Value chain strategy relates to structural supply chain planning encompassing the entire design / source / make / deliver process. This is of critical importance as the structure of a value chain typically locks in 80% of total costs. Key decisions include choosing the number and location of suppliers, manufacturing sites and logistics centers. The objective of value chain strategy is to design a supply chain that provides the right balance of flexibility and cost-efficiency to meet the requirements of the marketplace.
Key questions
- What is the best end-to-end value chain strategy that minimizes total cost while maintaining or improving serviceability?
- What is the best sourcing strategy – regional or centralized?
- What is the best manufacturing strategy – regional or centralized?
- What is the best distribution strategy - number and location of DCs?
- What are the right modes for inbound and outbound transportation?
- What if some of the underlying assumptions are modified – test of robustness?
Value Chain Strategy and SimFlex
SimFlex can quantify any potential value chain strategy from multiple perspectives, including cost, time, finance, customer service, asset utilization and currency exposure. Furthermore, SimFlex can produce an optimized value chain strategy that minimizes value chain costs, while respecting customer service requirements, and manufacturing / capacity issues.