Supply Chains and Strategy
Strategy must fit the chain
A supply chain strategy is not chosen in a vacuum; it must support the competitive strategy - the set of customer needs the firm has chosen to serve (price, delivery, variety, innovation, service). Strategic fit exists when chain capabilities match the uncertainty the chain must absorb. A price competitor needs an efficient chain; a responsiveness competitor needs capacity, inventory, and flexible suppliers, and accepts higher cost.
Order winners and order qualifiers are heavily tested: qualifiers are the minimum criteria a customer expects before a supplier is even considered; winners are the criteria that actually win the order. Neither is permanent - today's winner often becomes tomorrow's qualifier.
Structural and infrastructural choices
Structural decisions: facilities, capacity, location, technology, vertical integration. Infrastructural: planning, sourcing, inventory, transportation, information, organization. Base them on total delivered cost and strategic importance, not purchase price. Segment customers and products rather than running one chain for everything. SCOR frames the work as Plan, Source, Make, Deliver, Return, and Enable.
Traps
Equating lean with good and agile with better - match to demand characteristics. Confusing the bullwhip effect with seasonality: bullwhip is upstream variance amplification caused by batching, promotions, and shortage gaming. Assuming lowest price is lowest cost. Forgetting that outsourcing a strategically critical activity can destroy a core competency.
Worked example - total delivered cost
Supplier A: price $10.00, freight $0.50, 5% defect rate with $5 rework per bad unit → $10.00 + $0.50 + $0.25 = $10.75. Supplier B: price $9.60, freight $1.40, 1% defects → $9.60 + $1.40 + $0.05 = $11.05. A wins despite the higher price. Rule of thumb: compare cost per good unit received, not the quote.