Supply Chain Strategy

Group 1
Supply Chain

encompasses all activities associated with the flow

and transformation of goods and services from the
raw materials stage to the end user (customer) as
well as the associated information flows.
Supply Chain Management

The term supply chain management arose in the

late 1980s and came into widespread use in the
1990s. Prior to that time, businesses used terms such
as logistics and operations management
instead.
Supply Chain Management
Figure 1.
The Supply Chain
Supply Chain Management vs. Logistics
Supply Chain Management
Networks of companies that work
together and coordinate their
actions to deliver a product to
market
Acknowledges all of traditional
logistics and also includes
activities such as marketing, new
product development, finance,
and customer service.
Logistics
activities that occur within the
boundaries of a single
organization
Focuses on procurement,
distribution, maintenance, and
inventory management
Goal of Supply Chain Management

Increase throughput while simultaneously

reducing both inventory and operating
expense.
Supply Chain Strategy

How the supply chain should operate in order to

compete.
Supply chain strategy is an iterative process that
evaluates the cost benefit trade-offs of
operational components.
Developing a Supply Chain Strategy

Understand the Business Strategy

Understand how the enterprise chooses to compete.
Developing a Supply Chain Strategy

Assess the Extended Supply Chain

Conduct a detailed, realistic assessment of the
capabilities that exist within the organization and even
the extended supply chain.
Developing a Supply Chain Strategy

Develop an Implementation Plan

The development of an implementation plan should
include activities and tasks, roles, responsibilities, a
corresponding timeline, and performance metrics.
Development Considerations
Cooperate and Collaborate with Your Partners
Outsource Where Appropriate
Executing Supply Chain Strategy

Performance Management
Tracking performance allows an organization to measure how
successful it is in realizing the goals of a strategy
Iterate the Cost Benefit Evaluation Process
Keep Communicating with Your Partners
Good communication can keep the extended supply chain in
sync.
Supply Chain Strategy

Should meet service, cost and quality goals and improve

profits while minimizing risk
Must recognize customer needs
Must recognize the most likely socio-economic and
demographic scenarios that may occur
Supply Chain Strategy

Must honestly evaluate the SWOT of the firm

Must account for the evolving technology, that is, and will
be available
Must satisfy the financial goals of the company
It must do something, namely, it must generate a set of
actions that create the capabilities the firm will need in
the future
Elements of Supply Chain Strategy

Leverage
Communication
Efficiency
Innovation
Risk Management
Continuous improvement
Just-In-Time

In case stock control is costly and to reduce

spending and improve competitiveness, a business
can switch to an alternative method of stock control
called "just in time"
Just-In-Time

Where a business holds no stock and instead relies

upon deliveries of raw materials and components to
arrive exactly when they are needed. Instead of
occasional large deliveries o a warehouse,
components arrive just when they are needed and
are taken straight to the factory floor.