| Strategic Supply Chain Management | | | | company objectives include moving manufacturing |
| Introduction | | | | overseas, then the decisions may lean towards using |
| Supply chain management operates at three levels; | | | | subcontracting and third party logistics. As |
| strategic, tactical and operational. At the strategic | | | | environmental issues influence corporate policy to a |
| level, company management makes high level | | | | greater extent, this may influence strategic supply |
| strategic supply chain decisions that are relevant to | | | | chain decisions with regards to manufacturing. |
| whole organization. The decisions that are made with | | | | Suppliers |
| regards to the supply chain should reflect the overall | | | | Company management has to decide on the |
| corporate strategy that the organization is following. | | | | strategic supply chain policies with regards to |
| The strategic supply chain processes that | | | | suppliers. Reducing the purchasing spend for a |
| management has to decide upon will cover the | | | | company can directly relate to an increase in profit |
| breadth of the supply chain. These include product | | | | and strategically there are a number of decisions that |
| development, customers, manufacturing, vendors and | | | | can be made to obtain that result. Leveraging the |
| logistics. | | | | total company’s purchases over many |
| Product Development | | | | businesses can allow company management to select |
| Senior Management has to define a strategic | | | | strategic global suppliers who offer the greatest |
| direction when considering the products that the | | | | discounts. But these decisions have to correspond |
| company should manufacture and offer to their | | | | with the overall company objectives. If a company |
| customers. As product cycles mature or products | | | | has adopted policies on quality, then strategic |
| sales decline, management has to make strategic | | | | decisions on suppliers will have to fall within the |
| decisions to develop and introduce new versions of | | | | overall company objective. |
| existing products into the marketplace, rationalize the | | | | Logistics |
| current product offering or whether develop a new | | | | As well as strategic decisions on manufacturing |
| range of products and services. These strategic | | | | locations, the logistics function is key to the success |
| decisions may include the need to acquire another | | | | of the supply chain. Order fulfillment is an important |
| company or sell existing businesses. However, when | | | | part of the supply chain and company management |
| making these strategic product development | | | | need to make strategic decisions on the logistics |
| decisions, the overall objectives of the firm should be | | | | network. The design and operation of the network |
| the determining factor. | | | | has a significant influence on the performance of the |
| Customers | | | | supply chain. Strategic decisions are required on |
| At the strategic level, a company has to identify the | | | | warehouses, distribution centers which transportation |
| customers for its products and services. When | | | | modes should be used. If the overall company |
| company management makes strategic decisions on | | | | objectives identify the use of more third party |
| the products to manufacture, they need to then | | | | subcontracting, the company may strategically decide |
| identify the key customer segments where company | | | | to use third party logistics companies in the supply |
| marketing and advertising will be targeted. | | | | chain. |
| Manufacturing | | | | Strategic decisions determine the overall direction of |
| At the strategic level, manufacturing decisions define | | | | company’s supply chain. They should be made in |
| the manufacturing infrastructure and technology that | | | | conjunction with the companies overall objectives and |
| is required. Based on high level forecasting and sales | | | | not biased towards any particular product or regional |
| estimates, the company management has to make | | | | location. These high level decisions can be refined, as |
| strategic decisions on how products will be | | | | required, to the specific needs of the company at |
| manufactured. The decisions can require new | | | | the lower levels which allow for tactical and |
| manufacturing facilities to be built or to increase | | | | operational supply chain decisions to be made. |
| production at exiting facilities. However, if the overall | | | | |