Supply Chain Profits

7 07 2009

In terms of delivering goods or services to the consumer, the supply chain is not created equally.  More often than not, one part in the chain controls the bulk of the profits.  How did they get there?  They most likely earned it (though there are some interesting examples of other methods).  They have the power in chain to manipulate and control the negotiations.  They are the perceived value provider.

  • Where do you stand in terms of delivering value to the consumer?
  • What do the other parts in the supply chain offer in terms of value?
  • Can this chain be altered either from someone in the chain, or perhaps a whole new value chain?
  • What are your relations with the people in control, or with the entire chain?

Depending upon your business model, this could be a potential opportunity or threat.  We need to understand our position in the supply (or value) chain and if the position is changing.  We may not need to do it constantly, but we need to make sure someone owns the process and it is built into an ongoing management discussion.  At the very least it should be part of the strategy development plan.

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