Strategic Supply Chain Management - Supply Chain Online

CHAPTER 1 Core Discipline 1: View Your Supply Chain as a Strategic Asset 25
created an NPI-focused supply chain that delivers spectacular results for
the company and its investors.
Competing on Quality
Companies that compete on quality are known for the premium nature of
their products and services, as well as consistent and reliable performance.
Quality products include well-known names such as Lexus automobiles,
Maytag appliances, and Tropicana juices. Product development is obviously
critical to quality, but so are key supply chain processes such as
manufacturing, sourcing, quality assurance, and return. And if a product
is perishable or fragile, transportation and storage play an integral role.
One key supply chain attribute relative to quality is traceability—the
ability to trace a product back to its point of origin—a growing requirement
in a number of industries. Concerns about food safety and the booming
market for organic and “ethical” products mean that consumers want
to be able to trace a product from “farm to plate.” In the U.S. tire market,
for example, traceability back to the point of manufacture is a legal
requirement. Moreover, counterfeiting has emerged in a growing number
of sectors, such as luxury goods, entertainment, and pharmaceuticals. To
offset this risk, manufacturers increasingly use special tags, such as RFID
(radio frequency identification), that identify merchandise as genuine and
closely control product flows to consumers.
The example of Barlean’s Organic
Oils shows how a supply chain strategy can
deliver quality as a basis of competition.
Barlean’s is a $22 million family-owned
company that sells health supplements. The
company’s flagship product, flaxseed oil,
outsells the competition 20 to 1. Freshness
makes the difference. Barlean’s oil carries
a four-month expiration date, compared
with other oils that can be up to five
months old before they even hit store
shelves. Barlean’s manufacturing and distribution
processes give the company its
edge. Conventional manufacturing techniques
expose flax seeds to heat, light, air,
and overpressing, all of which compromise
quality. Barlean’s designed a manufacturing
process that protects its seeds from the
One key supply chain
attribute relative to
quality is
traceability—the
ability to trace a
product back to its
point of origin—a
growing requirement
in a number of
industries.