Supply chain strategy process

A supply chain strategy process to move towards a customer centric operation. 

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. 

Get to know your own DNA. Just as deoxyribonucleic acid (DNA) forms human cells with twisted strands of polymers forming a double helix, each item has its own DNA. You can only master the supply chain when you know each item s DNA. The twisted pairs or long polymers in the DNA cell makeup are replaced by demand and supply strands (representing the rhythms and cycles of demand and supply) in the supply chain. The processes of supply can only be effectively designed outside-in with a goal in mind (e.g., supply chain strategy). 

Need for supply chain strategy. The importance of supply chain strategy in the design and building phases of supply chain horizontal processes becomes clear very quickly. Don t start without it. 

As companies answer these questions and build their supply chain strategies, it is time to look forward. We can learn from history, but need to forge the path forward to drive differentiation. Before we can run the race, we must train. This training requires behavioral modification in three areas building supply chain agility, learning how to listen and learn, and valuing process innovation. 

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. 

The last step of the framework is to develop a supply chain strategy that will allow the company to identify the steps required to become a demand driven supply chain. This development should be performed aligned with the company strategic business planning process, as supply chain is a key enabler of business improvement and can help the company achieve top level business goals like revenue growth, increase asset utilization and profitability, improve customer service, just to name a few examples. 

After determining the nature of the product demand (e.g., functional and iimovative products) and the supply chain priorities (e.g., responsive or efficient), managers can employ a matrix to formulate the ideal supply chain strategy. Fisher proposes to plot the nature of the demand for each of the product families and its supply chain priorities, as illustrated in Fig. 4.31, in order to allow identify whether the process used for supplying products is well matched to the product type, which means, an efficient process for functional products and a responsive process for innovative products. 

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. 

This research also developed a formal framework to support companies in designing a supply chain strategy that will allow them to move towards a demand driven supply chain. This firamework is integrated with the assessment process of both current and future states proposed in this thesis, and should be used as part of the annual planning cycle. 

It will be difficult to implement a supply chain strategy without identifying the enabling processes needed to make the supply chains work. Enabling processes are often overlooked in strategy development and should be incorporated into the project plan. 

This tool, described in detail in Chapter 10, will translate strategic choices into activities. These activities, in turn, will lead to the processes needed to perform them. Because application of the activity system method requires strategic choices, they should have been made or they should be made during the supply chain strategy design. For this, the team must be empowered to make needed decisions. Changing supply chains in ways that are counter to strategic direction will lead to confusion, if not catastrophe. 

Identify the ways a reconstituted supply chain should support the strategy. Set a high-level specification for the new supply chain and its role. Divide the supply chain into processes. Examples include order fulfillment, payments, inbound material, physical distribution, production control, and new product introduction. List possible changes to the processes needed to meet strategic requirements. 

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. 

Supply Chain Strategy Activity system designs Development of themes and linked activities and process needs to support the strategy... 

The initiative for supply chain improvement will come from a sponsor s firm. The sponsor is an executive who champions the effort. The sponsor s firm can be a dominant player in the supply chain or one with a major stake in the project s success. The sponsor should have completed the preparation steps described previously in this section and will likely be somewhere in the process of developing and implementing its supply chain strategy. Indeed, the sponsor s firm may have already completed internal restructuring tasks. 

The following sections provide examples of top-down maps using High Tech and other companies as examples. Top-down maps are needed at each stage of supply chain strategy development. These include the development of spheres, or businesses within the business, the design of the activity system, and the identification of processes supporting each activity. 

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. 

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