Supply Chain Strategy and SC DriversSupply Chain Strategy and SC DriversDrivers of supply chain performance and logisticsDrivers of supply chain performance and logistics drivers driversA framework for structuring the following drivers: A framework for structuring the following drivers:Drivers: Drivers:Logistics Drivers: Facilities; Inventory; Transportation, Logistics Drivers: Facilities; Inventory; Transportation,Information Informationross Functional Drivers: !ourcing; "ricing; Information ross Functional Drivers: !ourcing; "ricing; Information#ole played $y each driver in !upply chain and#ole played $y each driver in !upply chain and ompetitive !trategy and their Decision omponentsompetitive !trategy and their Decision omponents "erformance %etrics for each Driver "erformance %etrics for each Driver&$stacles to achieving 't &$stacles to achieving 'tDrivers of Supply Chain Drivers of Supply Chain PerformancePerformanceFacilities Facilitiesplaces where inventory is stored, assem$led, or fa$ricated places where inventory is stored, assem$led, or fa$ricatedproduction sites and storage sites production sites and storage sitesInventory Inventoryraw materials, (I", 'nished goods within a supply chain raw materials, (I", 'nished goods within a supply chaininventory policies inventory policiesTransportation Transportationmoving inventory from point to point in a supply chain moving inventory from point to point in a supply chaincom$inations of transportation modes and routes com$inations of transportation modes and routesInformation Informationdata and analysis regarding inventory, transportation,data and analysis regarding inventory, transportation, facilities throughout the supply chain facilities throughout the supply chainpotentially the $iggest driver of supply chain performance potentially the $iggest driver of supply chain performance!ourcing !ourcing"ricing "ricingA Framework for A Framework for Structuring DriversStructuring DriversEfficiencyResponsivenessFacilities Transportation InventoryInformationSupply chain structureLogistics DriversCompetitive StrategySupply Chain StrategySourcing PricingCross Functional DriversNoteNoteTraditionally, supply chain drivers Traditionally, supply chain drivers focused upon were the logistics driversfocused upon were the logistics driversThese still continue to remain very These still continue to remain very important driversimportant drivers)owever, the focus on the other drivers )owever, the focus on the other drivers such as sourcing, pricing, information such as sourcing, pricing, information are gaining in importance in overall are gaining in importance in overall conte*t of !upply hain %anagementconte*t of !upply hain %anagementSupply Chain Decisions: Supply Chain Decisions: Structuring DriversStructuring DriversStrategic -Design ofdistribution networks /FacilitiesTactical - Planning of transportation or inventory policiesOperationalroutine transportation or inventory controlCase Illustration: al!mart Case Illustration: al!mart ompetitive strategy: to $e a relia$le , ompetitive strategy: to $e a relia$le , low cost retailer for a wide variety of low cost retailer for a wide variety of mass consumption goods+ This leads mass consumption goods+ This leads to, to, !upply hain !trategy: ideally a very !upply hain !trategy: ideally a very e,cientsupply chain with ade-uate e,cientsupply chain with ade-uate level of responsivenesslevel of responsiveness(al.mart uses the logistics and cross (al.mart uses the logistics and cross functional drivers e/ectively to achieve functional drivers e/ectively to achieve thisthisCase Illustration: al!martCase Illustration: al!martFacilities: centrally located D0s within a Facilities: centrally located D0s within a network of stores leading to aggregation network of stores leading to aggregation $ene'ts; retail stores only at locations that $ene'ts; retail stores only at locations that have a steady and large demand to 1ustify a have a steady and large demand to 1ustify a limited no+ of retail stores fed $y a singlelimited no+ of retail stores fed $y a singlecentrally located Dcentrally located DInformation: comparatively very high Information: comparatively very high investments and pioneering moves in #FID investments and pioneering moves in #FID technology to share point of sale data and technology to share point of sale data and demand data with its supply chain partners, demand data with its supply chain partners, reducing 2ull (hip 3/ect and increasing reducing 2ull (hip 3/ect and increasing responsiveness and e,ciencyresponsiveness and e,ciencyCase Illustration: al!martCase Illustration: al!martInventory: low level, prefera$ly only in Inventory: low level, prefera$ly only in stores rather than warehouses or D0s stores rather than warehouses or D0s $y using cross docking 4 3,ciency over $y using cross docking 4 3,ciency over responsiveness is favouredresponsiveness is favoured Transportation: using own 5eet ensures Transportation: using own 5eet ensures responsiveness; the increase in cost is responsiveness; the increase in cost is o/set $y reduction of transit inventory o/set $y reduction of transit inventory and low inventory at stores as well as and low inventory at stores as well as $ene't from high product availa$ility $ene't from high product availa$ility Case Illustration: al!"artCase Illustration: al!"art!ourcing: identi'es e,cient and low cost !ourcing: identi'es e,cient and low cost sources and feeds them with large orderssources and feeds them with large orders "ricing: 3DL" ensures steady high "ricing: 3DL" ensures steady high demands with very little 5uctuations demands with very little 5uctuations normally created $y price variations and normally created $y price variations and promotionspromotionsThus, (al.%art uses all the supply chain Thus, (al.%art uses all the supply chain drivers to create a right $alance $etween drivers to create a right $alance $etween e,ciency and responsiveness targeted $y e,ciency and responsiveness targeted $y its cometitive strategyits cometitive strategy