A company achieving strategic fit has found the right balance between responsiveness and efficiency. Each driver affects this balance. Having more facilities generally makes a chain more responsive, while having fewer, central facilities creates higher efficiency. Holding higher levels of inventory increases the responsiveness of a supply chain while keeping inventory low increases the chain's efficiency. Using faster modes of transportation increases a chain's responsiveness, while using slower modes generally increases efficiency.

Investing in information can vastly improve the supply chain performance on both dimensions. This investment, however, must be made based on the strategic position supported by the other drivers. Appropriate sourcing decisions raise supply chain profits by assigning supply chain functions to the right party, who brings higher economies of scale or a higher level of aggregation of uncertainty. Pricing can be used to attract the right target customer segment. Differential pricing can be used to attract customers who value responsiveness as well as customers who want efficiency. The supply chain can then be structured to provide responsiveness to some customers while improving overall efficiency.

Discuss the role of each driver in creating a strategic fit between the supply chain strategy and the competitive strategy.

Answer rating: 100% (QA)

Answer Role of each driver in creating a strategic fit between the supply chain strategy and the competitive strategy Explanation 1 A company achievin... View the full answer