Supply Chain and Competition

What does a company need to do to achieve that all-important strategic fit between the supply chain and competitive strategies A competitive strategy will specify, either explicitly or implicitly, one or more customer segments that a company hopes to satisfy. To achieve strategic fit, a company must ensure that its supply chain capabilities support its ability to satisfy the needs of the targeted customer segments. 

Chemical industry players have only recently started transforming their supply chains, and enormous potential still remains to be captured. Being an early adopter, moving first, and taking a creative approach can really ensure distinctiveness, competitive advantage, and long-term, sustainable value creation. 

Competitiveness is the fourth C in our list of concepts. Managing the competitiveness of a supply chain requires two sets of choices—the choice of the metrics of competition as well as responses to competitors choices. Typical metrics used include lead time, cost, profit, product variety, consistency, service level, fill rate, and others. For a monopolist, it is important to identify appropriate metrics to coordinate optimal choices across the supply chain. However, competition has an impact on the feasible... 

How coordinated are the supply chain choices with the company strategy How does this differ from our competitors If our competitors have a coordinated supply chain and we do not, then the relative efficiency of competitors may require coordination of our supply chain. Note that the coordination of all competing supply chains does not guarantee improved profits, but only su ests a competitive necessity. The decision then is whether to continue to eng e as needed or to change market focus. 

This chapter focused on examples of supply chains and their underl dng supply chain architecture, using a Four C conceptual framework. The Four Cs refer to chain structure and ownership, capacity, coordination, and competitiveness. The supply chain audit permits an understanding of current choices and an approach to evaluate alternate choices for supply chain architecture. The goal of this chapter was to explain the Four C choices made in different successful supply chain contexts. 

As individual brands these fundamental issues may seem insurmountable however, in spite of the highly competitive nature of the retail apparel market, a growing group of responsible retailers are tackling these issues together. These retailers have recognized the interdependencies of their businesses within the supply chain and how the development of a more sustainable model is beneficial to individual organizations as well as the industry as a whole. 

However, in today s fiercely competitive enviroiunent, it is not enough simply to streamline global supply chains and eliminate excess costs. Leading companies are applying new technologies and sophisticated analytics to make their supply chains more responsive to customer demand, rather than letting availability of supply drive the chain. 

A company with multiple supply chains, such as those tailored for multiple spheres, can use one model in one supply chain and a different model in another. This approach is justified by competitive strategies tailored to different product-market combinations, a purpose of process design for different spheres. 

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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