How can a Strateic Profit Model be used to examine the effec

How can a Strateic Profit Model be used to examine the effect of logistics decisions?

Solution

The strategic profit model is a popular and comprehensive model that captures the benefits of supply chain initiatives on business performance.  Competing supply chain initiatives can be compared and prioritized using this model.

Most firms are under pressure to improve on cost as well as customer service dimensions simultaneously.

A firm have to measure the effect the efficiency in integration, optimization, and restructuring.

Supply chain Optimization:

By improving on the forecasting, location, transportation and  inventory management decisions, a firm is is a position to improve on the cost and the service.

Supply Chain Integration:

There are significant wastage\'s at all departmental and organizational interfaces.  Intra and inter - firm integration of supply chains helps reduce waste in the system and improve the overall efficiency.  To make this possible, organization will have to make corresponding changes in the organization structure processes and performance measures.

Supply Chain Restructuring:

Restructuring of supply chains involves significant changes in the supply chain structure in terms of the way material and information flows are manged in the chain.

Some ways of restructured supply chains:

1)Moving from the MTS model to the CTO model

2)Reducing the number of stock point in distribution

3)Product and process redesign

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