competitive supply chain strategies lsm
TRANSCRIPT
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COMPETITIVE SUPPLY CHAIN STRATEGIES BY:Madhuri Muniyal
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Introduction• Definition: Designing a firm’s supply chain to
meet the competitive priorities of the firm’s operations strategy.
• Supply chain strategy to ensure superior value to the end customer in an efficient manner
• Optimum decision making between trade offs and costs.
• Innovation to obtain competitive advantage.16/11/2016 2Competitive Supply Chain
Strategies
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Concepts related to Supply Chain Strategies• Customer Service and Cost Trade Offs• There are 4 components of Customer Service:1.Order Delivery Lead Time2.Responsiveness3.Delivery Reliability4.Product Variety
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Customer Service & Trade Offs• Costs are directly associated with service
provision.• Higher service in low cost is desirable.• A firm cannot operate beyond a certain limit in
increasing its efficiency by increasing costs for higher services.
• The firm’s revenue is also affected by its service levels at certain costs.
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Order Delivery Lead Time• The time taken by the supply chain from
placement of order to delivery is known as Order Delivery Lead Time
• The time take from sourcing of material to delivery is known as Supply Chain Lead Time.
• Penetration Point is the point at which customer places order. It is also known as Decoupling Point.
• Different types of models are followed to make efficient delivery like MTS, MTO & CTO.
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Supply Chain Responsiveness• The firm’s ability to handle the uncertainties of
market demand.
• Based on uncertainties, products are classified into:1. Functional Products2. Innovative Products
• Example: CISCO
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Delivery Reliability• The fraction of satisfaction obtained by the customer
within the promised delivery lead time.
• For achieving higher reliability, a quick inventory turnover is needed, stock outs needs to be prevented.
• Cost management at this stage is very important.
• Example: Safexpress16/11/2016 Competitive Supply Chain
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Product Variety• Variety Explosion has occurred in large
number of goods.• It will also increase cost.• It increases complexity in supply chain.• Example: P&G
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Mass Customization
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• A strategy whereby a firm’s flexible processes generate a wide variety of personalized services or products at reasonably low costs. Eg. Dell
• Competitive advantages: Managing customer relationships. Eliminating finished goods inventory. Increasing perceived value.
• Disadvantages: Postponement is when some of the final activities in the
provision of a service or product are delayed until the orders are received.
Channel assembly is when members of the distribution channel act as if they were assembly stations in the factory.
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DELL’s Order Fulfillment Process
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Outsourcing• A Make-or-buy decision is a managerial choice
between whether to outsource a process or do it in-house.
• Outsourcing: Paying suppliers and distributors to perform processes and provide needed services and materials.
• Example: Bharti Airtel Outsources its Network Operations.
• Toyota Outsources its electronic parts.
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Lean Supply Chains
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Three key activities are required to attain a lean supply chain:
1. Strategic Sourcing: Identifying items or services that are of high value or complexity and purchase them from a select set of suppliers with whom the firm establishes a close relationship.
2. Cost Management: Limiting the number of suppliers and focusing on helping them reduce their costs through trust and friendly collaboration.
3. Supplier Development: Shifting from price negotiations to cost management and working with suppliers to achieve lean operations.
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Some Other Supply Chain Strategies
• Off shoring• Vendor Rationalization• Forward Integration• Backward Integration• Efficient Supply Chains• Responsive Supply Chains
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THANK YOU!
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