Operations and supply chain strategies

1.Strategy is a plan of actions to achieve a set of pre -determined specific goals. Operational
efficiency broadly refers to the ability of an organization to deliver quality services with fewer
resources. The more output an organization can produce from a given amount of input, the more
efficient those operations likely are. This is primarily a function of two variables, namely the quality
of an entity’s operations and its operating expenses.

If an organization can maintain high levels of operating efficiency, then it should be able to generate
greater profit per project with the same resources. This way, operationally efficient businesses are
often associated to well-oiled machines that can operate in new markets while still being profitable.

Document and review processes

Undocumented processes can't be reviewed, which means they can't be improved. Creating
documentation for even the most insignificant tasks ensures consistency so that repetitive tasks
don't have to be redesigned each time. Creating a written, standardized process also means that
anyone on the team can take over duties at any given notice.

Many small businesses that do not document procedures often have a single employee or team that
knows how to complete certain tasks.

Increase across-department communication

Communication is a value many companies add to their mission statements, but don't deliver on
when it comes to daily practice. In fact, “28% of employees cite poor communication as the reason
for not being able to deliver work on time,” says Duncan Lambden for business supplier consultant
firm Expert Market.

Improving a business's operational efficiency centers on departments communicating openly,

frequently, and easily. A few ways to improve cross-departmental communication include finding
the right communication technology and tools and finding ways to communicate regularly.

Be transparent with information

Managers and business owners often think too much transparency will slow down business
processes. Being too open about changes, business decisions, and other information only opens the
opportunity for response that could prevent quick moves and key business decisions. However,
transparency before big business changes occur can help save time and improve efficiency in the
long run. This also means being open and honest not only from the top-down, but listening to and
asking for transparency among employees, too.

Improve order fulfillment

With the age of Amazon Prime and instant order tracking, customers often expect short shipping
times — even with global supply chain issues. The key to fast shipping is fulfillment efficiency. The
quicker you can get a product out the door, the faster it can get into your customers' hands.
Fulfillment bottlenecks or gaps can cut into profits and even slow the growth of your business.
Track KPIs and performance metrics
Every business owner and manager wants to believe they're data-driven, but if key performance
indicators (KPIs) aren't established and measured, then they might as well be winging it. A KPI is a
way to quantify progress toward a specific business goal. If a procedure isn't moving the business
toward that goal in some way, then it may be affecting the operational efficiency of the company or
department.

Operational KPIs include those that fall under marketing, retail operations, sales operations,
logistics, customer service, IT operations, and HR operations. To cover all bases, ensure KPIs are both
long- and short-term goals. It's important to verify that the KPI you create fits your industry.
Marketing agencies will have very different goals and measurements than manufacturing, for
instance.

Manage financial strategies

To maintain operational efficiency and scale a growing business, it's critical that companies have a
sound financial strategy in place. The competition is always innovating, and the market is constantly
fluctuating. While many business owners must be flexible with their finances, they also need a
blueprint to maintain healthy margins.

2. Level of strategies – Every organization needs to have a strategy in order to beat competition and
stay ahead. A strategy is practiced at three different levels which include-

-Corporate level strategy- This strategy is designed by the top management consisting of the Board
of Directors and the Chief Executive Officer. A corporate level strategy helps in achieving objectives
by analysing all business opportunities available to an organization. Some of the questions asked in
this strategy are-

In what all businesses should the organization enter

What should be the organizational structure be like

What should be the roles, responsibilities of each business unit

How shall different resources be allocated to different business units

This strategy is implemented at the highest level of the company. Company executives look at ways
to improve and expand the company. They might identify additional markets they can enter.

-Business level strategy- A business-level strategy is an innovative way for a company to showcase
its unique assets, upsurge its competitive edge and help the individual components of its company
function as one whole unit.In order to better understand how business level strategy differs from
other strategy levels, it is useful to look at some examples of business level strategy as it is applied
‘on the ground’.
In very general terms, we can distinguish five strategies that organizations can utilize at a business
level to foster competitive advantage.

• Cost Leadership

Offering a product at a lower price than competitors is the most upfront way in which businesses
compete for customers. Business units can decrease costs by a number of means - building better
facilities, investing in tooling or reducing the cost of overheads, minimizing costs of R&D, POS, and so
forth.

• Differentiation

Rather than concentrating on lowering costs and passing those reduced costs onto customers,
differentiation strategies emphasize the development and marketing of products in a manner that
provides greater value to customers.

In the laptop market, Apple has invested heavily in R&D, customer service, and marketing,
successfully carving a niche that allows Apple to charge substantially more than other manufacturers
without compromising market share.

• Focused low cost

In addition to reducing costs, businesses may select to further focus their efforts by targeting only
one subset of the market. For example, a tool manufacturer chooses to focus only on the
professional tradesperson market.

• Focused differentiation

In much the same way, businesses may choose to distinguish themselves from their competitors
while concurrently focusing their efforts on a smaller subset of their customer base.

-Functional level strategy-Functional level strategies are the activities and goals assigned to various
departments that support your business level strategy and corporate level strategy. These strategies
specify the outcomes you want to see attained from the daily operations of specific departments (or
functions) of your business. The variables of this strategy are-

- Detail

Your functional level strategy will have the most detail of the three strategy types. Of course, you’ll
have the specific goals and actionable items for each department. But you’ll also have the
various metrics through which you gauge the achievement of your team’s actions.
-Alignment

Functional level strategies should always bring into line with the business level strategies and
corporate level strategies above them.
For example, if your corporate strategy is to recover market share and your business strategy is to
improve brand identification, you wouldn’t want one of your functional strategies to be for the
marketing department to update their computer systems. Those goals are out of alignment.

- Progress

When trying to measure your development, it can be easy to include too much information and
become inundated with data. It’s vital to keep in mind what your business level strategies and
corporate level strategies are and only measure the facets that help you determine if you’re
progressing toward those goals.

- Existing Resources

Every functional level strategy that you put in place should utilize the existing resources — both
equipment and personnel — that each department has to offer.

In other words, you don’t want to base your marketing department strategy on resources they don’t
have. Doing so could seriously weaken the broader goals above it (at the business and corporate
levels).

- Integration

In addition to vertical alignment, functional level strategies should also be integrated horizontally
within and among departments.

3.a. In generic pharmaceutical industry, typical supply chains consist of the following components:
manufacturing raw material, manufacturing pharmaceuticals, distributing centres, retail
pharmacies/hospitals, and patients. Because of the economic changes, pharmaceutical industry
member companies have been trying to rearrange their supply chains. The pharmaceutical business
is a multipart enterprise accompanied by conflicting purposes and several troublesome limitations. A
highly controlled setting combined with the life changing nature of the products describe the
pharmaceutical industry as a special challenging system.

Complicated activities in industrial processes are because of existing a multitude of variables and
their non-linear dynamics. Also, developing a systematic model to define such these processes
behaviour is generally difficult or unfeasible. Several different methods have been suggested for
modelling supply chains. Most of them are steady-state models based on constant conditions;
however, static models are not enough for active specifications of the supply chain due to
oscillations, lead time delays, sales forecasting, etc. Owing to this reality, system dynamics (SD)
method could be a proper technique for displaying interactions between several factors used in
modelling tool.
Here are the key benefits of 3party logistics in supply chain management:

Drive Cost Savings

Third Party Logistics firms specialize in logistics and thus have a more extensive network than your
company’s supply chain function. They have exclusive relationships within the logistics sector, and
can have greater influence during negotiations.

Get Access to Expertise and Experience

In today’s complex global market scenario, it is tough to anticipate and accommodate internal
expertise in all the capacities and regions required. A 3PL service provider has knowledge and skill in
matters such as transport documentation, import and export, international compliance and
economic regulations, for instance. Businesses looking to expand into international markets can
benefit from the logistics support and know-how that their partner can provide, thereby dipping
costly delays, cutting down the cycle time, and making the entry into a new region smoother.

Focus on Core Competencies

Outsourcing logistics will give your organization the leeway to focus on its core competencies
instead of getting involved in the management of non-core but critical functions.

Gain Flexibility and Scalability

Another advantage of third-party logistics in supply chain management is that it offers enterprises
the elasticity and scalability to use supply and distribution resources based on present business
needs. Thus, when sales are down, there are no redundant investments and unutilized resources,
and when there’s a surge in demand, enterprises can upscale.

3.b. Five types of competitive advantage

Successful business strategies are those that use the capabilities and competencies of the business
to address customer needs in a way that leads to sustainable competitive advantage. Competitive
advantage has characteristics which are highly desirable, hard to define or measure, and may even
be imaginary.

Observations of most industries would suggest that clear-cut competitive advantage is the exception
rather than the rule and strategic choices can rarely guarantee to deliver it.

In measuring whether the options and eventually the choices will deliver sustainable competitive
advantage it is necessary to test the proposals against the different ways in which competitive
advantage can be achieved for a time. These are

-Cost-based advantage
This is the most obvious way of achieving competitive advantage. Customers are always aware of the
price and will choose the lowest price if all else is equal. Low prices are only sustainable if costs are
low.
-Advantage from a differentiated product or service
If the offering is different in a way that customers value then it may offer a competitive advantage.

-First mover advantage

The first player to adopt some new product or approach may derive competitive advantage just
because it was first. Such advantage may occur if the first mover is able to grab a larger share of the
available market while its offering is still unique. By the time that competitors have copied the
offering, the first mover may have achieved economies of scale, or brand recognition which
withstand its advantage.

Unfortunately, while it is easy to find examples of companies who have done well by being first into
a new market, there are also many examples of fast followers who have been able to grab the lead
even after a late start. Later starters can avoid the mistakes of the leaders and so save time and
money in their launch

-Time-based advantage
There are other occasions in which time can be a source of competitive advantage. Time can often
be as important as price in a modern business. For instance, the time to bring new products to
market can be critical in high technology and fashion markets where product lives are short.

In other conditions the ability to deliver quickly or within very constricted timescales may be as
important as price. Many customers will pay more for fast or reliable delivery.

-Technology-based advantage
Rapid advances in technology can have important effects on the basis of competition. The complete
lessons on technology-based advantage are that innovation may be a source of business advantage
and that innovation may be based on technology. The trick of attaining competitive advantage from
technology is to bind the technology to create business innovation rather than exploit technology for
its own sake.

Any of the above means of achieving competitive advantage may be relevant in a particular context.
The basis of competition is likely to be changing and the winners will be those who understand the
present rules of competition and how the rules will change in the future. Thinking outside the box
seems to be the major means of achieving competitive advantage.

In summary, first-mover advantage can be formidable in the right circumstances. But it’s not
insoluble. Later entrants can maximize their chances by keeping pace with the leader and
establishing meaningful differentiation.

With the increasing changes in business environment, firms have to supply high quality products,
deliver fast responses, and make their dynamic competencies better. Particularly, the
pharmaceutical industry is facing the same challenges that many other industries have experienced
in the past. Only the firms that are eager to accept changes and improve their strategies will achieve
long term success.
The challenges that pharma companies are involved in are complicated and have an extensive range
including political, economic, social, technical, and legal considerations. The pharmaceutical industry
is characterized as a group of organizations, processes and actions, engaged in the invention, and
innovation of pharmaceuticals; furthermore, PSC is made up of corporations to supply and deliver
medications which have an important effect on customer satisfaction.