Supply chain strategy, defining

The greatest and most lasting impact on value happens when they converge and support the supply chain strategy. We find that supply chain leaders are often good at all three types, while supply chain laggards have not begun to define these critical network relationships. 

Supplier development programs matured the fastest in discrete industries. The Nokia/Ericsson story was a catalyst for high-tech and discrete manufacture adoption. A supplier development program is an orchestrated initiative using the supply chain strategy to define supplier relationships. It includes one or more of these key elements ... 

Focus on the bricks. How well have you defined the supply chain strategy around each element of the brick framework ... 

In the race for Supply Chain 2020, there is not enough time for consensus. This is often the elephant in the room. Instead, there needs to be a guiding coalition. While the term collaboration is bandied about, work teams can only collaborate when there is goal clarity. It happens when there is a clear win-win value proposition and teams have a common goal. The supply chain team needs clarity of role and purpose. The challenge for leadership teams is defining the supply chain strategy in a way that all functions see the entire elephant, not only different parts. 

Channel-driven fulfillment is the redesign of order processes to become demand driven, not order driven, and the supply chain strategy used is based on service level agreement for pull-based replenishment to define an order. Replenishment decisions are evaluated continuously for each channel based on profitability and product placement goals. Supply chain velocity and demand visibility are key elements for a successful execution of channel driven. 

Harrison (2003) also argues that the chaUenge for the firms is to define which of the three supply chain strategies described above is most appropriate for each product. Figure 2.4 below provides a framework to match supply chain strategies with products and industries. In the vertical axis, it is shown informatimi on uncertainty in customer demand, while the horizontal axis represents the importance of economies of scale, either in productirai or distribution ... 

One example of contingency approach applied to supply chain management comes from Fisher (1997). He proposes a framework to define what is the best supply chain for a company s product He argues that the first step in devising an effective supply chain strategy is to consider the nature of the demand for the products. To that end, many aspects are important for example, product lifecycle, demand predictability, product variety, and market standards for lead time and service. He proposes to classify products on two categories They are either primarily Functional or primarily Innovative, as summarized below ... 

Supply chain strategy is defined aligning product categories and supply chain functions as follow Physical (efficient process) for functional products and Market (responsiveness) for innovative products. 

The last step of the proposed methodology is to develop a supply chain strategy that will define all critical initiatives that the company should perform to move towards a demand driven supply chain. This is a very important step to ensure a structured and formal process to define and prioritize the different opportunities and strategic options available to the company. 

This book aims to identify and describe the key components of demand driven supply chains, and based on these components, develop a structured and integrated assessment framework that companies can use to assess their current and desired future supply chain states in light of the Demand Driven Supply Chain (DDSC) concepts, and to define a supply chain strategy to move towards a customer centric operation, cost effectively. 

Results are also measurable in terms of their achievement — even if it takes longer to know if one has reached one s objective. The outcome definition of the project leaves it to the project team to get to where one wants to go. The firm might begin with a broad result-defined outcome for an initial supply chain strategy project and then use several product-defined and service-defined projects to implement the strategy. So, frequently the supply chain strategy project will use a result to infer its scope and direction. 

Products Shortest term Easiest to define when it is complete Often supports a service or a result Least amount of latitude in terms of final product A supply chain strategy based on the company s strategic plan A collaboration strategy for trading partnerships A new warehouse An implemented supply chain information system... 

Figure 15.1 repeats a model for supply chain change introduced in Chapter 13. Such a model could form the nucleus of a singular methodology, Level 3 in the Kerzner maturity model. We have already used the approach to define the supply chain strategy. An important point is that it also applies to process improvement projects that implement the strategy. 

Ideally, the company should develop a vision for the supply chain, including the activity system the organization needs to carry out its strategy as developed in Chapter 10. Out of this vision will come a template for partnerships called the Collaboration Strategy. Chapter 15.1 described this deliverable of the supply chain strategy process. This will define what types of partners are sought and their contribution to fulfilling the vision. 

Issue, Issues List Issues are questions that define the scope of the supply chain strategy. A running list keeps track of these issues and the response implicit in the strategy. Issues are often tracked in categories like Financial, Organization Measures, Product Development, Processes, etc. 

If capital in the environment is not conducive to implementing the supply chain strategy, adequate strategic decisions should be made and tasks set for the development of internal capital, the qualities of which may reduce the negative impact of the environment should be directly defined. 

The CODP allows for a differentiation of supply chain strategy before and after the defined point. Companies may utilize a lean strategy up to the CODP and an agile strategy beyond it as depicted in Fig. 3.14 (Christopher and TowiU 2001). 

Since the leagile strategy has been defined for product 1 of the computer manufacturer, it is now important to take a closer look at the position of the customer order decoupling point (CODP), which will take place in CM2, but can be considered when looking at the determination of the supply chain strategy. 

After the customer requirements have been identified, a supply chain strategy is derived. To keep the generic framework simple, only two generic supply chain strategies are considered. Every company applying the framework can define its own supply chain strategies, which should always be based on the customers requirements. 

The SCOR systematic places return processes both upstream and downstream of the supply chain. The source return processes refer to the return of raw material or components to suppliers, whereas the deliver return processes address the receipt of returned finished goods from customers. Furthermore there is the return of empty containers. For all situations, three different return processes are defined (for defective products, MRO (maintenance, repair, and overhaul) products, and excess products). They are not mutually exclusive and can (or even should) be exercised simultaneously, depending on the chosen supply chain strategy and other factors such as product complexity and service level offered to the customer. 

The company PC Manufacturing Inc. analyzed its customer requirements and defined an optimal TO-BE supply chain strategy and processes. Afterwards the current supply chain was recorded and compared with the optimal one. This gap analysis showed that PC Manufacturing Inc. already had a satisfactory congruity between the two designs in many areas. However, four greater gaps were identified ... 

In the last chapter, we examined three frameworks, or models, that offer different ways to think about supply chain strategy. The model described in this chapter uses the "product life cycle" to define the product s position in its competitive market. The model helps us imderstand the relative importance of supply chain features, as distinct from product features, to long-term product success. It also brings into play the notion of time-criticality in supply chain innovation. As George Stalk noted in his article, time can be the dominant element in a strategy. 

One s supply chain strategy will depend on grid placement. Table 5.1, also published earlier, has examples of how supply chain thinking can apply to define a general strategy that fits each box. High-potency projects are those that will help the company accomplish the intent shown in the table. 

A term used by Michael Porter in defining networks of activities that provide a sustainable competitive advantage. This book recommends activity systems as the basis of a supply chain strategy. Chapter 7... 

Phase I Define a Supply Chain Strategy/Design... 

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