Building of Value Networks

In the development of the supply chain strategy, there is a critical question for each company to answer. It is, How and what should be outsourced Outsourcing to third parties can happen in all supply chain links—sales, distribution, manufacturing, procurement, and iimovation— in building a value chain. It can add value, reduce costs, and improve time to market, but it increases the need for planning, supply chain coordination of day-to-day activities and inventory, and visibility. Although companies can outsource their day-to-day supply chain activities, they cannot outsource 

The questions surrounding outsourcing and the building of strategic relationships through value networks are answered in the development of the supply chain strategy. This is easier said than done. It is ongoing. Most supply chains are complex. 

The goal is to identify the number and types of supply chains to improve the supply chain response. Most organizations have five to seven supply chains. Each one can be at different levels of maturity. Each one can require its own response. In general, in the design of supply chains, there are three types. They can be characterized by the type of response  

The efficient supply chain. This supply chain is focused on the lowest cost/case. There are five characteristics. Demand and supply variability is predictable, volumes are high, supply chain reliability is high, demand-shaping activities are low, and the raw material costs are stable. 

The responsive supply chain. The responsive supply rhain is designed for short cycles. This supply chain has high volumes, but also high demand and supply variability due to factors like seasonality, weather, short life cycles, and high levels of demand shaping in the channel. 

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Issue 2 Tackling demand distortion and waste. The number of nodes in the snpply chain increases variability. Data latency and distortion happen in each step, or node, of the supply chain. In the building of value networks, the greatest potential value and usually... 

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