Supply Chain Flexibility and Strategy Alignment

Explain how supply chain flexibility can help align the supply chain strategy with a company’s competitive strategy.

Main Stages of a Supply Chain

Supplier – Manufacture – Distribution – Retailer – Customer

Make-to-Stock Model

In the Make-to-Stock model, products are manufactured and stocked in anticipation of customer demand, based on forecasts.

Engineer-to-Order Model

Engineer-to-Order production begins only after an order is received, ensuring that the product can be customized to specific customer requirements.

Impact of Sharing POS Data

When a retailer shares POS (Point of Sales) data with their supplier, this should have the effect of reducing the bullwhip effect in the supply chain because the end demand is seen by the supplier.

Obstacles to Coordination in the Supply Chain

In the lecture, we discussed obstacles to coordination in the supply chain include all except: Management Obstacles.

Locations in the Supply Chain Network

The places in the supply chain network where product is stored, assembled, or fabricated are known as inventory.

Major Drivers of Supply Chain Performance

Which of the following is not a major driver of supply chain performance? Customers. [Solution: Customers are not a driver of supply chain performance]

Decision Phases in Supply Chain Management

Briefly explain the 3 Decision Phases in Supply Chain Management and give one example for each:

  • Supply chain strategy: Long Term planning on how the supply chain should work. Example: A Company Deciding to use eco-friendly materials.
  • Supply chain planning: Mid-Term planning for meeting demand. Example: A Store estimating how many coats he needs for winter season.
  • Supply chain operation: Day to day operations to keep the supply chain running. Example: a Restaurant ordering daily supplies based on the reservations.

Cost-Efficient Supply Chains

Cost-efficient supply chains focus on cost minimization, for example, by keeping factory utilization high. Cost-efficient supply chains focus on minimizing cost. Excess capacity = both a. and b.

Negotiating a horizontal cooperation contract with furniture producers in Germany to collaborate on customer deliveries in order to reduce the overall number of kilometers travelled per week = reducing greenhouse gas emissions (Long-term / distribution).

A toy manufacturer for Mattel in China runs out of yellow paint. They make a rush order to a local paint vendor they find in the internet (instead of their usual paint supplier = Short-term / procurement.

All of the statements are reasons that postponement can be a powerful tool to improve supply chain management. Postponement is a strategy used in supply chain management that involves delaying certain processes or decisions in the supply chain until customer demand is clearer.

Postponement Strategies

Postponement strategies essentially shift the Push/Pull decouple point downstream in the supply chain. By doing so, a larger portion of the supply chain operates under the pull strategy, which is more responsive to actual demand.

Customized Printing Example

Customized Printing: A clothing company produces basic t-shirts but postpones the printing of designs until specific customer orders are received. This allows for a wide range of custom designs without holding a large inventory of every possible design.

Push and Pull Processes

Push Processes (Blue Arrow): are processes related to preparing the products thinking they will sell. Pull Processes (Red Arrow): are processes related to making or sending the products only when someone specifically asks for them.

Push/Pull Decoupling Point

Push/Pull Decoupling Point: This is the point in the supply chain where the strategy shifts from a ‘push’ approach, driven by forecasts and standardized production, to a ‘pull’ approach, which is more customized and responsive to actual customer demand.

Reroute the Work in Progress (WIP) to Milling Machine 6 because Machine 5 unexpectedly broke down = short-term / production.

Supply chain strategy determines the nature of procurement and transportation of materials as well as the manufacture and distribution of the product. We used Cost-Efficiency vs Responsiveness to define strategic fit, with the idea being that a more responsive supply chain has a higher cost due to the increased system slack required. The curve that shows the lowest possible cost for a given level of responsiveness is referred to as the Cost-Responsiveness Frontier.