Chapter 2 Flashcards
What is the main goal of aligning supply chain strategy with competitive strategy?
To ensure supply chain actions are consistent with customer needs.
What are the four product attributes in a competitive product space?
- Product cost
- Response time
- Variety
- Quality
Define order qualifiers and order winners.
- Order qualifiers: Minimum standards for purchase consideration.
- Order winners: Attributes that make a product perceived as better than competitors.
What is implied uncertainty in a competitive strategy?
The level of uncertainty regarding demand and supply that a competitive strategy must address.
What does a highly responsive supply chain need to do?
- Respond to wide ranges of quantities demanded
- Meet short lead times
- Handle a large variety of products
- Build highly innovative products
- Meet a high service level
- Handle supply uncertainty
True or False: High responsiveness in a supply chain often comes without any cost.
False
What is the purpose of efficient supply chains?
To minimize inventories and maximize efficiency in predictable demand scenarios.
List the three steps to achieve strategic fit.
- Identify competitive strategy’s implied uncertainty
- Identify supply chain strategy’s responsiveness
- Restructure either strategy if mismatched
What factors increase implied demand uncertainty?
- Increase in range of quantity required
- Increase in response speed required
- Increase in variety of products required
- Increase in service level required
- Increase in rate of innovation expected
- Increase in number of channels through which the product may be acquired
What are the characteristics of a responsive supply chain?
- React quickly to market demands
- Position inventories and capacities to hedge against uncertainties
Fill in the blank: The supply chain must support the needs of the _______ customer segments.
[targeted]
What is the effect of globalization on supply chain strategy?
Supply chains must handle fluctuations in exchange rates and global demand.
Define supply uncertainty.
The risk associated with unpredictable supply factors such as production breakdowns and quality issues.
What is the trade-off involved in achieving high supply chain responsiveness?
Increased costs.
What is meant by ‘zone of strategic fit’?
The alignment between competitive strategy’s implied uncertainty and supply chain strategy’s responsiveness.
True or False: Efficient supply chains are best suited for unpredictable demand.
False
What characterizes a responsive supply chain compared to an efficient one?
- Responsive: Fast, flexible, high service levels
- Efficient: Low cost, predictable demand
How does Zara exemplify strategic fit?
Zara’s strategy focuses on high responsiveness, introducing new designs frequently to meet changing customer demands.
What happens when a company’s competitive strategy and supply chain strategy are mismatched?
Restructuring of either strategy is needed.
What is implied demand uncertainty?
The demand uncertainty for the portion of demand targeted by the competitive strategy.
What is a key consideration when maintaining strategic fit?
Monitoring changes in product variety, life cycles, globalization, and technology.
Fill in the blank: A company must adjust its strategy due to increasing _______ and shrinking life cycles.
[product variety]
