Strategic supply chain planning, Basic concepts of strategic planning - Integrated supply chain planning

Strategic Supply Chain Planning

As a result of studying this chapter, the student must:

know

• the basic concepts that characterize the process of supply chain strategic planning;

be able to

• make strategic decisions within the supply chain;

• Develop a supply chain strategy;

• Assess the achievement of strategic matching of the goals and resources of the supply chain;

own

• tools for forecasting the development of supply chains;

• methods and tools for strategic planning of supply chains.

Basic concepts of strategic planning

Strategic planning is the process of developing and maintaining a strategic balance between the goals and capabilities of the supply chain in changing market conditions. In M.I. Bukhalkov, strategic planning is the basis for the interaction of many internal and external economic processes, factors and phenomena G7].

The goal of strategic planning is to identify the most promising areas of the supply chain, ensuring its effectiveness and competitiveness.

Strategic planning of supply chains is carried out at three levels (Figure 3.1).

Levels of strategic supply chain planning

Fig. 3.1. Supply Chain Strategic Planning Levels

The first level determines the purpose of creating a supply chain. Among the basic strategic objectives of the first level are the following.

1. Defining a mission. A mission is a starting point that determines the purpose of the supply chain. The mission of the supply chain, for example, can be: a) maximum customer satisfaction; b) optimization of the supply chain (minimize costs); c) ensuring a balance of customer requirements and costs. The mission and the core values ​​that accompany it remain fairly stable throughout the supply chain.

2. Concept formulation. The concept, or vision, determines the state of the supply chain to which it wants to come, and indicates the directions for the development of cooperation, formulating areas of responsibility and requirements for the organization of relationships with partners . The vision provides a clear picture of the goal of the supply chain.

3. Identifying the key goal and objectives of the supply chain. In management practice, there are so-called SMART criteria that must be met by the goal. SMART is an abbreviation formed by the first letters of English words: specific; measurable; attainable; relevant; correlated with a specific time-bounded. Thus, the correct goal setting means that the goal is concrete, measurable, achievable, meaningful and correlates with a specific time.

Strategic objectives are the results that the supply chain seeks to achieve in the future to ensure competitiveness.

At the second level , they make decisions on the configuration of the supply chain. When configuring the supply chain, determine:

• the form of organization of the supply chain and the distribution network;

• structure (or composition) of supply chain suppliers;

• Sales program;

• Spectra of raw materials, materials and semi-finished products

• places of purchase, production and distribution;

• the structure of supply and distribution, as well as the necessary production, storage and transportation capacities.

The strategic configuration of the supply chain is to minimize costs in the supply chain, including the cost of production, purchase, storage, transportation, and the use of capacities and resources to meet service level requirements.

The main strategic issues at this level are presented in Table. 3.1.

Analysts note that up to 80% of the cost of the final product depends on the decisions made at this stage.

The third level is the level of strategies of enterprises entering the supply chain. At this level, companies develop their business strategies, the main goal of which is to increase the competitiveness of organizations and their competitive potential.

At this stage of strategic planning, the following strategies are usually formulated and coordinated: production, supply, distribution, transportation.

Table 3.1. Strategic supply chain planning issues

Production

Supply

Allocation

Manage

Number of plants

Number of suppliers

Sales form (direct supplies or use of regional distribution centers)

A savings and service level balance

Plant Capacities

Name of supplier enterprises

Number of Distribution Centers

Information technologies that support logistics processes

Factory Locations

Distribution of suppliers by plants

Power of distribution centers

Coordination of the activities of enterprises

Characteristics of products

-

Location of distribution centers

The form of cooperation between enterprises within the supply chain

Production technology

-

Distribution of customers by distribution centers

-

Transportation type

-

All three levels of strategic planning are very closely interrelated. For example, if the general strategy of the supply chain determines the sale of goods at low prices, then all the functional activity of the logistics system must correspond to the ability to bring products to the market at the lowest possible prices. Shortcomings, errors at any level sooner or later affect the implementation of the adopted supply chain strategy.

Therefore, the consistency of decisions at all levels of strategic planning is important because the resources and the main lines of activity at the functional level must constantly support the solution of tasks at the highest level.

A huge amount of data is needed for strategic supply chain planning. The main ones are:

about the location (factory or distribution center) - fixed costs for opening, closing and using

The name, variable operating costs, geographical data, country of location (for determining taxes, duties, benefits, etc.), capacities and processes, level and policy of inventory management, demand;

processes - technological plans, capacities, costs, quality of production, transportation and other processes;

products - assortment, types, options, product specifications, physical parameters, costs and profits;

Commodity is a description of each transport link by cost, power, time and mode of transport.

The strategic supply chain planning process involves the implementation of seven main stages (Figure 3.2).

1. Formation of prerequisites for changes in the state of the supply chain by reviewing its mission and objectives and posing the problem due to clarification of the objectives, their significance and timing of achievement.

2. Comprehensive analysis of the resources of the supply chain and its main competitors, as well as the situation in its industry and related industries.

Strategic Supply Chain Planning Process

Fig. 3.2. Supply Chain Strategic Planning Process

3. Refinement of strategic objectives taking into account potential threats and opportunities of the supply chain.

4. Development of a supply chain strategy, i.e. a set of projects, programs, activities, implementation

which with a high degree ensures the achievement of strategic goals on schedule.

5. Harmonization of the developed supply chain strategy with the strategies of the enterprises entering the supply chain.

6. Development of industrial policy of partners in the supply chain.

7. The final stage is the control and evaluation of the main results, the adjustment of the chosen strategy and the ways of its implementation.

The result of strategic planning is the development of a supply chain strategy.

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