Value chain strategy relates to structural supply chain planning that encompasses 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 / manufacturing / distribution strategy?
- What if some of the underlying assumptions are modified – test of robustness?
Value Chain Strategy and SimFlex
SimFlex quantifies any potential value chain strategy from multiple perspectives, including cost, finance, asset, time, service and currency exposure. Furthermore, SimFlex determines an optimized value chain strategy that minimizes end-to-end costs, while respecting customer service requirements, capacity and supply issues.