The 7 Principles of Supply Chain Management

This article explores the 7 fundamental principles of supply chain management and their importance in achieving success in the business world. It discusses the benefits of customer segmentation, customization of logistic networks, alignment of demand, product differentiation, resource management, supply chain technology, and channel spanning performance measurement. The article also highlights the need for primary research and consideration of stakeholders in future studies.

Running head: SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT
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Introduction:
In the era of globalization, supply chain management is a unique competitive advantage
in the business world. As observed in this era, one of the successful companies is different from
other companies because of their excellent management by of supply chain, as successful
businesses establish their identity because of their excellent management rather than the services
they provide to their customer's customer (Stevens and Johnson 2016). Hence, Supply chain
management is one of the crucial factors that business industries are required to consider
bringing faster revenue. The supply chain is defined as the activities that were conducted in a
business in order to provide the best-manufactured product to the end customers (Baldwin and
Lopez‐Gonzalez 2015). For assisting managers of the business in managing the supply chain and
consider it as a competitive advantage, a review had been conducted by Anderson, Britt and
Favre (2007), where researchers gathered the experience from the most successful manufacturer,
retailers and for extracting the seven fundamental principles of the supply chain. The growing
body of evidence highlighted that this article is the most request articles in 10 years and is
termed as the classic article in 10 years. Due to the high publicity of the article, in 2010, this
article was republished. In this article, the researchers considered the experience of retailers,
distributors and manufacturer and only successful ideas are generated into 7 themes or 7
fundamental principles of successful management of supply chain. The first principle is to that
the segmentation of the customer relied on the specific need of the different group and for
serving the profitability to these segments, an accurate adaptation of the principle is crucial. The
second principle is logistic network is required to customized in accordance with the requirement
of the services and customer segment profitability. The third principle is an alignment of the
demand according to the current market across the supply chain in order to ensure optimal

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resources allocation and consistency of forecast. The fourth principle is the differentiation of
product close to the end user as well as across the supply chain as speed conversion. The fifth
principle of the services is to proper management of resources which are a need for
manufacturing, for reducing the net cost of raw materials and related services. The sixth principle
is to develop supply chain supported technology for accurate decision making and giving a
transparent view of the flow of the product as well as formation. The seventh and last principle is
to adopt measurements of channel spanning performance for measuring success in reaching
customers. These ideas are important as these 7 key themes give managers a structured guide for
bringing success by integrating these principles in the business and provide a strategic advantage
in order to enhance customer satisfaction as well as profitability. The ideas aimed to provide
uppermost satisfaction at minimal cost through the management of raw materials and workflow
of the supply chain.
Methodology:
In order to conduct a successful study, it is crucial to choose appropriate methodology
which can align with the desired goal and objective of the study (Bovea et al. 2016). In the
current context, Anderson, Britt, and Favre (2007) conducted a review in order to gather the
experience of the successful manufacturer and retailer and transformed it into seven fundamental
principles. To gather the experience for successful supply chain, the researchers undertook
conceptual research methodology. The conceptual research method is defined as a methodology
where researcher observe as well as analyze the gathered information which already exists in for
developing concepts, principles, as observed in this research (Hagnell and Åkermo 2015). Hence,
for developing the fundamental principles, this is the best suitable method that was used by
researchers. Discussing the study design of the research article, Patterson et al. (2018), suggested

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that review is the most common research design that is undertaken by researchers for conducting
any research within a short time. With the assistance of the design, the researchers critically look
into the documented evidence which is crucial for undertaking research Gawande et al. 2016).
The researchers can assess the strength and limitation of existing data for drawing a brief
conclusion. Therefore, in order to develop these seven fundamental principles, this study design
is most accurate. The limitation of the study is that this study is secondary research which is
usually conducted based on data collected from other sources, highlighting the potential biases of
the study.
Taking into account the first principle, Anderson, Britt, and Favre (2007) highlighted that
customer segmentation is crucial for managing the successful supply chain as it divides the
market into a group according to needs. Segmentation of the group addresses the customer
demands according to the need. The managers can address these needs by conducting profile
research. However, Türkay, Saraçoğlu, and Arslan (2016) argued that the market follows the
principle “provide one product for all”, neglect additional need of the customers. Taking into
account the second principle, companies need to customize the logistic networks which include
best manufacturing costs, raw materials, and distribution for keeping the advantage of strategic
competition. However, Choi et al. (2016), argued that it is impossible to create that logistic
network for by meeting all criteria. In the third principle, researchers suggested that it provides
the importance of the service requirement and good sales in business. , Zhou (2016), argued that
these strategies are difficult to implement but by sharing the information with the trading
partners, the manager can reduce unnecessary data. In the fourth principle, the researchers
suggested that successful monopolistic competition results from accurate product differentiation.
Rajeev et al. (2017), argued that time is the most crucial factors for taking competitive

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advantage. One company can be successful with similar products like other companies if they
launch their product faster than other companies. Considering the fifth principle, a company can
reduce its delivery time by using unique resources of the market and gathering proper knowledge
of inventory system. In this context, Molenda (2019) suggested that companies must
acknowledge the importance of limited outsources of core expertise. Taking into account the
sixth principle, the authors highlighted that in order to support the success of the company, the
organizations must use supply chain technology which facilitates appropriate decision making as
well collaboration. In the last principle, the researchers highlighted that in order to bring success
within a shorter period of time, the managers should design accurate activities depending on the
cost of the company and implement it for determining the total cost. Giannakis and
Papadopoulos (2016) suggested that all activities cannot be depended on costs, there are other
factors presents which influence the supply chain that is required to consider in this case. While
considering the overall principles, the majority of the researchers suggested that employees of
the organizations will experience difficulties while coping up with the new system. The study
did not provide any statistical evidence and did not provide the role of the stakeholders in the
successful management of the supply chain. Hence, for obtaining the accurate result of research,
the researchers are required to undertake primary research and consider the role of stakeholders
in the successful management of the supply chain. The researchers must consider the statistical
impact of the incorporation of stakeholders.
Opinion:
The in-depth review provided me a detailed knowledge of the supply chain management and I
have gathered the learning that knowledge of supply chain management facilitates the faster

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launched of product to the customers by improving the allocation of resources and it saves the
cost and optimizes the efficiency of organizations. I have learned that time is an influential
competitive advantage when one company launch their product faster than other companies with
similar products. Hence, one can only flourish if they optimize the process of a supply chain in
the business market. From the article, I have gathered the knowledge that companies are able to
operate their business at a low cost if they optimize their logistics networks as well as the
relationship with buyers. It provides a better advantage of cost for improving the process of
manufacturing and brings high satisfaction. In order to gain the advantage of the market, the
business industries are required to input advance technologies for supporting the whole process
of the supply chain. In order to meet these criteria, the study provides a structured guide to
design activities that will improve the assets and establish goals and improve customer
engagements (Meixell, and Luoma 2015). Moreover, with the assistance of the article, I am able
to identify the two most crucial strategy of optimizing supply chain such as principle five and
three. The companies can allocation by identifying and meeting the demand of the market by
aligning planning according to it (three). The companies are able to reduce the cost of
manufacturing and meet the demand within a shorter period of time by stoking adequate
resources for manufacturing (Wang et al. 2016). However, the study failed to provide
information regarding stakeholders of the supply chain; researchers are required to consider the
role of the stakeholders.
Conclusion:
On a concluding note, it can be said that supply chain management is a unique
competitive advantage in the business world for establishing business. This paper explored the
study conducted by Anderson, Britt, and Favre (2007), where researchers gathered the

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experience from the most successful manufacturer, retailers and for extracting the seven
fundamental principles of the supply chain. After gathering knowledge, the key ideas are
generated into 7 fundamental principles of successful supply chain management. This article is
the most request articles in 10 years and is termed as the classic article in 10 years. The first
relevant issue is that it is impossible to create that logistic network for by meeting all criteria for
the successful supply chain; successful business companies’ addresses the majority of the criteria
but not all. The second crucial issues are that that the markets follow the principle “provide one
product for all”, neglect additional need of the customers. Consequently, the unmet need of
customer reduces customer engagement and high satisfaction. The third relevant issue is that all
activities cannot be depended on costs, there are other factors presents which influence the
supply chain that is required to consider in this case. Moreover, employees of the organizations
will experience difficulties while coping up with the new system of the supply chain. The
challenges observed in this article are that researchers conducted a secondary study for
developing these principles, not any primary study such as experimental study. The study did not
provide any statistical evidence and did not provide the role of the stakeholders in the successful
management of the supply chain. For obtaining accurate results, the researchers are required to
consider the challenges highlighted above. For obtaining the accurate result of the study,
researchers are required to undertake primary research such as cohort study or other
experimental study and consider the role of stakeholders in the successful management of the
supply chain. The researchers must consider the statistical impact of the incorporation of
stakeholders. The article can be used as a crucial theory in the domain of business management
as well as industrialist since it provides the foundation for a successful business. It is useful in
theories since it gives managers a structured guide for bringing success by integrating these

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principles in the business and provides a strategic advantage in order to enhance customer
satisfaction as well as profitability. This study is useful in practice since it provides companies a
guide for establishing goals, rapid implementation of essential changes needed in the company.
With the help of this article, the managers will be able to optimize their process of a supply chain
in the business market. They will be able to reduce their delivery time by using unique resources
of the market and gathering proper knowledge of inventory system.

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