Strategic Fit
sAchieving Strategic Fit
>How is strategic fit achieved? >Other issues affecting strategic fit * Strategic fit: –Consistency between customer priorities of competitive strategy and supply chain capabilities specified by the supply chain strategy
–Competitive and supply chain strategies have the same goals. * A company may fail because of a lack of strategic fit or because its processes and resources do not provide the capabilities to execute the desired strategy Example of strategic fit – Dell
How is Strategic Fit Achieved?
Step 1: Understanding the customer and supply chain uncertainty
Step 2: Understanding the supply chain
Step 3: Achieving strategic fit
Step 1: Understanding the Customer and Supply Chain Uncertainty * Identify the needs of the customer segment being served * Quantity of product needed in each lot * Response time customers will tolerate * Variety of products needed * Service level required * Price of the product * Desired rate of innovation in the product© 2004 Prentice-Hall, Inc. 2-10 * overall attribute of customer demand * Demand uncertainty: uncertainty of customer demand for a product * Implied demand uncertainty: resulting uncertainty for the supply chain given the portion of the demand the supply chain must handle and attributes the customer desire * Implied demand uncertainty also related to customer needs and product attributes * First step to strategic fit is to understand customers by mapping their demand on the implied uncertainty spectrum
Achieving Strategic Fit * Understanding the Customer –Lot size –Response time –Service level –Product variety –Price –Innovation
Step 2: Understanding the Supply Chain * How does the firm best meet demand? * Dimension describing the supply chain is supply chain responsiveness * Supply chain responsiveness-- ability to
–respond to wide
>How is strategic fit achieved? >Other issues affecting strategic fit * Strategic fit: –Consistency between customer priorities of competitive strategy and supply chain capabilities specified by the supply chain strategy
–Competitive and supply chain strategies have the same goals. * A company may fail because of a lack of strategic fit or because its processes and resources do not provide the capabilities to execute the desired strategy Example of strategic fit – Dell
How is Strategic Fit Achieved?
Step 1: Understanding the customer and supply chain uncertainty
Step 2: Understanding the supply chain
Step 3: Achieving strategic fit
Step 1: Understanding the Customer and Supply Chain Uncertainty * Identify the needs of the customer segment being served * Quantity of product needed in each lot * Response time customers will tolerate * Variety of products needed * Service level required * Price of the product * Desired rate of innovation in the product© 2004 Prentice-Hall, Inc. 2-10 * overall attribute of customer demand * Demand uncertainty: uncertainty of customer demand for a product * Implied demand uncertainty: resulting uncertainty for the supply chain given the portion of the demand the supply chain must handle and attributes the customer desire * Implied demand uncertainty also related to customer needs and product attributes * First step to strategic fit is to understand customers by mapping their demand on the implied uncertainty spectrum
Achieving Strategic Fit * Understanding the Customer –Lot size –Response time –Service level –Product variety –Price –Innovation
Step 2: Understanding the Supply Chain * How does the firm best meet demand? * Dimension describing the supply chain is supply chain responsiveness * Supply chain responsiveness-- ability to
–respond to wide