What Does a Supply Chain Analyst Do?

The supply chain covers all business activities from the supplier's supplier to the customer's customer regarding the formation and delivery of the final product or service. The supply chain includes not only manufacturers and parts / raw material suppliers, but also wholesale / distributors, retailers, and customers themselves. Within an organization, the supply chain encompasses all functions that fulfill customer needs, including new product development, purchasing, production, distribution, finance and customer service, and more. The supply chain is dynamic, which contains information, the flow of products and funds between organizations in the supply chain, each organizational link of the supply chain executes different processes, and interacts with other organizations in the supply chain.

Supply chain strategic analysis framework

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Supply chain strategic analysis framework

Purpose

To maximize the value generated by the entire supply chain

The supply chain covers all business activities from the supplier's supplier to the customer's customer regarding the formation and delivery of the final product or service. The supply chain includes not only manufacturers and parts / raw material suppliers, but also wholesale / distributors, retailers, and customers themselves. Within an organization, the supply chain encompasses all functions that fulfill customer needs, including new product development, purchasing, production, distribution, finance and customer service, and more. The supply chain is dynamic, which contains information, the flow of products and funds between organizations in the supply chain, each organizational link of the supply chain executes different processes, and interacts with other organizations in the supply chain.

The purpose of the supply chain is to maximize the value generated by the entire supply chain. The value of the supply chain refers to the difference between the revenue brought to the customer by the final product sales and the total cost paid by the supply chain to meet customer demand. Supply chain profitability refers to the total profit shared by the entire supply chain organization. In most commercial supply chains, the value of the supply chain is closely related to the profitability of the supply chain. The higher the profitability of the supply chain, the more successful the supply chain will be. The success of the supply chain is defined in terms of supply chain profit, rather than in terms of the profit of a single organization (focusing on the profit of a single organization usually results in a decrease in the profit of the entire supply chain)

There is only one source of revenue in any supply chain: customers. The customer is the only real cash inflow point in the supply chain. All other cash flows are nothing more than capital exchanges in the supply chain (assuming that the supply chain organizations are independent entities). This cash exchange increases the cost of the supply chain . In fact, the flow of all information, materials and funds in the supply chain incurs costs. Therefore, effective management of these flows is key to the success of the supply chain. Supply chain management is to obtain the maximum supply chain profit through the management of information flow, logistics and capital flow between the supply chain organizations.

Successful supply chain management requires making various decisions related to information, materials, and capital flows. These decisions can be divided into three stages based on their frequency and time span of impact:

Supply chain strategy (or design)

At this stage, the company decides how to structure the supply chain, determines the configuration of the supply chain, and what process each organization (organization) of the supply chain performs. These decisions are often referred to as strategic supply chain decisions. The company's strategic decisions include the location and capabilities of production and storage facilities, the products manufactured or stored at various locations, the transportation mode used according to the different delivery schedules, and the type of information system to be used. Companies must ensure that their supply chain configuration supports their strategic goals at this stage.

Supply chain planning

After the supply chain configuration is determined, the company needs to have a corresponding supply chain plan, that is, it must formulate a set of operating policies that control short-term operations. The decision at this stage must meet the constraints of the established strategic supply chain configuration. The plan starts with forecasting market demand in the coming year (or a time span of three months to one year), including deciding where to supply those markets, how much inventory is planned, whether to outsource manufacturing, replenishment and inventory policies, and stockpile setting Anti-stocking), and related policies such as promotion time and scale.

3. Supply chain operations

The decision time at this stage is week or day. The company makes relevant decisions to implement customer orders according to the established supply chain plan. The purpose is to implement the supply chain plan in the best possible way. At this stage, the company assigns orders to the inventory or production department, sets the order completion date, generates a warehouse pick list, specifies the order delivery mode, sets the delivery schedule, and issues replenishment orders. Because supply chain operations are short-term decisions, they often have less demand uncertainty. Therefore, the purpose of operational decision-making is to take advantage of this reduction in uncertainties to achieve optimal performance under the constraints of supply chain configuration and planning policies.

Supply chain design, planning and operations have a significant impact on the profitability and success of the entire supply chain

The supply chain consists of a series of processes that take place within an organization or between different organizations in the supply chain. They are combined to achieve the customer's demand for the product. There are two different ways to observe the processes that occur in the supply chain:

Cycle view

The process in the supply chain is divided into a series of cycles, and each process cycle occurs at the interface of two adjacent organizations in the supply chain. For a typical supply chain consisting of suppliers, manufacturers, distributors, retailers and customers, the entire supply chain process can be divided into four process cycles as shown in Figure 1: customer order cycle, replenishment cycle, manufacturing cycle and Purchase cycle; these four process cycles are shown in Figure 2. The process cycle perspective is very useful when considering operational decisions in the supply chain, as it clearly specifies the roles and responsibilities of each member organization of the supply chain.

2. Push / Pull view

All processes in the supply chain can be divided into two categories, depending on whether the operation of the process is in response to customer orders or expectations of customer orders. The pull process starts with responding to customer orders, and requirements are identified and known during operation. The push process starts with forecasting customer orders, and the demand is unknown at the time of execution, and the forecast must be made first. The push / pull boundary in the supply chain is the separation point between the push and pull processes in the supply chain. Taking Dell as an example, the starting point for its personal computer assembly is to push / pull boundaries. All processes prior to PC assembly are push processes, while assembly processes and all subsequent processes begin with responding to customer orders, and are therefore pull processes. Figure 3 shows the push / pull process in the Dell supply chain. The push / pull perspective is useful for making strategic decisions about supply chain design, such as supply chain management.

The strategy of medium delay product difference (Postpone) reflects this view well; by improving the product design process and pushing the push / pull boundary as far as possible, mass customization can be achieved while making full use of economies of scale. (Mass customization).

Competition strategy and supply chain strategy

The company's competitive strategy defines a set of customer needs that the company seeks to meet through its products and services. For example, Dell's order-to-manufacture model, whose competitive strategy emphasizes customization and multiple varieties at reasonable prices, customers have to wait about a week to get their products. In contrast, other customers are happy to visit a PC retailer and, with the help of sales staff, buy back a Compaq computer that day. Dell customers focus on variety and customization through online sourcing. Therefore, a company's competitive strategy is defined based on customer priorities, it targets one or more customer segments, and meets these customer needs through its products and services.

In order to implement the company's competitive strategy, the company's value chain, from new product development, marketing, production, distribution, to service, as well as auxiliary functions such as finance, accounting, information, personnel, must play a role. Strategy.

The company's value chain is shown in Figure 4. From a value chain perspective, the supply chain strategy dictates what needs to be done for production, distribution, and service. Supply chain strategies include traditional supplier strategies, production strategies, and logistics strategies. Decisions about inventory, transportation, production facilities, and information delivery in the supply chain are all part of the supply chain strategy. Figure 4 The company's value chain

Achieve strategic alignment

For any company to succeed, its supply chain strategy and competition strategy must match. Strategic fit means that competition and supply chain strategy have the same goals, and the customer priorities to be satisfied by the competition strategy and the supply chain capabilities to be established by the supply chain strategy must be consistent. Achieving strategic alignment is a key issue to be considered in the supply chain design phase mentioned above.

All functions of a company have an impact on the success of the company's value chain. These functions must cooperate with each other. No single function can ensure the success of the entire value chain, but the failure of any single function will cause the company's value chain to fail. The company's success and failure are closely related to the following two points:

1. All functional strategies must be coordinated and consistent with the competition strategy, and all functional strategies must support each other and help the company achieve the goals of its competitive strategy.

2. Functional departments must properly organize their business processes and resources to successfully execute their functional strategies.

To further illustrate the concept of strategic fit, we still take the Dell computer as an example. Dell's competitive strategy is to provide a wide range of customized products at reasonable prices; customers can choose from thousands of possible PC configurations. In terms of supply chain strategy, PC manufacturers have a choice. For example, at one end of the efficiency / response spectrum, a company can have an effective supply chain that can focus on producing low-cost PCs by limiting variety and leveraging economic scale. At the other end, a company can have a highly flexible and responsive supply chain that specializes in producing a wide range of products; in this case, its product costs will be higher than those in an efficient supply chain. Both supply chain strategies are feasible, but they are not in line with Dell's competitive strategy; a supply chain strategy that emphasizes flexibility and responsiveness and is not very costly is better aligned with Dell's competitive strategy of providing a large number of customized products. This strategic alignment also extends to the strategies of other Dell functions. For example, its new product development strategy should focus on designing products that are easy to customize, including designing common platforms for multiple products and using common parts.