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Supply Chain Management (2nd Edition) : Supply Chain Performance: Achieving Strategic Fit and Scope
Supply Chain Management (2nd Edition) : Supply Chain Performance: Achieving Strategic Fit and Scope
(2nd Edition)
Chapter 2
Supply Chain Performance:
Achieving Strategic Fit and Scope
2004 Prentice-Hall, Inc.
2-1
Outline
Competitive strategy:
defines the set of customer needs a firm seeks to satisfy through its
products and services
Low cost, Rapid Response, Product Differentiation
Ex: Migros versus BIM
HP versus Dell
Supply chain strategy:
determines the nature of material procurement, transportation of
materials, manufacture of product or creation of service, distribution of
product
Consistency and support between supply chain strategy, competitive
strategy, and other functional strategies is important!
New
Product
Development
Marketing
and
Operations Distribution
Sales
Service
Strategic fit:
Consistency between customer priorities of competitive
strategy and supply chain capabilities specified by the
supply chain strategy
Competitive and supply chain strategies have the same
goals
Lot size
Response time
Service level
Product variety
Price
Innovation
Implied
Demand
Uncertainty
High Fashion
Palm Pilot
Entirely new products
Customer Need
Price
Responsiveness
Low
High
Low Implied
Uncertainty
High Implied
Uncertainty
Product margin
Low
High
10%
40%-100%
1%-2%
10%-40%
10%-25%
Low
High
2004 Prentice-Hall, Inc.
Low
Cost
of it
e
F
n
Zo egic
t
ra
t
S
Responsiveness
spectrum
Efficient
supply chain
Certain
demand
2004 Prentice-Hall, Inc.
Implied
uncertainty
spectrum
Uncertain
demand
Responsive
Primary goal
Lowest cost
Quick response
Modularity to allow
postponement
Pricing strategy
Lower margins
Higher margins
Mfg strategy
High utilization
Capacity flexibility
Inventory strategy
Minimize inventory
Buffer inventory
Transportation strategy
Greater reliance on
responsive (fast) modes
Five categories:
Strategic Scope
Suppliers Manufacturer Distributor
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
Retailer
Customer
Intracompany
Intraoperational Scope
Strategic Scope:
Intracompany Intraoperation Scope
Suppliers Manufacturer Distributor
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
Retailer
Customer
Intracompany
Intrafunctional Scope
Strategic Scope:
Intracompany Intrafunctional Scope
Suppliers Manufacturer Distributor
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
Retailer
Customer
Intracompany
Interfunctional Scope
Strategic Scope:
Intracompany Interfunctional Scope
Suppliers Manufacturer Distributor
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
Retailer
Customer
Intercompany
Interfunctional Scope
Intercompany
Interfunctional Scope
Strategic Scope:
Intercompany Interfunctional Scope
Suppliers Manufacturer Distributor
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
Retailer
Customer
Flexible Intercompany
Interfunctional Scope