This article addresses the context and content of a generic supply strategy and discusses its strategy-making process. Building mostly on fundamental strategic management theories, the authors explain the role of supply strategy in its managerial context. In so doing, some light is shed on the meaning and use of the terms “strategy” and “strategies”. Also, a practical conceptual framework for supply strategy formulation is provided. The generic checklist, built by segmenting supply management decisions, is intended to guide supply professionals in addressing strategic issues to create value to customers, avoiding confusion and optimising resource allocation.
Classical frameworks guiding strategic thinking and strategy-making have not taken into account Supply Management at the same level as the Marketing, Finance or Production functions. Moreover, after decades of intellectual reasoning on strategy, research and practice, the concept of strategy is still misleading. It is argued that in an uncertain world, a strategy is too rigid to help dealing with change, that the formulation process is time and resource consuming, and that actually some top managers do not even know what a competitive strategy looks like. Some academics and practitioners have openly indicated their disappointment with strategy, and strategic planning indeed, whereas many organisations have simply abandoned it. Such a thought would have been considered foolish a few decades ago.
Interestingly, at the same time these discussions about the potential failure of—and the misunderstanding about—strategy and strategic planning have been going on, the strategic character of supply management has largely been recognised. A wide consensus has been reached on this matter and high-performance organisations know that resources must be allocated to develop a sound supply strategy (Carter et al., 2000; Anonymous, 1998; Hadeler and Evans, 1994; Doyle, 1990).
How can this apparent contradiction take place and how is it possible to explain its misleading effect on strategy? In other words, what is the meaning of strategy, particularly when applied to supply management, and what is the place supply strategy occupies in the strategy-making process of a firm? And finally, what are the differences between “strategy” and “strategies” in supply management? The objective of the analysis presented in this article is to discuss these issues and to elaborate an answer to these questions.
We begin this article by addressing the concept of strategy (Section 2) and generic approaches to strategy-making (Section 3), in order to make the fundamentals of our subsequent discussion on strategy in supply management explicit. In Section 2, we position the discussions at a managerial (or corporate) level to elicit the impacts on the definition of a supply “strategy” … and “strategies”. In Section 3, by identifying and analysing three basic approaches to strategy-making, our purpose is to characterise the actual organisational and decisional dynamics of supply management.
In Section 4, we briefly review the evolution of strategic thinking in supply management. In Section 5, we propose a conceptual framework, and the confusion surrounding “strategy” and “strategies” is specifically addressed. Finally, in Section 6, practical questions are identified to guide supply managers in getting maximum value out of the supply strategy formulation process.
The contribution of supply management and supply “strategy” to corporate strategy goals and objectives is no longer a matter of discussion: it has become a reality. Supply management is now called upon to develop sound supply “strategies” intended to create value to customers and bring out innovation. On the other hand, in a dynamic, networked and changing business environment, supply management has no choice but to be responsive, proactive and innovative in building competitive capabilities.
The main contribution of this article has been to make explicit the meaning and relevance of “strategy” and “strategies” in supply management, to help the function in fulfilling its role and accomplishing its objectives in the 21st century environment. Moreover, the derivation of a conceptual framework that exploits complementarity among fundamental strategy-making approaches, and the generic framework to identify critical strategic elements, constitute basic tools to help formulate a supply strategy and which should facilitate its implementation and its deployment. Case studies and surveys to validate the generic framework for supply strategy derived from literature review and practical experiences are contemplated for future research
