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Principles of the Supply Chain

Robots are delivering pizza. More and more retailers are promising same-day delivery. Customers want to track their chicken from the farm to the grocery store.

The world of supply chain and logistics is in upheaval, largely due to the digital transformation of the industrial sphere. However, there are still several timeless truths of the supply chain to keep in mind.

1. Overall Supply Chain Objectives Don’t Change.

The supply chain moves a product from point A to point B. Sure, there are now Industrial Internet of Things (IIoT) sensors throughout the supply chain pathway. And, on some manufacturing lines or delivery routes, automated tools are even taking over for humans. Nevertheless, the fundamental focus of the supply chain remains the same: manufacturing X at volume, at the lowest cost, to be delivered to Y in order to achieve the greatest profit margin.

The path from point A to point B, however, is more likely point A to point K (with stopping points at each letter in between). No one supply chain player is an island. Supply chains are complex, multi-tiered, many-faceted entities, with several partners playing various roles in navigating the route from product development and manufacture to sales and delivery.

2. Visibility Into the Supply Chain Is Crucial.

Greater transparency into your full supply chain matrix will always be beneficial. Of course, digital platform purveyors now offer endless solutions to dig deeper into all supply chain functions.

But even before the days of Big Data, supply chain success relied on monitoring, maintaining, and controlling many different information inputs. What’s changed is simply the manner in which we do this, and how multi-layered our analysis can become with the help of artificial intelligence (AI) and machine learning.

3. Knowing Your Customer Is Critical.

The digital transformation of the industrial sphere has only added weight to the timeless truth that knowing your customer is critical. Individualizing attention for segmented customer groups has always been a key supply chain differentiator. And today, with countless digital tools and technologies at our disposal, it’s easier than ever to personalize segments, track customer history, and project future needs.

At the same time, though, customer expectations are changing. As Amber Road’s LizAnn Nealing puts it, “Customer expectations continue to rise, including the need for more personalized products and services, faster delivery times, and ease of ordering. Since people are used to this speed and efficiency in their business and personal lives, the pressure for suppliers to become in sync is becoming more and more important.”

4. Business Values Are Important.

Ethics matter. In recent year, consumers and B2B customers alike are demanding greater corporate social responsibility (CSR). If you’re not already making efforts to reduce the environmental impact of your supply chain — for instance, by sourcing sustainable raw materials or employing electric vehicles on delivery routes — it’s time to start thinking green, because this trend isn’t going away.

Similarly, your business must also take responsibility for treating its employees right, being honest with business partners, and doing what it can to fend off cyber-attacks. If you don’t embrace these responsibilities, you’re likely to be overtaken by more ethically and socially aware competitors, as B2B buyers are increasingly concerned with the effects this has on company reputation and consumers are increasingly concerned with minimizing their overall footprint.

Part and parcel with increased social awareness is the widespread acknowledgment that the supply chain sphere is in need of more women and greater diversity. In a 2016 analysis, women held top-level supply chain positions at only 5% of Fortune 500 companies.

As for diversity, Hackett Group Research Director Laura Gibbons said last year, “Supplier diversity is evolving from a check-the-box corporate social responsibility (CSR) requirement to a strategic enabler providing access to innovative products and increased market share in new and developing communities.”

5. You Must Embrace Evolution.

One final truth of supply chain management? This is a dynamic area, and it always has been. The advancement and rapid evolution of supply chain and logistics tools, technologies, and techniques aren’t going to slow anytime soon.

Inevitably, the companies looking to become industry success stories will need to stay abreast of digital trends and new tech, but also be find new, innovative solutions that will help set their business apart from the competition.

Taking these five basic tenets into consideration can make a huge difference as industry continues to shift and evolve.

Image Credit: Travel mania /

Tom Shaw

Technical Education Post, Online Publisher

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