7 drivers of Supply Chain Excellence

1) Connectivity
2) Visibility (end-to-end)
3) Collaboration
4) Optimization
5) Execution
6) Speed
7) Reliability

Four types of Supply Chain strategies

1) Efficient supply chains: To create the highest levels of cost efficiency by

eliminating non-value added activities, pursuing scale economies, deploying

optimization techniques to get the best capacity utilization in production and
distribution, and establishing information linkages to ensure the most efficient,
accurate and cost-effective transmission of information across the supply chain.
2) Risk-hedging supply chains: To pool and share resources by sharing risks in

supply disruption. This type is common in retailing, where different retail stores or
dealerships share inventory.
3) Responsive supply chains: Responsive and flexible to the changing and diverse

needs of the customers. For this, companies use build-to-order and mass
customization processes as a means to meet the specific requirements of customers.
4) Agile supply chains: Responsive and flexible to Customer needs, while the risks of

supply shortages or disruptions are hedged by pooling inventory and other capacity
resources. Agile supply chains have the ability to be responsive to the changing,
diverse, and unpredictable demands of customers on the front end, while
minimizing the back-end risks of supply disruptions.

Lean vs. Agile Supply chains

Forces and Trends That Will impact the

Sustainability
Future
Supply
Chain
and the
New markets and a
Driving
new economic
balance

scarcity of
natural
resources

the value
chain

Economi
c

Managing
complexity
through
transparen
cy
Regulator
y

New rules, new

compliancy

Ecologic
al
Consumer
Behaviour
Information
flow

Product
flow

New
Technologie
s
Explosion of

Driving
the value
chain

Demographi
c

Graying and
Urbanisatio
n

Demand characteristics
(Functional vs. Innovative products)

Functional
products
Low demand
uncertainty
More predictable
demand
Stable demand
Long product life
Low inventory cost
Low profit margin
Low product variety
Higher volume

Innovative
products
High demand
uncertainty
Difficult to forecast
Variable demand
Short selling season
High inventory cost
High profit margin
High product variety
Low volume

Stable

Supply characteristics
(matured manf. Process

and Underlying tech. with well established

supply base)

Less breakdowns

Evolving

(manf. Process and

Underlying tech. are still under early development

and are rapidly changing)

Vulnerable to
breakdowns
Stable and higher
Variable and lower
yields
yields
Less quality problems Potential quality
problems
More supply sources Limited supply sources
Reliable suppliers
Unreliable suppliers
Less process changes More process changes
Less capacity
Potential capacity
constraints
constraints