Supply chain architecture competitiveness

The first goal of this book is to focus on supply chain architecture by focusing on four specific concepts, i.e., the Four Cs of supply chain man etnent. These four Cs are chain structure and ownership, capacity—its type and location across the supply chain, coordination mechanisms, and competitiveness—the metrics of competition and the competitive pressures faced by the supply chain. Choices made regarding each of these Four Cs generate possible supply chain architectures. 

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. 

The focus of a company is to be competitive in the marketplace and thus be profitable. A competitive supply chain has to provide customers with the expected or superior performance. But what does it mean to be competitive The competitiveness of a supply chain refers to two aspects of the supply chain (1) the link between a supply chain s choice of its competitive metric and the corresponding choice of its architecture and (2) the impact of competitors on a supply chain s performance. While successful firms in every industry often have unique capabilities, an important question for every firm is to adjust its supply chain architecture to remain competitive in the presence of a changing environment. 

This chapter showed how the choice of metric of competition and the existence of competitors affects the performance of a supply chain. The first part of the chapter examined the many alternate metrics that can determine performance, including costs, profitability, service, variety, and lead time. Each of these alternate metrics implies different choices for supply chain architecture as well as for the details of operation. In addition, in the presence of competitors, agreements that are good for the supply chain in a monopolistic setting may be bad for the supply chain in a competitive environment. Thus one may find an industry supply chain stuck in a bad equilibrium with frequent harmful promotions or advance order discounts, unable to pull itself out of this state due to competitive pressures. This chapter thus su ests that competitiveness can be a significant driver of supply chain performance. 

In the competitive markets of today, positioning a company simultaneously in the domains of product, process, and supply chain is an imperative. However, the tradeoffs among the dimensions can be quite complex, as they are interdependent. The building blocks of a framework for such tradeoffs can be the product-architecture that maps the functions of a product to physical components and determines the configuration of product-variants. The framework must include tools for assessing attributes such as component commonality, product quality, technology, manufacturing processes, and postponement, as shown in Fig. 3.1. Thus, to obtain the optimal tradeoff, one may tweak the product architecture appropriately in view of the customer preferences. 

---