Right product supply chain:
To develop a significant supply-chain strategy, organisations need to identify the product type, for which the company is looking to initiate an effective supply chain. It is observed that business firms need to determine whether the selected product falls under the innovative or functional category. After that, it is required to assess whether the supply chain of the company is efficient or responsive to the specific market. This determination will help managers to craft an effective supply chain strategy.
It has stated that some causes such as rationing along with storage gaming, updating of demand forecast, price fluctuation and order batching are there result in bullwhip effect. The forecasting of products is needed for scheduling the products, controlling inventory, capacity planning as well as planning for the requirements of materials (Jaipuria and Mahapatra, 2014). Moreover, a business organisation needs to monitor as well as control order batching to endure an active process of the supply chain. The distributors along with the manufacturers periodically have some unique and specific promotions such as discounts on price and quantity, rebates, coupons, and much more.
As stated earlier, organisations need to identify the product category (e.g. functional and innovative). Hence, the demand of function can be predicted from the current market research. Generally, the demand for useful products remain more than two years, and contribution margin remains from 5% to 20%. On another hand, the demand for innovative products is hard to predict. It is observed that demand of product lifecycle remains three months to one year. Also, product variety is also high than functional products. Therefore, innovative products need to be formulated by the companies for bringing an overall growth (Fredendall and Hill, 2016). Moreover, the companies should incorporate the process of physically efficient as it is cost-effective and helps in reducing the time and escalating performance.
Effective communication needs to be endured in an organisation. Moreover, the study of Lee et al. (1997) has stressed that for performing forecast updates similar sources of data of demand needs to be utilised. Moreover, inventory information should be accessed by the upstream site.
What has the author failed to establish in this article?
The companies are allowed to capture the voice of the consumers with the help of scanners of point-of-sale. According to Fisher (1997), demand nature of products needs to be considered at the time of spotting the light on the supply chain. In order to study the demanding environment for the products, an active and proper strategy of supply chain needs to be endured by considering the aspects of the life cycle of products, a variety of product, the standard of the market along with demand predictability. In this article, the author has stated how to develop an effective supply chain strategy for different kind of products. That means the author has highlighted the effectiveness of supply chain strategy. Although, the efficiency of the supply chain strategy was not established correctly. Hence, it can be said that more discussion on the way a better supply chain strategy meets the demands of consumers might have been better.
Fisher, M.L., 1997. What is the right supply chain for your product?. Harvard business review, 75, pp.105-117.
Fredendall, L.D. and Hill, E., 2016. Basics of supply chain management. CRC Press.
Jaipuria, S. and Mahapatra, S.S., 2014. An improved demand forecasting method to reduce bullwhip effect in supply chains. Expert Systems with Applications, 41(5), pp.2395-2408.
Lee, H.L., Padmanabhan, V. and Whang, S., 1997. The bullwhip effect in supply chains. Sloan management review, 38, pp.93-102.