Supply Chain Strategy

Let’s learn more about Supply Chain Strategy. Because supply chain management cuts across business functional and organizational boundaries, its impact is much broader and longer lasting. Therefore, supply chain management is inherently tied to strategic decision making. Put simply, the role of strategy is to plan the use of resources to meet objectives. In other words, a strategy is a series of plans to integrate an organization’s long-term objectives of supporting markets. It differs from a corporate philosophy, which concerns itself with a way of doing business. It also differs from a business doctrine, which represents a code of beliefs such as slogans. Depending on the extent of its scope, a strategy can be divided into three categories

• Corporate strategy—This is concerned with decisions by the business as a whole in terms of the industry sectors (e.g., transportation, cosmetic, auto manufacturing, construction, public utility) in which it wishes to compete.
• Business unit strategy—This is concerned with decisions on the target markets (e.g., seniors, teenagers, and women) in which the business currently competes or wishes to compete in the future. These decisions involve the coordination and integration of new product/service development, branding, customer relationship management, quality assurance, and delivery scheduling. This strategy can be sub-classified into cost, differentiation, and focus. A cost strategy zeroes in on low cost to sustain the firm’s competitive edge. A differentiation strategy stresses product/service innovations to attract new customers. A focus strategy develops a unique market niche to concentrate on the firm’s current strength.
• Functional strategy—This focuses on the management and control of the range of tasks supporting each specific business function, such as marketing, operations, purchasing, logistics, and finance. It also determines the bases on which the function will support the desired competitive advantage.

Regardless of the aforementioned strategic scope, the elevation of supply chain perspectives to a strategic position expands the responsibility of a supply chain manager in charting the direction of the organization and its partnering organizations. Thus, the supply chain manager should carefully formulate and select supply chain strategy. The formulation of the supply chain strategy may begin with answering the following fundamental business questions

• What do we do best?
• How can we improve what we have been doing?
• Where do we go from here?

Criteria for Effective Strategy

Strategies for your community initiative should meet several criteria.

Does the strategy:

• Give overall direction? A strategy, such as enhancing experience and skill or increasing resources and opportunities, should point out the overall path without dictating a particular narrow approach (e.g., using a specific skills training program).
• Fit resources and opportunities? A good strategy takes advantage of current resources and assets, such as people’s willingness to act or a tradition of self-help and community pride. It also embraces new opportunities such as an emerging public concern for neighborhood safety or parallel economic development efforts in the business community.
• Minimize resistance and barriers? When initiatives set out to accomplish important things, resistance (even opposition) is inevitable. However, strategies need not provide a reason for opponents to attack the initiative. Good strategies attract allies and deter opponents.
• Reach those affected? To address the issue or problem, strategies must connect the intervention with those who it should benefit. For example, if the mission of the initiative is to get people into decent jobs, do the strategies (providing education and skills training, creating job opportunities, etc.) reach those currently unemployed?
• Advance the mission? Taken together, are strategies likely to make a difference on the mission and objectives? If the aim is to reduce a problem such as unemployment, are the strategies enough to make a difference on rates of employment? If the aim is to prevent a problem, such as substance abuse, have factors contributing to risk (and protection) been changed sufficiently to reduce use of alcohol, tobacco, and other drugs?

Why develop strategies?

Developing strategies is really a way to focus your efforts and figure out how you’re going to get things done. By doing so, you can achieve the following advantages:

• Taking advantage of resources and emerging opportunities
• Responding effectively to resistance and barriers
• A more efficient use of time, energy, and resources

Developing a Supply Chain Strategy

As with the process you went through to write your vision and mission statements and to set your objectives, developing strategies involves brainstorming and talking to community members.

Organize a brainstorming meeting with members of your organization – Remember, people will work best in a relaxed and welcoming environment. You can help achieve this by:

• Making meetings a place where all members feel that their ideas are listened to and valued, and where constructive criticism may be openly voiced. To help meet these goals, you might post some “ground rules” so people feel free to express themselves. Ground rules might include:
• One person speaks at a time
• No interrupting each other
• Everyone’s ideas are respected

Review and identify the targets – Your targets of change include all of the people who experience (or are at risk for) this issue or problem addressed by your initiative. Remember to be inclusive; that is, include everyone who is affected by the problem or issue or whose action or inaction contributes to it.

Your agents of change include everyone who is in a position to help contribute to the solution.

Review your vision, mission, and objectives – It is helpful to review your mission, vision, and objectives to ensure that your strategies are all aligned with the goals expressed in your previous work.

Brainstorm the best strategies – The following list of questions can be a guide for deciding on the most beneficial strategies for your group:

• What resources and assets exist that can be used to help achieve the vision and mission? How can they be used best?
• What obstacles or resistance exist that could make it difficult to achieve your vision and mission? How can you minimize or get around them?
• What are potential agents of change willing to do to serve the mission?
• Do you want to reduce the existing problem, or does it make more sense to try to prevent (or reduce risk for) problems before they start? For example, if you are trying to reduce teen sexual activity, you might consider gearing some of your strategies to younger children, for whom sex is not yet a personal issue; or, to promote academic success, to work with younger children who still have full potential for learning and school success.
• How will your potential strategies decrease the risk for experiencing the problem (e.g., young girls getting pressure for sex from older men)? How will the strategies increase protective factors (e.g., support from peers; access to contraceptives)?
• What potential strategies will affect the whole population and problem? For example, connecting youth with caring adults might be good for virtually all youth, regardless of income or past experience with the problem. Also, just one strategy, affecting just one part of the community such as schools or youth organizations, often isn’t enough to improve the situation. Make sure that your strategies affect the problem or issue as a whole.
• What potential strategies reach those at particular risk for the problem? For example, early screenings might help focus on those at higher risk for heart disease or cancer; past academic failure or history of drug use, for identifying with whom support and other intervention efforts might be focused.