To drive long-term success, executives need to make sure they never underrate the importance of the supply chain. A solid, flexible supply chain strategy is the underlying enabler that allows a company to pursue objectives within its business strategy.

From acquiring raw materials to distributing finished products, supply chain processes touch every corner of a company's operations and business strategy. This centrality makes logistics an important area for executives to study, no matter their specific responsibilities within their respective organizations.

It's essential to build knowledge and best practices as soon as possible, rather than waiting for a major disruption to reveal the weaknesses in a company's current approach. Courses such as MIT Sloan Executive Education's Supply Chain Strategy and Management, taught by Senior Lecturer Thomas Roemer and Professor David Simchi-Levi, are designed to impart the necessary information.

What Is Supply Chain Strategy and Why Does It Matter?

Supply chain strategy is a wide-ranging concept because it’s a massive area with many separate roles. Creating a solid strategy that encompasses all these functions is a collaborative effort crossing departments and seniority levels.

Some of the specific tasks that fall under the supply chain strategy umbrella include:

• Sourcing and inventory management decisions: Where the company sources its raw materials, equipment, and inventory, dealing with issues such as redundancy and the need for a resilient supply chain strategy.
• Supply chain technology selection and deployment: The company's choice of supply chain technology platforms and related equipment, lately including systems such as Internet of Things (IoT) sensors.
• Partnerships and outsourcing: The supply chain partner agreements drawn up to provide support wherever needed, encompassing supplier relationships, distribution, and more.
• Corporate responsibility and governance: Efforts to minimize the environmental impact of the global supply chain and have a positive societal impact.

Consistent, strong supply chain decision-making across these areas is essential for building a company's everyday efficiency in meeting customer needs as well as its resilience in the face of challenges.

The Importance of an Effective Supply Chain Strategy

Organizations may not realize the true value of their supply chain practices until something goes wrong. Even years later, the most vibrant, universal example is the first wave of shutdowns during the COVID-19 pandemic.

In 2020, companies without resilient supply chain management practices suffered more than their more redundant peers as vital logistical links shut down, sometimes for months at a time. Businesses without in-depth plans found themselves struggling to source essential materials and goods.

Of course, supply chain optimization holds value outside of companies' responses to global or local disruption. Efficient processes, enabled by up-to-date thinking on communications technology integration, can drive strong everyday performance while also preparing organizations to recover quickly and completely from logistical breakdowns.

Read More: Review some of the ways in which  supply chains dealt with the disruptions brought on by COVID-19.

Advantages of a Well-Designed Supply Chain Strategy

A winning supply chain strategy is the key enabler for any given company. It is the roadmap by which that organization can:

• Efficiently and affordably produce and distribute products. This connection ideally begins the moment a new product, process, or service begins development, to ensure the company will be able to support it. This is why participants in Roemer and Simchi-Levi's course learn how to integrate supply chain design with product and process development.
• Coordinate a network of suppliers, sellers, and other partners: In addition to processes and technology, supply chain operations encompass relationships and communication. Executives who can negotiate and maintain beneficial connections with a wide variety of partner organizations are well-equipped to face both everyday needs and disruptions.
• Manage the business's environmental, social, and governance (ESG) performance: Many aspects of a company's ESG performance, from pollution to impact on local communities, are supply chain issues. Leaders who take an active, strategic approach to supply chain oversight can anticipate and mitigate negative ESG factors.

Due to the widespread impact of the supply chain on a company's overall performance, it's clear that supply chain process design and oversight can't remain siloed or limited within a dedicated supply chain department. Leaders of every part of an organization should be conversant in relevant concepts to ensure the company as a whole is maximizing the impact of its logistics processes.

Read More: Trace the global impact of supply chain decisions through a focus on fast fashion.

Developing a Suitable Supply Chain Strategy

Supply chain optimization can come from a combination of solid strategic fundamentals with novel, advanced concepts. This is why MIT Sloan Executive Education's courses impart a novel management framework based on technology clock speed, meaning the speed of tech advancement within an industry.

In general terms, the process of developing a winning supply chain strategy involves:

• Considering business objectives: The supply chain is an enabler in efforts to accomplish overall business objectives, which means these goals must be known, understood, and delineated across departments and levels of management.
• Creating a technology framework: The supply chain technology platforms that govern operations should be capable of coordinating efforts across a company in real time. Delays or communication breakdowns can limit a strategy's effectiveness.
• Selecting a network of strategic partners: A company's supply chain partner integration can determine its success or failure. Many individual decisions go into this process: Which processes are best served by outsourcing? How much redundancy is necessary? What will everyday operations look like as a result of these partnerships?
• Measuring results and KPIs for sustainable success: Supply chain management can't be a "set and forget" effort. Leaders need to establish meaningful key performance indicators (KPIs) and adjust based on the observed results.

A review of a company's current supply chain processes can reveal major areas for improvement. Even strategies that were sound when they were implemented can have become compromised by shifts in technological norms, geopolitical relationships, global climate, or other macro factors.

See More: View an expert webinar on how global supply chain strategies have had to change drastically, through the lens of COVID disruptions.

Learn Supply Chain Strategy Through Executive Education

Today's businesses can benefit from an infusion of expert thinking about supply chain strategy development. In Roemer and Simchi-Levi's Supply Chain Strategy and Management course, they show participants how to use e-business and digitization practices to modernize their approach, as well as how to use "clock speed benchmarking" to derive insights from the pace of change in their industries.

Because the supply chain is such a large conceptual area with connections to other aspects of company performance, participants in Supply Chain Strategy and Management often combine the course with Developing a Leading Edge Operations Strategy, taught by Roemer and Professor Vivek F. Farias.

Courses overseen by expert faculty members with deep industry experience and connections can help executives refresh their knowledge to face an ever-changing business climate. With the disruptions of COVID-19 and ongoing geopolitical conflict fresh in their minds, leaders can see the connections between well-planned supply chains and overall resilience.

The connection between optimized supply chain performance and organizational value is clear. In everyday scenarios—and especially when global or regional disruptions strike—companies whose executives understand supply chain best practices are better positioned for success.

Enroll in Supply Chain Management and Strategy to deepen your knowledge and discover a unique framework for supply chain process improvement.