SUPPLY CHAIN PERFORMANCE Achieving Strategic Fit and Scope
AGENDA <ul><li>STRATEGIES </li></ul><ul><li>ACHIEVING FIT </li></ul><ul><li>EXPANDING SCOPE </li></ul>
COMPETITIVE  AND  SUPPLY CHAIN  STRATEGIES Section 2.1
COMPETITIVE <ul><li>Defines </li></ul><ul><ul><li>Set of Customer Needs </li></ul></ul><ul><ul><li>Satisfy Trough Goods an...
COMPETITIVE <ul><li>Examples </li></ul><ul><ul><li>Low price </li></ul></ul><ul><ul><li>Availability </li></ul></ul><ul><u...
STRATEGIES <ul><li>COMPETITIVE </li></ul><ul><ul><li>AND </li></ul></ul><ul><li>SUPPLY CHAIN </li></ul>
VALUE CHAIN
VALUE CHAIN <ul><li>Portfolio </li></ul><ul><li>Make or Buy </li></ul>
VALUE CHAIN <ul><li>Segment </li></ul><ul><li>Target </li></ul><ul><li>Position </li></ul><ul><li>Mix </li></ul>
VALUE CHAIN SUPPLY CHAIN
ACHIEVING STRATEGIC FIT  Section 2.2
ACHEIVING <ul><li>Step 1:  Understand the Customer </li></ul><ul><ul><li>Attributes </li></ul></ul><ul><ul><ul><li>Lot Qua...
ACHEIVING <ul><li>Step 1:  Understand the Customer </li></ul><ul><ul><li>Uncertainty </li></ul></ul><ul><ul><ul><li>(of) D...
ACHEIVING <ul><li>Step 1:  Understand the Customer </li></ul><ul><ul><li>Uncertainty </li></ul></ul>
ACHEIVING <ul><li>Step 1:  Understand the Customer </li></ul><ul><ul><li>Uncertainty </li></ul></ul>
ACHEIVING <ul><li>Step 2:  Understand the Supply Chain </li></ul><ul><ul><li>Trade-Off </li></ul></ul><ul><ul><ul><li>Resp...
ACHEIVING <ul><li>Step 2:  Understand the Supply Chain </li></ul><ul><ul><li>Responsiveness </li></ul></ul><ul><ul><ul><li...
ACHEIVING <ul><li>Step 2:  Understand the Supply Chain </li></ul><ul><ul><li>Efficiency </li></ul></ul><ul><ul><ul><li>Ach...
ACHEIVING <ul><li>Step 2:  Understand the Supply Chain </li></ul><ul><ul><li>Responsiveness -  Efficient Frontier </li></u...
ACHEIVING <ul><li>Step 3:  Achieving Strategic Fit </li></ul><ul><ul><li>Consistency Between </li></ul></ul><ul><ul><ul><l...
ACHEIVING <ul><li>Step 3:  Achieving Strategic Fit </li></ul>
ACHEIVING <ul><li>Step 3:  Achieving Strategic Fit </li></ul>
ACHEIVING <ul><li>Step 3:  Achieving Strategic Fit </li></ul>Capacity Flexibility Utilization Mfr. High Margins Low Margin...
ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Multiple Products and Segments </li></ul></ul><ul><ul><ul><li...
ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Multiple Products and Segments </li></ul></ul><ul><ul><ul><li...
ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Product Life Cycle </li></ul></ul><ul><ul><ul><li>Beginning S...
ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Product Life Cycle </li></ul></ul><ul><ul><ul><li>Later Stage...
ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Product Life Cycle </li></ul></ul>
EXPANDING STRATEGIC SCOPE  Section 2.3
ALTERNATIVES <ul><li>Intracompany Intraoperational: Minimize Local Cost  </li></ul>
ALTERNATIVES <ul><li>Intracompany Intraoperational: Minimize Functional Cost  </li></ul>
ALTERNATIVES <ul><li>Intracompany Interoperational: Maximize Company Profit  </li></ul>
ALTERNATIVES <ul><li>Intercompany Interoperational: Maximize Supply Chain Surplus  </li></ul>
SUMMARY AND CONCLUSIONS
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SUPPLY CHAIN PERFORMANCE Achieving Strategic Fit and Scope

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SUPPLY CHAIN PERFORMANCE Achieving Strategic Fit and Scope

  1. 1. SUPPLY CHAIN PERFORMANCE Achieving Strategic Fit and Scope
  2. 2. AGENDA <ul><li>STRATEGIES </li></ul><ul><li>ACHIEVING FIT </li></ul><ul><li>EXPANDING SCOPE </li></ul>
  3. 3. COMPETITIVE AND SUPPLY CHAIN STRATEGIES Section 2.1
  4. 4. COMPETITIVE <ul><li>Defines </li></ul><ul><ul><li>Set of Customer Needs </li></ul></ul><ul><ul><li>Satisfy Trough Goods and Services </li></ul></ul>
  5. 5. COMPETITIVE <ul><li>Examples </li></ul><ul><ul><li>Low price </li></ul></ul><ul><ul><li>Availability </li></ul></ul><ul><ul><li>Convenience </li></ul></ul><ul><ul><li>Customization </li></ul></ul><ul><ul><li>Other </li></ul></ul>
  6. 6. STRATEGIES <ul><li>COMPETITIVE </li></ul><ul><ul><li>AND </li></ul></ul><ul><li>SUPPLY CHAIN </li></ul>
  7. 7. VALUE CHAIN
  8. 8. VALUE CHAIN <ul><li>Portfolio </li></ul><ul><li>Make or Buy </li></ul>
  9. 9. VALUE CHAIN <ul><li>Segment </li></ul><ul><li>Target </li></ul><ul><li>Position </li></ul><ul><li>Mix </li></ul>
  10. 10. VALUE CHAIN SUPPLY CHAIN
  11. 11. ACHIEVING STRATEGIC FIT Section 2.2
  12. 12. ACHEIVING <ul><li>Step 1: Understand the Customer </li></ul><ul><ul><li>Attributes </li></ul></ul><ul><ul><ul><li>Lot Quantity </li></ul></ul></ul><ul><ul><ul><li>Response Time </li></ul></ul></ul><ul><ul><ul><li>Variety of Products </li></ul></ul></ul><ul><ul><ul><li>Service Level </li></ul></ul></ul><ul><ul><ul><li>Price </li></ul></ul></ul><ul><ul><ul><li>Rate of Innovation </li></ul></ul></ul>
  13. 13. ACHEIVING <ul><li>Step 1: Understand the Customer </li></ul><ul><ul><li>Uncertainty </li></ul></ul><ul><ul><ul><li>(of) Demand </li></ul></ul></ul><ul><ul><ul><li>Implied Demand </li></ul></ul></ul><ul><ul><ul><ul><li>Portion of Demand Supply Chain Expected to Handle </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Customer Desires </li></ul></ul></ul></ul>
  14. 14. ACHEIVING <ul><li>Step 1: Understand the Customer </li></ul><ul><ul><li>Uncertainty </li></ul></ul>
  15. 15. ACHEIVING <ul><li>Step 1: Understand the Customer </li></ul><ul><ul><li>Uncertainty </li></ul></ul>
  16. 16. ACHEIVING <ul><li>Step 2: Understand the Supply Chain </li></ul><ul><ul><li>Trade-Off </li></ul></ul><ul><ul><ul><li>Responsiveness </li></ul></ul></ul><ul><ul><ul><li>Efficiency </li></ul></ul></ul>
  17. 17. ACHEIVING <ul><li>Step 2: Understand the Supply Chain </li></ul><ul><ul><li>Responsiveness </li></ul></ul><ul><ul><ul><li>Ranges of Quantity Demanded </li></ul></ul></ul><ul><ul><ul><li>Lead Times </li></ul></ul></ul><ul><ul><ul><li>Variety of Products </li></ul></ul></ul><ul><ul><ul><li>Innovative Products </li></ul></ul></ul><ul><ul><ul><li>Service Level </li></ul></ul></ul>
  18. 18. ACHEIVING <ul><li>Step 2: Understand the Supply Chain </li></ul><ul><ul><li>Efficiency </li></ul></ul><ul><ul><ul><li>Achieve Target (effective) </li></ul></ul></ul><ul><ul><ul><li>Lowest Total Cost </li></ul></ul></ul><ul><ul><ul><li>Inversely Related to Responsiveness </li></ul></ul></ul>
  19. 19. ACHEIVING <ul><li>Step 2: Understand the Supply Chain </li></ul><ul><ul><li>Responsiveness - Efficient Frontier </li></ul></ul>
  20. 20. ACHEIVING <ul><li>Step 3: Achieving Strategic Fit </li></ul><ul><ul><li>Consistency Between </li></ul></ul><ul><ul><ul><li>Implied Demand Uncertainty </li></ul></ul></ul><ul><ul><ul><li>Supply Chain Responsiveness </li></ul></ul></ul>
  21. 21. ACHEIVING <ul><li>Step 3: Achieving Strategic Fit </li></ul>
  22. 22. ACHEIVING <ul><li>Step 3: Achieving Strategic Fit </li></ul>
  23. 23. ACHEIVING <ul><li>Step 3: Achieving Strategic Fit </li></ul>Capacity Flexibility Utilization Mfr. High Margins Low Margins Pricing Respond to Demand Lowest Cost Prod. Design Responsive Efficient Goal
  24. 24. ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Multiple Products and Segments </li></ul></ul><ul><ul><ul><li>Choices </li></ul></ul></ul><ul><ul><ul><ul><li>Separate Supply Chains </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Tailored Supply Chain </li></ul></ul></ul></ul>
  25. 25. ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Multiple Products and Segments </li></ul></ul><ul><ul><ul><li>Tailored (potentially) Provides </li></ul></ul></ul><ul><ul><ul><ul><li>Economies of Scale </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Economies of Scope </li></ul></ul></ul></ul>
  26. 26. ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Product Life Cycle </li></ul></ul><ul><ul><ul><li>Beginning Stages </li></ul></ul></ul><ul><ul><ul><ul><li>Demand Uncertain </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Margins High </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Product Availability Crucial </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Cost Often Secondary Consideration </li></ul></ul></ul></ul>
  27. 27. ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Product Life Cycle </li></ul></ul><ul><ul><ul><li>Later Stages </li></ul></ul></ul><ul><ul><ul><ul><li>Demand More Certain </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Margins Lower </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Price Becomes Significant Factor </li></ul></ul></ul></ul>
  28. 28. ACHEIVING <ul><li>Other Considerations </li></ul><ul><ul><li>Product Life Cycle </li></ul></ul>
  29. 29. EXPANDING STRATEGIC SCOPE Section 2.3
  30. 30. ALTERNATIVES <ul><li>Intracompany Intraoperational: Minimize Local Cost </li></ul>
  31. 31. ALTERNATIVES <ul><li>Intracompany Intraoperational: Minimize Functional Cost </li></ul>
  32. 32. ALTERNATIVES <ul><li>Intracompany Interoperational: Maximize Company Profit </li></ul>
  33. 33. ALTERNATIVES <ul><li>Intercompany Interoperational: Maximize Supply Chain Surplus </li></ul>
  34. 34. SUMMARY AND CONCLUSIONS
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