Developing supply chain advantage is about integration. You need to line up your ducks! Three steps are involved.
Tony Hines author of supply chain strategies puts it this way:-
1. Understand what customers need.
2. Design service systems to deliver.
3. Manage risk factors to be both effective and efficient.
1. Understand what customers need
Keep your front line people with their ear to the ground. Listen to what customers are telling you they want. Decide which are order qualifiers and which are necessary to get the order. Of course you may not always be able to satisfy their needs but you will definitely have a better chance if you know what they value. If you are unable to satisfy their need you may be able to co-operate with others who can. This way you can win support from both your customer and your co-operator. Collaborative strategies can sometimes deliver what one organization cannot achieve on its own. Sometimes what customers want may be too costly. However, if you know what they value you may be able to offer affordable alternatives to meet their needs.
2. Design service systems to deliver
Designing service systems that can meet customer demand is a necessary part of building supply chain capabilities. Developing people with skills and developing tomorrow’s supply chain leaders is an important part of the process. Hines refers to the 7S Framework to give focus to the design process.
3. Manage risk factors to be both effective and efficient
The final step is to integrate what the customer wants, design service systems to deliver what they value and then manage supply chain risk factors. The risk factors are identified in Hines’ 7Vs. Value created and managed through managing volume volatility, variability, variety, visibility, virtuality and velocity.