Essentials of Supply Chain Management, 5th Edition

CHAPTER 8Defining Supply Chain Opportunities

After reading this chapter you will be able to:

• Apply the market analysis framework to define the type of markets your company serves and identify the performance capabilities most valuable to those markets;
• Define performance targets for your company to succeed in the markets you serve—the goal;
• Create a strategy and define the objectives needed to reach the goal;
• Estimate the budget needed for this effort and calculate the return on investment (ROI); and
• Create a high-level project plan that will guide the effort.

Now that conscious design and real-time management of a company's supply chain is possible, how does a company use this ability to its competitive advantage? A well-designed and -managed supply chain will enable a company to offer high levels of customer service and at the same time hold its inventories and cost of sales to lower levels than its competitors. This chapter will lay out a process to use for defining the supply chain management opportunities available to a company.

The Supply Chain as a Competitive Advantage

As companies such as Walmart and Amazon.com have so clearly shown, if a company can design and build a supply chain that is responsive to market demands, it can grow from a small company to become a major player. Efficient supply chain operations are central to being able to satisfy market demands ...