Creating Supply Chain Strategy for Competitive Advantage

Creating Supply Chain Strategy for Competitive Advantage

Successful collegiate football teams execute precise movements, split-second timing, and disciplined coordination – all under immense pressure. A company’s supply chain strategy is similarly complex, requiring carefully timed coordination of its many moving pieces in alignment with the company’s business strategy, model, and competitive positioning.

A well thought-out supply chain strategy and the resulting high-performing supply chain operations can save your company money and contribute to sales growth. Creating a supply chain strategy can seem like a daunting task but, there are steps you can take to realize value now by managing your supply chain as a strategic advantage to boost company performance and profitability. If you get your supply chain strategy right, it will accelerate your company’s growth and set you apart from the competition. Every company is different, thus clearly outlining your company’s unique value proposition using your company’s competitive positioning will allow you to construct a supply chain strategy that positions your company for sustainable long term success.

Challenges

High growth technology companies experiencing; delays with launches, disconnects with suppliers, and threats from competitors often find that their business strategy, model, and competitive positioning no longer align with their supply chain operations. This misalignment usually embodies itself in cash flow, product quality, or product availability issues.

Supply chain, unlike other functional areas of the company, is a horizontal end-to-end process guiding the seamless flow of products across the extended enterprise. Products flow through the company from supply partners to customers. This flow must in effect pass smoothly through vertical functional barriers. Further, the requirements of the customer must guide the flow, and those requirements must flow smoothly back through the functional barriers.

Research has shown that a majority of supply chain strategy failures center around execution. Our experience is that supply chain execution challenges often center around supply chain communication, collaboration, and visibility issues. Due to these highly complex, cross-functional, cross-company headwinds, developing, executing, and sustaining a supply chain strategy represents a unique set of challenges.

What is Supply Chain Strategy?

Supply chain strategy is the play book for achieving the supporting supply chain operational goals of your business strategy. Done right, a carefully crafted supply chain strategy can institute communication, collaboration, and visibility in your supply chain. Companies that have a well thought-out supply chain strategy are also able to accelerate growth with confidence, adjust strategic direction quicker, and take advantage of new markets sooner.

Companies that take the time to thoroughly review their business strategy, model, competitive positioning, and then create a supporting supply chain strategy, best position themselves for long term sustainable growth. A through supply chain strategy implementation plan will provide you and your team with the overarching vision, periodic operational project milestones, and specific daily tasks needed to fulfill the business strategy. Below is a step by step plan for developing, executing, and sustaining a supply chain strategy.

 1. Developing a Supply Chain Strategy

The development of a supply chain strategy should start with the company’s business strategy and end with the collection of all the inputs needed to assemble a supply chain strategy. First, thoroughly understand your company and competitor’s business strategy, model, and competitive positioning. Then collaborate with your internal team members and external supply partners to select the competitive market niche product and supporting service features in which your company can satisfy and compete. Lastly, determine the disruptive innovations; technologies, processes, materials, organization structures, and financial models that will allow the company to satisfy customer needs and wants. A truly world class sustainable supply chain that is both disruptive and defensible should incorporate appropriate disruptive innovations into the supply chain strategy.

2. Executing a Supply Chain Strategy

In order to avoid the most common supply chain strategy challenge, execution, companies must document, distribute and communicate a robust supply chain strategy and supporting implementation plan. A comprehensive supply chain strategy will define what success looks like, the specific; metrics, timelines, and results that need to be accomplished in order to realize the business strategy. It is then important to implement a clear supporting performance management system by outlining the empowered leads, desired results, and specified rewards for accomplishing the supply chain strategy. Then, proactively communicate supply chain strategy results via periodic emails and weekly team huddles to internal and external stakeholders to ensure continued alignment. The most successful companies execute their supply chain strategy at a high level by collaboratively creating their strategy, tracking their results, and making adjustments as needed.

3. Sustaining a Supply Chain Strategy

Companies must out execute and out innovative their competition by sustaining their supply chain strategy. Quarterly check-ins to revisit the business strategy are important for high growth technology companies as their industries evolve so quickly. More closely integrating your supply partners with you company via; real time information sharing, integrated sales and operations planning, and joint product development will provide better visibility producing further long term competitive advantages. Encourage a culture of disruptive innovation that strives for step changes not continuous improvement by benchmarking leading companies outside your industry. Sustaining your supply chain strategy is not an easy task and should periodically include an annual supply chain strategy update, repeating steps 1, 2 and 3, to ensure the company’s supply chain strategy remains cutting edge.

Conclusion

Carefully crafted strategies, whether on an athletic field or in the business world, often result in greater success. A robust supply chain strategy will allow you and your team to foster communication, collaboration, and visibility in your supply chain. High growth technology companies can put themselves in a better position to win by briefly pausing new product development to focus on mapping out their supply chain strategy. As with many planning activities that cause you to take a break from the action it can seem like you are slowing down progress. However, our experience shows us that companies that take the time to develop, execute, and sustain a supply chain strategy win in the game of business in the short and long term.

-William