Supply Chain Performance-Achieving Strategic Fit and Scope.ppt

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1、SEG 4610,Supply Chain Management,1,Supply Chain Performance: Achieving Strategic Fit and Scope,SEG 4610,Supply Chain Management,2,Strategic Decisions,Strategic Decisions are ones that keep an organisation matched to its environment.Motivation: Assure long term survival Ensure profit growth,SEG 4610,

2、Supply Chain Management,3,The Value Chain in a company,SEG 4610,Supply Chain Management,4,Competitive Strategy,A companys competitive strategy defines the set of customer needs that it seeks to satisfy through its products and services.Compaq (immediate availability) vs. Dell (customisation) ParkNSh

3、op vs. CitiSuperBased on the customers priorities Targets one or more customer segments Aim: provide goods/services to satisfy these customers needs,SEG 4610,Supply Chain Management,5,Competitive Dimensions,Cost Quality Time Flexibility/VarietyStrategic Positioning Defines those positions that a fir

4、m wants to occupy in the competitive product space.,SEG 4610,Supply Chain Management,6,Corporate Strategy, Competitive Priorities and Functional Inter-relationships,Market analysis segmentation needs assessment,Socioeconomic and business environment,Corporate strategy missions goals distinctive,Futu

5、re directions global strategy new products/services,Competitive priorities cost quality time flexibility,Capabilities current needed plans,Functional area strategies,SEG 4610,Supply Chain Management,7,Terry Hill (London Business School): Order Winners & Qualifiers,Order Qualifiers are those (minimum

6、) criteria that a company must meet to be considered as a possible supplier (e.g. ISO 9000). Order winners are those criteria that wins the orders. Invariably due to re-directing competitive priorities,SEG 4610,Supply Chain Management,8,Functional Strategies,Product development Product portfolio? Ou

7、tsourced or internal development? Marketing Customer segments? Products/price/promotion? Competitors? Finance Acquisition and allocation of resources Supply Chain Procurement, production, delivery and service,SEG 4610,Supply Chain Management,9,Developing an Operations Strategy (Terry Hill),1. Define

8、 corporate objectives. 2. Determine marketing strategies (strategic positioning). 3. Assess how different products qualify in their respective markets and win orders against competitors. 4. Establish appropriate operational processes for product manufacture and delivery. 5. Provide the operational i

9、nfrastructure to support production/delivery.,SEG 4610,Supply Chain Management,10,Strategic Fit,Strategic fit means consistency between the competitive advantage that a firm seeks and the process capabilities and managerial policies that it uses to achieve that advantage.Key to success: Competitive

10、strategy and functional strategies must support each other and fit as a co-ordinated overall strategy. Each function must structure its processes to be able to execute these strategies well.,SEG 4610,Supply Chain Management,11,Achieving Strategic Fit,Understand the customer Customer needs for target

11、ed segments? Define service requirements and desired costs Understand the supply chain Operational characteristics Performance vs. customer needs Achieving strategic fit Re-structure supply chain Alter competitive strategy,SEG 4610,Supply Chain Management,12,Understanding the customer,Lot size Respo

12、nse time Service level Product variety Price Innovation,Implied Demand Uncertainty,SEG 4610,Supply Chain Management,13,Implied vs. “real” demand uncertainty,Implied demand uncertainty is the uncertainty that exists due to the portion of demand that the supply chain is required to meet. Affected by:

13、Portion of demand (Market segment) handled by supply chain Attributes desired by customers,SEG 4610,Supply Chain Management,14,Implied Uncertainty Spectrum,Low Implied Demand Uncertainty,Somewhat Certain Demand,High Implied Demand Uncertainty,Somewhat Uncertain Demand,Purely functional products,Esta

14、blished products,New models of existing goods,Entirely new products,Gasoline,Crest toothpaste,New Ford Taurus,Palm Pilot,SEG 4610,Supply Chain Management,15,Relationship between Demand Characteristics and Implied Demand Uncertainty (Fisher),SEG 4610,Supply Chain Management,16,Achieving Strategic Fit

15、,Understand the customer Map where their demand is located on the implied uncertainty spectrum Understand the supply chain Achieving strategic fit,SEG 4610,Supply Chain Management,17,Understanding the Supply Chain,Supply chain responsiveness is its ability to: Respond to wide range of quantities dem

16、anded Meet short lead times Manufacture large variety of products Meet high service level Innovate anticipate customers demandResponsiveness comes at a cost ,SEG 4610,Supply Chain Management,18,Understanding the Supply Chain,Supply chain efficiency is the cost of making and delivering a product to t

17、he customer. Responsiveness cost efficient frontier Tradeoff between cost efficiency and responsiveness = Supply chain strategy - level of responsiveness offered,SEG 4610,Supply Chain Management,19,Responsiveness Spectrum,Highly efficient,Somewhat efficient,Highly responsive,Somewhat Responsive,Adva

18、nce production schedule; low variety or flexibility,Make-to-stock; Long production lead time (months),Mix model production; Production lead time in weeks,Make-to-order; Lead time in days,Glass production,M&S underwear,Automobile production,Dell PC,SEG 4610,Supply Chain Management,20,Achieving Strate

19、gic Fit,Understand the customer Map where their demand is located on the implied uncertainty spectrum Understand the supply chain Map where the supply chain capability is located on the responsiveness spectrum Achieving strategic fit,SEG 4610,Supply Chain Management,21,Achieving Strategic Fit,Effici

20、ent Supply Chain,Responsive Supply Chain,Strategic Fit,SEG 4610,Supply Chain Management,22,Efficient vs. Responsive Supply Chains,SEG 4610,Supply Chain Management,23,Achieving Strategic Fit,Understand the customer Map where their demand is located on the implied uncertainty spectrum Understand the s

21、upply chain Map where the supply chain capability is located on the responsiveness spectrum Achieving strategic fit Match supply chain responsiveness to implied demand uncertainty in zone of strategic fit. Other functional strategies must also be coordinated.,SEG 4610,Supply Chain Management,24,Outp

22、uts of Strategy (Terry Hill),Review of implications for manufacturing processes and infrastructure support for current and future products Assess degree of match between capabilities and order-winning and order-qualifying needs Continual monitor changes in match and mismatch Necessary operational re

23、-design, infrastructure investments, change schedule integrated into corporate strategy in co-ordination with other functional strategies,SEG 4610,Supply Chain Management,25,There is no SINGLE right supply chain for everyone There is only a right supply chain for your given competitive strategic pos

24、ition.,SEG 4610,Supply Chain Management,26,Other issues affecting Strategic Fit,Company offers multiple products to different customer segments Grainger: machine parts to Boeing, Ford and also small manufacturers Fast-moving products warehouses dispersed; slow moving items stored centrally Product l

25、ife cycles Demand characteristics different at different stages of life cycle Competitive strategic positioning will also change Supply chain and other functional strategies must adapt as product enters different stages of its life cycle Competitors actions change over time New products/services Cus

26、tomers expectations changes,SEG 4610,Supply Chain Management,27,Strategic Scope,SEG 4610,Supply Chain Management,28,Expanding Strategic Scope,Intra-company intra-operations scope: minimize local costs Intra-company intra-functional scope: minimize functional costs Intra-company inter-functional scop

27、e: Maximize company profits Inter-company inter-functional scope: Maximize supply chain surplusThe inter-company view essential as competition is not company vs company ,but supply chain vs supply chain The broader inter-company scope increases the size of the surplus to be shared among all stages o

28、f the supply chain,SEG 4610,Supply Chain Management,29,Drivers of Supply Chain Performance,inventory transportation facilities informationimpact on supply chain performance role in competitive strategy decision components,SEG 4610,Supply Chain Management,30,Inventory,Present throughout the supply ch

29、ain: Raw materials, work-in-process, finished goods at manufacturers/distributors/retailers, etc. Supply Chain role: Inventory reflects a mismatch of supply and demand Purposeful: economies-of-scale, anticipate future demand Related to throughput and “flow time” Competitive Strategy role: location a

30、nd amount of finished goods inventory impacts product availability (responsiveness) centralised/distributed storage impacts costs Decision Components: cycle inventory : inventory to meet demand between shipments safety stock: inventory held to meet unexpected demand seasonal inventory: inventory to

31、meet predictably variable demand,SEG 4610,Supply Chain Management,31,Transportation,Supply Chain role: Moves product between different stages in a supply chain Faster transportation modes decreases “flow time” Competitive Strategy role: More frequent deliveries increases responsiveness Transportatio

32、n system structure and operation must match the efficiency-responsiveness balance to competitive strategic position Decision Components: Transportation mode: air, truck, rail, ship, pipeline, Electronic delivery Network design and route selection In-house or out-source,SEG 4610,Supply Chain Manageme

33、nt,32,Facilities,Supply Chain role: Locations where “value-added” takes place in a supply chain Manufacturing (transformation), Warehousing (storage) Competitive Strategy role: Number and dispersion of warehouses affects costs facilities, management, inventory, transportation Location proximity to c

34、ustomers affects responsiveness Global and local presence affects customers perception Decision Components: Location Capacity Manufacturing Structure (Process Choices) Warehousing Operations storage by SKU or job-lots cross-docking,SEG 4610,Supply Chain Management,33,Information,Supply Chain role: I

35、nformation connects the various stages of a supply chain Daily operational decisions based on information about forecasted demand and product availability Competitive Strategy role: New info channels (e.g. Internet B2B platforms) allow customers to design their customised products (increases respons

36、iveness) Data collection increases understanding of customers preference target market segments improves demand forecasts Decision Components: Choice of enabling technologies EDI, Internet, ERP (SCM) software Push vs pull supply chains impacts info system design Co-ordination and information sharing

37、 Forecasting,SEG 4610,Supply Chain Management,34,Major Obstacles to Achieving Fit,Multiple owners and/or incentives in a supply chain Local optimisation and lack of global fit Customer fragmentation Increased product variety Shortening life-cycles Increasingly demanding customers Increasing implied

38、demand uncertainty Higher service expectations Globalisation Complexity of supply chain Increased competition Increased difficulty in executing new strategies,SEG 4610,Supply Chain Management,35,Dealing with obstacles,Multiple owners Contractual co-ordination Information co-ordination Customer fragm

39、entation Mass customisation Tailored logistics Globalisation Global companies, strategic partnerships First-mover advantage Company culture, investment in human resources,SEG 4610,Supply Chain Management,36,E-Commerce Strategy,What is E-commerce? Commerce transacted over the Internet Product informa

40、tion Order placement and/or negotiation Order tracking Order fulfilment Payment,SEG 4610,Supply Chain Management,37,Revenue Impact of E-Commerce,Length of supply chain Product Info Time to market Price/Contract Negotiation Order placement and tracking Order fulfilment Payment,SEG 4610,Supply Chain M

41、anagement,38,Cost Impact of E-Commerce,Facility Site and processing costs Inventory Levels and kinds Transportation Inbound/out bound logistics Infrastructure Information Sharing Co-ordination,SEG 4610,Supply Chain Management,39,Summary,Competitive Strategic Positioning Order-winners and qualifiers

42、Supply Chain Performance Efficiency vs Responsiveness Co-ordinated strategies Strategic Fit customers: implied demand uncertainty spectrum supply chain: responsiveness-cost spectrum Challenges E-commerce,SEG 4610,Supply Chain Management,40,References,Fisher, M. L., What is the right supply chain for your product?, Harvard Business Review, Mar-Apr 1997. Marien, E.J., The four supply chain enablers, Supply Chain Management Review, Mar-Apr, 2000, 60-68. Hill, T., Manufacturing Operations Strategy: Text and Cases, McGraw-Hill, 2009.,