Strategic Fit

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strategic fit

alignment between supply chain strategy & competitive strategy to support business

understanding supply chain strategy

angle for efficiency or responsiveness

supply chain levers

capacity, inventory, time, information, price

achieve strategic fit

consistency between what supply chain does well and the customer needs

customer needs

cost/service criteria and understand unpredictability of demand/supply

competitive strategy

customer needs that company is structured to fill through G&S

breakdowns-supply uncertainty

direct

demand variance-implied uncertainty

direct

evolving production process-supply uncertainty

direct

inflexible capacity-supply uncertainty

direct

innovation rate-implied uncertainty

direct

limited capacity-supply uncertainty

direct

number of channels to access product-implied uncertainty

direct

poor quality-supply uncertainty

direct

product variety-implied uncertainty

direct

responsiveness-uncertainty

direct

service level-implied uncertainty

direct

unpredictable yields-supply uncertainty

direct

capacity lever

flexible capacity decreases uncertainty

information lever

historical forecasts combat uncertainty

supply chain strategy

how company will procure, transport and manufacture successfully to provide G&S

efficiency-uncertainty

indirect

lead time-implied uncertainty

indirect

responsiveness-efficiency

indirect

efficiency

inverse of cost of making/delivering G&S

time lever

lower lead time decreases uncertainty

price lever

lower price decreases uncertainty

product age-uncertainty relationship

newer products have more uncertainty

responsive supply chain capabilities

supply wide range of order quantities and product variety and meet short lead times and high service level

responsiveness goal

to align with implied uncertainty as they have a direct relationship

implied demand uncertainty

uncertainty for portion of demand that supply chain is responsible for

demand uncertainty

uncertainty of customer demand for a product

how to achieve strategic fit

understand customer/supply chain uncertainty, understand supply chain capabilities, achieve fit

inventory lever

use to deal with demand fluctuations

understand customer & supply chain uncertainty

what customer needs in competitive strategy looking to fill and how does that apply stress to the supply chain strategy


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