Next Level Growth “Compete Against Giants” The power of SMALL businessTHE SUPER SEVEN

By: Luis Batista

In 1997, Supply Chain Management Review published one article called “The Seven Principles of Supply Chain Management” written by David Anderson, Frank Britt and Donavon Favre.

More than 10 years pass and this article is considered the “classic” article and got republished in 2010, and again in 2013.

  • Principle 1: Segment customers based on the ser-vice needs of distinct groups and adapt the supply chain to serve these segments profitably.
  • Principle 2: Customize the logistics network to the service requirements and profitability of customer segments.
  • Principle 3: Listen to market signals and align demand accordingly across the supply chain, ensuring consistent forecasts and optimal resource allocation.
  • Principle 4: Differentiate product closer to the customer and speed conversion across the supply chain.
  • Principle 5: Manage sources of supply strategically to reduce the total cost of owning materials and services.
  • Principle 6: Develop a supply-chain technology strategy that supports multiple levels of decision making and gives a clear view of the flow of products, services, and information.
  • Principle 7: Adopt channel-spanning performance measures to gauge collective success in reaching the end-user effectively and efficiently.


Integrate activities across the supply chain.  Doing so will improve asset utilization, reduce cost, and create price advantages that help attract and retain customers – and thus enhance revenue.

We will briefly go over each of the seven principals and show you how to apply them across a wide range of industries.


For more than two decades, supply chain management (SCM) has received increased attention among the industries for achieving competitive advantage.  There are seven principles which taken together can structure an organization’s supply chain strategy and tactics.  However, these are not exact universal recipes for success, but need careful thought about their applicability to each entity.  These principles are: segment customer based on their service needs; drive operations from demand; differentiate products closer to the customer; source strategically; develop supply chain technology strategy; and use supply chain spanning performance measures.

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