Tuesday, 8 January 2019

Supply chain drivers and metrics

Supply chain drivers and metrics

In understanding how the company can improve the performance of the supply chain in the ability to respond and efficiency, then it should test the trigger of supply chain namely, among others:

1. Facilities (facilities management)

This Trigger is the actual physical location in the network supply chain where products are stored, processed, and manufactured. Two main types: the place of production and storage. The debate on the role, location, capacity and flexibility of facilities have a significant impact on the performance of the supply chain.

2. The preparation of

this Triggers the raw materials, goods in process, and finished goods in the supply chain. Change the policy preparation, can change the efficiency and capabilities of the react company.

3. Transportation of

a trigger is needed to move supplies from one point to another in the supply chain. Transportation can be a various combinations and ways path with their respective characteristics.

4. information

Triggers consists of data and analysis on the facilities, supplies, transport, costs, prices, and customers, in the supply chain. The most-capable information in the performance of the supply chain because it have a direct impact on their respective triggers and also assist management in improving supply chain opportunities so that more efficient.

5. The resources

for this Trigger is the choice of who/part of the supply chain activity will use as the production, storage, transport, or information management. In the strategic level, this decision is deciding whether the company's performance or functions are being outsourced-right by the company. The decision with regard to these triggers, have an impact on the ability to respond and improve the company's supply chain.

6. Pricing (pricing)

this Triggers determine how much companies will issue price for the goods and services contained in the supply chain. Pricing impact the behavior of buyers of goods and services, thus can have an impact on the performance of the supply chain.

From each trigger the supply chain, interacting with other supply chain triggers to determine the level of ability to respond and the efficiency of the company. As a result, the structure of these triggers to determine if and how the impact on the performance of the supply chain.

The framework of the preparation of a trigger

To succeed, companies must craft a well combination of three logical and three triggers cross-functional. For each trigger, supply chain managers must do a trade-off between efficiency and capability of react is based on interaction with other triggers. This combination resulted in a trigger and then determine the ability to respond and profit on the overall supply chain.

Most firms, starting with strategies to compete and then decide if the supply chain strategies will be used. This supply chain strategy determines how the supply chain should make the company become easier and more efficient action.

The facility

The Role in the supply chain, the facility is where the location of the supply chain. With facilities, supplies can be changed either in the manufacturing process as well as saved. 

In the strategy, the role of the facility is a key trigger for the performance of the supply chain from the ability to respond and efficiency.

The decision in the facilities will help the company in the strategy's success. The components of the decision should be analyzed in the form of a facility role, location, capacity, and facilities related to the metrics.

The preparation of

Inventories in the supply chain is the meeting between demand and supply. Role in the supply chain increase number of requests that can be filled with a product that is ready and there at a time when customers need it. Other significant role is in reduced costs with economies of scale that exist for production and distribution.

The inventory can be either raw materials, goods in process, and finished goods. The main costs are the source of supply in the supply chain and have a great impact in the ability respond to the company. Meanwhile, the role of inventory in strategy competitive strategy is supporting a competing company. 

Component inventory decisions that needs to be analyzed in the form cycle supplies, safety supplies, seasonal supplies, production, skill level and supplies related to metrics.


Transport move products between different places in the supply chain. Same as other triggers, transport also have a great impact for the ability to respond and the efficiency of the company. A faster transport cause the supply chain becomes more responsive but not more efficient. Type of transport company can also affect the inventory and location of facilities in the supply chain.

His role in the strategies of competing companies is describing the State of the company regarding the consideration of the needs of target customers. If a company wants a competitive strategy target customers with a level of demand that has high response and customers also have the ability to pay is high then the company should have used transportation as a trigger so that more supply chain to respond. 

Components of transportation decisions that need to be analyzed in the form of transportation network design, the choice of means of transportation, and transportation related metrics.


Information very impact on every part of the supply chain. Provide information or serve a wide range of relationships between parts in the supply chain, so that it could coordinate and maximize the total profitability of the supply chain. The information is also important in operations on each part of the supply chain.

The role of information in competing strategies in a company used to make the company more responsive and more efficient. The rapid growth in the importance of technological information is evidence of impacts information can develop company. 

Components of an informed decision that needs to be analyzed in the form of push vs. pull, coordination and information-sharing, planning and forecasting, technology that enables and metrics related information.


a resource is a set of business processes that are required in the purchase of goods and services. Managers first need to decide which tasks are outsourced it and that will be done by the company itself. 

Its role in the competitive strategy is very important, namely at the level of efficiency and ability to respond will be accepted by the supply chain. In some instances the company to outsource to respond to 3 parts in too expensive for the company in developing the ability of the responded.
Component resource decisions that need to be analyzed in the form of in-house or outsource, selection of suppliers, procurement of goods, related resource metrics.

Pricing (Pricing)

pricing is a process where the company decides how large the charge on customers for goods and services produced. Pricing impact on segments of customers who choose to buy the product, as well as the expectations of customers. This directly impacts on the supply chain at the level of ability to respond just as much as the nature of demand in the supply chain.

The role of pricing in competitive strategy in the form of determination of target customers. This leads to the importance of the company to develop a supply chain that can bring together two different needs. 

Component pricing decisions that need to be analyzed in the form of pricing and economies of scale, everyday low pricing vs. high-low pricing, fixed price vs. the menu pricing, and pricing associated with metrics.

Barriers to the achievement of strategic fit is

key to be able to achieve strategic fit is the ability of the company to find a balance between the ability to respond and meet efficiency the needs of target customers. This decision should be allocated in responsiveness spectrum where companies are faced with many obstacles.

These Barriers can improve the company's difficulties in creating the ideal balance, but on the other hand the barriers can increase the chance of the company to improve management the supply chain.
The following barriers, which could be addressed by managers, can improve the company's ability to gain maximum profitability from the supply chain are:
  • Increasing product variations
  • Reduce the product life cycle
  • The increase in customer demand
  • The breakdown of ownership of supply chain
  • Globalization

The difficulty of the implementation of the new strategy

Many obstacles, such as the emergence of a variation product and his short life cycle, it can cause increasing difficulties in achieving supply chain strategies fit. The existence of barriers can create a great opportunity for companies to use the supply chain management in gaining competitive advantage.

Describe the main barriers in the corporate supply chain can help set successfully. Constraints above are factors that can hinder the performance of the supply chain.

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