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Management article
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Reference no. SMR45114
Authors: ManMohan Sodhi
Published by: MIT Sloan School of Management
Published in: "MIT Sloan Management Review", 2003
Length: 9 pages

Abstract

It is not uncommon in many companies for tactical planners to use computer models to optimise the supply chain - while, in a completely separate activity, senior managers formulate strategy. The endeavours are understandably separate as they differ fundamentally in nature. But today, the author posits, a few leading organisations are discovering the benefits of having the tactical planners in close communication with the big-picture strategists early on. A new approach called strategic supply- chain planning can ensure that critical supply-chain details inform a company''s business strategy and that supply-chain management aligns with the strategic direction - a synergy companies could benefit from at any time but is often most urgently needed after mergers or acquisitions. Companies routinely weigh long-term supply-chain-related decisions in light of alternative sources of supply, new geographic markets or new products, but tactical managers think about the issues differently than strategic managers. According to the author, a step-by-step approach can leverage the best of both worlds, and his research suggests how to combine the strategist''s scenario planning with the tactical planner''s optimisation modelling while avoiding the downsides of each approach. As long as the two teams work together, he says, strategic supply-chain planning can improve a company''s competitiveness. ManMohan S Sodhi is an associate professor of supply-chain management at Cass Business School in London.

About

Abstract

It is not uncommon in many companies for tactical planners to use computer models to optimise the supply chain - while, in a completely separate activity, senior managers formulate strategy. The endeavours are understandably separate as they differ fundamentally in nature. But today, the author posits, a few leading organisations are discovering the benefits of having the tactical planners in close communication with the big-picture strategists early on. A new approach called strategic supply- chain planning can ensure that critical supply-chain details inform a company''s business strategy and that supply-chain management aligns with the strategic direction - a synergy companies could benefit from at any time but is often most urgently needed after mergers or acquisitions. Companies routinely weigh long-term supply-chain-related decisions in light of alternative sources of supply, new geographic markets or new products, but tactical managers think about the issues differently than strategic managers. According to the author, a step-by-step approach can leverage the best of both worlds, and his research suggests how to combine the strategist''s scenario planning with the tactical planner''s optimisation modelling while avoiding the downsides of each approach. As long as the two teams work together, he says, strategic supply-chain planning can improve a company''s competitiveness. ManMohan S Sodhi is an associate professor of supply-chain management at Cass Business School in London.

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