Knowing which supply chain model is ideal for your business is crucial due to the complexity of supply chains and the fact that best practice might differ from industry to industry.
While there are a variety of supply chain network design from which to pick, the six most popular share a commitment to two core tenets: responsiveness and efficiency. Two groups of these six are focused on speed and the other on flexibility. You can select the best model for your company by thinking through its objectives and limitations and then weighing the merits of the several available models.
1. The Continuous Flow Model:
The continuous flow framework was developed with productivity in mind. It’s reliable even in the busiest of settings. Manufacturers who mass-produce a consistent product with little room for design innovation would benefit most from this tried-and-true framework.
For mass-produced goods, this model works wonderfully. Its tremendous efficiency is evident in the low prices it charges for its wares. Profit margins in manufacturing are determined by the cost of inputs. This makes sense scientifically.
2. The Fast Chain Model:
The fast-chain approach was developed with responsiveness in mind. It’s perfect for companies who regularly update their product lines. This business strategy works best for limited-time offers or limited-production runs. In this scenario, the winning producer is the one who can flood the market before the trend cycle ends.
In this framework, the early adopter has a significant edge over the competition. The designer and the marketing department are the real brains behind the fast industry. To rephrase, being the first to market depends on your ability to start your own trend. In a nutshell, this strategy relies on creative input.
3. The Efficient Chain Model:
If end-to-end efficiency is your top priority, then the efficient chain model is perfect for your industry. Predicting future output is crucial to this model’s ability to load and cool down machines effectively.
Commodity and raw material pricing are also crucial to the efficient model. Effective supply chains are experiencing capacity difficulties in the post-pandemic era. Causes include a lack of available workers, insufficient supplies, and prolonged delays.
This is the core of the matter. When predictions are off, it can have far-reaching consequences. This can cause delays all the way down the supply chain and drive up costs. And that’s when the most persuasive phrase is used.
4. The Agile Model:
To put it simply, a supply chain is a system that consists of a number of interdependent components that work together to achieve a common goal. For successful virtual integration, businesses must monitor market demand fluctuations in real time. Sharing supply chain duties is an integral part of process alignment.
This is accomplished through coordinated product development, inventory management, and supply chain operations. When a system is network-based, all participants in the supply chain have an equivalent impact.
The market sensitivity feature automatically adjusts production in response to shifts in demand. Companies operating in marketplaces with significant demand volatility can benefit greatly from this concept.
5. The Custom-Configured Model:
A custom-configured model, which is essentially a hybrid of the agile and continuous flow approaches and is thus optimal in situations when a wide variety of product configurations are needed. Any time a customer can choose certain features, that means they are using a specialized version of the product.
6. The Flexible Model:
Adapting to periods of high and low demand is easier for firms thanks to this model’s adaptability. Part segmentation, precise stocking algorithms, and adaptable planning are the three pillars around which a flexible supply chain model is built. This is accomplished by using a variety of vendors and implementing factory-floor automation.