سلاسل الإمداد والميزة التنافسية: المفاهيم والمحاور والمؤشرات

By MTMS Global · Last updated: 27/10/2026 · Reading time: 9 minutes · Category: Supply Chains

Introduction

The cost of a weak supply chain appears in scattered places in the financial statements: idle inventory that freezes capital, missing items that lose sales, and late shipments that weaken customer trust. This article discusses how a supply chain moves from being a cost center to a source of competitive advantage, drawing on the operations management literature rather than on generic lists of tips.

Supply chain and logistics

Mentzer and colleagues (2001) define supply chain management as the systematic, strategic coordination of the traditional business functions within a single company and across businesses within the chain, for the purpose of improving the long-term performance of the individual companies and of the chain as a whole. The chain therefore covers planning, sourcing, production and distribution through to the customer. Logistics is the part responsible for the movement, storage and delivery of goods within this wider framework (Christopher, 2016). The distinction helps allocate responsibilities: improving transport alone does not solve a problem in planning or in supplier relationships.

Choosing the strategy by product

Fisher (1997) argues that many supply chain failures stem from a mismatch between the nature of the product and the design of the chain. Functional products, with stable demand and low profit margins, such as basic food items, suit a chain focused on physical efficiency and cost reduction. Innovative products, with volatile demand and short life cycles, suit a responsive chain that accepts buffer inventory or spare capacity to avoid stock-outs. Lee (2004) adds that an outstanding chain combines three qualities: agility in the face of demand volatility (Agility), the ability to adapt to structural change (Adaptability), and alignment of the interests of the parties (Alignment).

Four core pillars

Chopra and Meindl (2016) identify key drivers of chain performance, including inventory, transport, information and sourcing. We present them here as four practical pillars.

1. Inventory and storage

The aim is to provide what the customer needs without hoarding that freezes capital. The Economic Order Quantity (EOQ) model developed by Harris (1913) balances the cost of placing an order against the cost of holding inventory, assuming relatively constant demand and known costs. Safety stock is added to cope with demand volatility and supplier delays. Warehouse design and layout reduce picking time and errors.

2. Transport and distribution

The choice of transport mode is determined by cost, speed, the nature of the goods and the reliability of the delivery date. Route optimization, trip scheduling and vehicle filling reduce the cost per unit moved, but the cheapest transport is not necessarily the lowest in total cost, because slow transport raises in-transit inventory and safety stock.

3. Procurement and suppliers

Strategic sourcing does not mean looking for the lowest price alone, but evaluating quality, adherence to schedules, flexibility and Total Cost of Ownership. Written supplier evaluation criteria and data-based negotiation help reduce total cost and identify the suppliers that deserve a long-term relationship.

4. Technology and risk

Enterprise resource planning (ERP) systems and data analytics provide visibility of the whole chain and improve demand forecasting. In return, the organization needs fallback plans for supply disruptions, such as diversifying suppliers, identifying bottlenecks in advance, and drawing up scenarios for the loss of a key supplier. Our article Enterprise risk management: the framework, the process and the risk register (Arabic) covers how to record and track these risks.

Tracking indicators

The table presents common supply chain indicators with the formula for calculating each. Each organization sets targets according to its sector. See the article Key Performance Indicators (KPIs): concept, design and common mistakes for designing a definition card for each indicator.

An illustrative example

The following example is hypothetical, to illustrate the calculation; its figures are not real data for any organization. A fast-moving consumer goods (FMCG) distribution company handles an item with annual demand of 12,000 units, a cost of EGP 300 to place one order, and an annual holding cost of EGP 5 per unit.

In practice this result is adjusted for the supplier’s minimum quantity, warehouse capacity and expiry dates, and safety stock is added to it; the model is a starting point, not a final decision.

Common mistakes

• Optimizing each function in isolation: choosing the cheapest transport mode may lower freight cost while raising inventory and its holding cost, so total cost increases.
• Relying on a single supplier: any disruption at that supplier becomes a disruption to the organization’s sales.
• Judging suppliers on price alone: it ignores the cost of delay, quality and returns.
• Designing one chain for all products: it ignores the different nature of demand across items (Fisher, 1997).
• No unified data: inventory figures differ between the warehouse, sales and procurement, so decisions become impossible.
• No fallback plan: weaknesses are discovered during the crisis, not before it.

Conclusion and recommendations

A supply chain becomes a competitive advantage when its strategy fits the nature of the product, its pillars are managed together rather than separately, and it is measured with clear indicators. For those starting out:

1. Classify your items as functional or innovative, and set the priority of efficiency or responsiveness for each category.
2. Review inventory with the EOQ model and safety stock, starting with the most important items.
3. Evaluate suppliers on written criteria that include total cost, not price alone.
4. Adopt five or six indicators from the table above, and assign an owner to each.
5. Record supply risks in a risk register, and draw up a fallback plan for the highest ones.

Frequently asked questions

What is the difference between a supply chain and logistics?

A supply chain is wider and covers planning, sourcing, production and distribution. Logistics is the part of it concerned with the movement, storage and delivery of goods (Mentzer et al., 2001; Christopher, 2016).

What is the Economic Order Quantity?

It is the quantity that minimizes the sum of the cost of placing orders and the cost of holding inventory, assuming relatively constant demand and known costs (Harris, 1913).

Does the same principle suit all items?

No. Stable items suit a chain focused on efficiency, and volatile items suit a responsive chain (Fisher, 1997).

Where should a small organization start?

By measuring only two or three indicators, such as on-time delivery, inventory turnover and supplier adherence, in a single spreadsheet, then expanding as needed.

Putting it into practice

MTMS Global offers consulting services for assessing supply chains and designing their indicators, and training programs for operations and procurement teams, including the Supply Chain and Logistics Diploma (Arabic). You can also contact us to discuss your organization’s needs.