Supply Chain Strategy: Key Elements, Importance & Best Practices


We will be talking about the meaning of Supply Chain Strategy or Strategic Supply Chain Management and what it means for any business. We will also discuss the importances of applying Supply Chain Strategy and its benefits in any business along with all its key elements. Also, the best practices of the Supply Chain Strategies will be covered in this blog. So, let’s begin and explore the field of Supply Chain Strategies.

What is Supply Chain Strategy?

Supply Chain Management or SCM is referred to as the movement of goods and services from manufacturers or suppliers to the distributors. And, a strategy adopted by any business in order to manage the supply chain activities in order to meet organisational goals of the business is called a Supply Chain Strategy. Every company has business strategies to compete in the market and if these strategies are not implemented efficiently then the company will fail to create a place in this competitive market. So, Supply Chain Strategies are a must for every business to grow and flourish.

The Five Main Elements of a Supply Chain Strategy

The role of a supply chain manager is to reduce or avoid any kind of shortages and keep the overall costs down. The main purpose is to oversee all the supply chain activities in order to maximise efficiency and minimise the cost of the company’s supply chain. Now we will be discussing the five main elements of the Supply Chain Strategies adopted by the supply chain manager.

1. Planning 

The first step of a Supply Chain Strategy is its planning. To have the best results an efficient and effective plan is to be adopted that meets the consumer’s demands and the manufacturing needs.

2. Sourcing 

This is the next step involving the source of raw materials, that is, working with the sellers to supply the necessary raw materials that are needed in the process of manufacturing. If needed, the sellers can source necessary goods to the company in advance.

3. Manufacturing 

This process is often referred to as the heart of a Supply Chain Strategy. During this process, the raw materials procured are transformed or manufactured into finished products with the help of labour and machineries with the help of some external forces as well.

4. Delivering 

This is one of the final processes of supply chain management. After the final products are manufactured and sales are finalised, the next step is to deliver and get those products to the demanding customers. This delivering and distributing process is often referred to as the brand image factor.

5. Returning 

Often known as reverse logistics, the process of returning should not be ignored by the company. It is already very bad for the brand image of the company that the product is being returned but it is even worse if for any error on the company’s end that the return process does not go swiftly and in favour of the customer.

Importances of Supply Chain Strategies

A Supply Chain Strategy is important for every business. It aims at efficiency and effectiveness of the whole production process and even beyond it. Let’s talk about some of the importances of having a proper Supply Chain Strategy for your business.

  1. Supporting the goals of your business – An essential part of achieving organisational goals is to analyse what is needed and required from the sellers and distributors. So building an effective and efficient Supply Chain Strategy ensures your business to meet its desired goals.
  2. Helps you to know your inventories – Supply Chain Strategies helps a business to know and understand where its inventories and raw materials stand in the supply chain in order to make sustainable profits.
  3. Adapting to change in customer demands and needs – A good Supply Chain Strategy can help a company identify the change in prices, customer tastes and preferences and customer’s rapid change in demand that results in probable profits for the business.
  4. Analysing past data of a company – For a company to grow and flourish meeting its business goals, the foremost job to do is analyse its previous records and data to get an idea of where does the business stand. Supply Chain Strategies helps in analysing such data.
  5. Changes in product design and management – In order to rule the market, a company must design its products based on the current prices and customer demands in the market that will ensure profit to the company. This is possible by proper implementation of an effective Supply Chain Strategy.

Best practices of Supply Chain Strategies

Let’s get an idea of the best practices of Supply Chain Strategies in brief.

  • Identification of talent and retention.
  • Management of performance.
  • Management of supplier alliances.
  • Recognising and management of risks.
  • Establishing a supply chain council and a supply chain structure. 
  • Maximising outputs and reducing the cost. 
  • Collaboration strategies for betterment of the business.
  • Management of the inventories. 
  • Managing the logistics department.
  • Monitoring management operations.


It can be concluded that Supply Chain Strategies is important and necessary for every business be it small or large. When a proper Supply Chain Strategy is implemented, the effectiveness and efficiency of the business operations gets a boost and all the organisation’s resources are managed swiftly leading to more profits for the company. Every company has business strategies to compete in the market and if these strategies are not implemented efficiently then the company will fail to create a place in this competitive market.


Q 1. How do you plan a supply chain strategy?

Answer : In order to plan a supply chain strategy you need to align your business strategies compared with your competitors and think about the future of your business keeping in mind the customer demands, you create a team of experts and plan the strategies.


Q 2. Where can you use supply chain management strategies?

 Answer : It can be used in any business organisation where raw materials are turned into finished goods.


Q 3. What is the 6 sigma model in the supply chain?

Answer : 6 sigma model is used to find out and fight the defects or the problems with the whole supply chain process with the help of statistical tools and concepts.


Q 4. What is the scope of the supply chain?

Answer : It starts from the demand chain and ends in the supply chain.


Q 5. What is the difference between SCM and logistics?

Answer : Logistics deals with the maintenance of goods and products while SCM deals with managing the whole supply chain process.