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Although supply chain management has grown in importance in recent years, many enterprises fail to link it with their overall business strategy. Strategic decisions are the ones that have a long lasting effect on the firm. Decisions governing various busniess units of the firm and how supply chain structures and industry structures overlap, and how these structures are affected by the speed of change in the industry.
Decisions relating to acquring market share and growth, entering new markets, deploying new processes for such change, are policy level decisions which affect decision drivers further down the line. Decisions relating to demand estimation, market segmentation, marketing strategy which includes selection of the right portfolio of products, their pricing and promotion, all form part of the business strategy. Operational strategy include reaching the target market, storage and logistics requirement, selection of right IT framework etc. All of these decision points have to be entwined with the supply chain strategy in order to achive the objective of the firm. Some of the strategic decisions within a few supply chain domains are:
Product Development
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What to outsource and what to make internally?
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Should there be a new channel of flow for information, goods etc. or should they be integrated into the already existing channels?
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Should there be new roles and responsibilities in place dedicated to the new product introduction?
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Selection of suppliers for the raw materials needed for new product based on cost effective and timely procurement?
Sourcing & Procurement
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Selection of vendors and suppliers and the base level number needed to maintain
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Whether to go for strategic level partnership with them?
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Identification of e-procurement options and infrastructure required to support it
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Inbound logistics associated with S & P vis-a-vis decisions relating to responsibility of the raw materials reaching the factory premise, the inbound transportation cost optimization etc.
Logistics & Distribution
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Direct shipment or intermediary storage points (warehouse/ DCs)
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Decisions on the number, location and capacity of the warehouses, distribution channels and manufacturing plants
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Selection of appropriate transportation flows (routes, vendors etc.) between facilities
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Decisions relating to Inventory Control such as – Inventory control are required for what reason - whether there is an uncertainty due to demand forecast, supply mismatch or some other reasons and what can be done to reduce such uncertainties?
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Impact of centralizing (or decentralizing) the distribution system on the inventory levels, transportation cost and service levels and the decision making based on that
Information Technology
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Level of IT (tools and software) involvement in modelling, simulation and forecasting the demand, capacity and using those as a decision support system
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Decision relating to integration/ sharing of technology, data, tools etc. both internally and between supply chain partners
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Role of e-commerce and the logistical infrastructure required to support it
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Level of automation required in distribution, material handling etc and the trade off between time saving and cost there in
Aqua MCG ensures the right alignment and implementation of supply chain practices with business strategies. Our consultants help you adjust your supply chain policies to the needs of your business unit and products. Supply chain and business (sales, marketing, finance) strategies must reflect an integrated design that includes effective tradeoffs between the various business and supply chain elements.
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