapping and, in fact, achieve profitable growth by treating supply chain management as a strategic variable.” While all the participants are called baseball players, they don't do whatever they want. Consider the diagram of the fresh food supply chain. Customers are divided into different groups called ‘segments’ in order to understand them better. This opens the door of opportunity to you to  to a wide variety of SCM career options for you! Winning the SCM “game” requires supply chain professionals to play similar roles. Other flows are also important. Social Media Of course, these players need to work well together. “Managers increasingly find themselves assigned the role of the rope in a very real tug of war—pulled one way by customers’ mounting demands and the opposite way by the company’s need for growth and profitability. SCM involves a series of key activities and processes that must be completed in an efficient (fuel-conserving, cost-reducing, etc.) – and must perform well at their assigned duties – fielding, throwing, and/or hitting – for the team to be successful. Each person has a role – pitcher, catcher, shortstop, etc. Without a strong supply chain in place, your caffeine-fix options would be severely limited. Here's an excerpt from the article: By doing so, the SCM team can flawlessly execute the following processes: More than ten years ago, a research study of 100+ manufacturers, distributors, and retailers uncovered some widely used supply chain strategies and initiatives. A “perfect order” delivery is only attained when all Seven Rights of Fulfillment are achieved. Because of all the processes that have to take place at different types of participating companies, each company needs supply chain managers to help improve their flows of product, information, and money. Principle 1: Segment customers based on the service needs of distinct groups and adapt the supply chain to serve these segments profitably. CSCMP and the tag are trademarks of CSCMP, Starting Your Supply Chain Management Career. Newsletters If the goal of SCM is to provide high product availability through efficient and timely fulfillment of customer demand, then how is the goal accomplished? Sometimes, it is also necessary to move products back through the supply chain for returns, repairs, recycling, or disposal. Principle 2 : Customize the logistics network to the service requirements and profitability of customer segments. Each supply chain player must understand his or her role, develop winning strategies, and collaborate with their supply chain teammates. Principles of supply chain management 1. The supply chain is responsible for getting those coffee beans across the world and to your kitchen. But there’s more to it. Supply chain managers must understand the customer’s problem or need and make sure that their companies can satisfy it better, faster, and cheaper than any competitors can. In their roles as suppliers, companies have a vested interest in financial flows; suppliers want to get paid for their products and services as soon as possible and with minimal hassle. document.write("") Something so common in every household, takes a great deal of planning, demand forecasting, procurement, and logistical expertise to move those beans to local sellers while still fresh. These savvy managers recognize two important things: Source: David L. Anderson, Frank F. Britt, and Donavon J. Favre, “The Seven Principles of Supply Chain Management, Supply Chain Management Review, (1997). They also stress the importance of coordinating activities (demand planning, sourcing, assembly, delivery, and information sharing) within and across organizations. All rights reserved. Otherwise, product will not be available when needed by consumers like you.