Supply chain management is great, if the Supply chain strategy is clear!
Supply Chain Management Vs. Supply Chain Strategy
While supply chain management is used to describe internal improvements to existing processes within the context of current, actual situations and constraints, the supply chain strategy realises the intent to create a sustainable competitive advantage by wisely using those operational resources and tactics.
Whereas supply chain management is about constraints, the corresponding strategy is about realising opportunities.
While supply chain management is often about the ‘How?’ highly structured tangible processes and information management systems at the execution levels of companies, the supply chain strategy is about the ‘What for?’ clarity, specially at the highest levels of companies.
SCM is dealing with today’s actual situation to generate improvement through process excellence. Supply chain strategy is forming the unique positioning that should result in a future competitive advantage.
Strong supply chain strategy can define a unique end-state that has the potential to change the competitive landscape, but if not followed by reliable execution, it usually delivers no value.
There are 4 main Supply chain strategies for companies:
1. Rationalisation (aimed at containing costs)
2. Synchronisation (aimed at balancing supply with demand)
3. Customisation (enhance customer interface)
4. Innovation (achieving rapid new product development and introduction)