Economies evolve, markets evolve, and channels evolve, and so must the supply chain.
These three strategies are based on pursuing costdifferentiation, or focus as the main strategy and then adopting the policies, investments, and projects around that. With 40 to 70 percent of costs embedded in the typical supply chain, it is critical that companies manage their supply chains optimally to achieve the highest returns now — and in the future, as the business environment changes.
One of the biggest failure points in aligning strategy is when the supply chain organization doesnt know what to align with. Supply chain functions like warehouse automation and transportation optimization direct reduce their cost of goods sold COGSand other functions like inventory optimization reduce the requirements for working capital thus increasing return on assets ROA.
Better planning through better demand forecasting can affect all the operations in a supply chain in a made-to-stock or retail situations. Manufacturing At the strategic level, manufacturing decisions define the manufacturing infrastructure and technology that is required.
Supplier performance management and business models should align the suppliers' incentives with yours. These functions not only add to the operational efficiency but can also provide differentiation in customer service through perfect order fulfillment and ability to track and communicate the customer order status throughout the fulfillment process.
Then the strategy needs to be communicated to the organization thoroughly and repeatedly.