Summary papers and frameworks by CEO

Here you can keep track of how I derive the overall strategy and make comments.

• All: Hau Lee, the triple A supply chain (see BB), Akkermans et al on Trust, transparency and travail (see BB), EJOR, 2004
• CEO:
o Hau Lee, http://www1.ximb.ac.in/users/fac/visiting/vfac.nsf/23e5e39594c064ee852564ae004fa010/89b99a7daf20080665257086002ecac4/$FILE/ATTFO1OF/Aligning%20Supply%20Chain%20Strategies%20with%20Product%20Uncertainty%20-%20CMR%20Spring%202002.pdf
o Fisher; http://www.computingscience.nl/docs/vakken/scm/Fisher.pdf

Strategy: Victorious Secret

The fresh connection company mission: To become the market leaders.

My team’s objectives: To create value chain thinking at the heart of our strategy. Porter (1995) argues that achieving competitive advantage requires a firm to make a choice about the type and scope of its competitive advantage. Our team chooses a differentiation strategy. This implies that we aim at providing greater services for the same price as our competitors. Our competitive scope is currently not focused on a specific segment, but is expected to undergo change in the near future.

For this purpose, we aim at building a triple A supply chain: agile, adaptable and aligned (Hau Lee, 2004). Fisher (1997) and Hau Lee (2002) differentiate between functional products requiring efficient supply chains and innovative products best suited for a responsive supply chain. Due to the nature of the products of the Fresh connection game, the demand uncertainty and the constantly evolving supply base, we categorize our products as having similar characteristics with the electronics market. Therefore, according to Hau Lee (2002), companies with innovative products and evolving supply processes have to utilize the combination of risk-hedging and responsive strategies, thus establishing an agile supply chain.

Since the external environment constantly changes, our company has to be able to adapt and evolve in order to keep its competitiveness (Hau Lee, 2004). The reshaping of the markets requires alignment throughout the supply chain. One of the ways to achieve alignment is through redefining partnership terms to share risks, costs and rewards (Hau Lee, 2004). This goal is closely related to the method our team chose to use for KPIs selection: the balanced scorecard (Kaplan and Norton, 2006). By continuously changing the company’s KPIs, our team aims at implementing new strategies without disrupting the organization (Norton and Kaplan, 2006).

Explore different strategies: What is the impact of such strategic choice at the tactical level in the Fresh Connection? What is the impact on KPIs?
Davis et al (2010)maintain that supply chains can be constituted from a combination, to a different extent, of six separate outcomes, tailored to the changing customers’ and market’s needs: cost, responsiveness, security, sustainability, resilience and innovation. However, the authors argue that, if blending several outcomes, reductions in performance along one dimension might be necessary, for example, to allow performance improvements in other dimensions. Below, table 1 offers a comparison between the strategies of cost, responsiveness and resilience, the latter two of which are similar to agility and adaptability in Hau Lee’s framework. The key design traits illustrate the basic trade-offs between the inventory, capacity and demand and supply management to be made during the course of the game. Since our strategy is differentiation, our focus is primarily on responsiveness and resilience, while maintaining reasonable pricing. Due to the hybrid nature of the company’s strategy, the trade-offs will impact the KPIs of the VP managers to a different extent. However, by using the balanced scorecard method for selecting performance measures, we thrive to grasp the overall progress of the company without placing excessive emphasis on a particular dimension. Blending these strategies is the key to achieving an excellent supply chain with enduring competitive advantage.


Future strategy: Since the company is currently stabilized and making modest profits, a more radical strategy can be undertaken during the next rounds. Options I will offer my team include focusing on the highest gross margin segments (Food & Groceries and Land markets) or stop offering certain products in separate markets. The latter decision is already being implemented in round 4 by Sales.








References:

Melnyk, S.A., Davis, E.W., Spekman, R.E., and Sandor, J. 2010. “OutcomeDriven Supply Chains.” Sloan Management Review, 51(2), 33-38.

Alignment: Using the Balanced Scorecard to Create Corporate Synergies by Robert S. Kaplan, David P. Norton ; Source: Harvard Business Press Books 320 pages. Publication date: Feb 23, 2006.

Fisher, ML (1997), "The right supply chain for your product", Harvard Business Review, pp.105-16.

Lee, H. L. 2002. Aligning supply chain strategies with product uncertainties. California Management Rev. 44(3) 105–115.

Lee Hau (2004), “The Triple-A Supply Chain,” Harvard Business Review, Vol. 82, No. 10, pp. 102–113.

M.E. Porter (1995) “The Competitive Advantage of the Inner City, Harvard Business Review.