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The supply chain encompasses all the activities and processes that put the product or service in the hands of the end user or customer. An effective, well managed and frequently reviewed supply chain management strategy is essential to maintaining a competitive advantage in your market.

The supply chain strategy must not be confused with the business strategy. Supply chain strategies deal with the operations necessary to meet the overall goals of the business strategy.

The supply chain strategy will look at the individual components and strategise with suppliers, distributors and customers to improve the cost efficiencies and product offerings from an operational perspective that is congruent with the overall business strategy.

Before we develop a supply chain strategy it is important to take a good hard look at the organistions core competencies and identify the strengths and weaknesses. The supply chain strategy will include an implementation plan which may include critical considerations like capital equipment purchases or upgrades or the decision to outsource in areas where the company’s weaknesses are exposed. The plan should focus on core competencies of both the company and your chosen suppliers.

Consultation and collaboration with suppliers and service providers plays an important role in the strategy development effectively allowing each contributor to leverage off the others strengths. It is important for your suppliers and service providers to understand how you would like to conduct business with them and on what terms. This is not to say that you need to discuss your strategy in depth with them, but having designed a strategy to meet the company goals, relationships need to be defined and expectations clearly understood. Any weak point in the supply chain will have a knock on effect to all the other areas. For example, if the strategy is dependent on receiving raw materials twice daily at 07H00 and 14H00 and the deliveries are late, it sets back the processes of every step in the supply chain. By the same token, if you are unable to receive the raw materials on time, you are affecting the suppliers supply chain that could involve penalties and have a negative effect on your relationship going forward. The purpose of this illustration is to enforce the need to be realistic about your capabilities.

It is often the best idea to have supply chain consultants if you do not have an in-house supply chain manager prepare a strategy from an unbiased and honest perspective enabling them to identify any flaws in your current processes that may be being overlooked. Consultant supply chain strategists may have invaluable insights into your operations and provide suggestions that and insights that will dramatically assist in the attainment of the company goals.