Monday, 12 January 2015

What are the 3 Steps to Align the Supply Chain and Business Strategy? Part One

The three steps that are used to align the supply chain and the business strategy are:

  1. Understanding your company’s market. What do the customers expect and want, how many products will be required? Will they want immediate delivery of goods that are ready to ship or will they be happy to wait for the product to be made or put together? How much will they be happy to pay for the product and the service they will receive? It’s also important to consider the innovation of the products being sold. Will they have a long life on the market or will the products become obsolete in a short time frame?
  2. Defining your company’s competencies. Define the strengths of your skills and where you belong in the supply chain. What type of company are you? Are you a producer, distributor, retailer or service provider? Where do you make money? By establishing answers to these questions, you can decide on the supply chain role best suited for your company.  If you serve multiple markets, it is necessary to determine and leverage the core competencies.
  3. Develop the supply chain capabilities. The development of the supply chain capabilities will support the role you play within the supply chain. This step must be completed after the first two steps so you’re fully aware of your market and the role that you play. In order to complete this step the company needs to work through the five supply chain drivers: production, inventory, location, transportation and information.

Return tomorrow when we’ll be taking a look at the five drivers used to develop the supply chain capabilities in more detail.

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