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Strategic Responsibilities
Tactical and Operational

Strategic Responsibilities
Supply chain strategy alignment: Aligning supply and
distribution strategies with organizational strategy and deciding
on the degree to which outsourcing will be employed.
Network configuration: Determining the number and location
of suppliers, warehouses, production/operations facilities, and
distribution centers.
Information technology: Integrating systems and processes
throughout the supply chain to share information, including
forecasts, inventory status, tracking of shipments, and events.
Products and services: Making decisions on new product and
services selection and design.

Strategic Responsibilities Cont.

Capacity planning: Assessing long-term capacity needs,
including when and how much will be needed and the degree of
flexibility to incorporate.
Strategic partnerships: Partnership choices, level of
partnering, and degree of formality.
Distribution strategy: Deciding whether to use centralized or
decentralized distribution, and deciding whether to use the
organizations own facilities and equipment for distribution or to
use third-party logistics providers.
Uncertainty and risk reduction: Identifying potential sources
of risk and deciding the amount of risk that is acceptable.

Tactical Responsibilities
Forecasting: Prepare and evaluate forecasts.
Sourcing: Choose suppliers and some make-or-buy decisions.
Operations planning: Coordinate the external supply chain and
internal operations.
Managing inventory: Decide where in the supply chain to store
the various types of inventory (raw materials, semifinished
goods, finished goods).
Transportation planning: Match capacity with demand.
Collaborating: Work with supply chain partners to coordinate

Operational Responsibilities
Scheduling: Short-term scheduling of operations and distribution.
Receiving: Management of inbound deliveries from suppliers.
Transforming: Conversion of inputs into outputs.
Order fulfilling: Linking production resources and/or inventory to specific
customer orders.
Managing inventory: Maintenance and replenishment activities.
Shipping: Management of outbound deliveries to distribution centers and/or
Information sharing: Exchange of information with supply chain partners.
Controlling: Control of quality, inventory, and other key variables and
implementing corrective action, including variation reduction, when necessary.

Make-or-Buy Decisions
A wholesaler or retailer buys everything that it sells; a
manufacturing operation hardly ever does. Manufacturers,
restaurants, and assemblers of products buy components
and subassemblies that go into final products.
Choosing products and services that can be
advantageously obtained externally as opposed to
produced internally is known as the make-or-buy decision .
Supply chain personnel evaluate alternative suppliers and
provide current, accurate, and complete data relevant to
the buy alternative.

Outsourcing transfers some of what are traditional
internal activities and resources of a firm to outside
vendors, making it slightly different from the traditional
make-or-buy decision.
Outsourcing, is part of the continuing trend toward
using the efficiency that comes with specialization. The
vendor performing the outsourced service is an expert
in that particular specialty. This leaves the outsourcing
firm to focus on its key success factors and its core

Order fulfillment refers to the processes involved in
responding to customer orders. Fulfillment time can be an
important criterion for customers. It is often a function of
the degree of customization required.

Engineer-to-Order (ETO). With this approach, products are

designed and built according to customer specifications. This
approach is frequently used for large-scale construction
projects, custom homebuilding, home remodeling, and for
products made in job shops. The fulfillment time can be
relatively lengthy because of the nature of the project, as well
as the presence of other jobs ahead of the new one.
Make-to-Order (MTO). With this approach, a standard
product design is used, but production of the final product is
linked to the final customers specifications. This approach is
used by aircraft manufacturers such as Boeing. Fulfillment time
is generally less than with ETO fulfillment, but still fairly long.

Assemble-to-Order (ATO). With this approach, products

are assembled to customer specifications from a stock of
standard and modular components. Computer manufacturers
such as Dell operate using this approach. Fulfillment times
are fairly short, often a week or less.
Make-to-Stock (MTS). With this approach, production is
based on a forecast, and products are sold to the customer
from finished goods stock. This approach is used in
department stores and supermarkets. The order fulfillment
time is immediate. A variation of this is e-commerce;
although goods have already been produced, there is a lag in
fulfillment to allow for shipping.

The SCOR (Supply Chain Operations Reference) model

1. Plan. Develop a strategy for managing all the resources that go into meeting
expected customer demand for a product or service, including a set of metrics to
monitor the supply chain.
2. Source. Select suppliers that will provide the goods and services needed to create
products or support services. Also, develop a system for delivery, receiving, and
verifying shipments or services. Structure payment along with metrics for monitoring
and, if necessary, improving relationships.
3. Make. Design the processes necessary for providing services or producing, testing,
and packaging goods. Monitor quality, service levels or production output, and worker
4. Deliver. Establish systems for coordinating receipt of shipments from vendors;
develop a network of warehouses; select carriers to transport goods to customers; set
up an invoicing system to receive payments; and devise a communication system for
two-way flow of information among supply chain partners.
5. Manage returns. Create a responsive and flexible network for receiving defective
and excess products from customers.