Module2 Flashcards
What is Strategic Fit?
- Strategic fit means aligning competitive strategy with supply chain capabilities
- Ensures all supply chain activities support customer priorities
What is the role of a Value Chain?
- A chain of key functions: product development, purchasing, operations, distribution, marketing
- Support functions (IT, HR, finance) enable these key functions
Define Competitive Strategy
- Specifies the set of customer needs a firm seeks to satisfy
- Guides products and services offered
Define Product Development Strategy
- Determines the portfolio of new products
- Guides innovation and product design
Define Marketing and Sales Strategy
- Specifies market segmentation
- Involves product positioning, pricing, and promotion
Define Supply Chain Strategy
- Determines nature of material purchasing, supply/transportation, production, and distribution
- Must align with competitive strategy to achieve strategic fit
What is Demand Uncertainty?
- Demand uncertainty: unpredictability of customer demand
- Implied demand uncertainty: uncertainty given the attributes customers want and the portion of demand the supply chain must handle
What is Supply Uncertainty?
- Reflects how capable supply sources are
- Increases with frequent breakdowns, unpredictable yields, poor quality, or inflexible capacity
Compare Functional vs Innovative products
- Functional: predictable demand, low margins, long life cycles
- Innovative: unpredictable demand, high margins, short life cycles
Define Supply Chain Responsiveness
Ability to:
- Respond to wide quantity ranges
- Meet short lead times
- Handle product variety
- Build innovative products
- Provide high service level
What is the Cost-Responsiveness Frontier?
- Representation of trade-off between efficiency (low cost) and responsiveness (flexibility)
- Firms aim to be on the efficient frontier to optimize both
How to achieve Strategic Fit?
- Understand supply and demand uncertainty
- Understand the supply chain’s capabilities
- Align capabilities to customer needs
What is the consequence of Misfit?
- Failure to align supply chain capabilities with competitive strategy
- Leads to lower performance and potential loss
What is Scope of Strategic Fit?
- The functions and stages within a supply chain that develop an integrated strategy
- Ranges from intraoperational to intercompany scopes
List 4 expanding Strategic Scopes
- Intracompany intraoperational scope
- Intracompany intrafunctional scope
- Intracompany interfunctional scope
- Intercompany interfunctional scope
Describe Intracompany Intraoperational scope
- Focus on one operation within a single function
- Each operation optimizes its own performance independently
Describe Intracompany Intrafunctional scope
- Includes all operations within a function
- Aims to maximize performance for that function (not entire firm)
Describe Intracompany Interfunctional scope
- All functional strategies within a company support each other
- Maximizes firm performance, but not total supply chain profits
Describe Intercompany Interfunctional scope
- All stages coordinate strategy across all functions
- Goal: maximize overall supply chain performance and profit
Name the 3 Logistical Drivers
- Facilities
- Inventory
- Transportation
Name the 3 Cross-functional Drivers
- Information
- Sourcing (Purchasing)
- Pricing
What is the role of Facilities?
- The where of the supply chain
- Can be manufacturing or storage (warehousing)
- Important for long-term decisions
Explain Cross-docking
- Inbound goods are unloaded, sorted, and loaded to outbound trucks without storage
- Benefits:
- Faster delivery
- Less warehouse space needed
- Lower costs
What is the role of Inventory?
- Buffers mismatches between supply and demand
- Affects flow time and throughput
- Includes raw materials, WIP, finished goods
List Types of Inventory
- Cycle inventory (depends on lot size)
- Safety inventory (to handle unpredictability)
- Seasonal inventory (for predictable demand fluctuation)
What is the role of Transportation?
- Moves product between stages of the supply chain
- Enables disintegration for economies of scale/scope
- Medium-term impact on cost and responsiveness
What is the role of Information?
- Connects stages of the supply chain
- Enables coordination, forecasting, and scheduling
- Can reduce need for trade-offs by improving both efficiency and responsiveness
What is the role of Sourcing (Purchasing)?
- Decides where to buy goods/services
- Determines vertical integration, supplier selection, and contracts
- Affects total supply chain profitability
What is the role of Pricing?
- Defines how much customers pay
- Can match supply and demand or target segments
- Impacts overall profit
