Comparison of Efficient and Responsive Supply Chain

  EFFICIENT SUPPLY  CHAIN                                            RESPONSIVE SUPPLY CHAIN

PRIMARY GOAL:  supply demand at a lower cost                        respond quickly to demand


PRODUCT DESIGN: maximum performance at minimum cost     creates modularity for product changes                                                                                                                            

PRICING STRATEGY: lower margins as price is a prime            higher  margin, price isn't a driver

MANUFACTURING: lower cost, high utilization                        flexible capacity to buffer unpredictability


INVENTORY ; minimize inventory to lower costs                        maintains buffer inventory
                                                                                         
                                                                                                                                                  

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Dimensions & Activities that affect Offshoring

The list of dimensions that impact the offshoring concept


Performance dimension  Order communication
Activity Impacting Performance  Order Placement
Impact of off sourcing More difficult communication

 Performance dimension: Supply chain visibility
Activity impacting Perform: Scheduling and expedite
 Impact on Offshoring: Poorer visibility

 Performance dimension: : Raw material costs
Activity Impacting Performance: : sourcing of raw material
Impact of Offsourcing Sourcing of raw material could go either way depending on raw material costs

 Performance dimension Unit Cost Production
Activity Impacting Performance: quality and transportation Labor/Fixed cos
the impact of Offsourcing: quality may suffer

Performance Dimension: Freight costs
activity impacting performance: transportation modes and-and quantity
Impacts of offshoring: higher freight costs  could go either way


Performance Dimension: Stockouts
activity impacting performance: Ordering, production transportation with poor visibility
Impacts of offshoring  : Increase"


Performance Dimension: Minimum order quantity
activity impacting performance: Production and transportation
Impacts of offshoring : larger minimum quantity increase inventory


Performance Dimension: working capital
activity impacting performance: Inventories and financial reconciliation
Impacts of offshoring "larger minimum quantity increase inventory

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Is your Supply Chain at risk due to Network Design failure

 Mitigating  your supply chain risk  during network design disruptions: 5 ways to  handle the supply chain risk

 1)INCREASE CAPACITY : Focus on low cost decentralisedGet capacity for predictable demand 

2)GET REDUNDANT SUPPLIERS :Get redundant supplies  for high volume demand and low redundant supply for low volume demand 

 3) INCREASE RESPONSIVE : Give  preference to  cost over responsiveness for a commodity item which has a long life cycle.In contrast   increase responsiveness over cost for shorter life cycle products 

 4)INCREASE INVENTORY: Decentralize inventory of predictable lower valued goods and decentralize unpredictable and higher valued goods or products 

5)INCREASE FLEXIBILITY : Favor cost over flexibility for high volume products. In contrast, favor  flexibility over cost for low volume products

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Performance characteristics of Retail Industry with Consumer Pick Up

The Inventory and cost impact "for  retail consumer pick " Industry

 In  retail consumer site, the inventory is stored with the manufacturer or distributor  warehouses, however, the consumer orders are based on online or the phone orders. In this   case, online consumers give the order online or mobile. The "goods are picked up and are then sent to the designated pick up spots "which are then send to the consumer. This involves
1) Order by phone
2) Orders are delivered to stockists
3) merchandise are then shipped  to pick up points

 In this post, we take a look on how " inventory costs and performance" impact consumer retail pick up industry

Cost factor : Inventory
Performance: Higher  than all other options

Cost factor: Transportation
Performance: lower that other options

Cost Factor : Facilities and handling
Performance: Higher than other  options. The increase in handling site  at the pick site can be significant for online and phone orders

Cost Factor : Information:
Performance: some investment in infrastructure needed  for online and phone orders.

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Supply Chain drivers that impacts Distribution Network Design

At the highest level performance of a distribution network shall be evaluated by following criterias
 1) customer needs that are met
2) Cost of meeting customers; The the firm must consider the impact of customer service and the cost of meeting that service

 Although there are customer values is impacted by various factors we discuss the measures influenced by the structure of the distribution network .Parameters that impact Customer needs are 1)response time for reaching customers
2)Product variety and SKU
3) Product availability
 4) customer experience
5)Time to market
6) order visibility
7) Return ability Firms that are able to target customers who can tolerate long response time are required only a few locations that may eb far from the customer. These companies focus on increasing the capacity of each warehouse ot stores In contrast firms that target customers with shorter tolerance response time needs to have their location close to their facilities

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6 supply chain drivers that impacts distribution network design

6 supply chain drivers that impacts distribution network design are

1) inventories
2)Transportation
3)facilities and handling
4)Response time :The other 2 drivers are 5) sourcing and  6)pricing

INVENTORY AND AFFECT ON SUPPLY CHAIN  a)As the number of facilities in the supply chain increase the costs also increases .To decease the inventory costs ,firms try to consolidate and limit the number of facilities in supply chains c)For example with fewer facilities Amazon  is able to turn its inventory 10 times a year, where as Barnes and nobles , with hundred of facilities is able to turn its inventory 3 times a year.

2) TRANSPORTATION AND SUPPLY CHAIN Transportation : Inbound transportation costs are the cost involved for bringing material into the factory.While outbound supply costs consist of  goods are transported out of the facility Outbound transportation costs per unit tend to be higher than inbound costs because the inbound lot sizes are typically larger

3) FACILITIES  PLANNING  AND SUPPLY CHAIN facility cost decreases as the number of facilities decrease because consolidation of facilities allows firms tro exploit economics of scale 4)Response time : if the firm wants to reduce its response time it might have to increase the number of facilities beyond the point that it minimizes logistics cost.

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Explaining the model of Supply Chain in Online Retail Industry: Infographic

explaining the  model of supply chain in online retail industry:

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Predictions & Forecasts of the Internet Of Things

predicting of forecast of internet of things

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