These primary partners can be manufacturers such as Dell or mass-merchants such as Walmart and Target.
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In contrast, supporting partners are companies that simply provide resources e. These supporting partners can be transportation carriers, consulting firms, third-party logistics providers, IT service providers, online brokers, and educational institutions. The categories are not exclusive, however, because a firm can be both a primary partner and a supportive partner of the supply chain, performing primary activities related to one process and supportive activities related to another process. Although the distinction between primary and supporting supply chain partners is not obvious in all cases, it allows the firm to define who the furthest upstream and downstream members of the supply chain are and identify where customer demand actually starts.
The furthest downstream or point of consumption may coincide with a value-offering point VOP , where a customer allocates demand to his or her upstream supply chain partner e.
According to Holmstrom et al. Such a clarification of the supply chain network eventually helps supply chain partners understand what scope of the supply chain problem should be addressed. Understanding the structural dimensions of a supply chain is a prerequisite for building the supply chain link.
From Transaction To Value: Using Channel Strategy For Competitive Advantage
In general, there are two structural dimensions: horizontal structure and vertical structure. The horizontal structure refers to the number of tiers across the supply chain. The supply chain may be lengthy, with numerous tiers, or it may be short, with just a few tiers. The vertical structure refers to the number of suppliers and customers represented within each tier, as illustrated by Figure 1.
Figure 1. Supply chain dimensions. For example, as some companies make strategic moves toward either supply base reduction or customer selectivity, the supply chain becomes narrower. Outsourcing inclusion of third-party logistics providers or functional spin-offs will also alter the supply chain dimension by lengthening and widening the supply chain.
Achieving Competitive Advantage Through Supply Chain Management
Porter stresses the strategic importance of linkages among supply chain activities, because the linkages could lead to competitive advantages. To fully exploit the benefits of such linkages, a firm should understand the specific characteristics of the linkages or links to which it is connected.
These links may connect multi-tier supply chain partners as the firm is actively involved in the management of tier one and a number of other links beyond tier one. Due to its direct involvement, the firm may allocate resources e. Monitored process links are not fully controlled by a firm typically a primary supply chain partner , but the firm is involved in monitoring or auditing how the links are integrated and managed.
Unmanaged process links are the ones that the firm neither actively manages nor monitors.
Therefore, those characteristics should be factored into the supply chain partnership process. Because the establishment of common goals is critical for successful strategic alliances, goal setting will be the first step of the supply chain partnership. To set common goals, supply chain partners need to figure out what will be the major driving forces drivers behind the supply chain linkages.
Though difficult to quantify, the ultimate goal of a supply chain is customer satisfaction. The following list represents typical service elements in a supply chain:. The monetary value is generally defined as a ratio of revenue to total cost. A supply chain can enhance its monetary value through increasing sales revenue, market share, and labor productivity, while reducing expenditures, defects, and duplication.
Leading supply chain planning software company and global consulting organization partner to help customers realize end-to-end supply chain optimization. With headquarters in Munich, Germany, mSE Solutions also provides Kinaxis with a strategic geographic advantage to help further drive our expansion in Europe. As a Kinaxis strategic partner, we can further extend that value with the power of RapidResponse to help our customers accelerate their supply chain journey.
Concurrent planning bridges functional planning silos and connects all nodes across the global supply chain for faster, more effective decision-making.
Forward-Looking Statements Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of Kinaxis' products and services compared to competitive offerings in the industry.
Readers are cautioned not to place undue reliance on such statements. Kinaxis' actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of Kinaxis to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by Kinaxis with Canadian securities regulatory authorities.
Kinaxis assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
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