Dell gives a choice to customers to make customized models for their requirement, and delivers them at their door steps. The Maximum Supply Chain Surplus view: Now the question arises as to how to handle this implied demand uncertainty? Ask your own questions, and get answers from Achieving strategic fit on Bayt.
However, failure at one function Achieving strategic fit lead to failure of the overall chain. So a strategic decision to increase the responsiveness will have additional cost which will Achieving strategic fit the efficiency.
Making decision on the supply chain to best serve the needs of the target segment customers.
Companies have to understand the need and priorities of targeted customer segments and the uncertainty of their demand. Strategy Fit that is apprehensive with strategies works in performs. Being a strategic fit is all about building the supply chain strategies to face the customer demand and uncertainty or in other words a supply chain which is able to supply big quantities required, in the shortest lead time, covering large product portfolios and providing better services.
Achieving strategic fitThe greater the implied demand uncertainty, the more responsive a supply chain has to be. Three steps are involved. The importance of achieving strategic fit is depicted below: It is very important to understand the demand at each stage of supply chain and choose the appropriate level of responsiveness or efficiency for that level.
Chopra and Meindl stated an important point: So it is a key factor in deceiving the ultimate gains of the organization so that achieve and carry on success. The demand uncertainty of target segments is called "Implied Demand Uncertainty" which is different from "Demand Uncertainty" which reflects the overall uncertainty of demand for a product.
Thus Dell absorbs most the uncertainty and provides responsiveness in supply chain and its supplier being efficient absorbs very little uncertainty.
This increased the implied demand uncertainty for Dell which needs a responsive supply chain. For a high implied demand uncertainty we need a responsive supply chain and for a low implied demand uncertainty we need an efficient supply chain.
What is "Strategic Fit"? Strategic fit between competitive strategy and supply chain strategy refers to the consistency between the customer needs that the competitive strategy aims to satisfy and the supply chain capabilities that the supply chain strategy aims to build.
To achieve strategic fit companies need to bring consistency between implied demand uncertainty and supply chain responsiveness. The main design of the supply chain management as well as protected well-designed strategy at the business company should be able to maintain the level of supply chain management responsiveness.
At this level of optimization and fit making, the entire supply chain is modeled as a system and optimization and fit is designed so that supply chain surplus is maximized.
As a solution to this increased cost Dell closely collaborates with suppliers, which allows Dell to operate with only a few hours of inventory for some parts and a few days of inventory for other common components.
So the extreme challenges in applying strategic management effectively in a business organization first strategic drift the other understands the contact of vital existing themes that effecting at a main point of time as well as finally the attractiveness of screening the strategic issues of the business organization in different ways.
The final step in importance of achieving strategic fit is the perfect equal among skills supply chain effect with the improbability of demand as well as supply.
Tweet From purchase of raw material to delivery of final product to the customer, a supply chain has different stages and the demand uncertainty is different for each stages.
To provide these services to the customer there will be additional costs involved for carrying huge inventory for all the parts which cannot be charged to the customers because Dell has to be competitive in the market to survive. Some companies being more responsive will have less efficient supply chain and if companies need an efficient supply chain then they have to lower the level of responsiveness.
Understanding the supply chain attributes alternatives available. Understanding the customer needs regarding attributes of supply. Companies can achieve these strategies by ensuring that their supply chain capabilities are able to support these strategies.
If the competitive strategy and supply chain strategy are aligned across all the operations functions of the company and optimization is attempted in an integral manner including the raw material inventory, manufacturing operations, finished goods inventory and warehouse, and transportation, the scope is extended to intracompany intrafuctional level.
Strategically companies have to decide on the level of responsiveness they need to provide and try to bring the efficiency by enhancing the processes and technologies.
There are many factors which influence the demand of customer like price, convenience of purchase, urgency of the product, size of the lot, delivery lead time, etc.
Companies also study what competitors are doing and what changes they can offer to have a competitive advantage, like winning customers by offering a lower price on the product or by providing large varieties of the product or by providing better services.
For example, to respond to a large product portfolio a company needs to increase the production and storage capacity which will increase the cost. The most limited scope over which strategic fit and optimization can be attempted is one with operation within a functional area in a company.
A Strategy maintains Achieving strategic fit direction and scope of a business organization more than the long term and achieves proper advantage in a changing business environment during its configuration of company resources as well as proficiency with the perfect aim of accomplishing expectations of stakeholder.
This way the supplier will have less demand uncertainty which can be handled through an efficient supply chain.
The uncertainty of customer and supply chain can be united as well as diagram against the range of uncertainty. Here you can get the valuable notes, study guide and discuss on different topics related management studies as well as BBA.
For this, companies have to build the supply chain capabilities of responsiveness and efficiency.The process for achieving strategic fit is given below: Strategic fit between competitive strategy and supply chain strategy refers to the consistency between the customer needs that the competitive strategy aims to satisfy and the supply chain capabilities that the supply chain strategy aims to.
The importance of achieving strategic fit is depicted below The first step in importance of achieving strategic fit is to recognize the customer and supply chain improbability between competitive and supply chain strategy.
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Do you have PowerPoint slides to share? If so, share your PPT presentation slides online with mi-centre.com Achieving strategic fit is critical to a company's overall success How a company achieves strategic fit between its supply chain strategy and its competitive strategy The importance of expanding the scope of strategic fit accross the supply chain.
Start studying Chp 2. Achieving Strategic Fit and Scope. Learn vocabulary, terms, and more with flashcards, games, and other study tools. A company has to make sure that its supply chain strategy and competitive strategy fit together. Strategic fit means that both the supply chain strategy and competitive strategy have the same goal.