Supply chain alignment

Figure 1 Supply-Demand Misalignment. (From J. Gattoma, Ed., Strategic Supply Chain Alignment Best Practice in Supply Chain Management. Reprinted by permission of the publisher, Gower Publishing, UK.)...

Beech, J. (1998). The supply demand nexus. In I. Gattorna (Ed.), Strategic supply chain alignment. Aldershot, UK Gower Press. 

The value stream approach in supply chain aligns well with Porter s value chain as shown in Figure 1.7. The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformation processes and outputs. How value chain activities are carried out determines costs and affects profits. 

Gattoma, J. (ed.) (1998) Strategic Supply Chain Alignment Best practice in supply chain management. Aldershot Gower. 

Of course, performance metrics must be changed to reflect process performance across the supply chain, and rewards and incentives must be aligned to these metrics in order to effect change. Each of the eight processes wUl now be described. 

Narayan VG, Raman A (2006) Aligning Incentives in supply chains. Harvard business review on supply chain management, pp 171-193... 

To help the reader not familiar with supply chain vernacular, here we start with a definition. For the purposes of this book, we define the term supply chain as "the process of organizational alignment to effectively manage the flows of cash, product, and information from the customer s customer to the supplier s supplier."... 

For each supply chain, the impact is different. There are no hard-and-fast rules. The trade-offs of customer service, forecast accuracy, and inventory are the easiest to understand. Through continuous improvement programs, employee training, investments in technology, and alignment of metrics, the core of the supply chain can be improved. 

The change in demand forecasting processes is a major change management hnrdle for the traditional supply chain. The shift from a focus on history to a focus on market drivers, or to align on demand assumptions versus debating nnmbers, is a cnltural redefinition. 

Fifth Shift in the Supply Chain Process Align the Supply Chain Market to Market. Become Market Driven... 

Consistent definitions matter. When it comes to supply chain benchmarking, the basics matter. Definitions, granularity, and frequency of the process need to align for data to be relevant. 

Strategic alignment. The supply chain should not be viewed in isolation from the business. This first measurement is perhaps the most important. It is the contribution of the supply chain team to the delivery of the business strategy. 

The role of the supply chain is growing in importance. As product life cycles change, demand cycles get shorter, and supply chain cycles get longer, the supply chain needs constant alignment. For example. 

Evaluate how the supply chain organization aligns with what you would like to reward. 

So, what is value It can take many forms. Value happens when the supply chain is used to drive competitive advantage. The supply chain drives maximum value when it is aligned to the business strategy. 

With greater maturity, the company aligns the supply chain market to market to become market driven. In this stage, the supply chain senses buy- and sell-side market shifts and orchestrates tradeoffs horizontally in a bidirectionally coordinated response. This represents less than 1 percent of companies interviewed. 

As the value discussion evolves, the need for a supply chain strategy becomes paramount. Business leaders want to know how they can align operational silos to improve the business strategy. This results in the development of a supply chain strategy. Figure 2.2 is a framework for this development. 

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