Strategic Supply Chain Management - Supply Chain Online

CHAPTER 2 Core Discipline 2: Develop an End-to-End Process Architecture 51
3. The simplicity test. A good supply chain architecture is made up
of simple, streamlined processes that minimize the complexity that adds
cost and reduces manageability. Processes should be clear and easily
understood by those who use them.
4. The integrity test. Your architecture must be highly reliable,
ensuring coherent and robust links among processes, data, and information
systems.
Let’s look at each of these tests more closely.
Strategic Fit
Some highly touted supply chain practices have been proven to support
effective, efficient performance—practices such as only entering customer
order data once, considering the total cost of ownership when selecting
suppliers, and using a cross-functional scorecard to measure supply chain
performance. While these “best practices” may be highly correlated with
superior performance, they won’t necessarily deliver on your company’s
supply chain strategy. It’s important before deciding how you want to
operate to think critically about why you need to operate a certain way.
Market leaders are set apart by their deep understanding of the critical
supply chain practices at which they must excel—those which truly support
competitive and brand differentiation.
Figure 2-2 shows examples of the critical
supply chain practices that enable each
of the primary supply chain strategies that
we identified in Chapter 1. Although any
organization may adopt these practices,
their relative importance is determined by a
company’s specific supply chain strategy.
As you think of what practices and
processes to make part of your supply
chain, consider to what extent they’ll drive
forward your supply chain strategy. Just as
not all supply chain strategies make sense
given the overall business strategy, not all
It’s important before
deciding how you
want to operate to
think critically about
why you need to
operate a certain
way.
practices are equally important given your supply chain strategy.
Amazon, billed as having the “Earth’s Biggest Selection,” provides
a good example of how to select business practices that align with supply
chain strategy. The company, which sells millions of different products,
stocks only those items designated as top sellers; the vast majority of