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Recipe of Success
For any company to be successful, its supply chain strategy and competitive strategy must fit together
Dell
Custom-made computer systems at a reasonable cost
Apple
brand loyalty, innovative hardware design, dedicated market shares, and ease of use
Our objective is to understand the relationship between supply chain strategy and competitive strategy Lets start with the term Value Chain
Operations
Distribution
Service
For competitive strategy to work, all the functional strategies must coordinate with each other The value chain emphasizes the close relationship between the functional strategies within a company.
All the functional strategies must not only support each other, but also support the overall supply chain strategy
Case of Dell
Competitive strategy? Supply Chain Strategy? New Product Development Strategy?
Variety of products required increases Demand per product becomes more disaggregated
2-14
Hanes apparel
Seven-Eleven Japan
Hanes apparel
Dell
2-17
Low High
2-18
Low
Cost
Responsiveness spectrum
Uncertain demand
Responsive
Quick response Modularity to allow postponement Higher margins Capacity flexibility Buffer inventory Aggressively reduce even if costs are significant Speed, flexibility, quality Greater reliance on responsive (fast) modes
Lowest cost Min product cost Lower margins High utilization Minimize inventory Reduce but not at expense of greater cost Cost and low quality Greater reliance on low cost modes
2-22
2-25
2-26
Five categories:
Intracompany intraoperation scope Intracompany intrafunctional scope Intracompany interfunctional scope Intercompany interfunctional scope
2-27
Retailer
Customer
2-28
2-29