Understanding supply chain management in your business strategy

Strong collaborative relationships with key suppliers are necessary for companies to understand at every moment their current "available to promise" inventory and capacity. Although outsourced manufacturing could be more expensive than in-house manufacturing, in the long term it would be less expensive than unused capacity.

Accordingly, competitive positioning is based on offering a continuous-replenishment system to customers in order to assure high service levels and low inventory levels at customers' facilities, thus achieving optimization of costs associated with inventory.

Examples of such industries include cement, steel, paper, commodities, and low-cost fashion, among others. A growing number of businesses recognize the many potential benefits of Enterprise Resource Planning ERP when it comes to managing business information, integrating various systems and working processes, and ensuring optimal operational efficiency.

This supply chain model is well suited for businesses with commoditized products, such as cement and steel. The SKU portfolio should be trimmed back to reduce the number of "high variation, low demand" SKUs, which create complexity in production and service. When the decoupling point is located farthest from the customer's end of the supply chain, product customization increases, therefore demand buffering should be supported by excess capacity.

The production sequence should be fixed and maintained for long periods of time. Due to the nature of such events, customers appreciate not only the speed of a supplier's response, but also its ability to tailor solutions to their needs.

These systems have been used widely to reduce cost and improve service level in large-scale logistics systems. In addition, modular processes and sharing of raw materials among several SKUs helps to ensure fast product development and manufacturability.

The book answers a recurring question in the business today: Kearney, 6 among others, developed several models regarding the formulation of supply chain strategy.

Among the many factors encompassed by this element, the most important are asset utilization and the location of the decoupling point. Article Figures [Figure 1] The four main elements of supply chain strategy Enlarge this image [Figure 2] Factors in supply chain processes Enlarge this image [Figure 3] Supply chain roadmap: There are no hard and fast rules when it comes to determining which system to implement first and the specific needs and circumstances of your business must be weighed and considered carefully before you reach a decision.

Production should instead be scheduled based on sales expectations for the length of the production cycle, using a model based on a "make to forecast" decoupling point.

The most powerful benefits of the "Supply Chain Roadmap" arise from its ability to help demystify the process of formulating supply chain strategy.

In this context, the proper alignment of the supply chain with business strategy is essential to ensure a high level of business performance.

My analysis has identified a set of common patterns that reveal key drivers of supply chain strategy and explain how these can be aligned in a coherent strategy.

In the most mature stage, collaborative planning with key customers helps to anticipate demand patterns. Recognizing the main "order winners" in terms of product features and service in a company's value proposal allows the enterprise to shape the connection and combination of the key drivers that must be incorporated into supply chain processes in order to ensure the fulfillment of that value promise to customers.

Consider using a cost-to-serve model to understand the cost and working capital implications of different supply chain services and processes that support trade-offs to deliver customer value.

Although outsourced manufacturing could be more expensive than in-house manufacturing, in the long term it would be less expensive than unused capacity. In addition, collaborative relationships with customers become more useful because they help to reduce demand uncertainty.

And second, they should ensure high levels of forecast accuracy to guarantee product availability and consequently, perfect order fulfillment.

Align external stakeholders on processes and actions to execute and deliver value: Companies fitting this profile must assure high utilization rates, often to the detriment of working capital and service levels. The fourth element, internal processes, provides an orientation that ensures a proper connection and combination within the supply chain activities that fall under the categories of source, make, and deliver.

Whether the strategy of your business is superior service, product innovation, or cost leadership, ensure your supply chain is helping to deliver the key points of that strategy. Bring together leaders from across your business to define the supply chain that will work for you—and make sure they provide the data your organization must deliver.

Supply Chain Strategy and Management Dates: Nov| Apr| Jul| NovThis course presents innovative strategies and best practices for. A supply chain strategy should always support the intent of the business strategy Dell broke into the big time by developing a business strategy and supply chain strategy that worked together.

Running head: Understanding Supply Chain Management in Your Business Strategy 2 When considering Supply Chain Management (SCM) there are a lot of factors in play. This includes the acquisition of raw materials to make a product and how much they cost, where the product is going, how much is being sold to a buyer and at what price, as well as costs of marketing among other things.

“Whereas current construction methods tend to support the fragmentation that plagues construction, supply-chain management promises an engineering basis to design, plan, and manage construction projects in a collaborative manner.” (O’ Brien ) The quantum leap in order value necessitates formulating suitable procurement and sub-contracting strategies for partnering and strategy for.

At the strategic level, company management makes high-level strategic supply chain decisions that are relevant to whole organizations.

The decisions that are made with regards to the supply chain should reflect the overall corporate strategy that the organization is following.

Understanding supply chain management in your business strategy