The 7 Principles of Supply Chain Management

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