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.
October 8, 2008; 7:58 AM ET
Management Tip of the Day
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Posted by: GBarraco@ecvision.com | October 9, 2008 10:38 AM
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