In a constantly evolving environment, companies must implement increasingly effective supply chain strategies. The business goals through this approach: To minimise costs and improve efficiency, making their procurement a true performance lever. The challenge is to build a supply chain strategy perfectly adapted to your company, its needs and its market. This involves following a three-step method, combining the best existing strategies.
What is a supply chain strategy?
A supply chain strategy broadly refers to how a company acquires the goods and services necessary for its activities. This covers the entire product life cycle, from sourcing raw materials to storing finished products and their distribution. It includes key steps such as demand forecasting, procurement management, supplier management, stock management and transport.
For any company, the key objective of a supply chain strategy is to ensure it makes the most of its resources whilst minimising costs. The idea is to gain efficiency across supply chain processes and ensure the quality of products and services sold, whilst proactively responding to customer demands, thus increasing customer satisfaction.
This is why this strategy must be based on an in-depth analysis of various parameters, including current supply chain operations, longer-term objectives and stakeholders (customers, suppliers and even competitors).
Three steps for an effective supply chain strategy
To develop an effective strategy for supply chains, three main steps should be followed: Understanding needs, analysing your market position and collaborating with stakeholders.
Understanding company needs
The first step is to understand the specific procurement needs of your company. This begins with a thorough analysis of customer demand, variations in orders and sales forecasts. It is also critical to take a closer look at the company’s own expectations. This involves evaluating specifications and quality requirements for the products or services you wish to purchase, setting financial objectives and having a clear vision of internal capabilities in terms of procurement management.
From there, the company can explore the market demands. This is an opportunity to identify potential supply chain challenges and search for potential suppliers based on clear and relevant procurement criteria.
Assessing market positioning
The second step is to evaluate your market position to make informed decisions. This involves conducting a SWOT analysis (Strengths - Weaknesses - Opportunities - Threats), which is an essential strategic supply chain tool. This allows the company to identify its strengths and weaknesses, as well as the opportunities and threats it faces in its market. It is from such an assessment that it can objectively angle its supply chain strategy.
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Strengths: Specialised resources, operational capabilities, strong supplier relationships, advanced technologies…
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Weaknesses: Deficient procurement processes, dependence on certain suppliers, stock management issues…
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Opportunities: Strategic partnerships, opening of new markets, innovations, new sourcing sources…
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Threats: Increased competition, regulatory changes, raw material shortages…
Collaborating with stakeholders
Lastly, the third step focuses on collaboration with various stakeholders. Initially, it involves engaging internal teams that play a crucial role in the supply chain, i.e. logistics, procurement, finance… This involves establishing open and transparent communication by sharing analysis results, then discussing the objectives, priorities and key performance indicators of the supply chain strategy.
Secondly, it is also necessary to exchange and collaborate with suppliers. By sharing key information about the company’s needs and forecasts, partners can align their interests and objectives. This approach can also lead to building strategic partnerships. This represents a key step in promoting stability, innovation and continuous improvement within the supply chain.
This can go even further, as Will Quinn, Global WMS Strategy Director for Infor, explains: "Creating complementary or additive strategic partnerships or alliances gives access to additional resources, benefiting from supply chain expertise and multiplying procurement capabilities. By forming strategic partnerships and alliances, companies thus have the opportunity to pool their resources and manage risks and crises together."
Various supply chain strategies
Each company has its own supply chain strategy, which meets its needs, objectives and vision. There are therefore many types of supply chain strategies from which to draw inspiration to build a version entirely adapted to your reality.
Outsourcing
Outsourcing procurement involves entrusting the management of supply chain activities to an external service provider. This can concern part or all of the procurement. Such an approach enables companies to focus on their core business, whilst benefiting from external expertise for these subjects, with efficiency gains and cost savings as a result.
Local sourcing
This involves favouring suppliers that are geographically close to your company. Local sourcing helps reduce transport costs and associated greenhouse gas emissions. Moreover, delivery times are shorter, which represents an undeniable competitive advantage, and supports the local economy.
Supplier diversification
This approach has a key objective: To avoid dependence on a single supplier. Diversifying sourcing sources thus allows for greater flexibility, reduced risks of supply chain disruptions and the creation of new business opportunities.
Just-in-Time procurement
This approach aims to minimise stock by receiving goods just before they are used in the production process. This helps reduce storage costs, minimise the risks of overstocking and improve cash flow management.
Sustainable procurement
Sustainable procurement enables companies to contribute to the goals and objectives defined within their CSR (Corporate Social Responsibility) strategy. It is also a lever for long-term cost reduction, regulatory compliance and brand image improvement. This notably involves integrating sustainable selection criteria in the choice of their partners, such as environmental management of their activity, respect for ethical fundamentals, certification of their committed policy (ISO 26000, 20400…).
Circular procurement
Circular procurement involves reusing, regenerating and recycling materials and products when they reach the end of their life cycle. This includes, for example, acquiring recycled materials, second-hand products, setting up a product return programme… This approach is synonymous with respect for the environment, but also cost reduction.
As you can see, implementing an effective and resilient supply chain strategy relies on a perfect understanding of your company’s needs and solid collaboration between internal teams and suppliers. This is how a company can transform its supply chain into a true competitive lever. Ultimately, this contributes to creating sustainable value for all stakeholders.
