Excellent supply chain management helps leading companies around the world achieve better service, lower costs, lower inventory, and ultimately competitive advantage. Research shows that the best organizations are creating this advantage by using six valuable practices. They are:

1. Supply chain strategic alignment

Leading companies align their supply chain strategy with the corporate strategy, and then drive alignment throughout the supply chain on objectives and aspirations. In the very best companies, supply chain colleagues from the shop floor to the most senior managers clearly understand the supply chain strategy and aspirations.

2. Segmentation to embrace the complexity that matters

Leading companies actively manage product and service complexity. They design multiple supply chains within a network to capitalize on the complexity that delivers competitive advantage. They take steps ruthlessly to eliminate complexity where it does not.

3. A balanced and forward-looking design

Leading companies create a top-down and forward-looking vision of their overall supply network. They ensure that the network balances productivity, flexibility, and risk to deliver great service without excessive cost or risk.

4. A lean, end-to-end value chain

Leading companies task their supply chain managers with optimizing end-to-end value chains, and drive true collaboration across functions. They typically deploy a standard toolkit for continuous improvement (e.g., Lean or Six Sigma), which they have made their own.

5. World-class integrated planning

Leading companies use disciplined integrated planning processes to ensure the organization executes in synchronization, without the need for heroes. They focus their planning efforts where it matters using sophisticated and robust techniques where they are valuable and using unaided computer predictions elsewhere.

6. The right talent, accountable for performance

Leading companies make supply chain talent development and acquisition an organizational priority. Supply chain positions form part of the top management career track. Once the right people are on board, companies hold talent fully accountable for their contribution to supply chain performance.

1) Read the article, "The Race for Supply Chain Advantage: Six Practices that Drive Supply Chain Performance"

2) Refer to pp. 2 - 10 and take particular note of Exhibit 3 - managing service, cost and inventory.

3) Why do only the top 10% seem to manage this well?

4) What organizations can you find to illustrate a company in the 10?

5) Does being in the top 10% enhance your marketing advantage? Explain.