Aligning Supply Chain Strategies with Product Uncertainties

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Supply chain management has emerged as one of the major areas for companies to gain a competitive edge. Managin g supply chain s effectively is a complex and challengin g task, due to the current business trends of expandin g product variety, short product life cycle, in creasing outsourcin g, globalization of businesses, and continuous advances in in formation technology. The Internet has contributed to both the in creasin g needs and opportunities for improved supply chain management. With the Internet, companies in a supply chain can be connected in real time with in formation and knowledge shared continuously, new products and services can be designed to fit special market segments, and new supply chain structures can be developed to serve customers in a more direct manner.

When a company faces the pressu re of excessive inventory, degraded customer service, escalatin g costs and declin in g profits, or a poor return on assets, its supply chain is out of control. On the other hand, when a company moves in to new markets or new technologies, it must have its supply chain prepared for the new business challenges and opportunities. Although there are many new supply chain concepts and fads designed to exploit the advantages of the Internet, successful companies understand that the righ t supply chain strategy is dependent on a number of factors:

▪ The strategy needs to be tailored to meet specific needs of the customers. ▪ A product with a stable demand and a reliable source of supply should not be managed in the same way as one with a high ly unpredictable demand and an unreliable source of supply.
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