THE SUPPLY CHAIN

STRATEGY AND
CORPORATE STRATEGY
 Tactical,
Operational and
Strategic supply
chain
Supply chain management operates at
three levels:

1. Strategic Level

2. Tactical Level

3. Operational Level.
Strategic Supply Chain
At the strategic level, company management makes high-level strategic supply chain
decisions that are relevant to whole organizations.

The decisions that are made with regards to the supply chain should reflect the overall
corporate strategy that the organization is following.

The strategic supply chain processes that management has to decide upon will cover
the breadth of the supply chain.

These include
◦ Product development
◦ Customers
◦ Manufacturing
◦ Inventory
◦ Vendors
◦ Logistics
Product
Development
Product Development
Product Development
Senior Management has to define a strategic direction
when considering the products that the company should
manufacture and offer to their customers.
As product cycles mature or products sales decline,
management has to make strategic decisions to develop and
introduce new versions of existing products into the
marketplace, rationalize the current product offering, or
whether develop a new range of products and services.
Product Development
These strategic decisions may include
◦ The need to acquire another company or
◦ Sell existing businesses.
◦ However, when making these strategic product development
decisions, the overall objectives of the firm should be the
determining factor.
Customers
◦ At the strategic level, a company
has to identify the customers for its
products and services.
◦ When company management
makes strategic decisions on the
products to manufacture, they
need to then identify the key
customer segments
where company marketing and
advertising will be targeted.
Identify the key
customer
segments
Manufacturing/Facilities
◦ At the strategic level, manufacturing decisions define the
manufacturing infrastructure and technology that is required.
◦ Based on high-level forecasting and sales estimates, the
company management has to make strategic decisions on how
products will be manufactured.
Manufacturing/Facilities
◦ The decisions can require new manufacturing facilities to be
built or to increase production at existing facilities.
◦ The overall company objectives include moving manufacturing
overseas, then the decisions may lean towards using
subcontracting and third party logistics.
◦ As environmental issues influence corporate policy to a greater
extent, this may influence strategic supply chain decisions with
regards to manufacturing.
Inventory
❑Inventory is key to profitability.
❑Inventory velocity turns assets into profits.
❑The faster inventory turns, the greater the profitability.
Inventory is the key issue to supply chain management
success.
❑Customers demand that their orders be shipped complete,
accurate and on-time.
❑That means having the right inventory at the right place at
the right time.
Suppliers
◦ Company management has to decide on the strategic supply
chain policies with regards to suppliers.
◦ Reducing the purchasing spend for a company can directly
relate to an increase in profit and strategically there are a
number of decisions that can be made to obtain that result.
◦ Leveraging the total company’s purchases over many businesses
can allow company management to select strategic global
suppliers who offer the greatest discounts.
Suppliers
◦ But these decisions have to correspond with the overall
company objectives
◦ If a company has adopted policies on quality, then strategic
decisions on suppliers will have to fall within the overall
company objective.
Logistics
◦ As well as strategic decisions on manufacturing locations, the
logistics function is key to the success of the supply chain.
◦ Order fulfilment is an important part of the supply chain and
company management needs to make strategic decisions on the
logistics network.
◦ The design and operation of the network have a significant
influence on the performance of the supply chain.
Logistics
◦ Strategic decisions are required in warehouses, distribution
centers which transportation modes should be used.
◦ If the overall company objectives identify the use of more third
party subcontracting, the company may strategically decide to
use third-party logistics companies in the supply chain.
Strategic Supply Chain
Management
◦ Strategic decisions determine the overall direction of company’s
supply chain.
◦ They should be made in conjunction with the companies overall
objectives and not biased towards any particular product or
regional location.
◦ These high-level decisions can be refined, as required, to the
specific needs of the company at the lower levels which allow
for tactical and operational supply chain decisions to be made.
 ◦ The primary and overriding goal of any supply chain is to make
sure a company is delivering the orders its customers want when
its customers want those orders - and accomplish this by
spending as little money as possible.
◦ Only by lowering costs and improving performance can a supply
Conclusion chain be truly optimized.
◦ When a supply chain is managed at the operational, tactical and
strategic levels - it has the best chance of helping its company
reach its goals.
 ◦ When strategic supply chain is optimized, a company is
Conclusion delivering what its customers want, when its customers want it -
and spending as little money as possible getting that done.
CORPORATE
STRATEGY
CORPORATE STRATEGY
After this lesson we will learn the following:
1. Definition of Corporate Strategy
2. How Corporate strategy can be used in your organization
3. Benefits of Corporate Strategy
4. Critical Factors in Corporate Strategy
5. Importance and Implementation of Corporate Strategy
DEFINITION OF
CORPORATE
STRATEGY
Process by which members of an
organization envision its future and
develop the necessary procedures and
operations to achieve that future.
HOW CAN CORPORATE STRATEGY BE
USED IN YOUR ORGANIZATION?
1. PROVIDES A PLAN

2. ESTABLISHES A PATTERN OF ACTIONS

3. ESTABLISHES POSITION

4. INCORPORATES PERSPECTIVE
BENEFITS OF STRATEGIC PLANNING
•PROVIDES FRAMEWORK FOR ACTION
•ENABLES ORGANIZATION TO SHARE A VISION AND A BELIEF
THAT THE VISION CAN BE FULFILLED.
•EVALUATE YOUR COMPETITORS & ADJUST TO CURRENT
EVENTS
•MOTIVATE & ENCOURAGE MANAGERS
SIX CRITICAL STRATEGIC FACTORS
2. AN ESTABLISHMENT OF
1. A COHERENT,
AN ORGANIZATION’S 3. A DEFINITION OF AN
UNIFYING, AND
LONG –TERM OBJECTIVES, ORGANIZATION’S
INTEGRATIVE PATTERN OF
PLANS, AND ALLOCATION COMPETITIVE DOMAIN.
DECISIONS
OF RESOURCES

4. A RESPONSE TO 6. IDENTIFYING THE

5. DEVELOPING
INTERNAL STRENGTHS & ECONOMIC FACTORS THE
DIFFERENTIATING TASKS
WEAKNESSES AND ORGANIZATION WILL
AND ROLES AT ALL
EXTERNAL THREATS & CONTRIBUTE TO
FUNCTIONAL LEVELS.
OPPORTUNITIES. STAKEHOLDERS.
 FOCUS ON A SINGLE “DRIVING FORCE”
❑PRODUCTS OFFERED
❑MARKET NEEDS
❑TECHNOLOGY
HOW CAN YOU ❑PRODUCTION CAPABILITY
IMPLEMENT ❑METHOD OF SALE
STRATEGY? ❑METHOD OF DISTRIBUTION
❑NATURAL RESOURCES
❑SIZE/GROWTH
❑RETURN/PROFIT
 1. IS THE CURRENT STRATEGY IMPLICIT OR
EXPLICIT?

2. WHAT IS HAPPENING IN THE LARGER,

QUESTIONS TO SOCIAL AND EDUCATIONAL ENVIRONMENTS?
CONSIDER FOR
YOUR 3. WHAT ARE OUR GROWTH, SIZE, AND
COMPANY’S PROFITABILITY GOALS?
CORPORATE 4. IN WHICH MARKETS WILL WE COMPETE?
STRATEGY
5. IN WHICH BUSINESSES AND GEOGRAPHIC
AREAS?
TO STRATEGICALLY SUCCEED YOUR
COMPANY NEEDS TO KNOW…
WHERE YOU ARE GOING (MISSION
STATEMENT, SPECIFIC GOALS)

WHAT IS THE ENVIRONMENT

HOW DO YOU GET THERE

SUMMARY
▪CORPOARTE STRATEGY IS A PROCESS WHERE MEMBERS ENVISION LONG-TERM GOALS FOR AN
ORGANIZATION
▪CORPORATE STRATEGY SHOULD INCLUDE ALL MEMBERS OF THE ORGANIZATION
▪IN ORDER FOR STRATEGIC SUCCESS, EACH INDIVIDUAL
THANK YOU ☺