Strategic Supply Chain Management - Supply Chain Online

10 Strategic Supply Chain Management
sales and build-to-order manufacturing to the computer industry. In truth,
Michael Dell is a visionary in supply chain management. PCs simply were
the medium he used to introduce his idea for a competitive supply chain:
Sell direct, build to order, and ship direct. Sam Walton was another supply
chain visionary. Wal-Mart’s legendary partnership with Procter & Gamble
to replenish inventory automatically showed the power of integrating with
key suppliers. To further reduce inefficiencies and costs, Wal-Mart shifted
from buying from distributors to buying directly from manufacturers for a
broad range of merchandise. These and other supply chain actions combine
to deliver on the promise of “always low prices”—the strategy that has
helped Wal-Mart become the world’s largest retailer.
FIVE KEY CONFIGURATION COMPONENTS
Strategic supply chain management is more than just innovation for the
sake of being innovative. It’s creating a unique supply chain configuration
that drives your strategic objectives forward. To get the most from your
supply chain, you need to consider five critical configuration components:
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Operations strategy
Outsourcing strategy
Channel strategy
Customer service strategy
Asset network
Your decisions around these components and how they play together define
your supply chain strategy.
Until now, companies tended to either address these components
informally or make decisions about them in isolation—often as part of a
functional strategy related to sales, purchasing, or manufacturing.
However, companies that view the supply chain as a strategic asset see
their components as interdependent—part of an integrated whole. Let’s
look at each more closely.
Operations Strategy
Your decisions about how you’ll produce goods and services form your
operations strategy. Will you choose make to stock, make to order, engineer
to order, or some combination Will you outsource manufacturing
Will you pursue a low-cost offshore manufacturing strategy Will you
complete your final configuration outside the manufacturing plant and