STRATEGY ALIGNMENT

Annotations:

• Succesful:business model, and supply chain

1. Strategy Development Process
   1. Environmental Analysis
      1. SWOT
      2. Understand environment, customers, industry, ompetitors
   2. Corporate Mission
      1. Reason firm's existance
      2. Value it wishes to create
   3. Form a strategy
      1. Competitive advantage

         Annotations:

         • low price, design, or volume flexibility, quality, quick delivery, dependability, aftersale service, broad product lines.
2. OM Contribution to strategy
   1. Operation Decisions
      1. Product
      2. Quality
      3. Process
      4. Location
      5. Layout
      6. HR
      7. SC
      8. Inventory
      9. Scheduling
      10. Maintenance
   2. Strategy
      1. Flexibility
      2. Low Cost Delivery
      3. Quality
      4. After sales service
      5. Broad Product Line
   3. Competitive Advantage
      1. Differentiation (Better)
      2. Response (Faster)
      3. Cost Leadership (Cheaper)
3. SC Operating Model to Competitiviness
   1. Competitive strategy Elements

      Annotations:

      • Characteristics of Operating Model  aligned to support and enhance
      1. Lowest prices

         Annotations:

         • Lowest prices
      2. Highest margin products

         Annotations:

         • • Maximum availability at point of sale • Lowest operating cost
      3. Highest quality

         Annotations:

         • • Highest quality of suppliers • Strongest manufacturing quality controls
      4. Fastest customer response

         Annotations:

         • • Shortest order-to-delivery cycle • Fastest request-to-promise date
      5. Most innovative

         Annotations:

         • • Most efficient new product launch
      6. Highest Return-on-Assets

         Annotations:

         • • Highest plant utilization • Lowest inventories
      7. Best customer service

         Annotations:

         • Specific service for each customer segment • Maximum availability at point of sa
      8. Most environmentally responsible

         Annotations:

         • • Minimize waste and maximize recycling
   2. Activity map
      1. Competitive Advantage
      2. Critical success factors
      3. Supporting activities

1. Competition Parameters Cost to Value
   1. Cost/Prices 60/s70s
   2. Quality/Variety 80s
   3. Time 90s
2. Definition
   1. criteria used by customers in service or product selection
   2. Order Qualiiers
      1. demonstrated levels of performance required to do business
         1. Cost; Cost &quality; cost, quality& speed;cost, quality, speed &customization
   3. Ordner Winners
      1. criteria for differentiating services or products of one firm from those of another
         1. Cost, Quality speed,customizaton, service

1. Productivity
   1. Value Output/Value Input
      1. single factor
   2. output (good & srvices)/ material+energy(labor+material+energy+capital+miscellaneous)
      1. multifactor
   3. increase
      1. INPUT:mix of capital(38%), labor (10%) & management(52%)
2. Utilization
   1. average fraction of the capacity of a process or activity that is utilized during an operation.
      1. indicators
         1. + facility utilization + inventory turns +cash-to-cash cycle
   2. compares actual output to potential output
3. Customer Response
   1. responsiveness to changes in customer requirements
      1. indicators
         1. + order cycle times +perfect order fulfillment +quality + new producttime-to-market
4. SC TRIANGLE
   1. Balance set of performance metrics
      1. Functional product
         1. Low cost of sale, low risk of obselence, high forecast accuracy, low product variety, long product life cycle
         2. SC:Physically efficient
            1. Supply predictable demand efficiently at lowest possible cost
         3. Life cycle > 2 years Gross Margin < 20% Low Product Variety
      2. Innovative product
         1. High cost of sale, high risk of obselence, low forecast accuracy, high product variety, short product life cycle
         2. SC: market resonsive
         3. Life cycle < 1 year Gross Margin > 20% High Product Variety
         4. Respond quickly to unpredictable demand in order to minimize stockouts, markdowns, and obsolete inventory
   2. SC Framework & strategy aligment process
      1. 1.Go to Mkt strategy
         1. 2.SC strategy
            1. 3.Operating Model/ performance objective
               1. 4.Tailored Practices
                  1. need to align to strategically-aligned SC performance objectives!
   3. Triangle
      1. Customer Response: High margin & short lyfe cycle products
      2. Efficiency: Low marging & mature product
      3. Asset Utilization:Capital intensive Industries
      4. Aligment of Corporate strategies with SC strategies