1. Dr. Behzad Behdani
Lecturer, Consultant, Principal Researcher
Supply Chain Management/ Logistics
Module 1:
How to define
Supply Chain
Strategy?

2. • Supply Chain Managers:
• To decide about an appropriate strategy for their Supply
Chains
• Logistics Service Providers:
• To understand the expectation of companies based on
the type of Supply Chain
• MBA Students/Researchers:
• To get an overview of existing literature on “Supply
Chain Strategy”
This lecture is useful for:

3. What is the role of “Supply
Chain Strategy”
Business Strategy
Supply Chain Strategy
Supply Chain
Capabilities
Supply Chain
Performance
Source: Morash, E.A. (2001). Supply Chain Strategies, Capabilities, and Performance. Transportation Journal, 41(1), p. 37-54.

4. Business Strategy: the organization’s positioning in
terms of following dimensions of competence:
• Quality (performance, consistent quality,
reliability)
• Time (delivery speed, development speed)
• Flexibility (mix of products, mix of
volume/packaging)
• Cost (labor, material, engineering, quality-
related)
Defining Business Strategy
Source:BozarthC.andR.Handfield (2008). Introduction toOperationsandSupplyChainManagement, 2/e.Prentice Hall.

5. Defining Business Strategy
Conflicting dimensions
High Quality
High Flexibility
Low Cost
Short Delivery
Time

6. Form Business to Supply Chain
Strategy
High Quality
High Flexibility
Low Cost
Short Delivery
Time

7. From Supply Chain Strategy to
Supply Chain Capabilities
Facilities Inventory Transportation
Information
Logistical
Sourcing Pricing
Cross-
Functional
Business Strategy
Supply Chain Strategy
Efficiency Responsiveness
Source:ChopraS.andMeindl P.(2012).SupplyChainManagement: Strategy,Planning,andOperation,5/e,PearsonEducation.

8. • Fisher (1997, p.106):
“The root cause of the problems plaguing many supply
chains is a mismatch between the type of product and the
type of supply chain”
Other views on defining Supply
Chain Strategy
Supply Chain Strategy and Product Characteristics
Source:Fisher, M. L. (1997). What is the Right Supply Chain for Your Product? Harvard Business Review 75(2), p. 105–116.
match
matchmismatch
mismatch
Responsive
SupplyChain
Efficient
SupplyChain
Functional
Products
Innovative
Products

9. • Multiple products:
• Separate supply chains or Tailored supply chains?
• Product life cycle:
• Supply Chain Strategy moves toward efficiency as
innovative products (if successful) will eventually
evolve to become functional products.
• Product Customization/Standardization:
• As companies move away from customization
toward standardization, there is a shift from
flexibility and a high-performance design quality to a
consistent quality and cost.
Some relevant issues

10. Other views on defining Supply
Chain Strategy
Supply Chain Strategy and S/D Uncertainty
Source:Chase,R.B.,Aquilano, N.J.andJacobs, R.F.(2000).Operations ManagementforCompetitive Advantage, 9/e.,McGrawHill.
Demand Uncertainty
Low (Functional
products)
High (Innovative
products)
Efficient
Supply Chain
Responsive
Supply Chain
Risk-Hedging
Supply Chain
Agile
Supply Chain
Low
(Stable
Process)
High
(Evolving
Process)
SupplyUncertainty

11. Other views on defining
Supply Chain Strategy
Looking at Market Characteristics: Lean vs. Agile
Agile:
Speedy reaction
to a dynamic/
unpredictable
Market
Lean:
Efficient
reaction to a
stable Market

12. • Christopher (2000, p. 39):
“Agility is needed in less predictable environments where
demand is volatile and the requirement for variety is high”
and “Lean works best in high volume, low variety and
predictable environments.”
Other views on defining
Supply Chain Strategy
Looking at Market Characteristics: Lean vs. Agile
Source:Christopher,M.(2000).Theagilesupply chain: competing involatilemarkets.IndustrialMarketingManagement29(1),p.37–44.
Agile
Lean
LowHigh
Low HighVariability
Variety

13. Other views on defining
Supply Chain Strategy
Looking at Market Characteristics: Lean vs. Agile
Source:Christopher,M.,Peck,H.,andTowill, D.(2006).Ataxonomyforselecting globalsupplychain strategies. International JournalofLogistics
Management17(2),p.277–287.
Lean
Plan and Execute
Agile
Quick Response
Lean
Continuous Replenishment
Leagile
Postponement
Predictable Unpredictable
Demand Characteristics
SupplyCharacteristics
Long
Lead
Time
Short
Lead
Time

14. • Two views on “Leanagile” Supply Chain:
• Dividing the total demand for a product
can be to “base” and “surge” demand;
considering lean for “base” demand
which is more predictable and using agile
strategy to cope with “surge” demand
(Christopher et al., 2006).
• Operating cost-effectively (i.e. lean) in the
“upstream” of supply chain and
responsively (i.e., agile) in the market
“downstream” (Bruce et al., 2004).
Other views on defining
Supply Chain Strategy
Looking at Market Characteristics: Lean vs. Agile
Source:
• Christopher, M.,Peck,H.,andTowill, D.(2006).Ataxonomyforselecting globalsupply chainstrategies. International JournalofLogisticsManagement
17(2),p.277–287.
• Bruce,M.,DalyL.,andTowers,N.(2004).Leanoragile.Asolutionforsupply chain managementinthetextilesandclothing industry?
International JournalofOperationsandProduction Management24(2),p.151-170.

15. Thanks for your attention.
Questions?
Or suggestion?
B.Behdani@tudelft.nl