A company needs to take some steps to achieve a strategic fit between the supply chain and competitive strategies. These strategies may be implicated or explicated or one or more customer segments. So that the company can satisfy these segments. At first, a company should ensure its supply chain capabilities to satisfy the needs of the targeted customer segments.
Now, we are going to learn three major steps to achieving strategic fit. Have a look –
- Understanding the customer and supply chain uncertainty
Primarily, a company must understand the customer needs for each targeted segments. After understanding this, the company also tries to understand the uncertainty of these needs of the supply chain. However, these needs help to understand the desired cost and service requirement for these. Besides, we also see that uncertainty identifies the extent of the unpredictability of demand and supply. This helps the company to prepare for the desired supply chain.
Before selecting a segment, a company needs to understand the customer needs. For example, if your customers are very price sensitive, you can’t charge higher for them. On the other hand, if your customers are ready to pay for higher quality then you have to fulfill them.
In general, customer demands are varying from different segments along with several attributes. Such as –
- Quantity of the product needed in each lot
It means that customers want a one-stop solution in which they can purchase everything.
- Response time that customers are willing to tolerate
It is the main factor. Because customers are more sensitive at the response time. It is more obvious in the restaurant. Some customers prefer quick delivery and others may not.
- Variety of products needed
A growing number of customers present here, their need, want and demand is not the same at all. All of them want different types of goods to fulfill their desire.
- Service level required
The restaurant is the best example of it. In an emergency order, they need to respond to fast otherwise they will lose consumers as well as reputation.
- Price of the product
Usually, a high-quality product has a higher price than fewer quality goods. Besides, an emergency order can charge more than construction order.
- The desired rate of innovation in the product
In a departmental store, customers want different types of innovative products and new designs in their store.
Each customer in particular segment has similar needs and in a different segment has different needs. However, our key goal is to identify the main measure that can satisfy their different needs. Through this way, a company is able to achieve a strategic fit.
- Understanding the supply chain capabilities
Here, many types of supply chains are designed for performing different tasks quickly. That’s why a company needs to understand its supply chain design well.
However, there is a big question that how the firm best meets customer’s demand in the uncertain situation. Now, we are going to see different characteristics of the supply chain that influence their responsiveness and efficiency.
At first, we will learn the supply chain ability that means responsiveness. Let’s see –
- Respond to wide ranges of quantities demanded
- Meet short lead times
- Handle a large variety of products
- Build a highly innovative level
- Handle supply uncertainty
These are similar characteristics among several firms to maintain demand and supply.
- Achieve a strategic fit
If any mismatch exists between supply chain and consumer needs, then the company needs to restructure its supply chain or select an alternative course of action to change its competitive strategy.
After understanding the uncertainty level, the final step is to ensure supply chain responsiveness. It ensures supply chain responsiveness is consistent with the implied uncertainty. However, its main goal is to maintain high responsiveness for a supply chain. Besides, it tries to identify whether there is any mismatch or not.