Supply Chain

Last updated Jan 25, 2023 Edit

• Business

A good supply chain should:

• meet needs and wants of customers
• be efficient

• Flexibility is the ability to respond to change
  • To meet a sudden increase or decrease in demand
  • Change an aspect of the product to meet changing consumer tastes
  • Respond to erratic demand
    • Seasonality
    • Fashion
  • Flexibility can be improved through managing inventory and supply chain management
    • Good relationship with suppliers to respond quickly to changing needs
    • Just in time operations
    • Technology to quickly change re-order levels
  • A trend in increased flexibility is the ability of firms to use mass customisation
  • Mass customisation is the ability to tailor goods made in bulk to meet the requirements of individual customers

• Collaborative Customisation
  • The business works closely with the customer to meet their precise needs
• Adaptive Customisation
  • A standardised product which can be customised or adjusted by the customer.
• Transparent Customisation
  • This type of customisation occurs when unique products are produced for each customer but these are not identified as mass customised products.
• Cosmetic customisation - where standard products are produced but marketed to different customers in different ways.

• Higher revenue
• Cost reductions
• Greater customer loyalty
• Competitive advantage
• Improved understanding of customer’s wants
• Improved workforce motivation
• Higher profile

• A market in which customers value variety and individuality
• Quick responsiveness to market changes
• Ability to provide customisation (a wide variety of alternative versions of the same product).
• Scope for mass efficiency/economies of scale.

• Requirement for sophisticated information systems
• Greater expense in terms of IT, capital equipment and staff training
• Problems with rejected products
• Unsuitable supply chains

• Speed of response
  • To meet customers needs within a set time period
  • Ability to make changes to products to reflect changing consumer tastes
    • This will only be achievable if inventory levels are low a d suppliers can change order sizes and components quickly
  • Dependability
    • A business operating a just in time system will be reliant on suppliers to deliver the right quantity and quality on time to ensure supply meets demand.

• Lots of stock/capacity
• Outsource
• Temporary Labour
• Produce to order

1. c
2. c
3. d
4. b
5. A business trying to use mass customisation might face issues relating to lead times, as suppliers may struggle to deliver products on time when changes have to be made on a per unit basis.

A strategic supplier is a supplier that is essential for the running of a business, whereas a commodity supplier is not completely essential.

Business