Business owners discussing ways to improve their supply chain strategy.
Midsize business

5 ways to strengthen your supply chain strategy with examples


What is a supply chain strategy?

A supply chain strategy is an approach to managing the network between an organization and its suppliers. Supply chain managers develop this strategy with the primary goal of maximizing value across all stages of the production cycle.


A supply chain strategy is not just an advantage but a necessity for fast-paced businesses. It’s the blueprint for how companies manage suppliers, ensuring goods go from raw materials to the end consumer. 


Supplier relationship management requires a delicate balance of efficiency and alignment with your overarching business strategy. But what does it take to create a winning supply chain strategy? Let’s look at the complexities of supply chains and the top five strategies you can use to improve yours: 


  1. Place buffers along your supply chain
  2. Diversify your manufacturing and sourcing network
  3. Invest in demand forecasting
  4. Standardize your processes
  5. Be Responsive


How supply chain strategy works 

A supply chain strategy is a guide that helps companies get their products to customers as quickly and efficiently as possible. It’s a roadmap that ensures every phase of the supply chain is optimized—including materials sourcing, manufacturing, delivery, and logistics.

Things to consider when improving your supply chain strategy, such as product portfolio and customer locations.

Here’s how to put a supply chain strategy in place:


  1. Define your goals: Lay out the purpose of your supply chain. For example, does it aim to be the fastest, most cost-efficient, most innovative, or most customer-centric?
  2. Analyze your current operations: Go beyond a simple SWOT (strengths, weaknesses, opportunities, threats) analysis and look at each step of your supply chain, from sourcing raw materials to delivering the final product.
  3. Identify potential improvements: What changes can you make to your operations to improve efficiency and reduce costs? Start with quick wins, such as optimizing transportation routes, renegotiating supplier contracts, or automating manual processes.
  4. Develop a plan: How will you implement your improvements? Define your specific actions, timelines, responsibilities, and resources required for each improvement initiative.
  5. Monitor and measure results: Establish a system to collect and analyze data on your supply chain's performance. Align employee goals with supply chain objectives and provide incentives for meeting or exceeding targets.

note icon Set specific, quantifiable, and time-bound goals for your supply chain strategy, like reducing total supply chain costs by 10% within two years or increasing inventory turnover by 15% within 18 months.


As the global market becomes more complex, proactively establishing a supply chain strategy is critical for any business that turns raw materials into finished goods. This includes industries such as manufacturing, retail, construction, and wholesale or distribution.


5 must-use supply chain strategies

So, what can supply chain leaders do to bolster their supply network? Here are the top five supply chain strategies to consider:

The top five supply chain strategies, including strategic buffers and demand forecasting.

1. Place buffers along your supply chain

Strategically placing buffers can help you absorb the impact of unexpected delays. There are three types of buffers you can implement along the supply chain:


  1. Inventory: Keep safety stock or buffer stock to protect against delays or demand surges. 
  2. Time: Materials arrive before demand to protect an upstream or downstream process or delivery point.
  3. Capacity: Leverage underutilized space like warehouses or production facilities.


These precautions can mitigate disruptions from demand surges, supplier delays, or unforeseen events.

2. Diversify your manufacturing and sourcing network

As supply chain disruptions intensify, relying on a single source to get products is risky. For example, natural disasters can prevent goods from being shipped overseas.


Diversifying your network, also called multi-sourcing, starts with categorizing partners based on current costs and the financial impact if the partner can’t follow through. Then, you can forge relationships with additional suppliers or a supplier that has capabilities in multiple locations.

3. Invest in demand forecasting

Demand forecasting is the process of using data to gauge the demand for materials ahead of time, so you don’t come up short. Accurate supply chain forecasting improves lead times, cuts costs, and improves customer satisfaction.


There are numerous methods to predict demand: 


  • Survey customers
  • Monitor social media
  • Review historical data and trends
  • Get advice from a consultant
  • Leverage technology 


Get expert insights on how to best manage inventory and improve your supply chain flow.

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4. Standardize your processes

The more consistent you keep your supply chain operations, the more dependable it will be. This is especially true for organizations whose suppliers and manufacturers are global. 


Templates for platforms, products, and plants enable seamless production and adherence to compliance regulations. For example, companies in the automotive industry may use common vehicle platforms to synchronize their supply chain strategy.

5. Be Responsive

A responsive supply chain prioritizes the ability to adapt and react quickly. It's about building agility into your operations. With responsiveness, you can adjust production and inventory to meet sudden surges or dips in demand for products. 


Such agility gives you the ability to navigate customer preferences, market fluctuations, economic conductions, competitor actions, and unexpected events like political instability or natural disasters.

Traits of an effective supply chain strategy 

In the past, making supply chains “lean” was a popular strategy for leaders. Meaning the priority was to minimize waste to deliver products as fast as possible. However, the COVID-19 pandemic prompted supply chain leaders to shift their focus from efficiency to resilience to withstand global volatility.


Here are some of the key characteristics of a strong and effective supply chain:


  • Collaborative: Ability to work with suppliers, customers, and partners to optimize your supply chain. Sharing data and insights allows for better decision-making. 
  • Agile: Quickly pivot to adapt to changes in demand, supply shortages, or sudden market shifts. This requires flexibility in sourcing, manufacturing, and distribution. 
  • Resilient: Can absorb shocks, whether it's a major weather event that disrupts transportation or a cyberattack that targets key systems. 
  • Visible: Clear visibility into your supply chain, from raw materials to finished goods. Supply chain transparency allows you to identify and address problems quickly.
  • Sustainable: Your company is mindful of the environmental and social impact of its supply chains.

note icon Increasing your supply chain’s resilience may not be particularly cost-effective in the short term, but it can ensure long-term profitability.



Examples of supply chain strategy in action

Companies of all sizes face supply chain challenges. Let’s look at real-world examples of companies that were able to improve and optimize their supply chain with effective strategies: 

Walgreens leans into big data

Walgreens started investing in supply chain technology that aggregates data to improve efficiency. Historical inventory and sales data helped Walgreens adjust its supply chain to reduce excess inventory and cut costs for warehousing and transportation. They also ensure they have enough stock to meet expected customer demands.

Bob’s Discount keeps tabs on tariffs

The furniture retailer Bob’s Discount Furniture kept a pulse on higher tariffs on goods sourced from China—which would directly impact their business. In response, they shifted their furniture sourcing out of China. 

Boeing navigates digital thread

Boeing adopted a digital thread strategy to navigate its vast parts supplier network. Its digital thread allowed it to track assets and connect data from design, manufacturing, and supply chain operations. This allowed for real-time visibility and collaboration, improving manufacturing processes and streamlining aircraft assembly. 

Eaton adds sustainability

Eaton recognized the growing importance of sustainability in its supply chain. The company launched an initiative to reduce its carbon footprint and improve energy efficiency. As part of its supply chain strategy, it collaborated with suppliers to implement eco-friendly practices and transparent reporting. 

Intel builds in resilience

Intel faced supply chain disruptions during the global chip shortage. However, the company's proactive approach to risk management, including diversifying its supplier base, has allowed it to navigate the crisis relatively well. Intel's resilience demonstrated the importance of preparedness and agility in the face of unforeseen challenges.


Benefits of supply chain management

Supply chain management is a strategy that gives organizations a competitive advantage. Here are the top advantages of putting a supply chain strategy in place: 


  • Better efficiency: Tailoring supply chain processes to specific business needs streamlines operations, eliminates waste, and reduces lead times, driving a substantial increase in overall productivity.
  • Lower costs: Better efficiency starts with precisely identifying and eliminating unnecessary expenditures, resulting in leaner, more profitable operations. 
  • Improved customer satisfaction: Aligning the supply chain with customer expectations ensures products are consistently available at the right time and place. 
  • Increased resilience: A flexible and adaptable supply chain enables swift responses to market fluctuations and unexpected disruptions. 
  • Competitive advantage: Excelling in areas that matter most to their business, companies can differentiate themselves from competitors and gain capture market share.
Key advantages of investing in supply chain strategy, including cost reduction and optimized efficiency.

There’s no such thing as a “risk-free” supply chain. The complexity of supply chains makes them inherently vulnerable to factors outside the organization’s control. However, incorporating the strategies above into your planning process can improve sustainability and minimize the impact of interference if and when it happens.


Navigate midsize business challenges and opportunities

It’s almost impossible to predict what the next big threat will be, and that’s why supply chain optimization is important for businesses of all sizes. You can’t put a price on resilience—it can make the difference between merely surviving a challenge and emerging more robust than before.


Inventory management software can track inventory in real time and provide valuable insights for data-driven decision-making.

Supply chain strategy FAQ


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