Ch2. Supply Strategy

Ch2. Supply Strategy

1. How can supply and the supply chain contribute effectively to organizational objectives and strategy?

2. Strategy

   • An action plan designed to achieve specific long- term goals and objectives

3. Strategic planning

   • Levels
     • Corporate
       • What business are we in?
     • Business Unit
     • Function
   • Categories
     • Survival
       • basic need
     • Growth
       • employees, assets, operating units, countries, market share
     • Financial
       • size of budget, surplus or profit, revenue, ROI, ROA
     • Environmental
       • Clean air, water, etc

4. Challenges

   • Interpretation of corporate objetives and supply objetives
   • Choice of appropriate action plan or strategy to achieve
   • Identification and feedback of supply issues to be integrated

5. Subcategories

   • Assurance-of-supply strategies
   • Cost-reduction strategies
   • Supply chain support strategies
   • Environmental-change strategies
   • Competitive-edge strategies
   • Risk-management strategies
     • RISK
       • Types of Risk
         • Operational
           • The risk of interruption of the flow of goods or services
         • Financial
           • The risk that the price of the goods or services acquired will change significantly
         • Reputational
       • Managing Supply Risk
         • Identification and classification of the risk
         • Impact assessment
         • Risk Strategy

6. Components

   • WHAT?
     • Make vs buy
     • Standar vs special
   • Quality?
     • Supplier quality assurance programs
       • Zero defect plans
       • Process quality control programs
       • Quality certification programs
   • How much?
     • Large vs small quantities
   • Who?
     • Centralize or decentralize
     • Location of staff
     • Top management involvement
   • When?
     • Now vs later
     • Forward buy
   • Where?
     • Local vs regional
     • Domestic vs International
     • Large vs Small
     • Single vs multiple sourcing
     • High vs low supplier turnover
     • Supplier relations
     • Supplier certification
     • Supplier ownership
   • How?
     • System and procedures
     • E-Commerce
     • Negotiations
     • Competitive bids
     • Fixed bids
     • Blanket orders/open orders
     • System contracting
     • Group buying
     • Material requirements planning
     • Long-term contracts
     • Ethics
     • Agresive or passive
     • Purchasing research
     • Value analysis
   • Why?
     • Objetives congruent
     • Market reasons
     • Internal reasons
       • Outside supply
       • Inside supply

7. FUENTE: Johnson F, Flynn A. (2015). Purchasing and Supply Management. New York: Mc Graw Hill.