The 2 Types of Supply Chains
| Reactive Supply Chain Strategy | Data-Driven Supply Chain Strategy |
|---|
| Customer service and on-time delivery dependent on guesswork | Better data improves outbound logistics and increases on-time delivery by 4%.[iv] |
The bullwhip effect is a distribution channel phenomenon in which demand forecasts yield supply chain inefficiencies. It has been described as “the observed propensity for material orders to be more variable than demand signals and for this variability to increase the further upstream a company is in a supply chain”.
Responsiveness can be defined as the ability of the supply chain to respond purposefully and within an appropriate timeframe to customer requests or changes in the marketplace.
? Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.
Supply chain costs are defined as costs that constitute a considerable percentage of the total sales price of a product or service. Manufacturers usually define supply chain costs using the total cost of ownership. To this, they add the additional costs incurred before or after the product or service delivery.
moving quickly and easily
(1) Total length of the supply chain—The total length of the supply chain is [given by Eq. (4)] arrived at by adding up the days of inventory for raw materials (DRM), days of work in progress (DWIP) and days of finished goods (DFG).
Supply chain resilience is the supply chain's ability to be prepared for unexpected risk events, responding and recovering quickly to potential disruptions to return to its original situation or grow by moving to a new, more desirable state in order to increase customer service, market share and financial performance.
The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.
- Understand How Your Supply Chain Strategies and Business Plans Connect.
- Analyze your Current Supply Chain and Supply Chain Management Strategy.
- Work Closely With Your Team and Third-Party Vendors.
- Choose the Right Solution.
- Implement the Plan.
A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. The supply chain also represents the steps it takes to get the product or service from its original state to the customer.
Some of the main focuses on agile manufacturing include components such as consumer focused product design, fully connected IT, supply chain cooperation, and full company involvement. All of these focuses are key within taking production up a notch and fully comprehending how to boost your manufacturing process.
Agile manufacturing is a term applied to an organization that has created the processes, tools, and training to enable it to respond quickly to customer needs and market changes while still controlling costs and quality. It's mostly related to lean manufacturing.
Viewed in this light, Amazon, despite being the biggest retailer in the world and one of the most valuable publicly traded companies, remains a lean startup at heart.
Disadvantages of Lean Manufacturing
- Equipment Failure. Lean has very little room for error.
- Delivery Inconsistencies. In correlation with equipment failure, lean manufacturing can lead to delivery inconsistencies.
- Employee Dissatisfaction.
Lean in Procurement and Supply Management can be viewed as a way to: Improve the procurement process and workflows, reducing time and eliminating waste. Reduce/lower costs while improving the quality of products and services. Improve the performance and responsiveness of suppliers.
Quick response to Demand – Zara follows a pull model in their inventory and supply chain management. They create up to 1000 designs every month based on store sales and current trends.
Lean encourages teams to deliver fast by managing flow, limiting the amount of WIP (work-in-process) to reduce context switching and improve focus. Agile teams manage flow by working in cross-functional teams on delivering one iteration at a time.
An efficient supply chain makes the best use of its resources — financial, human, technological or physical. By doing so minimizes costs for materials and packaging and reduces time wastage.
The main difference is that the Agile methodology concerns the optimization of a development process, while the Lean method concerns the optimization of a production process. But the differences between Lean and Agile are not over. The Lean methodology is often applied to improve processes in all organizations.
What is Agile Manufacturing? While lean manufacturing focuses on removing waste and 'dropping weight', agile is more focused at using the current resources intelligently and that the organization has the right data to implement changes in manufacturing.
Flexible supply chains means that a company can easily adjust production levels, raw-material purchases, and transport capacity in order to maximize profits. When demand is high the company boost production, when it is low it can scale back.
Agile manufacturing helps the company to respond in an instant to consumer demands, without losing on consistency as well. Consumers admire the pace, and so does your enterprise! An Agile manufacturing strategy ensures quick distribution systems and promptness without losing the surface of the goods.
1. A resilient supply chains that are able to hedge against supply, demand, and price risks by applying a variety of financial and contractual tools.
