{"id":10637,"date":"2022-03-08T07:14:04","date_gmt":"2022-03-08T12:14:04","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=10637"},"modified":"2022-09-29T11:08:08","modified_gmt":"2022-09-29T16:08:08","slug":"how-we-can-align-our-corporate-strategy-and-supply-chain-strategy","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/how-we-can-align-our-corporate-strategy-and-supply-chain-strategy\/","title":{"rendered":"How We Can Align Our Corporate Strategy and Supply Chain Strategy"},"content":{"rendered":"

\"\"Most organizations struggle to find a true strategic fit between their Corporate Strategies and their Supply Chain Strategies.<\/p>\n

For most organizations, they operate within a highly complex and globally interconnected Supply Chain. Aligning Supply Chain solutions to support the organization\u2019s strategies has become increasingly difficult. This has never been more evident than during the COVID-19 global crisis, as Supply Chains are experiencing unprecedented issues and bottlenecks, resulting in delivery delays of many months with multi-year impacts.<\/p>\n

Supply Chain Leaders<\/a> struggle with a variety of often conflicting demands from other functions\u2014e.g. Marketing, Sales, Engineering, Manufacturing, and Procurement. Due to the difficulty in managing these demands and balancing trade-offs, we cannot address issues like cost, customization, speed, and price in an effective, cross-functional manner.<\/p>\n

\"\"However, once an organization succeeds in effectively aligning its Corporate Strategy with its Supply Chain Strategy<\/a>, it enjoys the immense benefits of superior Financial Performance<\/a>, with tangible benefits in terms of both Cost Management<\/a> and Sales Growth<\/a>.\u00a0 To achieve this, the organization needs to find the Supply Chain Model most suitable for its Purpose and Strategy<\/a>.<\/p>\n

So, how do find the appropriate Supply Chain Model befitting our unique organization and circumstances?<\/em><\/p>\n

To attain alignment, our first step is to understand the 6 Strategic Archetypes that are most commonly found in global organizations.\u00a0 These are:<\/p>\n

    \n
  1. Innovators<\/li>\n
  2. Premium Players<\/li>\n
  3. Customizers<\/li>\n
  4. Green Players<\/li>\n
  5. Aggregators<\/li>\n
  6. Value Players<\/li>\n<\/ol>\n

    Each archetype is characterized by its Customer Value Proposition<\/a>.\u00a0 Each archetype is also characterized by certain mix of Supply Chain Models, of which there are 12 (as captured on the slide below).<\/p>\n

    \"\"<\/a><\/p>\n

    To design an effective Supply Chain Strategy<\/a>, our intent is to develop a capabilities-oriented Supply Chain to align the basic Supply Chain characteristics against the organization\u2019s Strategy.<\/p>\n

    Be aware that the most successful strategies are combinations of multiple Strategic Archetypes.\u00a0 This slide below\u00a0maps the Supply Chain Models to our 6 Strategic Archetypes.<\/p>\n

    \"\"<\/a><\/p>\n

    We can leverage this chart to determine the most prevalent Supply Chain Models for our organization.<\/p>\n

    Therefore, the essence of Strategy and Supply Chain Alignment<\/a> is to identify those top capabilities it requires that match its Strategic Archetypes.\u00a0\u00a0Utilizing the Supply Chain Model-Strategic Archetype chart (on the slide above), we can determine which capabilities we need and map them against the capabilities we currently possess.<\/p>\n

    The most successful strategies are combinations are various Strategic Archetypes, thus representing very distinctive ways to play in the market.<\/p>\n

    An organization doesn\u2019t need to excel in everything. It needs to determine the organization it wants to be and then focus on developing the Supply Chain characteristics and capabilities that matches this objective.\u00a0 In fact, it is important to realize an organization can typically only focus on 3-5 areas to improve its Supply Chain at one time.<\/p>\n

    This is achieved by first dissecting its Value Proposition into the relevant Strategic Archetypes; and then by identifying those Supply Chain Models most relevant to its Strategic Archetypes.<\/p>\n

    As an example, Amazon\u2019s Value Proposition involves being an Aggregator, Value Player, and Innovator. Therefore, the Supply Chain Models of highest importance to Amazon include:<\/p>\n