1. Why is supply chain strategy so important?
Supply chain: The network of retailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery and production of a particular product.
Supply chain strategy: an iterative process that evaluates the cost-benefit trade-offs of operational components.
There are some reasons why supply chain is very important, because
a. It can be controlled to reduce costs.
b. To operationalize and support your business strategy.
c. To focuses on driving down operational costs and maximizing efficiencies.
d. To establish how you work with your supply chain partners, including suppliers, distributions, costumers, and even your customers’ customers.
2. How to develop a supply chain strategy?
There are some steps to develop a supply chain strategy :
a. First step is Understand the business strategy
Ø To clearly understand how the enterprise chooses to compete.
Ø It forces the supply chain operation to see itself as a customer facing entity serving the competitive goals of the enterprise.
Ø Supply chain strategy isn’t simply a linear derivative of the business strategy, but it can be the enabler of the business strategy.
Ø Look to your core competencies, focus, and means of differentiation when developing a supply chain strategy.
b. Second step is Assess the extended supply chain
ü To conduct a detailed, realistic assessment of the capabilities that exist within the organization and even the extended supply chain.
ü Begin by closely scrutinizing your organization’s assets and evaluate how well they support the strategy.
ü A formal supply chain assessment by a non-biased outside party may assist you in better understanding your operational strengths and opportunities for improvement.
ü Once the assessment is complete, assemble a team to review and prioritize recommendations, validate the opportunities, define the risks, and the requirements for implementation.
c. Third step is Develop an implementation plan
· Directly tied to the business strategy, highly specific as to enablers and metrics, and with a defined set of implementation requirements and contingencies.
· It should include activities and tasks, roles, responsibilities, a corresponding timeline, and performance metrics.
· Establish a sub-team to shepherd the execution and provide project management responsibility to resolve issues and track status.
d. Last step is Development considerations
v Cooperate and collaborate with your partners:
§ Throughout the development process remember to include your supply chain partners.
§ Seek out mutual goals that both organizations can execute on.
v Outsource where appropriate:
§ Evaluating opportunities to outsource areas that are not your core competency.
§ Focus more resources on the core competencies your organization does well.
3. a. What are the differences that you have experience in buying a product through a physical retail store and an online store?
The differences between buying product in physical retail store and online store:
Physical retail store
§ Display: By shopping at a physical retail store (brick and mortar store) the customers are able to physically touch and handle items they are interested in buying.
§ Expense: Physical retail stores usually require a bigger budget since you have to lease space, rent property and pay for other location expenses.
§ Location: Physical retail store locations can limit the amount of customer traffic and foot traffic from shoppers, especially if they are not in a bigger city or metro area.
§ Communication: Face-to-face interaction customers get by shopping at physical retail store.
§ Technology: The technology used to run physical retail store has been around for years and rarely changes as often as it does in the online selling world.
Online store :
§ Display: Online retailers are forced to display items using only pictures, graphics and text based product descriptions.
§ Expense: Online store owners do not usually have to worry about building leases or property expense.
§ Location: Online retailers are not limited to one location and have no geographical boundaries like a physical retail storefront has. Online retailers have no limits and can typically service local, national and international customers.
§ Communication: Online retailers may have a hard time getting information across to the customer and must be sure to answer all possible buyer questions through text and graphics on the site so there is no confusion during the purchase.
§ Technology: Most online store owners find that their technology is constantly changing and there is a bigger need for them to keep up and adjust as it improves.
b. What are the differences in their supply chain strategy?
The differences between supply chain strategy in physical retail store and online store:
Physical retail store:
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mall, in small or individual lots for direct consumption by the purchaser. In physical retail store, the supply chain strategy called “bricks and mortar”. This the flows for physical retail store:
“Supplier -> Manufacturers->Retailers -> Customers”
Online store:
Online shopping is a form of electronic commerce whereby consumers directly buy goods or services from a seller over the Internet without an intermediary service. A type of electronic commerce used for business-to-consumer (B2C) transactions and mail order. This supply chain strategy for online store:
“Supplier -> Wholesaler -> Reseller -> Customers”
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