Supply Chain Design

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Description of Supply Chain Design. Explanation.


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Definition Supply Chain Design. Description.

Supply Chain Design involves the determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of warehouse and production facilities (reduce Bullwhip Effect), the products, the modes of transportation, and supporting information systems.

Four Levels of Supply Chain Improvement

According to Charles C. Poirier and Michael J. Bauer (E-supply chain), a supply chain improvement may occur at 4 levels:

  1. Sourcing and Logistics — The driver is the Vice President of Supply or Sourcing, who focuses on project logistics, inventory and order fulfillment, organized by team and function.
  2. Internal Excellence — The drivers are the Supply Chain Leader (COO) and the Chief Information Officer. The focus is system improvement and process redesign. The tools are best practices, benchmarks and activity-based costing.
  3. Network Construction — The primary drivers are the business unit leaders. Their focus is on forecasting, planning and inter-enterprise. The tools are database mining, electronic commerce and metrics.
  4. Industry Leadership — The drivers are the CEO and the management team. They focus on the network and the consumer. Their tools are virtual information systems, the intranet and the Internet.

Reducing Supply Chain Cost

The AIM & DRIVE method is a system for reducing costs by working with your entire supply chain while improving quality and delighting your end customers. The steps are:

  1. “Agreeing” to manage costs with a supply-chain approach.
  2. “Identifying” where you are incurring costs and which costs you can lower by working cooperatively with your suppliers.
  3. “Measuring” second- and third-level costs.
  4. "Defining” your mutual chief cost drivers and your strategic options.
  5. “Reducing,” altering or removing the operations that create those costs.
  6. “Implementing” your action plan.
  7. “Verifying” the plan by monitoring the costs.
  8. “Eternally” refining your cost structure and sharpening your processes.

Source: Jimmy Anklesaria, Supply Chain Cost Management.

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Supply Chain Design Special Interest Group

Special Interest Group


Best Practices - Supply Chain Design Premium

Expert Tips - Supply Chain Design Premium

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A supply chain strategy generally consists of thre...
Usage (application): Supply Chain Strategy, Supply Chain Design

Resources - Supply Chain Design Premium

Supply Chain Management: Processes and TypesSign up

This presentation elaborates on various Supply Cha...
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Information, Information Flows and Information Technology in Supply ChainsSign up

This presentation elaborates on the role of inform...
Usage (application): Master Model of Supply Chain Excellence, Supply Chain Software Categories, Supply Chain Information Systems

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Sustainability in supply chains, including the fol...
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How to Design and Build Sustainable Supply ChainsSign up

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Usage (application): Sustainability, Supply Chain Management

Introduction to Supply Chain ManagementSign up

While Porter’s value chain is a firm-level supply ...
Usage (application): Supply Chain Management, Supply Chain Design

Introduction to (Sustainable) Value Chain AnalysisSign up

Value Chain Analysis involves analyzing three thin...
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Usage (application): Enterprise Resource Planning, Supply Chain Management, Information Technology, IT ERP

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This presentation provides an introduction into En...
Usage (application): Enterprise Resource Planning, Supply Chain Management

Supply Chain Management Performance Measurement & MetricsSign up

Presentation about Supply Chain Management and its...
Usage (application): Supply Chain Management, Performance Management, SCOR Model, Balanced Scorecard

Achieving Strategic Fit - Supply Chain StrategySign up

Presentation aims to explain how companies can ach...
Usage (application): Supply Chain Strategy, Supply Chain Design

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Compare with: Value Chain  |  3rd Party Logistics (3PL)  |  Vendor Managed Inventory  |  Cross-Docking  |  Design Thinking

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