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First, I think we should make clear our philosophy on what strategy is – or perhaps, is not. Most strategic plans fail in these three respects – and then CEOs wring their hands when their strategy is not delivered on. We hope you find the Strategic Planning Template useful – remember to subscribe here to receive all of our updates if you have not already done so.
Any company that has a global supply chain should consider introducing its strategic left hand to its operational right hand.
How should companies ensure that relevant supply-chain details inform the business-strategy formulation and that strategic direction and the supply chain are in alignment?
Consider a strategic supply-chain planning exercise at a polyvinyl chloride (PVC) manufacturer that we’ll call Acme Vinyl Co. With fragmented spare capacity around North America, a falling stock price and a need to rationalize the postacquisition supply chain, Acme’s leaders considered their options. Strategic supply-chain planning falls in the middle of a decision-making spectrum that has business-strategy formulation at one end and tactical supply-chain planning at the other. Live on May 12: Integrating Sales and OperationsOn May 12 at 1 pm ET, a free webinar on how to bridge the divide between sales and operations. Navigating the Patent Minefield Through ConsortiaTech consortia help reduce patent risk, but managers must weigh the pros and cons for innovation. Tech Savvy: A Lesson in Managing Digital Disruption from FintechWhat’s happening this week at the intersection of management and technology. Research suggests that outsourcing IT helps reduce sales expenses and general and administrative costs.

This is especially important in fast-growing markets like Asia, where societies are collective. Revisit the 10S Strategic Thinking Model and check your Strategy especially against your Situation. Strategic supply-chain planning that combines aspects of business-strategy formulation with aspects of tactical supply-chain planning can make each far more valuable to the planning effort than either would be alone.
Acme’s North American revenues came from PVC for building (55%), packaging (15%), consumer goods (10%), the electronic industry (10%), the automotive industry (4%) and from non-PVC products (6%).
Some favored consolidating manufacturing into one or two new mega-plants; others suggested closing existing plants or lines.
Optimization models can be built into spreadsheets by using the Solver feature within Excel, for instance, or by using add-on software, but these models are not comprehensive enough to take into account the scope and detail needed for a global supply-chain model. Sodhi is an associate professor of supply-chain management at Cass Business School in London. Strategic supply-chain planning is the Pegasus of strategy: It can soar, but it also needs to keep its feet on the ground.
Management chose to do a strategic supply-chain planning exercise to assist decision making.
For such optimization, the cost of APS software, including implementation, may exceed $1 million.
Mintzberg, “Planning on the Left Side and Managing on the Right,” Harvard Business Review 54 (July–August 1976): 49–59.
Although companies routinely weigh long-term supply-chain-related decisions in light of alternative sources of supply, new geographic markets or new products, various levels of management use different approaches, often in isolation.

Acme had been seeing revenue growth for several years, mostly as a result of acquiring other PVC manufacturers. Lee, “Strategic Analysis of Integrated Production-Distribution Systems: Models and Methods,” Operations Research 36, no. Beavis, “Seize the Moment — Radical Supply Chain Integration as a Means of Increasing Shareholder Value and Enabling Acquisitions To Deliver on Their Promises,” Manufacturing Engineer 80, no. Wilson, “How Companies Use Scenarios: Practices and Prescriptions,” SRI International, Menlo Park, California, report no. Senior managers make such decisions as part of formulating business strategy; supply-chain planners, as an extension of their tactical supply-chain planning. Mintzberg, “Planning on the Left Side, Managing on the Right,” in “Mintzberg on Management: Inside Our Strange World of Organizations” (New York, Free Press, 1989), pp.
Lee, “Resource Deployment Analysis of Global Manufacturing and Distribution Networks,” Journal of Manufacturing and Operations Management 2, no.
Trafton, “Global Supply-Chain Management at Digital Equipment Corporation,” Interfaces 25 (January 1995): 69–93.

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