The 7 Principles of Supply Chain Management

The most requested article in the 10-year history of Supply Chain Management Review was one that appeared in our very first issue in the spring of 1997. Written by experts from the respected Logistics practice of Andersen Consulting (now Accenture), “The Seven Principles of Supply Chain Management,” layed out a clear and compelling case for excellence in supply chain management. The insights provided here remain remarkably fresh ten years later.

By David L. Anderson, Frank F. Britt, and Donavon J. Favre

Supply Chain Management Review

April 1, 2007

The above praiseworthy note (you can access the full article on my website in News & Resources) appeared in the tenth anniversary issue of the Supply Chain Management Review,  a publication which was the first to rise above the logistics "trade magazine" space and treat supply chain as a serious topic worthy of in-depth research. Frank Quinn, the magazine’s long time editor, has long been a supporter of driving more rigor into supply chain analysis and encouraged me to write the article for the inangual issue.  As Donovan Favre and Frank Britt, my co-authors can attest, it was a long and hard labor.  Frank B to this day insists we went through 33 drafts of the article.  That is a bit excessive, but not far from the truth.

But I was curious about Frank Q’s comment that the insights remain fresh after ten years.  It made me go back and reread the article to see if I agreed. Here is my assessment:

1. The seven principles basically survive the test of time. Although I might include some thoughts around global supply chain risks, add a section on insourcing/outsourcing strategies, update the case studies and tighten up the procurement strategy discussion, I still believe companies cannot go wrong by adopting these principles as the basis of their supply chain strategies.
2. We still have a long way to go on supply chain strategy implementation.  The fact that the principles are still relatively fresh implies that many companies have not done the best job implementing strategies that underly the principles.
3. Technology and data will be the major game changer going forward. UPC, RFID and GPS related data were not around when we wrote the article.  The growing availability of "real-time" supply chain data as well as the tools to enable us to use the data in planning and executing supply chains will be the key factor that separates the winners and losers in supply chain management over the coming decade.

The bottom line? To paraphrase Paul Simon, the advice is still relevant, not crazy, after all these years. If you have a few minutes, check it out and let me know what you think.