Dr. Mohamad Fazle Rabbi - supply chain strategy

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Dr. Mohamad Fazle Rabbi - supply chain strategy

  1. 1. Towards Development of a Supply Chain Strategy 15 December, 2011
  2. 2. Agenda <ul><li>Introduction </li></ul><ul><li>Business Strategy and Supply Chain Management </li></ul><ul><li>Proposed Supply Chain Classification </li></ul><ul><li>SCM Strategy Development </li></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  3. 3. Introduction <ul><li>The presentation is based on a current research in the Supply Chain Management Strategy at the College of Business Administration (CBA) in Jeddah, KSA </li></ul><ul><li>Relationhip between business strategy and supply chain strategy is emphasized </li></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  4. 4. Mission of an Enterprise <ul><li>An enterprise must have a mission which states the purpose- what it is going to contribute to the society. </li></ul><ul><li>The mission drives the specific goals and objectives to be achieved </li></ul><ul><li>Business Strategy- addresses the various ‘how’ questions. </li></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  5. 5. Company Mission Dec 15, 2011 Kuwait Supply Chain and Logistics Conf Vision or guiding philosophy: what we want to be Purpose What we are here for Core values and beliefs Who we want to be Mission What we want to achieve
  6. 6. Business Strategy <ul><li>Definition (APICS Dictionary, 13 th Edition): </li></ul><ul><ul><li>“ the strategy of enterprise identifies how a company will function in its environment. The strategy specifies how to satisfy customers, how to grow the business, how to compete in its environment, how to manage the organization and develop capabilities within the business, and how to achieve financial objectives.” </li></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  7. 7. Business Strategy and Supply Chain Management Strategy <ul><li>Business Strategy identifies: </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Needs </li></ul></ul><ul><ul><li>Order qualifiers and order winners </li></ul></ul><ul><ul><ul><li>Qualifiers: Minimum functions and characteristics that meet the minimum needs of potential customers </li></ul></ul></ul><ul><ul><ul><li>Winners: Functions and characteristics that wins the customers (functionality, quality, costs, time, price, etc.) </li></ul></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  8. 8. Aligning Business Strategy and Supply Chain Management Strategy Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  9. 9. Matching Demand with Supply <ul><li>Marketing determines market and demand </li></ul><ul><ul><li>Global demand – by region, by customers for the finished products (by SKU’s) </li></ul></ul><ul><ul><li>Marketing strategy </li></ul></ul><ul><li>Supply Chain Management- assist in meeting the demands </li></ul><ul><ul><li>Supply Chain Strategy </li></ul></ul><ul><li>Finance </li></ul><ul><ul><li>Supports business strategy </li></ul></ul><ul><ul><ul><li>Supports marketing and supply chain </li></ul></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  10. 10. Supply Chain Process Dec 15, 2011 Kuwait Supply Chain and Logistics Conf Market Demand Order Winners Product Design
  11. 11. Factors Impacting Strategic Supply Chain Process <ul><li>Product </li></ul><ul><ul><li>Product design </li></ul></ul><ul><ul><ul><li>Materials and components used </li></ul></ul></ul><ul><ul><ul><li>Product characteristics </li></ul></ul></ul><ul><ul><li>Number of products </li></ul></ul><ul><ul><li>Redesign </li></ul></ul><ul><li>Demand characteristics </li></ul><ul><ul><li>Stable- unstable- seasonal for each end product </li></ul></ul><ul><ul><li>Markets- regions, customer segments </li></ul></ul><ul><ul><li>Product life cycle </li></ul></ul><ul><li>Order winners </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Speed </li></ul></ul><ul><ul><li>Availability </li></ul></ul><ul><ul><li>Quality </li></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  12. 12. Classification of the Supply Chain <ul><li>Proposed ABC classification of Supply Chain </li></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf Classification A B C <ul><li>Product </li></ul><ul><ul><li>Complexity </li></ul></ul><ul><ul><li>Life cycle </li></ul></ul><ul><ul><li>Innovation </li></ul></ul><ul><ul><li>Varieties </li></ul></ul>High Short High High Medium Medium Medium Medium Low Long Low Low <ul><li>Demand </li></ul><ul><ul><li>Volatility </li></ul></ul><ul><ul><li>Seasonality </li></ul></ul><ul><ul><li>Volume </li></ul></ul>High High Any Medium Medium Medium Stable Minimum High <ul><li>Order Winners </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Availability </li></ul></ul>High Six-Sigma Critical Reasonable Four sigma Very important Low Three sigma Important
  13. 13. Supply Chain Strategy Options Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  14. 14. Strategic Options <ul><li>Outsourcing </li></ul><ul><ul><li>Assembly </li></ul></ul><ul><ul><li>Packaging </li></ul></ul><ul><ul><li>Fabrication </li></ul></ul><ul><ul><li>Raw materials </li></ul></ul><ul><ul><li>Logistics </li></ul></ul><ul><li>Locations </li></ul><ul><ul><li>Distribution network </li></ul></ul><ul><ul><li>Plants and facilities </li></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  15. 15. Strategic Options <ul><li>Processes </li></ul><ul><ul><li>Process design </li></ul></ul><ul><ul><li>Equipments </li></ul></ul><ul><ul><li>Operations Planning </li></ul></ul><ul><li>Integration </li></ul><ul><ul><li>Key partners </li></ul></ul><ul><ul><li>Collaboration </li></ul></ul><ul><ul><ul><li>Design </li></ul></ul></ul><ul><ul><ul><li>Planning </li></ul></ul></ul><ul><ul><ul><li>Inventory management </li></ul></ul></ul><ul><ul><ul><li>Other </li></ul></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  16. 16. Strategic Options <ul><li>Technology </li></ul><ul><ul><li>ERP </li></ul></ul><ul><ul><li>Interface and integration </li></ul></ul><ul><ul><li>Joint development </li></ul></ul><ul><li>Organization </li></ul><ul><ul><li>Supply Chain Organization </li></ul></ul><ul><li>People </li></ul><ul><ul><li>Development </li></ul></ul><ul><ul><li>Recruitment </li></ul></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  17. 17. Summary <ul><li>Successful business needs to align business strategy with SCM Strategy </li></ul><ul><li>Need to have different strategies for different business scenarios </li></ul><ul><li>A supply chain classification scheme is presented to assist development of different strategies for different supply chain classes </li></ul><ul><li>Further research needed </li></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf
  18. 18. Questions? <ul><li>Thank You! </li></ul>Dec 15, 2011 Kuwait Supply Chain and Logistics Conf

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