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Supply Chain Performance: Achieving Strategic Fit And

Supply Chain Performance: Achieving Strategic Fit And

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Published by: vaibhavs_1009 on Mar 15, 2010
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Supply Chain Performance:Achieving Strategic Fitand Scope1 Competitive and Supply Chain Strategies2 Achieving Strategic Fit3 Expanding Strategic Scope4 Sammy of Learning ObjectivesDiscussion QuestionsBibliographyLearning ObjectivesAfter reading this chapter, you will be able to1.explain why achieving strategic fit is critical to a company's overall success;2. describe how a company achieves strategic fit between its supply chain strategy and itscmepetitive strategy; and3.discuss the importance of expanding the slave of strategic fit ara ,the supplychain.n this chapter, we define supply chain strategy and explain how creating a strategictit between a company's competitive strategy and its supply chain strategy affectspc, formance. We also discuss the importance of expanding the scope of strategic fit from one operation within a company to all stages of the supply chain... ......"01002AMOON44OMII COMPETITIVE AND SUPPLY CHAIN STRATEGIESA company's tompetlfive strategy defines the set of customer needs that it seekstosatisfy through its products and services. For example, Wal-Mart aims to providehighavailability of a variety of reasonable quality products at low prices. Most productssold at Wal-Mart are commonplace. (everything from home appliances to clothing)and can be purchased elsewhere. What Wal-Mart provides is a low price and productavailability. McMaster-Carr sells maintenance, repair, and operations (-IVIRO)products.It offers more than 200,000 different products through both a catalog and a Web27
Supply Chain Performance Achieving Strategic fir and Scopesite. Its competitive strategy is built around providing the customer convenience.McMaster-Carr does not compete based on low price. However, it guarantees productavailability and delivery within a day, Customers do not come to McMaster-Carrlooking for the lowest-price product; rather, they come because of the wide variety ofproducts available and the promise of next-day delivery. Clearly, the competitivestrategy at Wal-Mart is different from that at McMaster-Carr.We can also contrast Dell, with its build-to-order model, with a firm like Compaq,selling personal computers (PCs) through retailers. Dell has stressed customizationand variety at a reasonable cost, with customers having to wait about a week togettheir product. In contrast, a customer can walk into a computer retailer, be helped bya salesperson, and leave the same day with a Compaq computer. However, theamount of variety and customization available at the retailer is Ihrtited. In each case,the competitive strategy is based on how the customer prioritizes product cost,productdelivery or response time, product variety, and product quality. A McMaster-Carr customer places greater emphasis on product variety and response time than on costA Wal-Mart customer, conversely, places greater emphasis on cost. A Dell customer,purchasing on-line, places great emphasis on product variety and customization.Acustomer purchasing a PC at a retailer is most concerned with the help in product selectionand faster response time. Thus, a firm's competitive strategy will be definedbased on the customer's priorities, Competitive strategy targets one or more customersegments and aims to provide products and services that will satisfy these customers'needs.To see the relationship between competitive strategy and supply chain strategy,we start with the value chain for any organization, as shown in Figure 1.The value chain begins with new product development, which creates specificationsfor the product. Marketing and sales generates demand by publicizing the customerpriorities that the product and services will satisfy. Marketing also brings customerinput hack to new product development Using new product specifications,operations transforms inputs to outputs to create the product. Distribution eithertakes the product to the customer or brings the customer to the product. Servicere

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