B2B Integration : A Practical Guide to Collaborative E-commerce

418 B2B Integration — A Practical Guide to Collaborative E-commerce
Let's review principles of a good supply chain before we discuss the
pull-based supply chain, which is based on them.
14.4.1. Principles of SCM
Accenture, a leading provider of technology and management services
and solutions, has laid down a few principles of effective supply chain
management. If these principles are adopted, it gives a company
competitive advantages over others in the form of larger revenues,
tighter cost control, more effective asset utilization and better customer
service.
The principles spelt out are as follows:
1. Division of customers based on service needs — Prior to the
introduction of SCM, customers were provided with the same level
of services within a group after classifying them by industry, product,
or trade channel. An effective SCM, however, groups customers by
their diverse service needs, irrespective of the industry they belong
to, and then customizes services to suit these groups.
2. Tailor the logistics network — A successful SCM is not based on a
large logistics network but rather caters to the service requirement
bottom-line needs of customers.
3. Listen to signals of market demand and plan accordingly — A
successful SCM senses and reacts to changing market conditions,
such as demand patterns of customers, through its sales and operations
planning module.
4. Distinguish products that the customer wants — Gone are the days
when companies could stockpile their products in anticipation of
demand and make customers keep large inventories. There has now
been an appreciable change in the balance of power between customers
and companies providing them with products and services. Now it is
the customer who is in the driving seat, asking companies to deliver
what, when and how.
5. Strategic management of supply sources — The real-time information
sharing enabled by SCM helps companies to reduce their inventory,
thereby lowering the operational costs.