Business And Finance

Why it is Important for a Supply Chain to Align with Business Strategy

How closely does your business’ supply chain align with your business strategy? If you’re not sure then that is certainly cause enough to look at it long and hard. Ideally, your business strategy and supply chain should be blended together. In fact, it is often better to look at them as extensions of one another as opposed to two disparate entities.

Supply Chain Designed to Fulfill Business Objectives

On the surface it is easy enough to see why a supply chain and business strategy should be inter-linked because the supply chain should be designed to help fulfill business objectives and the growth mapped out as part of the business strategy. With that in mind, the design of the supply chain should be based on the business strategy as a whole.

If it is based on the business strategy, the supply chain can be optimized by taking that into account as well. Any additionally demands that are required to meet business objectives can be identified in advance and optimized in terms of both cost as well as effectiveness.

That extends throughout all areas of the supply chain, which is what makes it so crucial. If you take a minute to imagine the alternative – i.e. a supply chain not designed with business strategy in mind, then the risk of it failing to deliver and fulfill business objectives could result in disaster.

Business Strategy that Considers Supply Chain Efficiency

As much as the supply chain should be designed by taking into account the business strategy, the inverse is also somewhat true. Based on the efficiency and effectiveness of the supply chain, the business strategy can be improved so that it maximizes its results too.

While the focus of the business strategy is still going to be on advancing the business’ position in the market and improving its market share, sales, profit, and other metrics – taking into account the efficiency of the supply chain will only help further those goals. Doing so will help promote realistic business goals that can capitalize on the strengths of the supply chain and also potentially cater to its weaknesses.

Essentially this makes the relationship between the business strategy and supply chain a two-way street where both need to align to each other to be as optimal as possible. Often it is difficult to accomplish this in house, particularly for small and medium businesses or startups – which is where having an experienced hand to help out such as Paul Trudgian supply chain consultant would go a long way.

By ensuring that your business supply chain is aligned with the business strategy, you should be able to maximize the effectiveness of both and ensure your business is able to compete in the long term. Pulling that off requires a very specialized skillset and considerable experience, which is why it is better to engage a consultant that is up to the task rather than taking the risk of attempting it in-house without the necessary expertise.