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Chapter 2 - SCM
Chapter 2 - SCM
Dung H. Nguyen
Faculty of International Economic Relations
University of Economics and Law
Strategic fit
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COMPETITIVE AND SUPPLY CHAIN STRATEGIES
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ACHIEVING STRATEGIC FIT
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ACHIEVING STRATEGIC FIT
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HOW IS STRATEGIC FIT ACHIEVED?
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STEP 1: UNDERSTANDING THE CUSTOMER AND SUPPLY CHAIN UNCERTAINTY
Demand uncertainty
– uncertainty of
customer demand for a product
Implied demand uncertainty – resulting
uncertainty for the supply chain given the
portion of the demand the supply chain must
handle and attributes the customer desires
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STEP 1: UNDERSTANDING THE CUSTOMER AND SUPPLY CHAIN UNCERTAINTY
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STEP 2: UNDERSTANDING SUPPLY CHAIN CAPABILITIES
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SUPPLY CHAIN CAPABILITIES
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SUPPLY CHAIN CAPABILITIES: 7-ELEVEN
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STEP 3: ACHIEVING STRATEGIC FIT
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SUPPLY CHAIN CAPABILITIES
Efficient Responsive
Primary goal Lowest cost Quick response
Lead time strategy Reduce but not at expense of Aggressively reduce even if
greater cost costs are significant
Supplier selection strategy Low cost, sufficient quality Speed, flexibility, quality
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SUPPLY CHAIN AGILITY
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STRUCTURING DRIVERS
Competitive Strategy
Efficiency Responsiveness
Supply chain structure
Logistical Drivers
Cross-Functional Drivers
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FACILITIES (7-ELEVEN STORES BANGKOK)
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FACILITIES
Storage
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FACILITY DECISIONS
Location:
o Centralize vs Decentralize
o Macroeconomic factors: workers, infrastructure, tax, etc.
Capacity
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INVENTORY
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INVENTORY DECISIONS
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TRANSPORTATION
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INFORMATION
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SOURCING
Source: dailymail.co.uk 25
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PRICING
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PRICING
Source: heartofcodes
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WALMART CASE
Inventory: cross-docking
Transportation: own fleet
Facilities: centralized DCs
Information: large IT investment
Sourcing: large orders
Pricing: EDLP
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CHAPTER 2 - SUPPLY CHAIN PERFORMANCE
THANK YOU!