Supply Chain
Strategy
WAQAS SHAKIR
PhD Scholar
Lecture
No. 4
What is Supply
Chain?
• A supply chain refers to the network of
organizations, people, activities, information,
and resources involved in the creation and
delivery of a product or service from the
supplier to the end-users.
• It encompasses all the activities involved in
producing and delivering goods and services,
including sourcing raw materials,
manufacturing, transportation, warehousing,
distribution, and customer service.
Objectives of Supply Chain
To ensure the availability of raw materials and other inputs required
for production
To minimize inventory holding costs while maintaining sufficient
inventory levels to meet customer demand
Objectives of Supply Chain
To improve delivery times and reduce lead times for products and
services
To increase efficiency and reduce costs in all aspects of the supply
chain, including procurement, production, transportation,
warehousing, and distribution.
Objectives of Supply Chain
To optimize supplier relationships and develop strategic
partnerships with key suppliers
To enhance collaboration and communication across all functions
and organizations in the supply chain
Objectives of Supply Chain
To ensure compliance with legal, regulatory, and ethical standards
in all aspects of the supply chain
To identify and mitigate risks and vulnerabilities in the supply
chain, such as disruptions to supply or changes in demand
Objectives of Supply Chain
To continuously monitor and improve supply chain performance
through the use of metrics, analytics, and other tools.
Importance of Supply Chain
A well-managed supply chain can bring numerous benefits to an
organization, including:
Improved customer satisfaction and loyalty through better
product quality, on-time delivery, and efficient customer service.
Increased efficiency and productivity by minimizing waste,
reducing lead times, and improving inventory management.
Importance of Supply Chain
A well-managed supply chain can bring numerous benefits to an
organization, including:
Reduced costs by optimizing transportation, warehousing, and
other operational expenses.
Better risk management by identifying and mitigating potential
disruptions and vulnerabilities in the supply chain.
Importance of Supply Chain
A well-managed supply chain can bring numerous benefits to an
organization, including:
Competitive advantage through innovation, responsiveness, and
flexibility.
Decision Phases in Supply Chain
The supply chain decision-making process involves four key phases:
Strategic planning:
This involves setting the overall direction and objectives for the
supply chain, including decisions on sourcing strategies,
production locations, distribution channels, and customer service
policies.
Decision Phases in Supply Chain
Tactical planning:
This involves translating the strategic plan into specific action
plans and budgets for each functional area of the supply chain, such
as production scheduling, inventory management, transportation
planning, and warehousing.
Decision Phases in Supply Chain
Execution:
This involves implementing the tactical plans through day-to-day
operations, such as purchasing, manufacturing, shipping, and
delivery.
Decision Phases in Supply Chain
Monitoring and control
This involves tracking performance metrics, identifying deviations
from plans, and taking corrective action as necessary to ensure that
the supply chain is meeting its objectives.
Process Views of a Supply Chain
There are three primary process views of a supply chain:
Material flow:
This refers to the physical movement of materials and products
from suppliers to customers, including procurement, production,
and distribution.
Process Views of a Supply Chain
There are three primary process views of a supply chain:
Material flow:
This refers to the physical movement of materials and products
from suppliers to customers, including procurement, production,
and distribution.
Process Views of a Supply Chain
There are three primary process views of a supply chain:
Information flow
This refers to the flow of information and data across the supply
chain, including order processing, inventory management, and
demand forecasting.
Process Views of a Supply Chain
There are three primary process views of a supply chain:
Financial flow
This refers to the flow of funds and payments across the supply
chain, including invoicing, payment terms, and financing
arrangements.
Supply Chain Performance:
Achieving Strategic Fit and Scope
Competitive and Supply Chain Strategies:
To achieve success in a competitive marketplace, it is essential to
develop and execute effective supply chain strategies that align
with the company's overall competitive strategy.
Competitive and Supply Chain Strategies:
A company's competitive strategy should inform its supply chain
strategy, which in turn should drive operational decisions and
actions.
Competitive and Supply Chain Strategies:
Some examples of competitive strategies that can inform supply
chain strategies include cost leadership, differentiation, and focus.
Achieving Strategic Fit:
Strategic fit refers to the degree to which a company's supply chain
capabilities align with its competitive strategy. Achieving strategic
fit requires a close alignment between the company's customer
requirements, supply chain capabilities, and competitive priorities.
Achieving Strategic Fit:
To achieve strategic fit, a company must design its supply chain to
match the demands of its target customers and the requirements of
its competitive strategy. This includes decisions around product
design, sourcing, production, inventory management, and
logistics.
Expanding Strategic Scope:
Expanding strategic scope involves increasing the range of
products and services offered by a company, as well as expanding
into new geographic markets or customer segments.
Expanding Strategic Scope:
This requires a corresponding expansion of the company's supply
chain capabilities, including sourcing, production, logistics, and
customer service.
Expanding Strategic Scope:
Expanding strategic scope can create new opportunities for growth
and profitability, but it also requires careful planning and
execution to ensure that the supply chain can support the
expanded scope effectively.
Challenges to Achieving and
Maintaining Strategic Fit:
There are several challenges to achieving and maintaining strategic
fit in a supply chain, including:
Rapid changes in customer demands and market conditions that
can make it difficult to anticipate and respond effectively.
Challenges to Achieving and
Maintaining Strategic Fit:
Limited visibility and control over upstream and downstream
supply chain partners that can create coordination and integration
challenges.
Complex and global supply chains that require coordination across
multiple geographies, languages, and cultures.
Challenges to Achieving and
Maintaining Strategic Fit:
The need to balance cost, quality, and speed in a highly competitive
marketplace.
Achieving and Maintaining Strategic
Fit in Emerging Retail Markets
Emerging retail markets, such as China, India, and Brazil, present
unique challenges and opportunities for achieving and maintaining
strategic fit in a supply chain.
Achieving and Maintaining Strategic
Fit in Emerging Retail Markets
These markets have rapidly growing consumer demand, but they
also have different cultural, economic, and regulatory environments
that require careful consideration.
Achieving and Maintaining Strategic
Fit in Emerging Retail Markets
To achieve strategic fit in these markets, companies must invest in
local supply chain capabilities, build strong relationships with local
partners, and adapt their supply chain processes to the unique
market conditions.
Achieving and Maintaining Strategic
Fit in Emerging Retail Markets
This includes developing new product and service offerings,
optimizing logistics and distribution networks, and building a
strong customer service infrastructure.
