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Implements the basic principles of supply chain management

Basenton Logistics implements the basic principles of supply chain management

Market competition in the 21st century is a competition between supply chain and supply chain. Facing the trend of global economic integration, the way out for Chinese enterprises lies in changing the backward management model and the vertical integration of “big and complete” and “small and complete”. The approach of modernization implements modern supply chain management, complements the advantages of resources with cooperative enterprises, and rapidly enhances the competitiveness of the enterprise’s supply chain. Enterprises should adhere to certain principles when implementing supply chain management to ensure that the implementation can achieve ideal results.

Seven principles in the implementation of supply chain management.

1) Divide customer groups according to the service characteristics required by customers. The traditional market division is based on the company’s own conditions, such as industry, products and distribution channels. The company then provides the same level of service to customers in the same area; and the supply chain Management emphasizes the determination of service methods and service levels according to the conditions and needs of customers. 

2) Design and build the company’s logistics network

Designing and establishing a company’s logistics network is a way to ensure the successful delivery of goods. For example, according to the needs of customers and the profitability of the company, a paper company found that two customer groups have very different service needs: large printing companies allow longer lead times, while small local printing companies require supply within 24 hours , So the company established 3 large-scale distribution centers and 46 quick response centers for scarce items.

3) Listen to market demand information

Sales and operations plans must monitor the entire supply chain in order to issue early warnings of changes in demand in a timely manner, and arrange and adjust plans accordingly.

4) Time delay

Due to the violent fluctuations in market demand, the closer it is to customers receiving the final product and service, the less accurate the demand forecast, and the company has to maintain a relatively large inventory. In the process of implementing mass customization production, a detergent company first processes the products in the company, and then completes the final packaging in the sales store.

5) Establish a win-win cooperation strategy with suppliers

Forcing suppliers to lower prices will certainly benefit companies in terms of prices, but mutual cooperation can fundamentally reduce the cost of the entire supply chain, and companies will gain greater benefits, and this benefit will be long-term.

6) Establish an information system in the entire supply chain

An enterprise’s information system should first handle daily affairs and e-commerce, and then support multi-level decision-making information, such as demand planning and resource planning. Finally, it should conduct forward-looking strategic analysis based on most information from outside the enterprise.

7) Establish performance appraisal criteria

Companies should establish performance appraisal criteria within the scope of the entire supply chain, and should not only establish partial and isolated standards based on individual companies. The final acceptance criterion of the supply chain should be customer satisfaction. 

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