1.3 Supply Chain Performance

Question 1

Competitive Strategy

Answer 1

• defines the set of customer needs a firm seeks to satisfy through its products and services.
  → Customer needs regarding costs, lead time, range of products or quality

Question 2

Product Development Strategy

Answer 2

Specification of the portfolio of new products to develop.

Question 3

Marketing and Sales Strategy

Answer 3

Specification of market position, pricing and promotion of the product

Question 4

Supply Chain Strategy

Answer 4

determines:
- the nature of material procurement
- transportation of materials
- manufacture of product (the framework of the supply chain) or creation of service
- distribution of product

Question 5

Supply Chain Strategy

Answer 5

determines:
- the nature of material procurement
- transportation of materials
- manufacture of product (the framework of the supply chain) or creation of service
- distribution of product.

Question 6

Strategic Fit

Answer 6

Competitive and supply chain strategies have aligned goals
→ Adjusting the SC to meet the customer needs
→ Structure all processes and resources within the company as well as the SC to be able to execute strategies successfully

Question 7

steps to achieve strategic fit

Answer 7

• Understanding the customer and supply chain uncertainty
• Understanding the supply chain capabilities
• Achieving strategic fit

Question 8

Achieving strategic fit

Answer 8

▪ Align supply chain responsiveness and implied uncertainty (demand and supply capability)
▪ There is a SC strategy for every competitive situation. However, there is no universal solution.
▪ Possible need for a differentiated strategy depending on different
– Customer segments
– Product lifecycles
– Changes in the competitive situation

Question 9

Understanding the customer and supply chain uncertainty
- Analysis of Potential Customer Needs

Answer 9

▪ Quantity of product needed in each lot
▪ Response time customers will tolerate
▪ Variety of products needed
▪ Required service level
▪ Price of the product
▪ Desired rate of innovation in the product
→ Homogenous customer needs are often the base for identifying different (demand) segments

Question 10

Understanding the customer and supply chain uncertainty
- Implied Demand Uncertainty

Answer 10

Demand uncertainty to which the SC is exposed in order to meet customer needs.

Question 11

Understanding the customer and supply chain uncertainty
- Correlation between Implied Demand Uncertainty and Other Attributes

Answer 11

Question 12

Understanding the supply chain capabilities
- Supply Chain Responsiveness

Answer 12

Supply chain responsiveness is the ability to:
▪ Respond to wide ranges of quantities demanded
▪ Meet short lead times
▪ Handle a large variety of products
▪ Build highly innovative products
▪ Meet a very high service level

Question 13

Understanding the supply chain capabilities
- Supply Chain Efficiency

Answer 13

Minimize a product’s manufacturing and transport costs

Question 14

Understanding the supply chain capabilities
- Fig. Cost-Responsiveness Efficient Frontier

Answer 14

Question 15

Achieving Strategic Fit
- Fig. Zone of strategic fit

Answer 15

Question 16

Achieving strategic fit
- Comparison of Efficient and Responsive Supply Chains

Answer 16

Question 17

Adjusting the Supply Chain for Strategic Fit
- Considering various customer segments

Answer 17

▪ Designing different supply chains (e.g., serving private and business customers)
▪ Compromise solution (e.g., service differentiation)

Question 18

Adjusting the Supply Chain for Strategic Fit
- Accounting for the product life cycle

Answer 18

▪ Introduction and growth:
High uncertainty and variating demand, high contribution margin
→ Prioritizing product availability
▪ Maturity and Decline:
Predictable demand, low contribution margin
→ Prioritizing the price

Question 19

Challenges in Achieving and Maintaining Strategic Fit

Answer 19

▪ Increasing product variety and shorter product lifecycles
▪ Globalization and increasing uncertainty
▪ Fragmentation of supply chain ownership
▪ Changing technology and business environment
▪ Increasing uncertainty within the political environment (trade, taxes, Brexit, COVID19,…)
▪ Environment and sustainability
→ Achieving and maintaining the strategic fit is increasingly difficult
→ However, overcoming these challenges potentially offers a competitive advantage