Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Performance & Drivers
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Supply Chain Performance & Drivers
Chapter 2
Regarding the first statement, in the 21st Century, having a superior product is no longer sufficient. There has been a shift in the modern business where businesses no longer compete as autonomous entities, rather as supply chains (Mohamed & Omwenga, 2015). For instance, both Apple and Sum sang manufacture and sell phones. Since both of their products are of high quality, they shift their competitions to the efficiencies of their supply chains. In this case, Apple has managed to have an efficient supply chain compared to Sam sang hence more sales. In the second statement, in a strategic fit, there is a consistency between the needs of a consumer that the competitive strategy seeks to fulfill and the supply capabilities that the supply chain aims to build (Soni & Kodali, 2011). While no single function can lead to the success of the supply chain, a failure at one of the functions could lead to the failure of the overall chain.
According to Chopra & Meindl (2016), demand uncertainty refers to takes place where an entity is not in a position to accurately predict the demand for its products or services. For instance, when Apple Inc. manufactures the iPhone 8 Plus, it may not be able to accurately predict how many people will buy the product. Implied demand uncertainty is due to uncertainty due to the demand the supply chain is expected to handle and the characteristics the consumers desire. Assume that Apple Inc. has looked at the trends and established that at least 20% of its clients will upgrade to the new phone. Then the remaining 80% of sales will be due to the clients’ desire to have the latest phone. Hence, the implied demand uncertainty will be 80%. Supply uncertainty occurs where a decision maker in the supply chain is unable to know what to decide because of a lack of transparency of the supply chain and the effect of possible actions (Vilko, Ritala & Edelmann, 2014). For example, Apple Inc. depends on Samsung for the supply of some parts of the iPhone 8 Plus like the screen. While Apple Inc. With demand increasing f...