Supply chains used to be just about day to day operations, but now they're a strategic part of how a business competes, grows and delivers value. To really succeed, you need to look beyond today and focus on what's going to keep your organisation ahead of the game.
So, what does it take for a business to get its supply chain on the same page as its overall goals? Here are the key things that need to happen:
Long-term thinking - planning for the future
Keeping risks under control
Making sure your costs are in check
Being able to adapt and grow as demand changes
That’s where strategic supply chain management and strategic planning in supply chain management come in. This is not just about making sure your day-to-day supply chain ops are running smoothly, it's about planning and optimising supply chain activities to make sure they support the business as a whole.
For big enterprises in manufacturing, warehousing, retail and distribution - especially the ones that use SAP or are thinking about migrating to S/4HANA - it means turning the supply chain into a scalable business capability. If you’re reviewing or transforming your supply chain strategy, this guide will look at all the key areas - including demand planning, supplier strategy, network design, inventory strategy, risk management, cost optimisation, the importance of data and systems, SAP’s place in supply chain strategy, some real-world examples, and the benefits and challenges that come with it.
Strategic supply chain management all about planning and optimising supply chain operations for the long-haul.
It means making sure your supply chain supports your long-term business success, and not just focusing on the day-to-day tasks.
A supplier strategy that works for you
A network design that’s efficient and effective
Building risk and resilience into your operations
In simple terms, it means making sure your supply chain is working for you, and not the other way round.
Strategic planning in supply chain management is all about how organisations develop supply chain processes that line up with their business objectives and corporate strategy.
It’s a process that includes:
Forecasting long-term demand
Designing your supply network
Selecting suppliers that really work for you
Planning for the future and what resources you might need
The end result is that your supply chain is ready for whatever comes next. And, it means:
Supply chains that aren’t beholden to the day-to-day, but are able to grow and change with the business
Let’s say a company decides to expand into a new market.
They redesign their supply chain network to make it more efficient
They start working with new suppliers who can support their growth plans
They reposition their distribution centres to make the most of their new market opportunities
And, the end result is:
Efficient expansion into the new market
Lower logistics costs
Happy customers
The key is to align any network changes you make with your long-term goals - this will help keep costs in check and make it easier to manage during the transition.
A good strategic planning process will look something like this:
Business goals spelled out ↓ Demand and supply forecasts created ↓ Supply chain network designed ↓ Supplier strategy developed ↓ Processes lined up with objectives ↓ Perforance monitored and optimised with an eye to the trends and emerging technologies that will shape your supply chain for the long-term
This will help make sure your organisation is aligned, and that you have all the data you need to make informed decisions.
A few key elements will help define a strong supply chain strategy.
Forecasting demand for the long-haul
Getting production, supply and inventory management all aligned to meet that demand
Using AI and machine learning to get even more accurate with demand forecasting
Selecting reliable and cost-effective suppliers that really work for you
Managing those relationships to get the most out of them
Getting your warehouse ops and distribution locations working as smoothly as possible
Automation in warehouse ops can really cut labour costs and improve efficiency
Balancing stock levels with the need to get orders out quickly
Reducing costs while still keeping stock levels as high as you need them to be
Identifying the risks in your supply chain
Planning for alternative sourcing and logistics
Thinking about sustainable practices in supply chain risk management - like reducing your carbon footprint and supporting ethical operations.
Getting these elements right will make sure you’ve got a robust and efficient supply chain.
SAP strategy is about how SAP systems can support your strategic supply chain planning.
SAP can help you with:
Real-time data analysis
Integrated planning and execution
End-to-end visibility and transparency across all the systems connected to SAP and beyond
SAP can also help with:
Demand forecasting
Supply planning
Inventory optimisation
Performance analytics
It all adds up to informed decision-making and connected processes across the business.
Let’s say a company experiences a lot of supply chain disruptions.
A strategic analysis of the risks will highlight the problems
New sourcing strategies are put in place
The supply chain becomes more resilient
And, the end result is:
Reduced risk
Improved reliability
A stronger business
Or, let’s say a company is just piling up inventory costs.
Strategic planning is used to optimise stock levels
The warehouse network is redesigned to make it more efficient
And, the end result is:
Lower costs
Improved efficiency
When it’s done right, strategic supply chain management can deliver:
Optimised processes and reduced waste
Lower operational and logistics costs
The ability to handle disruptions
Better insight into how your operations are running
A supply chain that can grow and change with your business Helping Businesses Grow
Supply chains are no longer just operational functions, they're strategic assets that can actually help drive a company forward
Organisations often find themselves up against the following obstacles:
They just can't get a clear view of what's going on in their operations
Their different processes aren't all integrated, which makes things really hard to manage
Companies are often so focused on getting things done right now, they forget about the long game
Their supply chains have grown complicated and hard to manage
All of these challenges can have a serious impact on a business - from how well it performs to how expensive it is to run to how competitive it is
The truth is, things change and your supply chain needs to keep up. This can be due to shifts in your business priorities, the fact that your supply chain has grown in complexity or external factors that just affect your operations
If you don't take the time to regularly review and update your strategy, things will naturally start to slide and before you know it your strategy is outdated, inefficiencies are rife and risks are growing
Strategic planning is an ongoing thing and it requires continuous assessment and adaptation.
In order to build a modern supply chain strategy, you're going to need the right tools for the job, including:
ERP platforms that give you real-time data
Supply chain planning tools that give you predictive insights
Analytics solutions that let you do scenario modelling
We help businesses like yours by:
Defining a supply chain strategy that really works
Aligning your systems with your business goals, so everything is working together
Optimising your processes to get more out of your operations
Improving your overall performance
Modern supply chains are all about integration, digitalisation and real-time analysis. They're not just about dealing with the immediate issues of today, but about building a more resilient, flexible and adaptable supply chain that can keep up with the challenges of tomorrow
When things are working well, your supply chain is aligned with your business strategy, your systems are all talking to each other and your data is helping you make the right decisions. You're proactively managing risks and operations are efficient, scalable and productive.
The result is a supply chain that is a real asset to your business.
Strategic supply chain management
Long-term planning and optimisation of supply chains to meet business goals and strategy.
Supply chain strategy
A plan for managing your supply chain operations.
Demand planning
Forecasting demand to help you plan and manage stock.
Network design
Planning out your warehouse and distribution setup.
Procurement
Getting the right materials and services at the right price, at the right time.
Logistics management
Getting your goods from A to B in the most efficient way possible.
Information systems
Tools for managing data and coordinating operations across your supply chain.
Risk management
Identifying and managing risks in your supply chain.
What is strategic supply chain management?
Managing your supply chain with a view to long-term goals.
What is strategic planning in supply chain management?
Designing your supply chain processes to meet business goals.
Why is supply chain strategy important?
It improves efficiency, reduces costs and strengthens customer satisfaction.
How does SAP support supply chain strategy?
Through tools for data, integration and planning.
What are the benefits of strategic supply chain management?
Efficiency, cost control, resilience, scalability and innovation.
A good supply chain strategy isn't just about planning - it's about getting all the different parts of your business working together. Business goals, supply chain processes and data all need to be singing the same tune. When they are, your supply chain becomes a real competitive advantage - not just a means of keeping the lights on.