Best-in-class companies recognize strategic sourcing as a
value creator and consider it to be integral to their overall strategies for
growth. Here's what it takes to bring your organization up to that level.
Managerial
Focus: It is important to explain the
linkage and alignment between an organization's competitive positioning and its
supply chain processes. The connection between these two areas is governed by
the decision-making process and is driven by the supply chain's managerial
focus.
This focus is the most important
factor in ensuring coherence between supply chain execution and a business's
unique value proposal. Yet it also can be an area where organizations are more
likely to fail. Such failures mainly result from a standard managerial approach
that emphasizes efficiency-oriented performance indicators regardless of the
competitive positioning defined by the organization. This approach encourages
companies to focus on seeking local efficiencies that may conflict with their
value proposal to customers, thus creating misalignment between the supply
chain and business strategy.
Internal Processes: Internal processes, provides an orientation that ensures a
proper connection and combination within the supply chain activities that fall
under the categories of source, make, and deliver. Among the many factors
encompassed by this element, the most important are asset utilization
and the location of the decoupling point. The decoupling point is the
process in the value chain where a product takes on unique characteristics or
specifications for a specific customer or group of customers.
When the business framework is
characterized by a high degree of relevance of the cost of assets to the total
cost, and/or when the unique value proposal is oriented to low cost, the high
utilization of assets is mandated. Consequently, the location of the decoupling
point should be at the end of the transformation process, or at least at the
output point for the most relevant manufacturing asset in terms of cost.
Simultaneous Capabilities, or Multiple Supply Chains?
Organizations tend to want their supply chains to have simultaneous
capabilities: efficient, fast, agile, custom-configured, and flexible, among
others. Yet each of these capabilities requires different skills, and in the
majority of cases, these skill sets are incompatible within the same supply
chain. However, it is possible to develop several parallel supply chains
within a single organization, each focused on a defined market segment with a
responsiveness level and a cost structure that are appropriate to the segment
it serves.
The most powerful benefits of the "Supply Chain Roadmap" arise from its ability to help demystify the process of formulating supply chain strategy. It does so by identifying the key drivers of business strategy, and then helping managers understand how those drivers would align in a coherent way with each of the six generic supply chains. This makes it possible to select the supply chain type that best fits a particular business segment.
The most powerful benefits of the "Supply Chain Roadmap" arise from its ability to help demystify the process of formulating supply chain strategy. It does so by identifying the key drivers of business strategy, and then helping managers understand how those drivers would align in a coherent way with each of the six generic supply chains. This makes it possible to select the supply chain type that best fits a particular business segment.