Activity systems, supply chains strategy

This tool, described in detail in Chapter 10, will translate strategic choices into activities. These activities, in turn, will lead to the processes needed to perform them. Because application of the activity system method requires strategic choices, they should have been made or they should be made during the supply chain strategy design. For this, the team must be empowered to make needed decisions. Changing supply chains in ways that are counter to strategic direction will lead to confusion, if not catastrophe. 

Supply Chain Strategy Activity system designs Development of themes and linked activities and process needs to support the strategy... 

Ideally, the company should develop a vision for the supply chain, including the activity system the organization needs to carry out its strategy as developed in Chapter 10. Out of this vision will come a template for partnerships called the Collaboration Strategy. Chapter 15.1 described this deliverable of the supply chain strategy process. This will define what types of partners are sought and their contribution to fulfilling the vision. 

The following sections provide examples of top-down maps using High Tech and other companies as examples. Top-down maps are needed at each stage of supply chain strategy development. These include the development of spheres, or businesses within the business, the design of the activity system, and the identification of processes supporting each activity. 

A term used by Michael Porter in defining networks of activities that provide a sustainable competitive advantage. This book recommends activity systems as the basis of a supply chain strategy. Chapter 7... 

One of the major advantages of moving to OR and synchronous supply chain strategies is that, by reducing lot quantities and increasing the rate of throughput in the logistics system, modulations in the level of activity in the pipeline can be reduced. 

We return to spheres here because the important task of their selection lies between the chartering of a supply chain effort and the development of activity systems, described in the next chapter. Figure 8.2 flowcharts the process of strategy setting. 

Quadrant III brings complexity without the profits products there should be considered for elimination or simplification. Quadrant IV products could be considered for cost increases. Perhaps extended product features developed in an activity system would differentiate the product and increase the product s value to some customer segments. A distinctive supply chain could support this strategy. 

Michael Porter, Harvard Business School professor and a thought leader on strategy, maintains that linked activities and processes are especially resistant to competitive pressures. He refers to these linked activities as activity systems. The concept of activity systems has valuable application in SCM because a well-linked supply chain is one type of activity system. 

The remainder of this chapter describes how to make the transition from activity system design to a strategy for adding partners in the supply chain. 

We can illustrate how a partnership strategy could possibly evolve from an activity system, again turning to Acme as our example. Acme s strategy called for a restructuring of its supply chain along the lines of a newly developed activity system. These activities fit together to form a supply chain to better serve its customers. 

Activity system A term originated by Michael Porter in defining networks of activities that provide a sustainable competitive advantage. These networks can constitute a supply chain. An activity in this context is a feature of the company s strategy that makes it distinctive. Activities, in turn, are supported by supply chain and other company processes. In this Handbook, groups of supporting processes make up activities. 

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