Strategic fit is
based on two strategies; the first one is competitive strategy, which is
designed on preferences of customers. And the other one is supply chain
strategy, which is associated with supply chain capability, therefore both to
achieve strategic fit both strategies should be aligned with each other.
In the target
market customers preferences is specify by competitive strategy, where as the
supply chain strategy strives to fulfill the customers order in an effective
and efficient manner. Hence the main objective to achieve strategic fit by
ensuring that the supply chain strategy has enough capability to support
“competitive strategy” by fulfilling the customers need. (Israr, 2013).
The supply chain
strategy is contrived according to the capabilities of all individuals to make
decisions regarding procurement, manufacturing, and transportation, the flow of
information and finally delivery of product to the customers. (Heydari, 2011).
A study carried out by Chopra and Meindl (2001) introduced logistical and cross
function drivers which aid towards designing the supply chain strategy.
Logistical drivers include facility, inventor, and transportation.
Cross-functional drivers consist of information, pricing and sourcing. By coming
to the above logistical and cross functional drivers, another five areas of
decision making are identifies which include production, location, inventory,
information, and transportation. (Hugos, 2003).
Responsiveness is the two main spectrum of supply chain, hence there is a trade
of between responsive and efficient supply chian. (Chopra and Meindl, 2001).
The Consumer enjoys high product availability, shorter lead time when the
supply chain strategies is devised on the base of the responsive supply chain.
However, product offered in this strategy is normally high in price. Whereas
SCS designed on the base of efficient supply provides low-cost products to
consumers but lacks the element of high
product availability and service. (Heydari, 2011)
between the supply chain strategy and competitive strategy is crucial for and
organization as it can make or break the organization. Synchronization of
between supply chain strategy and competitive strategy can lead to the success
of the organization or the success deeply relies on this. (Chopra and
The supply chain
strategy is mainly influence by the nature of the product, or it can be said
that according to the nature of the product supply chain strategy is designed.
For a product with large variety and quantity, less price, efficient supply
chain is suitable whereas for an innovative product which has unpredictable
demand, shorter shelf life. Whereas
responsive supply chain would be appropriate.( Fisher, 1997)
Product type is
deeply linked with the uncertainties from
the customers’ side especially demand uncertainty. Therefore demand uncertainty
is considered important while devising a supply chain strategy. The demand for
innovatiove product is less predictable where as demand is predictable in case
functional products. The uncertain demand could be fata for innovative products
as it can result shortage of product in satisfying the customers demand. The average
stock-out rate for innovative products 10-40 percent while 1-2 percent for
functional products (Fisher, 1997).
identifies two types of uncertainties which include demand and supply
uncertainties. Lees has proposed two strategies