Strategies_of_SCM_with_Strategic_Fit.pptx

Rac lecture

1. Introduction to Chapter 2 Strategies of Supply Chain Management Chapter Overview: - Supply chain strategies - Achieving strategic fit - Overcoming obstacles - Strategic supply chain decisions Ali Hassan 2021-ME- 521

2. What is a Supply Chain Strategy? - A long-term plan to meet customer demands at the lowest cost. - Aligns supply chain with business goals to deliver products efficiently. - Key Goals: 1. Reduce costs. 2. Improve efficiency. 3. Meet customer needs.

3. Competitive Supply Chain Strategies - Modern challenges: global competition, limited resources. - Strategies help: 1. Meet customer needs on time. 2. Reduce costs and errors. 3. Stay competitive in the market. - Example: Walmart’s strategy focuses on low-cost products under one roof.

4. Strategic Fit: Definition - **Strategic Fit:** Alignment between the business strategy and supply chain strategy. - Ensures the supply chain can meet customer needs while supporting overall business goals. - Key Aspects: 1. Consistency between business and supply chain strategies. 2. Understanding customer needs. 3. Analyzing supply chain capabilities. 4. Adapting to uncertainties.

5. Steps to Achieve Strategic Fit 1. **Understand Customer Needs**: - Identify service, quality, and cost expectations. 2. **Evaluate Supply Chain Capabilities**: - Check if the supply chain meets identified demands. 3. **Align Strategies**: - Adjust supply chain operations and policies to support business goals.

6. Achieving Strategic Fit - Strategic fit ensures that the supply chain supports business strategy. - Helps meet customer needs efficiently. - Example: - Walmart: Focuses on low costs and bulk purchasing. - Luxury brands: Focus on quality and customization.

7. Obstacles in Achieving Strategic Fit (Part 1) 1. Increased Product Variety: - Customization raises costs and complexity. 2. Shorter Product Lifecycles: - Frequent updates needed as products last only months. 3. Increased Customer Demands: - Expect faster responses, better quality, and lower costs.

8. Obstacles in Achieving Strategic Fit (Part 2) 4. Fragmented Supply Chains: - Coordination is difficult among different stakeholders. 5. Globalization: - Cross-border operations increase logistics challenges. 6. Execution Issues: - Competing priorities make implementing new strategies hard.

9. Strategic Supply Chain Decisions (Part 1) 1. **Facilities:** - Location choices for production and storage facilities. - Types: - Flexible: Handles multiple products but less efficient. - Dedicated: Focused on one product and highly efficient.

10. Strategic Supply Chain Decisions (Part 2) 2. **Inventory:** - Maintain a balance to avoid shortages or excess stock. - Use Just-in-Time (JIT) for cost efficiency. 3. **Transportation:** - Select modes (road, air, rail, sea) based on speed, cost, and volume. 4. **Sourcing:** - Decide between in-house production or outsourcing to suppliers.

11. Case Study: Zara’s Supply Chain (Part 1) - Zara, a fashion retailer, operates on a 5-6 week design-to-sale cycle. - Industry average: 6 months. - **Focus Areas:** 1. Speed 2. Flexibility 3. Efficiency

12. Case Study: Zara’s Supply Chain (Part 2) **Key Practices:** 1. Flexible Manufacturing: - Combines in-house production with outsourcing. 2. Centralized Distribution: - Ships globally from one center in Spain. 3. Regular Updates: - New designs introduced weekly to stay competitive.

13. Case Study: Zara’s Supply Chain (Part 3) **Results:** - Quick response to customer demands. - Low inventory levels. - Maintains market leadership through agility and efficiency.

14. Summary of Chapter 2 - Supply chain strategies help businesses stay competitive. - Strategic fit aligns supply chains with customer needs. - Overcoming challenges like globalization and short lifecycles is key. - Strategic decisions in facilities, inventory, and sourcing optimize performance.

15. Questions? Thank you for your attention! Feel free to ask any questions about Chapter 2!