SUPPLY CHAIN PERFORMANCE

Delivered by Rabi’aa Naushad

BB-A Hons MBA

Competitive StrategyThe 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

The Value Chain

NPD MKT& Sales

Operations

Distribution

Services

Finance, Accounts, IT, HR, Admin

Achieving a Strategic FitStrategic 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 Strategic FitUnderstanding the Customer and Supply

Chain Strategy

Understanding the supply Chain Capabilities

Achieving Strategic Fit

Understanding the Customer & Supply Chain UncertaintyCustomer demand from different segment varies

alongseveral attributes…The Quantity of the product needed in each lotThe Response Time that customers are willing to

tolerateThe Variety of product neededThe Service level requiredThe Price of the productThe desired rate of innovation in the product

Implied Demand UncertainityIt 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

Understanding the Supply Chain CapabilitiesRespond to wide ranges of quantities

demandedMeet short lead timesHandle a large variety of productsBuild High innovative productsMeet a high service levelHandle supply uncertainty

Achieving Strategic FitThere is no supply chain strategy that is

always rightThere is a right supply chain strategy for a

given competitive strategy

PLC:Toward the beginning of the Life Cycle

Demand is very uncertain & may be unpredictableMargins are often high & time is crucial to gaining

salesProduct availability is crucial to capturing the

marketCost is often a secondary consideration

At the maturity of the Life CycleDemand has become more certain & supply is

predictableMargins are lower due to an increase in competitive

pressurePrice become a significant factor in customer choice

Globalization & Competitive Changes over TimeImportant 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.