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Summary Chapter 4: supply chain strategies

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In this document, I summarized chapter 4: supply chain strategies

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  • December 19, 2022
  • 9
  • 2021/2022
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Chapter 4: Supply chain
strategies
Pg 57-76 in textbook



1. Strategy

Strategy?

= Planning and configuring the organization for the future in accordance with certain stakeholders
expectations

= A long term plan for success

• This part: not focused on corporate strategy but more on link between strategy and both
logistics & SCM

• Top-down approach

- Corporate level

- Business unit level (companies divided into different sub-units)

- Functional level = departmental level, e.g. marketing, IT, SCM,…

• Bottom-up approach

- More weight possible for certain department as input for corporate strategy

• Break the silo-structure!

• Strategy implementation is the hardest part



Top down vs bottom up

Focus area: formulating
functional strategy of logistics
& SCM should not be restricted
to the department alone. It
should focus on cross-
functional, process-based
perspective!

, 2. The evolution of manufacturing

 See the arrow
from craft
production, via
mass production,
lean production
and now mass
customisation

Balance between customer
service & costs!

Satifying customer demand

Producing large volumes
and benefit from
economies of scale

Prior to industrial revolution, skilled artisans produced goods customized for individual customer needs
= craft production

Satisfied customer demand but comes at high costs

One of the most exciting advancements in the early twentieth centure was the widespread development
of mass production => Henry Ford

Economies of scale: Model T



3. Lean production

= Lean production and logistics is focused on eliminating waste using a set of proven standardized tools
and methodologies that target organizational efficiencies while integrating a performance
improvement system utilized by everyone

 The origins of lean production and logistics can be traced back to the car company Toyota and its
Toyota Production System (TPS)

 System not focused on efficiency of
individual machines, rather on total
flows through a system
 Pull rather than psuh

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