A01 chaf6542 06 se fm indd

The supply chain management strategy process

A strategic approach for supply chain management can also be defined using the SOSTAC™ 

approach(referred to in Chapters 5 and 8). Table 6.3 summarises a SOSTAC™ approach to 

supply chain management strategy development based on the guidance of Hughes et al. 

(1998). Table 6.3 implies a linear approach to strategic thinking, but, as was pointed out in 

Chapters 4 and 5, an iterative approach is called for in which there is a joint development 

between the organisation, the suppliers and other third parties.

Strategies for supply chain improvement have been categorised by Hughes et al. (1998) 

according to the scope of change and the speed of change. Figure 6.15 illustrates four strate‑

gic options for the supply chain. The two strategies that are relatively limited in scope apply 

to individual processes such as procurement or outbound logistics and can be thought of as 

delivering improvement at an operational level. These may give  short‑  term benefits while 

minimising the risk of more radical change. Conversely, where the scope of change is more 

extensive there is a greater risk, but also greater potential reward. These changes include com‑

plete re‑engineering of processes or major changes to the supply chain.

Box 6.4

Standardising the world’s data with GDSN

Every commercial organisation has databases or catalogues containing information 

about the products they make, or sell, or buy. But, and it is a big but, the way in which 

they describe the information differs according to internal terminology, country, com‑

peting industry standards and when the database was last updated. This is one of the 

reasons for the development of barcodes and this principle has been developed fur‑

ther by supply chain trade organisation Global Standards One (GS1) into the Electronic 

Product Code (EPC) and GDSN.

The Global Data Synchronisation Network (GDSN) was launched in 2005 to create 

standards for sharing information about retail products. By 2008 there were over 2 mil‑

lion items registered. G1, the organisation that manages this standard, explains that 

there are five simple steps that allow trading partners to synchronise item, location and 

price data with each other: