Aligning Product Strategy to Supply Chain Practices
Read this article. The authors study whether organizational products are aligned with optimal supply chain types. Besides the product, what other aspects must be analyzed when selecting a specific type of supply chain?
Introduction
The alignment of a business's product strategy with
its supply chain strategy is a challenge for all businesses to master –
whether they are small, medium or large enterprises. Whilst larger
multinationals often have the skilled staff to make sure that their
product strategy is closely aligned with their supply chain strategy,
small-to-medium-sized enterprises often face significant challenges
because they often do not have either the additional personnel or the
skilfulness to do so. Small businesses often are 'time starved' because
they typically have fewer staff members who must wear 'many hats' and
must constantly multitask for the business just to survive – let alone
thrive. However, small businesses are not just typically 'time starved',
but often 'resource starved' as well. In other words, they are often
pressured to perform many tasks in a short period of time in the working
day with far fewer resources typically than the medium-to-large
business. Typically, smaller businesses – especially 'start up'
businesses – face significant resource challenges including human
resource, financial resource, operational resource and asset resource
challenges (in terms of vehicles needed, storage or warehousing space
needed, as well as office space with required items such as sufficient
computers and other capital asset requirements).
Small businesses
often develop new or innovative products; yet, just making or sourcing
these for the marketplace can be challenging given their abovementioned
resource constraints, namely time, money, people and physical
facilities. Many small businesses are often very successful with the
early development and management of their product strategy whilst the
products are new to the marketplace or selling in smaller volumes. Where
they often struggle is with the more 'sophisticated art' of linking
their product strategy to a more developed 'supply chain strategy' as
their small business grows and an increasing number of products are
sold. As sales volumes increase, more products are sold and these must
be sourced or created. Problems often arise upstream in the supply chain
(raw materials sourcing and related tasks), or even downstream in the
supply chain once the product has been created (physical storage and
distribution by road, rail, air or sea). There is little wonder then
that such small businesses often struggle to align and fine-tune their
product strategy with their supply chain strategy.
The alignment
of these strategies within small craft businesses (in Gauteng Province,
South Africa) is therefore the specific focus of this research. Whilst
there has been scant research on craft supply chains in other parts of
the globe, there has been no research conducted on the craft supply
chains of smaller craft businesses operating within Gauteng, South
Africa. Furthermore, very little information is available on how craft
producers (who typically supply tourists and the tourism industry) align
their innovative and inventive product strategies with similarly
appropriate and successful supply chain management (SCM) strategies. In
simple terms, one needs to identify whether they have sufficient
vehicles to distribute the volumes of finished goods produced (outbound
distribution), whether they have sufficient storage space to warehouse
the products they produce and whether they match their inbound raw
materials requirements with the volumes they produce (demand
forecasting).