APICS - CSCP 2020 Module 1 Section A

This section introduces the competitive advantage of various organizational strategies. It also addresses how to develop a complementary supply chain strategy for those strategies, including how to resolve misalignments or gaps. Some tools and techniques that can be used to help in understand the economic environment and assess an organizations strategic strengths and weaknesses will also be covered.

Theres a kind of magic in some words, strategy and strategic being key examples. Place strategic in front of the name of any business process, and suddenly that process acquires an aura of great importance. Strategic objectives cry out to be achieved in a way that simple objectives do not. Strategic planning, the process of developing a strategic plan, sounds considerably more sophisticated and powerful than plain old planning. Theres a reason those words have such power. Strategy, originally a military term, is how generals marshal all available resources in pursuit of victory. Strategy wins football games and chess matchesor loses them.

Its really the same in the business world. Each company has a business strategy that paints a broad picture of how it will compete in the marketplace. According to the APICS Dictionary, 16th edition, a strategic plan describes

how to marshal and determine actions to support the mission, goals, and objectives of an organization. [It] generally includes an organizations explicit mission, goals, and objectives and the specific actions needed to achieve those goals and objectives.

Since business strategy is like military strategy in that it requires the marshaling and organizing of all its resources, then it becomes clear that the businesss supply chain can be its most potent strategic resource. Designing and building the right supply chain, one that promotes the business strategies, may just be the most powerful way to gain an edge on the competition, to move faster, deliver more value, and be more flexible in the face of both steady change and surprises. The supply chain strategy is a complex and evolving way that organizations use to distinguish themselves in the competitive contest to create value for their customers and investors.

In Exhibit 1-1 you can see how the direction of an organization is predicated on its business strategy. Of course many organizations now also use mission and vision statements to give clarity to their purpose.

If these strategies are not aligned, the direction and fit will be askew. All three strategies are linked and dependent. The APICS Dictionary, 16th edition, differentiates between business and organizational strategy (listed as strategy in the Dictionary) as follows:

Business strategy. A plan for choosing how to compete. Three generic business strategies are (1) least cost, (2) differentiation, and (3) focus.

Strategy [organizational]. For an enterprise, identifies how the company will function in its environment. Specifies how to satisfy customers, how to grow the business, how to compete in its environment, how to manage the organization and develop capabilities within the business, and how to achieve financial objectives.

Supply chain strategy is then a strategy for how the supply chain will function in its environment to meet the goals of the organizations business and organizational strategies. Competitive advantages are closely related to business strategy because they outline the advantages the organization should realize once it has decided how it will compete. A business model is the organizations business and organizational strategy formalized into a business plan.

The business model, competitive advantages, and external influences on supply chain strategy are the first subjects in this section. Then you will explore supply chain strategy and how to resolve gaps between the as-is and desired strategies. You will also learn about some tools to achieve supply chain strategy.