Course Title:

Strategic Supply Chain Management

Chapter One
Overview of Strategic Supply Chain
Management

3/21/2024 1
 1.1 The Concept of Strategy

• The term strategy is derived from a Greek word „strategos‟ means generalship.

• Definitions of strategy have roots in military strategy, which defines itself in terms of

• Drafting the plan of war,

• Shaping individual campaigns and deciding on individual engagements (battles) with

the enemy.

• In military sense is the art of war,

• More precisely, the art of the general – the key decision maker.

• Especially the planning of movements of troops and ships etc, into favorable
positions, (Robert M. Grant, 1996) .
3/21/2024 2
 Cont…
The analogy with business is that
Are actions those determine whether an organization survives, prospers, or dies.

Its the overall plan for deploying resources to establish a favourable position.

Its a set of related actions that managers take to increase their organization‟s performance.

Its the pattern of activities followed by an organization in pursuit of its long-term purposes.

Its a course of action that helps to achieve organizational goals.

Its about charting an unknown future.

Its about how decisions are taken.

Its about winning and etc.

3/21/2024 3
 Cont…

In general to know clearly the term strategy, we have to respond the next three central
questions:

1. Where are we now?

2. Where do we want to go from here?

3. How are we going to get there?

3/21/2024 4
 Cont…

Where are we now? In terms of:

 Financial performance

 Service performance

 Market position

 Competitive resources and capabilities

 Changing industry conditions

3/21/2024 5
 Cont…

Where do we want to go from here?

What buyers needs to try to satisfy?

Which growth opportunities to emphasis /maximize?

What target we will reach?

How are we going to get there?
Which competitive move and approaches to use as a strategy?

3/21/2024 6
 1.2 Attributes of Strategy
key attributes of strategic management?

1) It is focused on overall organizational goals and objectives;

2) It involves multiple stakeholders in decision-making;

3) It requires both short-term and long-term perspectives; and

4) It requires the recognition of trade-offs between effectiveness and

efficiency

3/21/2024 7
 1.3 Schools of thoughts in strategy and strategy making

Reading assignment

3/21/2024 8
1.4 Strategic planning, plan, thinking and strategic
management

3/21/2024 9
 Strategic Planning

• Strategic Planning; is the process of scanning the environment, determining

organization‟s long-term goals and identifying and formulating the best approach for
achieving those goals.

• It provides you with the big picture of what you are doing and where you are going, and
how to achieve it.

3/21/2024 10
 Strategic plan

• Strategic plan is a written document describing where an organization wants to be in

the future, and the broad areas of activity that it will undertake to achieve this vision.

• It includes a vision statement, a mission statement, goals and objectives, an action

plan, and details on how often the strategic plan will be reviewed and updated.

 A vision statement that answers the question “What do we want to become?”

 A clear vision provides the foundation for developing a comprehensive mission

statement.

 Developing a vision statement is often considered the first step in strategic planning
3/21/2024 11
 Strategic management

• Strategic management can be define as the art and science of formulating,

implementing, and evaluating cross functional decisions that enable the organization
to achieve its goals.

• Strategic management is a set of managerial decisions and actions that determines

the long run performance of a corporation.

3/21/2024 12
 1.5 level strategy
The typical business firm usually considers three types of strategy
Corporate level strategy

Business level strategy

Functional level strategy

Corporate level strategy

• Describes a company‟s overall direction in terms of its general attitude toward growth
and the management of its various businesses and product lines.

• Typically fit within the three main categories of growth, stability, and retrenchment.

3/21/2024 13
 level strategy cont…
Business level strategy

concerned with the question “How do we compete?”

• usually occurs at the business unit.

• Emphasizes improvement of the competitive position of a corporation‟s products or

services in the specific industry or market segment served by that business unit.

• Competitive Strategy- Cost leadership, Differentiation and Focus

• Cooperative Strategy – Licensing, Joint Venture and Value Chain Partnership

3/21/2024 14
 Functional level strategy

Concerned with the question “How do we support the business level strategy?”

• Is the approach taken by a functional area to achieve corporate and business unit
objectives and strategies by maximizing resource productivity.

• It is concerned with developing and development a distinctive competence to provide

a company or business unit with a competitive advantage

3/21/2024 15
 1.6 Strategic Supply Chain Management
What is a supply chain strategy?

• Is the systemic, strategic coordination of the business functions and the tactics
across businesses within the supply chain, for the purposes of improving the long-
term performance of the individual companies and the supply chain as a whole.

• Is the strategic coordination of production, inventory, location, warehousing and

transportation among the participants in a supply chain to achieve the best mix of
effectiveness and responsiveness for the whole SC participants.

3/21/2024 16
 Cont…
• A strategy for how the supply chain will function in its environment to meet the goals of the
organization‟s business and organization strategies”.

• The refers to systematical designing, implementing, and evaluating the flow of materials,
products, and information among multiple participants.

• Is portion of the strategic plan includes developing the ability of the firm to leverage internal
relationships, supplier alliances, and customer relationships to create sustained competitive
advantage.

• A supply chain strategy is part of the overall business strategy, designed around a well-defined
basis of competition (innovation, low cost, service, quality).

3/21/2024 17
 Cont…

Supply chain management operates at three levels:

Strategic Level

Tactical Level

Operational Level.

• At the strategic level, company management makes high-level strategic supply chain
decisions that are relevant to whole organizations.

• The decisions that are made with regards to the supply chain should reflect the overall
corporate strategy that the organization is following.

3/21/2024 18
 Cont…

The strategic supply chain processes that management has to decide upon will
cover the breadth of the supply chain. These include
• Product development,

• Customers,

• Manufacturing,

• Inventory

• Vendors,

• Logistics.
3/21/2024 19
 1.7 Evolution of Strategic Supply Chain Management

Reading Assignment

3/21/2024 20
 1.8 The process of Strategic supply chain management
• The strategy-making process is the process by which managers select and then
implement a set of strategies that aim to achieve a competitive advantage.
Strategic management consists of four basic elements:
1. Environmental scanning
2. Strategy formulation
3. Strategy implementation
4. Evaluation and control

3/21/2024 21
 1.8. Corporate Governance and Social Responsibility

• Corporate governance is the system by which companies are directed and controlled.
• corporate governance is
• an essential aspect of ensuring confidence in democratic market economies.
• Managing the relationship between management, board members, shareholders and
other stakeholders.
• Central to attracting and maintaining investment.

• CSR and corporate governance are central to managing the contemporary relationship
between business and society.

• CSR and corporate governance mutually beneficial and can add value to companies
whilst maintaining a good relationship with society.

3/21/2024 22
 Social responsibility
• “Social responsibility is the commitment of business to contribute to
sustainable economic development-working with employees, their families, the
local community and society at large to improve the quality of life in ways that
are both good for business and good for development” (World Bank, 2008).

3/21/2024 23
 1.9 Challenges of Strategic Supply Chain Management
Some of the most common supply chain challenges are:
1. Inefficient flow of information and funds forces SC to be reactive, not proactive
2. Long lead times and high variability across the supply chain
3. Mismatch between ordering amount and actual need
4. Information systems and flows couldn‟t be improved
5. The future of the product demand is uncertain
6. Lack of Supply Chain Flexibility and Agility.
7. Cost Management.
8. Customer Expectations.
9. Supplier Relationship Management
3/21/2024 24
 Cont…
• Challenge 1: Inefficient flow of information and funds forces supply chain to be reactive, not proactive
• Forecasts are inconsistent in methods and quality
• Flow of money does not necessarily coincide with need
• Causes ordering of products to be uneven

Challenge 2: Long lead times and high variability across the supply chain
• Low production capacity and variability of demand make it hard to achieve consistent lead times
• Margin of error compounds at each delivery point in supply chain, making it difficult to project
accurate lead times
• High variability leads to low trust in the supply chain

3/21/2024 25
 Cont…
Challenge 3: Mismatch between ordering amount and actual need

• Amounts ordered inconsistent with number of consumers served

• Scarcity of supply, uncertainty in targeted arrival dates and limited fund flow

Challenge 4: Information systems and flows couldn‟t be improved

• Backward information flow, including information on handover and feedback on

quality, is either unavailable or nontransparent

• Exception handling capabilities not present

• Information may be inconsistent

3/21/2024 26
 Cont…

Challenge 5: The future of the product demand is uncertain

• Some products demand will vary depending on level of long-term success and with short
term spikes in demand due to local crises.

Challenge 6: Lack of Supply Chain Resilience and Agility.

• When it comes to potential disruptions; terrorist attacks, natural disasters, political

conflict, war, and, of course, epidemics are just a few of the potential disasters that can
shatter multiple links in a globe- spanning supply chain.

3/21/2024 27
 The end of the first chapter

Thanks for your attention!

3/21/2024 28