Strategy Audit

To reflect constantly changing customer needs and preferences, the supply chain strategy needs to be periodically evaluated, fine-tuned, and modified. One effective way of doing this is to conduct a supply chain strategy audit in which supply chain managers detail the strategic priorities and ensure that every unit within the organization pulls together to achieve shared organizational objectives without the less-than-optimal or inconsistent alignment of strategic priorities. Also, the audit should reveal a need for shift in strategic priorities and development of new supply chain strategies.

When conducting an audit of the supply chain strategy, the company should take the following steps, which are analogous to the ones proposed by Stock and Lambert:

  • Establish the task force to assist in the audit process.
  • Prepare a list of key questions that will be raised by the task force for audit interviews. These questions may be related to the firm’s internal interface among different business units, its competitors’ supply chain strategy, the extent of outsourcing, the level of internal resistance to organizational changes, competitive priorities, supply chain efficiency, and market niches and segments.
  • Develop specific performance metrics that enable the firm to gauge its competitive strengths and weaknesses relative to its competitors and then to identify the firm’s challenges and opportunities in the chosen market.
  • Collect the firm’s financial records and transaction data while soliciting the opinions of internal employees regarding the efficiency and effectiveness of the implemented supply chain strategy via personal interviews.
  • Identify alternative strategies that may be substituted for the current strategy for continuous improvement.
  • Recommend the required changes and improvement of the implemented strategy to top management.

The external supply chain strategy audit requires the solicitation of feedback from the firm’s ultimate customers and supply chain partners, such as suppliers and third-party logistics providers. The external audit is often composed of random customer surveys, forums with selected supply chain partners, and in-depth interviews with selected customers representing different market segments.

Number of Supply Chains
Strategic Management Processes

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