1. 5 KEY CONFIGURATION COMPONENTS FOR SC STRETGY

2. 5 KEY CONFIGURATION COMPONENTS FOR SC STRATEGY ◆ Operations strategy ◆ Outsourcing strategy ◆ Channel strategy ◆ Customer service strategy ◆ Asset network

3. Operations Strategy Make to stock, Configure to order Make to order Engineer to order, Combination

4. Make to stock Make to stock is the best strategy for standardized products that sell in high volume. Larger production batches keep manufacturing costs down, and having these products in inventory means that customer demand can be met quickly.

5. Make to order Make to order is the preferred strategy for customized products or products with infrequent demand. Companies following this strategy produce a shippable product only with a customer order in hand. This keeps inventory levels low while allowing for a wide range of product options.

6. Configure to order Configure to order is a hybrid strategy in which a product is partially completed to a generic level and then finished when an order is received. This is the preferred strategy when there are many variations of the end product and you want to achieve low finished-goods inventory and shorter customer lead times than make to order can deliver.

7. Engineer to order Engineer to order, which shares many of the characteristics of make to order, is used in industries where complex products and services are created to unique customer specifications.

8. Channel Strategy Sell indirectly through distributors or retailers Directly to customers via the Internet or a direct sales force

9. Outsourcing Strategy Scale—Third-party providers often can offer services more cheaply because of a large customer base that keeps utilization rates high and unit costs low. External partners also can help companies to scale up production quickly without having to invest in new manufacturing capacity. Scope—For companies that want to expand into new markets or geographies, outsourcing partners can provide access to operations in new locations which would not be economical to replicate internally at current business volumes. Technology expertise—Outsourcing partners may have mastered a product or process technology that would require a sizable investment to develop internally.

10. Customer Service Strategy Your customer service strategy should be based on two things: the overall volume and profitability of your customer accounts and an understanding of what your customers really want

11. Customer Service Strategy Should all customers get same-day delivery, or should you aim for different service levels depending on customer importance? Should all products be equally available, or should some customers have quicker, easier access?

12. Asset Network Company’s asset network—the factories, warehouses, production equipment, order desks, and service centers that make up your business. The location, size, and mission of these assets have a major impact on supply chain performance.

13. Most companies choose one of three network models based on such factors as business size, customer service requirements, tax advantages, supplier base, local content rules, and labor costs:

14. Global model—Manufacturing of a given product line is done in one location for the global market. The choice of this model is driven by factors such as the need to colocate manufacturing with research and development (R&D), the need to control unit manufacturing costs for very capital-intensive products, or the need for highly specialized manufacturing skills.

15. Regional model—Manufacturing is done primarily in the region where the products are sold, although some cross-regional flows may exist based on production-center specialization. The regional model is often chosen based on a mix of factors, including customer service levels, import duty levels, and the need to adapt products to specific regional requirements.