Supply Chain as Strategic Asset: The Key to Reaching Business Goals
Or click here to see the Table of Contents
Creating an effective supply chain is essential to compete. But the scope of supply chains is so vast that simply defining what is an effective supply chain is a tough task, let alone creating it. This book provides a valuable roadmap for defining and creating a supply chain strategy that will help you create an effective supply chain that supports your business strategy. It begins by providing an overview of the generic business strategies and proceeds to define supply chain strategies, reviewing the strengths and weaknesses along with the reasoning behind selection of a specific strategy over the others.
It investigates the relationship between some of the well-known business strategies and how they may affect the selection of the supply chain strategy. As technology is the de-facto enabler of business capabilities in current times, therefore, the book also provides a good overview of the prevalent practices in developing and pursuing effective technology strategy that will best support the business needs.
The objective of this book is to explore the relationship between the three strategies: business strategy that sets the goals, functional strategies (with specific focus on supply chain functions) that define the business capabilities to achieve the business goals, and the technology strategy that enables building the business capabilities effectively. I believe that senior executives who understand this synergistic relationship can transform their companies most effectively by prioritizing the capital investments that are fully aligned with the business goals of the firm and hence provide the best returns on the investments.
Here is how this book is organized.
The first chapter provides an overview of the underlying precept of the book which is the belief that the business strategy of a firm must define and drive the competitive advantages sought by it. In turn, these competitive advantages sustain the development and growth of the business of the firm. The process of the creation of superior business capabilities from the corporate strategy consists of the strategy development, strategy planning, and strategy execution. This chapter provides an overview of the process describing these steps, introduces the concepts of functional and deployment strategies and their relationships with the business strategy. In doing so, it lays the foundation for the rest of the book and the flow of the discussion on the subject of strategic alignment among the business, functional, and the deployment strategies.
Chapters 2 and 3
In these two chapters, I review the basic concepts of business strategy. This is done by reviewing the existing literature and concepts on strategy development and management. I review the fundamental strategies as first suggested by Porter and how these strategies affect the supply chain management functions in an organization. In addition, I also review the resource-based view of strategy and the concept of competing on capabilities.
Real-life examples from the industry are used to explain how the basic concepts of strategy have evolved and what does that mean to the strategy development and implementation processes for the companies today. The scope and frequency of changes in the global environment makes the process of strategy development more complex and this rapid rate of changes also affects the process of strategy development by requiring that the frequency at which the business strategies are reviewed becomes shorter.
Since there is abundant literature available on corporate strategy formulation and development, I keep that part of discussion limited to a review of the main concepts on the subject, but spend more time on relating these concepts with the functional and deployment strategies as well as the impact of changing business environment on the conventional concepts of business strategy as summarized earlier.
Chapters 4, 5, and 6
These three chapters of the book focus on functional strategy, the definition, concepts, and its role in supporting and realizing the strategic objectives. Functional strategy has not been an explicit part of strategy development so far and provides an excellent opportunity for the corporations to distinguish themselves by aligning their operations with their strategies through the development of a functional strategy. Functional strategy development is the part of strategic planning where corporations must analyze their functional capabilities, understand the gaps that will cause strategic failure, understand the enhancements that will not only allow a short-term win, but also provide a competitive advantage that can be sustained in the medium to longer term; and finally, help them prioritize their investments into building the capabilities that are required for strategy realization.
Businesses need many different functions to operate effectively. Examples of such functions are human resources, marketing, product development, supply chain, merchandising, accounting, and so on. Any of these functional areas can become a strategic focus for the corporation, if the capabilities enabled by that function can help the company achieve the goals of its corporate strategy. However, I focus primarily on the supply chain functions. I review the fundamental strategies that can be pursued for designing supply chains, understand what these are and when to use them, and relate these supply chain strategies back to the business strategies to show how they can support the corporate strategies and help realize the goals set by these strategies. We will also review how these functional strategies not only depend on the business strategies, but also affect them in turn, setting up not a one-sided but an active two-sided relationship between the two.
Chapter 7: Technology Strategy
In this chapter, I review the role of technology in today’s corporations with specific focus on its ability to create and maintain capabilities that are central to the competitive advantages sought by their strategies. We will see why technology management should be viewed as one of the primary competency of the business rather than a supporting activity that has been the conventional view in most corporations.
This chapter provides an overview of the enterprise architecture and its role in defining and implementing a technology strategy. I evaluate the current state of enterprise architecture in the corporations, its organizational limitations as well as the opportunities and potential evolution. Then, it identifies the factors that inhibit the enterprise architecture from successfully driving technological change that can lead the corporations from viewing the technology as a necessary evil to viewing it as an evolutionary enabler.
A successful deployment strategy consists of aligning the technology strategy with the business and functional strategies so that capital investments can be prioritized towards creation of coherent and sustainable solutions that create long-term competitive advantages for the corporation. This theme continues in the next chapter, where I cover how achieving such an alignment provides an agile, flexible, and cost-effective process for the creation and maintenance of competitive advantages in an ever-changing business environment.
Chapter 8: Keeping It All Together
In this concluding part of the book, I explore how the three strategies, business, functional, and technology, come together and enable the corporations to create and maintain competitive advantages that are sustainable in the long term. We will cover what types of organizational structures support such alignment and others that inhibit it. I also cover other organizational factors that affect successful strategy alignment and suggest how to manage them better to achieve the holy grail of functional capabilities that can keep a corporation at the edge of the value creation frontier.
© Vivek Sehgal, 2010, All Rights Reserved.
Want to know more about supply chain processes? How they work and what they afford? Check out my books on Supply Chain Management at Amazon.