facebook page button

Supply Chain Strategy and Design

The Supply Chain design and supply chain strategy is referred to the operational strategy in which a business or organization moves and transforms raw materials to finish goods. A well designed and operated supply chain is very important in terms of being able to supply both internal and external customers on time and in full and add value to these. The design of a supply chain must be also well planned and structured to achieve the lowest delivered cost to key markets and lowest inventory holding costs with a well thought inventory management system. A supply chain is usually built around the following product and consumer/customer characteristics :

-Product Shelf life
-Product life cycle
-Product physical and usage characteristics
-Demand predictability and stability
-Current capacity and future capacity requirements -Number of product lines and standardization of products
-Reliability on third party suppliers to deliver products or materials

There are many types of supply chain designs and strategies but these can be grouped into the categories below and are further explained :

-Lean Just in time supply chain

-Flexible supply chain

-Risk adverse supply chain

Most businesses will have a combination of these supply chains in place, some may choose to operate only one strategy and this will depend on the product, customer and market characteristics such as capacity utilization they operate with as mentioned above. Operations or management consultants can sometimes be engaged by businesses to design and implement their supply chain strategies.

       More lean concepts and terms