barcode using vb.net FOUR CRITERIA OF A GOOD SUPPLY CHAIN STRATEGY in Software

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FOUR CRITERIA OF A GOOD SUPPLY CHAIN STRATEGY
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The configuration components operations strategy, channel strategy, outsourcing strategy, customer service strategy, and asset network are the fundamental building blocks of your supply chain strategy. However, to drive forward your strategic business objectives and really gain a competitive edge, these components and the choices you make about each one must be
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Aligned with your business strategy Aligned with your customers needs Aligned with your power position (your influence) Adaptive, because competitive advantage is temporary and market conditions change
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These four criteria may sound elementary, but few companies actually follow them. In fact, the practice of developing and managing a supply chain strategy is not widespread. Many of our clients over the years have had only the most rudimentary supply chain strategy process in place, indicating that these concepts are either not well understood or difficult to implement. Let s examine them one by one.
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Align with Your Business Strategy
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Your supply chain strategy should directly support and drive forward your business strategy. We believe that an effective business strategy begins with a core strategic vision (see Figure 1-3) that lays down the boundary conditions for your business: what you are, what you ll do, and just as important what you are not and what you won t do.
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CHAPTER 1 Core Discipline 1: View Your Supply Chain as a Strategic Asset
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F I G U R E 1 3
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Boundary conditions of the core strategic vision.
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Customer Requirements Market Size and Competition Competitive Situation Core Strategic Vision Core Competencies Key Business Policies Financial Goals
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External Internal
The core strategic vision clarifies the answers to key business strategy questions such as: What are your overall strategic objectives What value do you deliver to your customers How does your company differentiate itself in the marketplace Unless the answers to these key questions drive your supply chain strategy and configuration, your supply chain will be operating in a vacuum. Here s one example of many. We worked with an electronics company that had spent millions to improve production and order-fulfillment times. The company s on-time delivery performance was excellent. There was only one problem delivery performance was no longer the key to profitable growth. Increased competition meant that customers were demanding, and getting, lower prices. What s more, a slowdown in several of the company s primary markets was cutting into revenues and sharply reducing return on assets. The company s president recognized the need to move to a much lower breakeven point, but supply chain operations were focusing on yesterday s priority customer delivery excellence. Where does this type of disconnect come from Simply put, the new business vision of the company s president had not been translated into new objectives for the supply chain. Although the overall business plan clearly showed the volume and price declines and their impact on margins, the implications for supply chain operations had not been considered. It was only when the company began to lose money that a major supply chain reorganization occurred, which led to factory closures, facility consolidation, and outsourcing of manufacturing.
Strategic Supply Chain Management
Translating your business strategy into an effective plan of action requires communication and discipline. The matrix in Figure 1-4 offers a framework for thinking broadly about four typical ways that companies compete on innovation, cost, service, and quality otherwise known as the basis of competition. The matrix shows the key supply chain contribution for each strategy. Some aspect of innovation, cost, service, and quality is a part of almost every company s strategy. But leading companies focus on just one of these as a primary strategy their basis of competition for winning in a chosen market. From a supply chain perspective, each basis of competition requires distinct structure, processes, information systems, and skills.
Competing on Cost
Companies that compete on cost offer low prices to attract cost-sensitive buyers or to maintain share in a commodity market. This strategy demands highly efficient, integrated operations, and the supply chain plays a critical role in keeping both product and supply chain costs down. The low-cost supply chain focuses on efficiency-based metrics such as asset utilization, inventory days of supply, product costs, and total supply chain costs. Product standardization and process standardization are critical, as are supplier and production quality and inventory control.
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