Supply chain management is a concept whose time has arrived; however, this concept must be translated into action. The most comprehensive and effective approach to reducing costs in your corporation’s supply chain is to develop a strategic view, permitting you to see the big picture before attacking this immense task. Developing a strategic view of your supply chain will align you with your organization’s objectives so that you will know what you should be focused on as opposed to falling into an activity trap – a lot of activity with little results.

We would all like to think we are aligned with our organization’s strategic objectives, but are we really? Are we in fact meeting our organization’s needs or potential needs with our supply chain strategies and tactics, or are we just creating a lot of dust and smoke with our activities? If you are serious about aligning your supply chain initiatives with your organization for greater impact and results, then you need to understand your organization’s primary strategic objective first. In a broad sense, your organization has five primary strategic objective choices:

1. Low Cost Strategy: Squeeze the last dollar out of your expenses.

2. High Quality Strategy: Conformance to requirements.

3. Zero Defects Strategy: Remove the variation in practices to save.

4. Customer First Strategy: Focused on customers’ needs and wants.

5. Niche Player Strategy: Concentration on one or two product lines.

Once you have identified your organization’s primary strategic objective based on your interpretation of your organization’s mission and vision, you can then devise your mission, vision, strategies, and tactics for your supply chain management to align with your organization.

Now that you have identified your organization’s primary strategic objective, you can plan the road map you will take with your supply chain with certainty. For example, if your organization’s primary strategic objective is the Low-Cost Strategy, you can target your efforts on squeezing out all waste and inefficiency in your supply chain by:

1. Establishing a goal to purchase 95% of your commodities on contract vs. national average of 72%.

2. Re-focusing your value analysis efforts on supply chain optimization.

3. Reducing your inventory levels by 25% or more company-wide.

By developing these types of targeted strategic goals, you now have a roadmap to align your supply chain objectives with your organization’s primary strategic objective, thus ensuring that your supply chain efforts are focused on the right things that are important to your organization.