Chp 2. Achieving Strategic Fit and Scope
How is strategic fit achieved?
1. understanding the customer and supply chain uncertainty 2. understanding the supply chain 3.achieving strategic fit
agile intercompany scope
a firm's ability to achieve strategic fit when partnering with supply chain stages that change over time
strategic fit
competitive and supply chain strategies have aligned goals.
competitive strategy
defines the set of customer needs a firm seeks to satisfy through its products and services
supply chain strategy
determines the nature of material procurement, transportation of materials, manufacture of product or creation of service, distribution of product.
step 3; achieving strategic fit
ensure that the degree of supply chain responsiveness is consistent with the implied uncertainty, assign roles to different stages of the supply chain that ensure the appropriate level of responsiveness, ensure that all functions maintain consistent strategies that support the competitive strategy.
step 2; understanding supply chain capabilities
how does the firm best meet demand?
interfunctional scope
maximize company profit
intercompany scope
maximize supply chain surplus
intraoperation scope
minimize local cost view
intrafunctional view
minimize total functional cost
step 1; understanding the customer and supply chain uncertainty
quantity of product needed in each lot, response time, variety of products needed, service level required, price of the product, desired rate of innovation in the product
supply chain responsiveness is the ability to
respond to wide range of quantities demanded, meet short lead times, handle a large variety of products, build highly innovative products, meet a very high service level
implied demand uncertainty
resulting uncertainty for the supply chain given the portion of the demand the supply chain must handle and attributes the customer desires.
cost-responsiveness efficient frontier curve
shows the lowest possible cost for a given level of responsiveness
marketing and sales strategy
specifies how the market will be segmented and product positioned, priced, and promoted
product development strategy
specifies the portfolio of new products that the company will try to develop
scope of strategic fit
the functions within the firm and stages across the supply chain that device an integrated strategy with an aligned objective.
demand uncertainty
uncertainty of customer demand for a product