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Chapter:2 Supply Chain Performance Achieving Strategic Fit and Scope : 

Delivered by Tooba Hasan Khwaja Chapter:2 Supply Chain Performance Achieving Strategic Fit and Scope

Competitive & Supply Chain Strategy: 

Competitive & Supply Chain Strategy

Competitive Strategy

The set of customer needs that the company seeks to satisfy through its product and services It is based on how the customer prioritize s any of the product or service attribute Competitive Strategy

The Value Chain: 

The Value Chain NPD MKT& Sales Operations Distribution Services Finance, Accounts, IT, HR, Admin

Achieving a Strategic Fit: 

Strategic fit means that both the competitive and supply chain strategies have aligned goals Perfect fit between competitive strategy and functional strategy through a well coordinated overall strategy Each function must structure their processes and resources to execute their strategy The supply chain design and role of each stage must be aligned to back up supply chain strategy Achieving a Strategic Fit

Achieving Strategic Fit: 

Understanding the Customer and Supply Chain Strategy Understanding the supply Chain Capabilities Achieving Strategic Fit Achieving S t rategic Fit

Understanding the Customer & Supply Chain Uncertainty: 

Customer demand from different segment varies along several attributes… The Quantity of the product needed in each lot The Response Time that customers are willing to tolerate The Variety of product needed The Service level required The Price of the product The desired rate of innovation in the product Understanding the Customer & Supply Chain Uncertainty

Implied Demand Uncertainity: 

It is demand uncertainty due to the portion of the demand that the supply chain is targeting not the entire demand In contrast Demand Uncertainty is the uncertainty of customer demand for a product Implied Demand Uncertainity

Understanding the Supply Chain Capabilities: 

Respond to wide ranges of quantities demanded Meet short lead times Handle a large variety of products Build High innovative products Meet a high service level Handle supply uncertainty Understanding the Supply Chain Capabilities

Achieving Strategic Fit: 

There is no supply chain strategy that is always right There is a right supply chain strategy for a given competitive strategy Achieving Strategic Fit

Other Issues Affecting Strategic Fit: 

Other Issues Affecting Strategic Fit

PLC: 

Toward the beginning of the Life Cycle Demand is very uncertain & may be unpredictable Margins are often high & time is crucial to gaining sales Product availability is crucial to capturing the market Cost is often a secondary consideration At the maturity of the Life Cycle Demand has become more certain & supply is predictable Margins are lower due to an increase in competitive pressure Price become a significant factor in customer choice PLC

Globalization & Competitive Changes over Time: 

Important to consider the change in competitor behavior resulting from changes in competitor behavior due to globalization Flooding of marketplace with product variety , customers are becoming accustomed to having their individual needs Today, focus is on producing sufficient variety at reasonable rate Globalization & Competitive Changes over Time