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What is the Right Supply Chain for your product?

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RajSingh Rathore

on 27 February 2015

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Transcript of What is the Right Supply Chain for your product?

Product Life Cycle
What are the different aspects that managers face to devise an effective supply chain for their company?
According to Fischer, the first step to devise an effective supply chain is to classify products on the basis of their demand patterns.
How do you devise an Ideal Supply-Chain Strategy?
On the basis of their demand patterns, they fall into one of two categories- 1) Functional Products 2) Innovative Products
Is your product functional or innovative?
What is the right Supply Chain for your product?
By Marshall L. Fischer
With high profit margins and volatile demand, Innovative products require a fundamentally different supply chain than stable low margin functional products do.
What kind of function does your supply chain perfom?
How do you devise an Ideal Supply-Chain Strategy?
Demand Predictability
Product Variety
Market Standards for Lead Time & Service
What is the first step to devising an effective supply chain strategy?
Functional Product
Satisfy basic needs
Stable predictable demand
Long life cycles
Low product variety
Innovative Product
Unpredictable demand
Short product life cycle
High product variety
Supply Chain Functions
Physical Function

Market Mediation Function
Functional versus Innovative Products
Physically Efficient versus Market-Responsive Supply Chains
Step 1
Step 2
How do you devise an ideal supply chain strategy?
Step 3
Matching Supply Chains with products
Is your company's supply chain suffering from Schizophrenia?
This phenomenon explains why one finds so many broken supply chains- or unresponsive chains trying to supply innovative products- in industries such as automobiles, personal computers, and packaged consumer goods.
Efficient Supply of Functional Products
Continuous Replenishment Strategy (also known as Vendor Managed Inventory - VMI) is a vital tool in the implementation of the Efficient Consumer Response (ECR) strategy. Campbell's continuos replenishment program embodies a model in which the manufacturer and retailer co-operate to cut costs throughout the chain thereby increasing the size of the pie.
Responsive Supply of Innovative Products
Accept the uncertainty of demand
Continue to strive to Reduce uncertainty
Avoid uncertainty by cutting lead times & increasing supply chain flexibility
Hedge against the remaining residual uncertainty with buffers of inventory or excess capacity
Full transcript