Strategic Supply Chain Design

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Title: How To Do Strategic Supply-Chain Planning. Authors: Sodhi, ManMohan S. Source: MIT Sloan Management Review; Fall2003, Vol. 45 Issue 1, p69, 7p Document Type: Article Subject Terms: *BUSINESS planning *MANAGEMENT science *STRATEGIC planning *SUPPLY chains Abstract: Any company that has a global supply chain should consider introducing its strategic left hand to its operational right hand. Senior managers formulate strategy to maximize shareholder value; supply-chain planners run optimization models to minimize costs. Consider a strategic supply-chain planning exercise at a polyvinyl chloride (PVC) manufacturer that we will call Acme Vinyl Co. Acme 's North American revenues came from PVC for building (55%), packaging (15%), consumer goods (10%), the electronic industry (10%), the automotive industry (4%) and from non-PVC products (6%). Although business-strategy formulation also uses tools and flame-works, it requires much more creativity than tactical planning. For tactical supply-chain planning, the decision options and the factors affecting them (production capacity, distribution capacity, variable costs, demand forecast) are clearly defined. Optimization models for tactical supply-chain planning and models for strategic supply-chain planning differ only slightly in their design, but markedly in their use. In scenario planning, senior managers build internally consistent, alternative views of possible future outcomes. Full Text Word Count: 4476 ISSN: 1532-9194 Accession Number: 11162982 Database: Business Source Premier

How To Do Strategic Supply-Chain Planning

Senior managers formulate strategy to maximize shareholder value; supply-chain planners run optimization models to minimize costs. Combining scenario planning with supply-chain planning achieves the best of both worlds, which leads to long-term competitive

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