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Supply Chain 7 Principles Essay

3164 words - 13 pages

Table of Contents

• Introduction Page 1

• The Great Seven

▪ Principle 1 Grouping Page 2

▪ Principle 2 Customization Pages 2 - 3

▪ Principle 3 Listening Page 3

▪ Principle 4 Differentiate Page 4

▪ Principle 5 Managing Pages 4 - 5

▪ Principle 6 Development Page 5

▪ Principle 7 Performance Pages 5 - 6

• Recommendation

▪ The Right Attitude Pages 6 - 7

▪ Adapt to Changes Page 7

• Conclusion Page 7

• References Pages 8 - 9


In this assignment, we are to critic an ...view middle of the document...

The Great Seven

Principle 1 Grouping
In the article, the authors mention grouping of customers base on their business requirements to better understand the required SCM flow so as to customize the service or product provided. To an extent, we agree that there is no one solution to all customer needs. One example would be the freight services provided to bullion industry and spare parts distributors. To use this example to explain, let us look at the basic requirements of bullion storage service industry, they offer storage of high value pernicious metals for their clients and therefore fast and on time shipment are very important to these clients due to the value of the shipment as this offers a piece of mind from the bullion storage providers to their clients. On the other hand for spare parts distributors, on time delivery is not really an important factor to them as the replenishment of stocks are usually based on proper planning or forecasting which there is always buff stocks to kick in if their shipment do not arrive on time, thus some slack would be acceptable. However, these spare parts distributors would consider product quality such as zero damage a higher priority in their industry compared to on time delivery.
Thus using such example, as a freight service provider, they can consider such grouping of their customers to focus their resources on the needed area rather than trying to allocate all of their resources in all areas and not perform to customer’s standard or requirements. In our point of view such grouping allows you increase the value of the customer you are servicing and to an extent reduce the amount of resources needed to support such requirements compare to initial Bender A (2013)

Principle 2 Customization
There are many models for customizing the supply chain network to suit every individual customers needs, as per the authors mention, we too feel that such integration in the supply chain can help to reduce recourses. In the article’s case based on their exhibit 2, the author’s used a simple relationship between manufacturer, distributor and end customer as an example to show us that customizing through sharing of information and integration of the three parties have reduced inventory cost and has reduced zero stock inventory to supply to end users.

As a matter of fact, some companies have already started such integration. However, it might not be exactly as sharing of information explained in the article but more of a merger between two organizations. Of the few who had done so in the past that is more commonly known to us is
Exxon and Mobil DiMaggio M (2009) there are many reasons as to why different organizations merge, of which the most common two reasons are to achieve economics of scales and cost efficiency as mention by Gehi A as well in his short article on Benefits of Merger and Acquisition. To which the authors wanted to emphasize on the benefits of information sharing to reduce cost....

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