Supply Chain

Strategy
WAQAS SHAKIR
PhD Scholar
Lecture
03
WAQAS SHAKIR
PhD Scholar
Introduction
 Strategic Supply Chain

• 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.
• The strategic supply chain processes that management has to decide
upon will cover the breadth of the supply chain.
 Manufacturing/Facilities
• The decisions can require new manufacturing facilities to be built or to
increase production at existing facilities.
• The overall company objectives include moving manufacturing overseas,
then the decisions may lean towards using subcontracting and third party
logistics.
• As environmental issues influence corporate policy to a greater extent,
this may influence strategic supply chain decisions with regards to
manufacturing.
 Inventory
• Inventory is key to profitability.
• Inventory velocity turns assets into profits.
• The faster inventory turns, the greater the profitability. Inventory is the
key issue to supply chain management success.
• Customers demand that their orders be shipped complete, accurate and on-
time.
• That means having the right inventory at the right place at the right time.
 Suppliers
• Company management has to decide on the strategic supply chain
policies with regards to suppliers.
• Reducing the purchasing spend for a company can directly relate to an
increase in profit and strategically there are a number of decisions that can
be made to obtain that result.
• Leveraging the total company’s purchases over many businesses can allow
company management to select strategic global suppliers who offer the
greatest discounts.
 Suppliers
• But these decisions have to correspond with the overall company
objectives
• If a company has adopted policies on quality, then strategic decisions on
suppliers will have to fall within the overall company objective.
 Logistics
• As well as strategic decisions on manufacturing locations, the logistics
function is key to the success of the supply chain.
• Order fulfilment is an important part of the supply chain and company
management needs to make strategic decisions on the logistics network.
• The design and operation of the network have a significant influence on
the performance of the supply chain.
 Logistics
• Strategic decisions are required in warehouses, distribution centers which
transportation modes should be used.
• If the overall company objectives identify the use of more third party
subcontracting, the company may strategically decide to use third-party
logistics companies in the supply chain.
 Strategic Supply Chain Management
• Strategic decisions determine the overall direction of company’s supply
chain.
• They should be made in conjunction with the companies overall
objectives and not biased towards any particular product or regional
location.
• These high-level decisions can be refined, as required, to the specific
needs of the company at the lower levels which allow for tactical
and operational supply chain decisions to be made.