Strategic Supply Chain Management - Supply Chain Online

CHAPTER 1 Core Discipline 1: View Your Supply Chain as a Strategic Asset 17
is leveraging manufacturing partners’ common parts lists, engaging in collaborative
product design reviews, and leveraging partner repair capacity
in its own spare-parts and service network. Additionally, Tellabs has
established its manufacturing agreements to allow for movement of production
and repair operations into countries where a local presence benefits
market-share growth goals.
Third, consider the uniqueness of your internal operations. Do you
have business processes or unusual product characteristics that would be
difficult for an outsider to replicate If so, you have little to gain by going
outside—an outsourcer’s scale advantage won’t apply to your unusual
requirements. Wal-Mart, for example, has developed a highly customized
internal logistics operation that manages inbound inventory flows from its
central distribution centers to the shelves of its retail locations. As the
owner of one of the largest warehousing operations in the world, Wal-
Mart has nothing to gain—and everything to lose—by outsourcing this
aspect of its operations.
Fourth, consider the balance of power between you and your outsourcing
partner. Many providers of manufacturing, distribution, and customer-fulfillment
services are already larger than their customers. As
these service providers consolidate further, they’ll gain even more power.
Will you get the services that you need at a competitive price if your volume
of business isn’t high enough
To choose the best service provider, go beyond technical criteria and
consider the overall business context. Weigh the volume you represent
against the service provider’s strategy and overall size. You may end up
changing your decision about which service providers to use, how to
divide the volume among them, and even whether to outsource at all.
Customer Service Strategy
Customer service strategy is another key configuration component. Your
customer service strategy should be based on two things: the overall volume
and profitability of your customer accounts and an understanding of
what your customers really want. Both pieces of knowledge are integral
to your supply chain strategy because they help you to prioritize and
focus your capabilities.
Should all customers get same-day delivery, or should you aim for
different service levels depending on customer importance Should all
products be equally available, or should some customers have quicker,
easier access If your company never examines its service strategy, you