SCM #4.1 SC Strategic

Question 1

What are the aims of Strategy?

Answer 1

Strategy aims to achieve superior performance

> competing differently, doing what rival firm’s don’t or can’t do

Question 2

What is competitive advantage?

Answer 2

means superior performance relative to other competitors in the same industry or to the industry average

Question 3

2 questions that a firm has to answer when defines a strategy?

Answer 3

1/ Where should we compete?
2/ How should we compete?
» purpose: create sustainable competitive advantage

Question 4

What is SC strategy in the value chain?

Answer 4

(beside new product development & Mar & Sales) SC strategy defines the nature of material procurement, transportation, manufacture of products or creation of services, distribution of products

Question 5

What is Strategic fit and why it is important?

Answer 5

SF means that the strategies “fit together’’
The consistency and support between SC strategy, competitive strategy & other functional strategies is important
Without SF, company may fail, b/c its processes & resources do not provide the capacities to execute the desired strategy

Question 6

How is strategic fit achieved?

Answer 6

1. Understanding the Cus. and SC uncertainty
2. Understand the SC capacities
3. Achieving SF

Question 7

Cus. uncertainty: list down attributes of varying Demand from different Cus Segments

Answer 7

1. Quantity of product needed in each lot
2. Response time (Cus. are willing to tolerate)
3. Variety of products needed
4. Service level required
5. Price
6. Desired rate of innovation of product

Question 8

Compare demand uncertainty (DU)& Implied demand (I-DU) uncertainty

Answer 8

i-DU: resulting uncertainty for only the portion of the demand, to satisfy based on the attributes of the cus. desires

Question 9

List down elements of SC uncertainty?

Answer 9

1. Supply source (breakdowns, poor quality, limited supply capacity)
2. Life-cycle position of the product
   (Salt, Automobile model, communication device)

Question 10

Def. of SC responsiveness & efficiency

Answer 10

1. Response SC are capable of responding quickly to changing Cus. needs.
   Efficiency: able to deliver products at a low cost

Question 11

How does the firm best meet demand?

Answer 11

1. Highly efficient: integrated steel mills
2. A traditional make-to-stock manufacturer with production lead time of several weeks
3. Most automotive production: delivering a large variety of products in a couple of weeks
4. Highly responsive: Seven-Eleven changing merchandise mix by location and time of day