3. Controlling the Supply Networks

Three basic strategies enable supply networks to create value:

• Sales volume increase (sell more)

• Sales revenue increase (sell for more)

• Margin of contribution increase (reduce cost)

These strategies should influence the business simultaneously as they do not compete with each other. Figure 2.6 illustrated the importance the supply network has on the value creation process—especially in complex environments with several governance diamonds. Therefore, the potential benefits of enduring alliances include the following:

Accelerating the development of products, services, or processes: This includes the alliance with preferred product or parts suppliers or specialist IT or logistics service providers.

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