Analysis of Responsiveness vs. Efficiency in Supply Chain Management of Perishable Items

Topics: Supply chain management, Supply chain, Logistics Pages: 4 (1210 words) Published: March 21, 2011

A firm’s ability to satisfy customer requirements in a timely manner is referred to as Responsiveness, while efficiency is a firm’s ability to deliver goods in accordance with the customer’s expectations with least wastage in terms of raw materials, labour and cost. While choosing what supply chain process is to be used, the choice one has to make is between responsiveness and efficiency.It is Extremely vital to identify the correct framework to device the most effective supply chain.Different frameworks has been suggested for arriving at a proper supply chain process.But the choices has been widely varied.The first person to arrive at a standardized solution was Fisher, who suggested the proper supply chain framework can only be decided by analyzing the nature of the demand for the product. For functional products (stable, predictable demand, long life cycle, and slow “clockspeed”) Fisher argues that the supply chain should be designed for cost efficiency; for innovative products (volatile demand, short life cycle, fast “clockspeed”) he maintained that the supply chain should be designed to be fast and responsive.Fisher’s model was modified by Lee in 2002 who suggested that the choice between responsiveness and efficiency can only be made by considering the tendency with which the value of the product changes between production and delivery to the customer.He deduced that for products whose value remains constant throughout the entire supply chain, any of the two parameters can be selected.But for perishable products whose value changes very rapidly throughout the supply chain and hence in the cost of time delays, both the parameters i.e responsiveness and efficiency can be used collaboratively to retain the value of the product. As we see for products like melons, sweet corn, flowers or sea food the declining value varies with time. In the initial stage the declining...
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