Supply chain architecture impact

Understanding Supply Chain Architecture and its Impact—A Case ... 

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. 

Thus far, we have focused on alternate performance metrics and associated supply chain architecture. Now we will consider the impact of competitors who independently make decisions to maximize their performance. The presence of competitors may often benefit individual customers but may also decrease the profitability of supply chain entities. A key concept is that competing supply chains generate equilibrium results, in which each supply chain makes decisions independently, anticipating but not knowing decisions by competitors. There are several ways that supply chains affect the competing choices and performance of a given supply chain. 

What does all this mean for a supply chain manager in Europe It means that spatial distance may not be an appropriate way to look at the supply chain because country boundaries may have an impact. It means that individual country specific rules regarding truck sizes and movement would need to be considered while planning the supply chain network. Coordination agreements to decide how orders are initiated and delivered could have a significant impact on costs. In short, the supply chain architecture in Europe would have to respond to the specific European logistics context. 

Introduction of new products often causes disruptions in the supply chain. Such disruptions may impact the inventories of components or they may require restructuring the architecture of the supply chain. 

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