Are You Using the Right Supply Chain for Your Product?

Do you have persistent supply chain headaches--excess inventory, stockouts? If so, you may be using the wrong supply chain for your product.

Is your offering functional--it satisfies basic needs and has a long life cycle, low margins, and stable demand? (Think paper towels.) Use an efficient supply chain to minimize costs. For example, real-time contact with your retailers helps you replenish product as needed, reducing inventory costs.

Is your product innovative--it has great variety, a short life cycle, high profit margins, and volatile demand? (Think a laptop line with numerous novel features.) You need a responsive supply chain to manage uncertainty. For instance, use standard components for different product versions.

By Editor  |  October 8, 2008; 7:58 AM ET  | Category:  Management Tip of the Day
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Your statements resonate even more so in times when retail organizations are trying to maximize their return in light of the dwindling market spend and a forecast that is bleak for the holidays.

What retailers need is the ability to collaborate with their supplier network to determine product "flow" and relate their supplier interactions directly to SKU level product orders. Technology solutions for supply chain and product lifecycle management need to provide the flexibility for supplier trade flows to be nimble - factory to store for large and bulky items and factory to DC to store for items that need frequent replenishment to scattered area - for example. Not all PLM and SC solution providers offer this capability or provide a platform for real-time, reportable, detailed collaboration. Look for these features when selecting a provider.

Even in tough economic times, technology investments that deliver payback need to be considered over IT spending cut backs.

Posted by: | October 9, 2008 10:38 AM

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