What headings might you have under a supply chain strategic plan?
- Background (the current position)
- Vision and missions (strategic aim for function)
- Proposed structure for the function
- Resources needed
- Business case for change management plans
When considering the background heading of a supply chain strategic plan, what information should you have summarising the current position?
- Organisations current vision, mission and quantifiable business objectives
- Planned sources of competitive advantage
- Organisations planned strategy
- Cultural context
- Resources available
- External environmental factors
What is a spend analysis? What type of information can you determine?
It is obtaining data on all organisation spend from a purchase ledger. The type of information you can determine is:
• How many suppliers were used
• Spend by supplier and total spend
• Spend by department
• Spend on each expense category
• If departments are using the same suppliers
• If suppliers are being used for the same goods / services
Spend analysis is used for strategic views rather than transactional approaches.
When considering the “vision and mission” which is the strategic direction of the function, it needs to align with corporate objectives. How can the supply chain function support the following corporate objectives? “Quality Improvement” “Lean Supply” “Cost Reduction” “Agile Supply” “Reducing time to market” “Reducing risk and supply chain vulnerability” “Supporting Innovation” “Diversification”
- Quality Improvement by selecting higher quality suppliers
- Lean supply (eliminating waste) by collaboration and recognition of mutual dependence
- Cost Reduction by reducing costs of bought in products
- Agile Supply (respond to rapid changes in markets) by using responsive suppliers
- Reducing time to market by using a pool of trusted capable suppliers for designing efficient supply
- Reducing risks and SC vulnerability by long term contracting and implementing risk approaches
- Can be implemented by accessing market information and using innovative suppliers / effective specification and design processes
- Diversification by using efficient specification and design processes and the ability of appropriate new sources of supply
When formulating the supply chain strategy, you need to decide how to develop and manage the supplier base. What tool can be used for this?
Kraljics Matrix can help you identify a relationship management plan for each category of supply. E.g. strategic suppliers need collaboration.
Low Annual Spend, Low Supply Vulnerability – Routine
High Annual Spend, Low Supply Vulnerability – Leverage
Low Annual Spend, High Supply Vulnerability – Bottleneck
High Annual Spend, High Supply Vulnerability – Strategic
What value can be added by developing good relationships with high quality suppliers?
- Innovation – can give competitive edge
- Flexible Delivery – from suppliers will allow less inventory to be held
- Strategic Market Information – suppliers can provide you with strategic market information
What different structures are there for the supply chain function?
- Hybrid CLAN – Centre led action network, locally based procurement staff report to local management with secondary responsibility to a small procurement centre. Centre must co-ordinate the local buyers by formulating policy, setting standards and encouraging best practice.
- Hybrid SCAN – Strategically controlled action network is same as CLAN but with procurement teams reporting primarily to the central procurement unit
When trying to drive change what elements may need to be addressed?
The cultural web made up of: • Symbols • Power Structures • Organisation Structures • Control Systems • Rituals and routines • Stories
What is a tool for achieving change in 3 stages?
- Introduce Imbalances