STRATEGY ALIGNMENT

STRATEGY ALIGNMENT

1. PRIORIDADES COMPETITIVAS

   • Succesful:business model, and supply chain
   • Strategy Development Process
     • Environmental Analysis
       • SWOT
       • Understand environment, customers, industry, ompetitors
     • Corporate Mission
       • Reason firm's existance
       • Value it wishes to create
     • Form a strategy
       • Competitive advantage
         • low price, design, or volume flexibility, quality, quick delivery, dependability, aftersale service, broad product lines.
   • OM Contribution to strategy
     • Operation Decisions
       • Product
       • Quality
       • Process
       • Location
       • Layout
       • HR
       • SC
       • Inventory
       • Scheduling
       • Maintenance
     • Strategy
       • Flexibility
       • Low Cost Delivery
       • Quality
       • After sales service
       • Broad Product Line
     • Competitive Advantage
       • Differentiation (Better)
       • Response (Faster)
       • Cost Leadership (Cheaper)
   • SC Operating Model to Competitiviness
     • Competitive strategy Elements
       • Characteristics of Operating Model  aligned to support and enhance
       • Lowest prices
         • Lowest prices
       • Highest margin products
         • • Maximum availability at point of sale • Lowest operating cost
       • Highest quality
         • • Highest quality of suppliers • Strongest manufacturing quality controls
       • Fastest customer response
         • • Shortest order-to-delivery cycle • Fastest request-to-promise date
       • Most innovative
         • • Most efficient new product launch
       • Highest Return-on-Assets
         • • Highest plant utilization • Lowest inventories
       • Best customer service
         • Specific service for each customer segment • Maximum availability at point of sa
       • Most environmentally responsible
         • • Minimize waste and maximize recycling
     • Activity map
       • Competitive Advantage
       • Critical success factors
       • Supporting activities

2. ORDER WINNERS & ORDER QUALIFIERS

   • Competition Parameters Cost to Value
     • Cost/Prices 60/s70s
     • Quality/Variety 80s
     • Time 90s
   • Definition
     • criteria used by customers in service or product selection
     • Order Qualiiers
       • demonstrated levels of performance required to do business
         • Cost; Cost &quality; cost, quality& speed;cost, quality, speed &customization
     • Ordner Winners
       • criteria for differentiating services or products of one firm from those of another
         • Cost, Quality speed,customizaton, service

3. OPERATIONAL PERFORMANCE METRICS &THE SUPPLY CHAIN-TRIANGLE

   • Productivity
     • Value Output/Value Input
       • single factor
     • output (good & srvices)/ material+energy(labor+material+energy+capital+miscellaneous)
       • multifactor
     • increase
       • INPUT:mix of capital(38%), labor (10%) & management(52%)
   • Utilization
     • average fraction of the capacity of a process or activity that is utilized during an operation.
       • indicators
         • + facility utilization + inventory turns +cash-to-cash cycle
     • compares actual output to potential output
   • Customer Response
     • responsiveness to changes in customer requirements
       • indicators
         • + order cycle times +perfect order fulfillment +quality + new producttime-to-market
   • SC TRIANGLE
     • Balance set of performance metrics
       • Functional product
         • Low cost of sale, low risk of obselence, high forecast accuracy, low product variety, long product life cycle
         • SC:Physically efficient
           • Supply predictable demand efficiently at lowest possible cost
         • Life cycle > 2 years Gross Margin < 20% Low Product Variety
       • Innovative product
         • High cost of sale, high risk of obselence, low forecast accuracy, high product variety, short product life cycle
         • SC: market resonsive
         • Life cycle < 1 year Gross Margin > 20% High Product Variety
         • Respond quickly to unpredictable demand in order to minimize stockouts, markdowns, and obsolete inventory
     • SC Framework & strategy aligment process
       • 1.Go to Mkt strategy
         • 2.SC strategy
           • 3.Operating Model/ performance objective
             • 4.Tailored Practices
               • need to align to strategically-aligned SC performance objectives!
     • Triangle
       • Customer Response: High margin & short lyfe cycle products
       • Efficiency: Low marging & mature product
       • Asset Utilization:Capital intensive Industries
       • Aligment of Corporate strategies with SC strategies