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?


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).