10 Minute Supply Chain & Logistics Strategy

Summary

The speaker addresses the surprising scarcity of supply chain strategies in businesses despite their importance. They offer a concise guide to creating a strategy, emphasizing the need for alignment between business, financial, and service strategies to satisfy shareholders, customers, and the team. The focus should be on three clear objectives, derived from the business's goals, and translated into actionable tactics and measurable KPIs. The presentation aims to simplify the process, proving that a supply chain strategy can be straightforward and effective.

Takeaways

• 📈 Few businesses have a supply chain strategy, which has not changed much over the last 20 years.
• 📝 Developing a supply chain strategy is not difficult and can be done quickly.
• 🗣 Businesses often have a clear vision and mission, but these do not always translate to actionable strategies for supply chain staff.
• 🔍 Many businesses lack a documented supply chain strategy, leading to significant impacts on business performance.
• 📉 Glitches in the supply chain can cause an average fall of 8.6% in shareholder value.
• 🔄 Aligning business strategy, financial strategy, and service strategy is crucial for supply chain success.
• 🎯 Effective supply chain strategies should have clear, simple objectives (typically three or four).
• 🏆 Key components of a successful supply chain strategy include warehousing, transport, procurement, customer service, inventory policy, and planning process.
• 🛠 Objectives should be meaningful and easy to understand for all employees, from top management to warehouse staff.
• 📊 Once objectives are set, tactics and key performance indicators (KPIs) should be developed to support and measure the achievement of these objectives.

Q & A

Why do many businesses struggle to put a supply chain strategy together?

Many businesses struggle because they often develop a high-level vision and mission that doesn't effectively translate to the operational level, where the actual supply chain work is done.

What is the significance of having a supply chain strategy?

A supply chain strategy is crucial for aligning business, financial, and service strategies to ensure happy shareholders, customers, and a motivated team. It also helps to prevent supply chain glitches that can negatively impact shareholder value.

What is the average fall in shareholder value due to supply chain glitches according to the study mentioned in the script?

The study identified that glitches in the supply chain cause an average fall of 8.6% in shareholder value.

What percentage of businesses actually have a documented supply chain strategy?

Only 39% of businesses have a documented supply chain strategy that is understood by their people.

How does the lack of a supply chain strategy impact business performance according to the surveys conducted?

65% of the businesses that do not have a supply chain strategy believe that it impacts their business performance negatively.

What are the three key components of a supply chain strategy as depicted in the Venn diagram?

The three key components are business strategy, financial strategy, and service strategy, and their alignment is essential for a successful supply chain.

Why is it important to have a clear and simple objective for the supply chain strategy?

Clear and simple objectives help to focus the organization on doing the right things and are easier for all levels of the organization to understand and act upon.

What are the recommended number of objectives for a supply chain strategy?

It is recommended to have three or four objectives for a supply chain strategy, focusing on cost, service, quality, and often safety in certain industries.

What is the first step in developing a supply chain strategy according to the script?

The first step is to come up with three clear objectives for the supply chain that align with the overarching business objectives.

Why is it necessary to develop tactics and measures after establishing the objectives?

Developing tactics and measures ensures that the objectives are actionable and that there are clear indicators to measure progress and success towards the objectives.

What is the recommended approach for articulating supply chain objectives to ensure they are meaningful to all levels of the organization?

The objectives should be articulated in simple catchphrases that convey the purpose behind them, making them relatable and understandable to everyone, including those working at the operational level.