Creating Supply Chain Strategy for Competitive Advantage

Creating a Supply Chain Strategy for Competitive Advantage

Successful collegiate football teams execute precise movements, split-second timing, and disciplined coordination – all under immense pressure. A company’s supply chain strategy is similarly complex, requiring carefully timed coordination of its many moving pieces in alignment with the company’s business strategy, model, and competitive positioning.

A well thought-out strategy and resulting high-performing supply chain operations can save your company money and contribute to sales growth. Creating a strategy can seem like a daunting task but, there are steps you can take to realize value now by managing your supply chain as a strategic advantage to boost company performance and profitability. If you get the  strategy right, it will accelerate your company’s growth and set you apart from the competition.

Every company is different, thus clearly outlining your company’s unique value proposition using its competitive positioning allows you to construct a supply chain strategy that positions your company for sustainable long-term success.

Challenges

High-growth technology companies experiencing delays with launches, disconnects with suppliers, and threats from competitors often find that their business strategy, model, and competitive positioning no longer align with their supply chain operations; a misalignment that usually embodies itself in cash flow, product quality, or product availability issues.

Supply chain, unlike other functional areas of the company, is a horizontal end-to-end process, guiding the seamless flow of products across the extended enterprise. Products flow through the company from supply partners to customers. This flow must in effect pass smoothly through vertical functional barriers. Further, the requirements of the customer must guide the flow, and those requirements must flow smoothly back through the functional barriers.

Research has shown that a majority of supply chain failures center around execution. Our experience is that supply chain execution challenges often center around communication, collaboration, and visibility issues. Due to these highly complex, cross-functional company headwinds, developing, executing, and sustaining a strategy represents a unique set of challenges.

What is Supply Chain Strategy?

It’s the play book for achieving the supporting supply chain operational goals of your business strategy. Done right, a carefully crafted strategy can institute communication, collaboration, and visibility in your supply chain. It will also help to accelerate growth with confidence, adjust your strategic direction quicker, and take advantage of new markets sooner.

Companies that take the time to thoroughly review their business strategy, model, competitive positioning, and then create a supporting strategy, best position themselves for long-term sustainable growth. A thorough implementation plan will provide you and your team with the overarching vision, project milestones, and specific tasks needed to fulfill the business strategy. Below is a step-by-step plan for developing, executing, and sustaining a supply chain strategy.

 1. Development

The development of your strategy should start with the company’s business strategy and end with the collection of all the inputs needed to assemble your supply chain. First, thoroughly understand your company and competitor’s business strategy, model, and competitive positioning. Then collaborate with your internal team members and external supply partners to select the competitive market niche product and supporting service features in which your company can satisfy and compete.

Then, determine the disruptive innovations, technologies, processes, materials, organization structures, and financial models that will allow the company to satisfy customer needs and wants. A world-class sustainable supply chain that is both disruptive and defensible should incorporate appropriate disruptive innovations into your strategy.

2. Execution

In order to avoid the most common supply chain challenge, execution, companies must document, distribute and communicate a robust strategy and supporting implementation plan. A comprehensive supply chain strategy will define what success looks like, the specific metrics, timelines, and results that need to be accomplished to realize the business strategy. It is then important to implement a clear supporting performance management system by outlining the leads, desired results, and specified rewards for accomplishing proper execution.

Then, proactively communicate strategy results via periodic emails and weekly team huddles to internal and external stakeholders to ensure continued alignment. The most successful companies execute at a high level by collaboratively creating their strategy, tracking their results, and making adjustments as needed.

3. Sustainability

Companies must out-execute and out-innovate their competition by sustaining their supply chain strategy. Quarterly check-ins to revisit the business strategy are important for high-growth technology companies as their industries evolve quickly. More closely integrating your supply partners with your company via real-time information sharing, integrated sales and operations planning, and joint product development will provide better visibility, producing further long-term competitive advantages.

Encourage a culture of disruptive innovation that strives for step changes, not continuous improvement by benchmarking leading companies outside your industry. Sustaining your strategy is not an easy task and should periodically include an annual update, repeating steps 1, 2 and 3, to ensure the company’s strategy remains cutting edge.

Conclusion

Carefully crafted strategies, whether on an athletic field or in the business world, often result in greater success. A robust strategy will allow you and your team to foster communication, collaboration, and visibility in your supply chain. High-growth technology companies can put themselves in a better position to win by briefly pausing new product development to focus on mapping out their supply chains. As with many planning activities that cause you to take a break from the action it can seem like you are slowing down progress; however, our experience shows that companies who take the time to develop, execute, and sustain a supply chain strategy will win in the game of business in both the short and long term.

-William