ALIGNMENT THEORY

1
ALIGNMENT THEORY
Competitive Environment

• Rules of the Game
• How the Company Plans to Play the Game
• The Capability to Play the Game
• Building a Team Vision to Play the Game

Strategy
Culture
Leadership Style
2
ALIGNMENT LOGICS
3
Competitive Position(Rules of the Game)
4
Business Strategy(How We Plan To Play The Game)
5
Organisation Culture(Capability to Play the Game)
6
Leadership Style(Building A Team Vision)
7
MARKETPLACE LOGICS
Market Uncertainty
Need for Creativity Change (D)
Need for Integration Cohesion (I)
Low Competitive Intensity
High Competitive Intensity
(A) Need for Control Order
(P) Need for Action Results
Market Certainty
8
MARKETPLACE LOGICS
Market Uncertainty
SURPRISE ME (D)
UNDERSTAND ME (I)
Low Competitive Intensity
High Competitive Intensity
(A) BE CONSISTENT
(P) RESPOND
Market Certainty
9
Evolution of Purchasing Supply Chain Management
Mechanical

• Some college education
• Computer processes paper
• Transaction driven
• Spot buy system
• Measures price reductions
• Reports at low level
• Primary focus Keep the production line running
• Tracks purchase price variance
• Poor data availability

Reactive

• High school education
• Process paper
• Clerical function
• Reactive/crisis mode
• Reports at very low level

Stage 1 Stage 2
10
Evolution of Purchasing Supply Chain Management
Strategic Supply Management
Proactive

• Supply as a competitive weapon
• Supply strategy integrated with
• SBU strategy
• Velocity development production
• Measures continuous improvement
• Global view
• Optimise cost of ownership
• Supply strategy centralised
• Purchasing activity decentralised
• Data available and used
• Supply base by design
• Leverages supplier technology
• Monitor environment
• Manage relationships
• Value chain management

• Professional staff
• Proactive approach
• Some long-term contracts
• Measures some cost of ownership
• Suppliers considered resources
• Reports to higher management
• Some cross functional support
• Training and education offered
• Purchasing power in purchasing
• Limited use of data
• Some commodity strategies

Stage 3 Stage 4