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2.SCM - STRATEGIES
COMPETITIVE STRATEGY
Set of customer needs a firm seeks to satisfy through its products and services in order to gain competitive advantage A set of needs not addressed by the competitors Customer segmentation Competitive strategy targets one or more customer segments to satisfy their needs.
ORGANIZATION
Finance, Accounting, Information Technology, Human Resources New Product Development Marketing and Operations Sales
Distribution
Service
STRTEGIC FIT
Consistency and support between - Competitive strategy, - Supply chain strategy, -Other Functional strategies
STRTEGIC FIT
Lack of strategic fit due to - Supply chain design - Processes & resources do not support a fit - Conflict in goals(Target different priorities) Perfect fit: Dell
CUSTOMER NEEDS
Needs of the customer segment being served varies in the following attributes Quantity of product needed in each lot Response time customers will tolerate Variety of products needed Service level required Price of the product Desired rate of innovation in the product
Variety of products required increases Demand per product becomes more disaggregated Number of channels increases Rate of innovation increases Required service level increases Total customer demand is now disaggregated over more channels New products tend to have more uncertain demand Handle unusual surges in demand
Salt at a supermarket
SUPPLY UNCERTAINITY
Agricultural products Weather Disruptions Quality problems
RESPONSIVENESS SPECTRUM
Highly efficient
Somewhat efficient
Somewhat responsive
Highly responsive
Standardized apparel
COST-RESPONSIVENESS
Responsiveness
High
Cost
STRATEGIC FIT
High implied uncertainty - High responsiveness Low implied uncertainty - Efficiency
No right supply chain strategy independent of competitive strategy Right supply chain strategy for a given competitive strategy
DELL
Customized PC : variety Delivery within days Innovation High demand uncertainty Supply uncertainty for new components
SALT
Stable customer demand No variety, no innovation Low implied uncertainty No supply uncertainty Efficient supply chain
STRATEGIC FIT
Responsive supply chain
Responsiveness spectrum
Efficient supply chain Certain demand Implied uncertainty spectrum Uncertain demand