What are the 7 R’s of Supply Chain Management?

7Rs of Supply Chain Management

Supply Chain Management establishes the strategies with which a supply chain will be overseen as well as dictating the way in which tasks are discovered and remedied.

While all of the minute details of Supply Chain Management as a whole might be a bit difficult to cover in just one article, there is something called the 7R’s of Supply Chain Management that sums it up rather well…


The Right Product – The goods, materials, or services offered

Supply and demand are at the forefront of supply chain management. Yet, it isn’t just understanding which markets are flourishing and which markets are declining.  

Knowledge of not only the existing market but of the product’s liability is essential. While the market for a particular product may be high currently, it might have a history of low demand or a consistently declining ROI.

Supply chain managers must know which markets are worth investing capital in to have an ROI. Supply Chain Managers should look at markets that are doing well, weigh the product against the competition that is already in the marketplace, and then decide which goods will provide the largest ROI.

But that’s just the first part of it. After all, this is all about the supply chain, so this concept goes a lot deeper than simply finding a profitable or scalable niche in the marketplace.

You also need to be able to deliver the correct product, on time, every time.   


The Right Customer – Building up for the long-term

While customers outside of your target market may wish to use your product or services, it is critical that you focus your attention on the long-term gain you seek from your primary audience. Seeking out customers who require your products, goods, or services on a regular basis will ensure that you remain relevant in the marketplace.

Sustainability is also maintained by seeking out clientele who can potentially bring new customers into the fold through word-of-mouth referrals.

Essentially, if you give your current clients or customers a positive experience they are more likely to refer new clients to you in return.


The Right Location – Getting Product where it should go

Let’s talk about location…

There is a substantial amount of distance between Buffalo, New York, and Buffalo, Wyoming. Building connections with partners in regions closer to your primary customer base gives you the ability to fulfill and deliver orders to those customers quicker than if your primary fulfillment center was located several cities away from them.

Supply chain managers must also assemble teams that can deliver products and goods to the correct location, on time, every time. Generally, this means implementing location tracking software, as well as keeping open and uninterrupted communication with their drivers.


The Right Price – Establish competitive prices based on market data

Hand in hand with the goods and services offered is the price at which they are offered.

Markets fluctuate based upon the supply and demand of any given product. Additionally, the location of the demand dictates variations in the price of the supply.

Knowing this, you should set your prices within a range that allows you to remain competitive in the current market while paying close attention to its yield potential as the market fluctuates.  

Software which monitors variations in costs is essential to maintaining this sort of competitive edge. As the price for your goods and services is apt to fluctuate over time as it costs you more to scale, having a system in place that evaluates these costs and even helps you find better pricing ensures that you continue to benefit from both cost savings and larger margins.


The Right Time – Keep your deliveries on time

Supply chain managers need to have a firm understanding of how best to expedite their delivery times while simultaneously ensuring a smooth process through all phases from receiving all the way to fulfillment.

Here are just a couple of really simple ways to begin reducing your delivery times:

  • Time zones, traffic patterns, and typical delays should be built into any software algorithms being utilized.
  • Supply chain managers should be able to easily relay any known potential delay factors to their transportation teams.
  • When calculating delivery dates, supply chain managers should relay to customers the dates which they can expect there to be high volume or other forms of delays. This transparency ensures that the customer has the opportunity to schedule deliveries around peak shipping days and the like.

It is better for an estimated time of delivery that is generally longer than that of your competitors than to have a reputation for over-promising and not being able to fulfill delivery products on time. By calculating deterrent factors, as well as using the appropriate tracking software in your logistics process, supply chains are better prepared to deliver products even before the deadline.


The Right Quality – Ensure the condition of your products

It goes without saying but on-time deliveries matter little to your customer if the condition of the product is sub-standard or the goods are outright damaged.

Knowledge of proper storage and handling of goods is fundamental to not only getting the products to their destination in one piece but is also a great way to build rapport with your customers through positive shared experiences. The quality of your product is the lifeblood of your supply chain. None of the other 7 R’s matter if you cannot deliver a quality product to the consumer in perfect condition, on time, every time.

Understand various conditions which may affect the overall quality of your product, including last-mile issues.


The Right Quantity – Meeting the demand

Even though this is last on our list, it is also probably one of the most neglected steps that, in turn, lead to things like backorders and stockouts can be avoided by simply paying close attention to the generated re-order levels and inventory.

The utilization of WES and WMS platforms can help prevent these types of backorders and delays.

However, even if the inventory is checked, the quantity of the product should be visually inspected prior to shipping. Additionally, any products which require multiple modes of transportation should verify order information at each transitional stage.


Adhering to the 7 R’s of Supply Chain Management

Customers are able to easily either validate or discredit your supply chain based upon the adherence to these 7 fundamental principles.

Supply chain managers must understand and put into practice these core principles on a consistent basis, using software, and implementing teams that focus on the concepts of the 7 R’s of supply chain management.