Logistics and Supply Chain Management

1. COMPETITIVE SUPPLY
CHAIN STRATEGIES
BY:Madhuri
Muniyal

2. Introduction
• Definition: Designing a firm’s supply chain to
meet the competitive priorities of the firm’s
operations strategy.
• Supply chain strategy to ensure superior value
to the end customer in an efficient manner
• Optimum decision making between trade offs
and costs.
• Innovation to obtain competitive advantage.
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3. Concepts related to Supply Chain
Strategies
• Customer Service and Cost Trade Offs
• There are 4 components of Customer Service:
1.Order Delivery Lead Time
2.Responsiveness
3.Delivery Reliability
4.Product Variety
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4. Customer Service & Trade Offs
• Costs are directly associated with service
provision.
• Higher service in low cost is desirable.
• A firm cannot operate beyond a certain limit in
increasing its efficiency by increasing costs for
higher services.
• The firm’s revenue is also affected by its
service levels at certain costs.
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5. Order Delivery Lead Time
• The time taken by the supply chain from
placement of order to delivery is known as Order
Delivery Lead Time
• The time take from sourcing of material to
delivery is known as Supply Chain Lead Time.
• Penetration Point is the point at which customer
places order. It is also known as Decoupling
Point.
• Different types of models are followed to make
efficient delivery like MTS, MTO & CTO.
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6. Supply Chain Responsiveness
• The firm’s ability to handle the uncertainties of
market demand.
• Based on uncertainties, products are classified into:
1. Functional Products
2. Innovative Products
• Example: CISCO
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7. Delivery Reliability
• The fraction of satisfaction obtained by the customer
within the promised delivery lead time.
• For achieving higher reliability, a quick inventory
turnover is needed, stock outs needs to be prevented.
• Cost management at this stage is very important.
• Example: Safexpress
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8. Product Variety
• Variety Explosion has occurred in large
number of goods.
• It will also increase cost.
• It increases complexity in supply chain.
• Example: P&G
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9. Mass Customization
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• A strategy whereby a firm’s flexible processes generate a
wide variety of personalized services or products at
reasonably low costs. Eg. Dell
• Competitive advantages:
 Managing customer relationships.
 Eliminating finished goods inventory.
 Increasing perceived value.
• Disadvantages:
 Postponement is when some of the final activities in the
provision of a service or product are delayed until the orders
are received.
 Channel assembly is when members of the distribution
channel act as if they were assembly stations in the factory.

10. DELL’s Order Fulfillment Process
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11. Outsourcing
• A Make-or-buy decision is a managerial choice
between whether to outsource a process or do it in-
house.
• Outsourcing: Paying suppliers and distributors to
perform processes and provide needed services and
materials.
• Example: Bharti Airtel Outsources its Network
Operations.
• Toyota Outsources its electronic parts.
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12. Lean Supply Chains
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Three key activities are required to attain a lean supply chain:
1. Strategic Sourcing: Identifying items or services that are of
high value or complexity and purchase them from a select set
of suppliers with whom the firm establishes a close
relationship.
2. Cost Management: Limiting the number of suppliers and
focusing on helping them reduce their costs through trust and
friendly collaboration.
3. Supplier Development: Shifting from price negotiations to
cost management and working with suppliers to achieve lean
operations.

13. Some Other Supply Chain Strategies
• Off shoring
• Vendor Rationalization
• Forward Integration
• Backward Integration
• Efficient Supply Chains
• Responsive Supply Chains
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14. THANK YOU!
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