Supply Chain Management Fundamentals

Important of supply chain management fundamentals

The first and foremost aspect every successful Supply Chain management has is making customers an integral part of their supply chain. The industry paradigm is shifting in a direction where all the successful companies have aligned their supply chain strategy according to the customers. They consider the demands of the customers as the primary source of their supply chain strategy. Back in the 1920s when Ford Supply chain was designed. it had an inflexible system and it was more of a product-centric approach than that of customer-centric. This was changed when Toyota’s supply chain started outsourcing services as per the requirements of the customers. Making the supply chain more flexible while Dell has successfully designed the most customer-centric supply chain to date. The emergence of Online Market and E-commerce has made the study of Supply chain and variables affecting it mandatory. The main focus of every emerging business these days is the new emerging systems and technologies. However, here’s a tip: The fundamentals must never be forgotten!

Here’s a list of the fundamentals of Supply Chain Management:

1. Keeping the network distribution properly aligned.
There are various stakeholders in a supply chain, from manufacturers to distributors to wholesalers to retailers and the one connecting everything, Logistics. A successful supply chain sees that all the things that flow in it i.e., Products, Information, Money have a proper pathway that is followed and is aligned in a way that is easy to analyze, track, and amend if necessary.

2. Keeping a well-planned strategy for the supply chain, which is properly understood.
The most successful business strategies give ownership to every stakeholder that forces them to work more efficiently. It is necessary that each participant knows the business model that is running through and is also well aware of the contribution it makes to the value chain.

3. Keeping in mind the product profitability and understanding the customer’s need.
As earlier discussed, the modern supply chain focuses on customers, as we’re moving more and more towards an era of information. The customer-centric approach helps us to understand their needs in a better way and delivering that in the shortest time is what every successful supply chain does.

4. Adaptation of proper and relevant operation planning process as well as adopting good sales.

5. Proper management of one’s inventory.
Inventory management is one of the most important aspects of any supply chain as it takes up the most amount of capital moving in the whole chain. Proper inventory management ensures that your supply chain is working efficiently and is profitable. We should adopt the modern methods of inventory management like IT, lean, etc. to meet the demands of customers in a speedy way.

6. Proper management of one’s outsourcing contracts.

7. Incorporating and managing the risk and uncertainty within supply chain management

8. Sorting out different products, customers, channels and design in an optimal portfolio of logistics, further segmenting the approaches and strategies for each.

9. Identify, design, and implement the appropriate forecasting methodology, sort out the inventory replenishment policy for each of these segments.

10. Choosing the optimal transportation route for each segment.

Most businesses these days have big gaps when it comes to practicing these basic yet essential fundamentals. if this business want to meet success, the topmost priority should be to follow the listed fundamental