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Chapter 2
Supply Strategy
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2. Key Questions Addressed in Chapter 2
How can supply and the supply chain contribute effectively to organizational objectives and strategy?
AND
How can the organizational objectives and strategy properly reflect the contribution and opportunities offered in the supply chain?
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3. Supply Strategy Interpreted in Organizational Strategy
Objectives
Organizational
Objectives
Supply
Strategy
Organizational
Strategy
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4. ©McGraw-Hill Education. All rights reserved.
Supply Strategy Links Current and Future Markets to Current and Future Needs
Current
Needs
Future
Needs
Current
Markets
Future
Markets
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5. Normal Organizational and Supply Objectives
Organizational Objectives
Survival
Growth
Financial
Environmental
Supply Objectives
Quality
Quantity
Delivery
Price
Service
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6. Six Major Supply Strategy Areas
Assurance of supply
Cost reduction
Supply chain support
Environmental change
Competitive edge
Risk management
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7. Three Categories of Supply Risk
Operational:
Risk of interruption of the flow of goods or services
Financial:
Risk that the price of the goods or services acquired will change significantly
Reputational:
Risk that the organization’s reputation will be harmed by a supply decision
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8. Strategic Purchasing Planning Process
Restate
organizational goals
Identify and
analyze alternatives
Determine supply
objectives to contribute
to organizational goals
Determine
supply strategy
Review implementation
factors
Isolate factors affecting
achievement of
supply objectives
Gain commitment
and implement
Evaluate
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9. Supply Strategy Questions
What?
Quality?
How much?
Who?
When?
What Price?
Where?
How?
Why?
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