>> 7 Principles of Logistics & SCM >>

As our crew sails in the Gulf of Mexico, with the sun setting in the distance, we are reminded of the timeless principles that guide logistics and supply chain management (Anderson, D. L., Britt, F. E., & Favre, D. J. 1997). Those principles continue to inform and shape logistics & supply chain management decisions, just as the waves continue to shape the shore.

The first principle, "Segment Customers Based on Service Needs," calls for organizing customers based on their logistics and supply chain needs and then marketing to the segmentation. As the demands of customers have grown more complex, there has been an increase in customer segmentations. For example, one group of customers can be segmented because of their need for information technology services.

The second principle, "Customize the Logistics Network," seeks to meet the needs of demanding customer segments by emphasizing the necessity of creating customized logistic networks based on the needs of each element, rather than a 'one size fits all approach.' This second principle is critical as more organizations adopt omnichannel solutions as part of their logistics efforts, especially in mega-cities consisting of regions of more than 10 million people.

Principle three, "Listen to Signals of Market Demand and Plan Accordingly," is relevant because ongoing innovations and technology solutions allow supply chain partners to capture data and interpret the information in ways that will help better understand real-time, point-of-sale information that will help inform business decisions.

The fourth principle, "Differentiate Products Closer to the Customer," demands that companies find ways to meet the needs of their customers by offering different ways for custom orders to be made and fulfilled.

Principle five, "Source Strategically," builds off another long-standing principle of successful supply chain management, including relationship management, collaboration, and critical two-way communication. Win-win scenarios that advance all parties involved will ultimately lead to better outcomes, helping to achieve the perfect order.

The sixth principle, "Developing a Supply Chain-Wide Technology Strategy," serves as a reminder of the importance of integration and collaboration in supply chain efforts. Technology allows internal and external stakeholder partners access to information that will allow for greater cohesion in decision-making.

Lastly, Principle seven, "Adopt Channel-Spanning Performance Measures," highlights the importance of performance measures in understanding the strength of a supply chain effort. A select few supply performance measures should be used to help stakeholders understand the dynamics between suppliers, customers, and consumers.

Reference: Anderson, D. L., Britt, F. E., & Favre, D. J. (1997). The seven principles of supply chain management. Supply Chain Management Review, 1(1), 1-10. #business #scm #logistics