7 Principle of Supply Chain Management
7 Principles of Supply Chain Management
1. Introduction
Before we are to analysis this article, first let us clarify something before we start .In this article, it states the 7 principles of supply chain management and its importance in practical ,many of us must have a question, what is a supply chain management and why is it important for a company today ?
Supply chain management (SCM) is the process that is used by a company to ensure that its supply chain is efficient and cost effective. They are aiming at provide the highest degree of customer satisfaction at the lowest possible cost through management of material and information flow in the supply chain .It requires the commitment of supply chain partners to work closely to coordinate order generation, order taking, and order fulfillment.
Supply chain management consists of three flows: product flow, information flow and finance flow. Product flow is the physical movement of raw materials, work-in-process and finished product from supplier to manufacturer to the wholesaler and on to the consumer. Information flow is the shared information within the supply chain garnered from the various systems such as the transport planning systems, warehouse management systems, customer record management, order fulfillment systems and more. The third flow is the flow of money. This would be billing, the giving of credit, the transfer of money from manufacturer to supplier or from the consumer to the manufacturer or reversed. Any documentation with regards to money will be managed as part of this flow.
Benefits of integrated supply chain management:
There are countless benefits that supply chain management can bring to companies. Not only does it make for shorter lead-times to a customer and improved planning and forecasting capabilities for all partners of the supply chain, it also leads to cost savings and efficiency optimization. Time advantage is created when one of the business processes is faster than
1. Introduction
Before we are to analysis this article, first let us clarify something before we start .In this article, it states the 7 principles of supply chain management and its importance in practical ,many of us must have a question, what is a supply chain management and why is it important for a company today ?
Supply chain management (SCM) is the process that is used by a company to ensure that its supply chain is efficient and cost effective. They are aiming at provide the highest degree of customer satisfaction at the lowest possible cost through management of material and information flow in the supply chain .It requires the commitment of supply chain partners to work closely to coordinate order generation, order taking, and order fulfillment.
Supply chain management consists of three flows: product flow, information flow and finance flow. Product flow is the physical movement of raw materials, work-in-process and finished product from supplier to manufacturer to the wholesaler and on to the consumer. Information flow is the shared information within the supply chain garnered from the various systems such as the transport planning systems, warehouse management systems, customer record management, order fulfillment systems and more. The third flow is the flow of money. This would be billing, the giving of credit, the transfer of money from manufacturer to supplier or from the consumer to the manufacturer or reversed. Any documentation with regards to money will be managed as part of this flow.
Benefits of integrated supply chain management:
There are countless benefits that supply chain management can bring to companies. Not only does it make for shorter lead-times to a customer and improved planning and forecasting capabilities for all partners of the supply chain, it also leads to cost savings and efficiency optimization. Time advantage is created when one of the business processes is faster than