This process defines what your supply chain needs to be good at, and it allows you to prioritize supply chain objectives. Your organization and the skill sets of your people will be different, too. However, these strategies must all link directly to and support the overall business strategy. They will help suppliers anticipate changes in capacity requirements, both in the short term for scheduling purposes and in the long term for asset-investment decisions.
Internal performance evaluations and bonus structures need to match the aligned metrics that have been set. This is the key factor in reducing complexity in this type of supply chain. However, it is possible to develop several parallel supply chains within a single organization, each focused on a defined market segment with a responsiveness level and a cost structure that are appropriate to the segment it serves.
Relevance of the cost of assets to total cost becomes critical in industrial sectors where business profits are highly correlated with the asset-utilization rate. In the most mature stage, collaborative planning with key customers helps to anticipate demand patterns.
Consequently, the minimum size of the order does not depend on the size of the manufacturing batch, and minimum order size is governed by the relevance of transportation cost to the total cost. What Good Looks Like To appreciate how appropriate supply chain strategies drive business performance, case study examples are always interesting.
The decoupling point is the process in the value chain where a product takes on unique characteristics or specifications for a specific customer or group of customers. Strong collaborative relationships with key suppliers are necessary for companies to understand at every moment their current "available to promise" inventory and capacity.
Although each of these elements includes multiple factors, only some of those factors are relevant drivers for the formulation of a supply chain strategy. Whilst at the customer end of the supply chain, the focus must be around service and product availability. The buy in stage of strategy development should focus not only on ensuring the business objectives are clearly supported, but must also articulate the business benefits to the senior executive team in language that is meaningful to them.
With the supply chain strategic imperatives nailed down, many often silo focused decisions can be avoided, as everyone has a clear focus on the end game. Companies like Orica provide these products and services in some of the most remote parts of Australia. Relaxing that delivery requirement opened up a significant opportunity for inventory improvement.
Structure your supply chain to optimize the strategic goals. This may require pooling of critical resources—including with those of competitors—because these companies address unexpected situations that could easily result in demand exceeding capacity, and it is not economically feasible to have unlimited capacity.
These strategic imperatives will vary by industry and business and be guided by the business objectives, but some examples are offered here to illustrate the concept.
Align incentives end to end. Appreciate that businesses all have different strategies and this drives the need for different supply chain strategies. Good supply chain management focuses on the results delivered at the customer end; good operational management takes care of the details.
Consequently, a continuous-replenishment model is inappropriate. Keep refreshing the strategy and alignment process. First, they should ensure high rates of asset utilization coupled with high overall equipment efficiency OEE in order to reduce cost. This belief fails to account for the fact that there are tradeoffs in optimizing different goals.
In the service sector, some fast food restaurants apply this supply chain model. As with the strategic imperatives, the KPI focus will and should vary dependant on the industry and specific business focus. My analysis has identified a set of common patterns that reveal key drivers of supply chain strategy and explain how these can be aligned in a coherent strategy.
Article Figures [Figure 1] The four main elements of supply chain strategy Enlarge this image [Figure 2] Factors in supply chain processes Enlarge this image [Figure 3] Supply chain roadmap: Align supply chain performance metrics with the corporate strategy. One of the biggest failure points in aligning strategy is when the supply chain organization doesnt know what to align with.
Change management approach In Walmart bought Woolco in Canada. These are often split into continuity products, non-continuity products and seasonal products.
Surprisingly, many businesses, even at the top end of town, have supply chain strategies that are misaligned to the business goals or have strategies that are poorly articulated and communicated within the business.
Identify the areas of your corporate strategy that are enabled by the supply chain. Configuration and downstream processes should be managed under the criteria of an agile supply chain. Supply chains oriented to responsiveness Industries that face considerable demand uncertainty, where market mediation cost is highly relevant, should employ one of three different supply chain approaches that are oriented toward providing capacity in response to changes in demand.
Organizations tend to want their supply chains to have simultaneous capabilities: This makes it possible to select the supply chain type that best fits a particular business segment.
This model typically is for a very mature supply chain with a customer demand profile that has little variation.Developing Market Specific Supply Chain Strategies by Gian Andrea Manzoni Business Operations: Systems Perspectives in Global Organizations Walden University 14th June Developing Market Specific Supply Chain Strategies In today’s business environment, companies have to deal with demand volatility and cost reduction.
that in the event of non-supply the particular sales opportunity is lost forever (5). Consequently the focus in supply chain management must shift from the idea of cost as the order winner to responsiveness as the market winner.
The implication is that the emphasis in supply chain management in the future must be on agility. Reading - Towill & Christopher Developing Market Specific Supply Chain Strategies - Free download as PDF File .pdf), Text File .txt) or view presentation slides online.
supply chain. Firstly, we need to appreciate that the supply chain strategy forms only one part of the overall business strategy and takes its place along side other strategies such as; marketing, new product development, human resources, information technology and.
Hewlett-Packard Supply Chain Strategy Running head: EVALUATION AND APPLICATION THESIS There are three techniques accessible for overcoming competition in any market: differentiation, cost leadership, and. Accordingly, an organization's supply chain strategy is shaped by the interrelation among four main elements, as shown in Figure 1: the industry framework (the marketplace); the organization's unique value proposal (its competitive positioning); its internal processes (supply chain processes); and its managerial focus (the linkage among supply chain .Download