Companies are competing significantly more on supply chain management. There are many technologies that aid COOs and managers to gain a competitive edge to make their business more efficient, cost-conscious, and enhancing strategic operations. Modern businesses must transform the way suppliers, manufacturers, distributors, and customers interact globally. The developments of technology compensate for these challenges to help maximize operational efficiency to satisfy consumer expectations in immediate (‘want it now’) delivery. Before this course, I did not realize the big picture and that company’s survival depends significantly on supply chains. I thought competition was primarily based on their strategy (low-cost, response, differentiation) and how desirable their products are in the market.
In class, we learned how different supply chain decisions impact strategy—such as low-cost, response, and differentiation. It is imperative for companies to adjust their approach on how they mitigate risk and react to disruptions of the factors in Process, Controls, and Environment appropriately. With technology and analytic tools, managers have the capability to plan, monitor, and forecast more concisely than ever before.
There was a featured panel discussion of supply chain Industry Experts that shared their opinion on the ‘Trends and Insights’ in SupplyChainDigest website article. The VP of Marketing at Logility, Karin Bursa, mentioned that companies want to improve their forecast accuracy. She said analysts discussed how a “5% improvement in forecast accuracy can drive double digit improvements in service levels virtually for free.”
Building value throughout the supply chain is vital to sustain successful relationships between suppliers, manufacturers, and consumers. Companies are now adopting a more complex and detailed supply chain by creating “multiple virtual supply chains to develop tailored end-to-end processes to support distinctly different segments of the business.”
This reminds me of when we discussed how supply chain decisions impact strategy. If the two concepts compliment each other, it can avoid setbacks and expedite the process activities to maximize strategic operations. The four basic process strategies we covered were process focus, repetitive focus, product focus, and mass customization. The type of product, volume produced, and variety of products must be taken into consideration when deciding which process to implement and how it will affect the strategic operations of the company.
Process and supply chain activities affect the main strategies, low-cost, response, and differentiation. For example, operating a differentiation strategy, process characteristics are modular—process that lend themselves to mass customization. Or operating a low-cost strategy, the process characteristics will be to maintain high average utilization. It is evident from our class discussions that the interaction between supply chain management and strategy can determine how competitive a company is in the market.