Definition of Supply Chain Strategy

Strategy refers to a plan of action designed to achieve a major aim. Supply chain strategy are long term plans defining how the supply chain should operate in order to compete effectively and reduce costs within an organization.

They are interactive processes that evaluate cost and benefit trade off of operational components.

Supply chain strategies may be divided into:

1.Lean Supply Chain Strategies
It is a value stream focused on eliminating all kinds of waste to increase competitiveness. Many organizations have adopted this strategy as it reduces cost along the supply chain. A lean strategy in the supply chain requires a stable product demand. In order to facilitate successful production schedules this will in turn lead to reduced work in progress, reduced inventory and reduced cycle times.

2. Agile Supply Chain Strategies
Agility in the supply chain refers to how flexible the supply chain is in responding to:

  • Customer demand. (preferences)
  • Legal frameworks.
  • Technology
  • In general, the volatile environment

It will include adoption of e-platforms so as to increase speed, flexibility, innovation, proactivity, quality and profitability. Choosing an appropriate supply chain strategy will lead to reducing of overhead costs and production.

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