Essay on "Supply Chain Design"

Essay 6 pages (1867 words) Sources: 10 Style: APA

[EXCERPT] . . . .

Right Supply Chain for Your Product?

In the article What is the Right Supply Chain for Your Product? (Fisher, 1997) the author contends that there needs to be a precise alignment of an organizations' supply chain objectives, frameworks and strategies to the product strategies of the firm. The author provides a series of insights and frameworks for making this point throughout the article, beginning with a discussion of how critical it is for supply chains to be demand-driven and progressing through the trade-offs of functional relative to innovative products. The article logically progresses to a discussion of physically efficient vs. market-responsive supply chains and the differences between each. Devising the ideal supply chain strategy entails matching the innovativeness of a product with the responsiveness of its supply chain to ensure a high level of accuracy and cost reductions in sourcing, coordinating, manufacturing and fulfilling the product. Likewise, the author contends that functional products require an efficient supply chain due to the efficiencies necessary to fulfill demand. The efficient supply of functional products, often common in pick-pack-ship traditional fulfillment operations (Yao, Liu, 2009) are contrasted with the need to provide greater responsiveness to innovative and mass customized products (Aldanondo, Vareilles, 2008). The author ends with a discussion of how mass customization and build-to-order products require an inherently responsive and agile supply chain that in many ways aligns with the supply chains used for new, innovative products for their introductory period. The article concludes with a discussion of how mass customization is effective as a means to gain customer loyalty over the long-term yet must also be managed closely to ensure overproduction or lack of forecasting accuracy occurs. The dichotomy of how critical it is for mass customization to fulfill the expectations set with customers on the one hand while also creating the necessary levels of supplier, process and system synchronization is critical for its success as a strategy (Yao, Liu, 2009). Mass customization as a strategy enabled by supply chains shows significant potential for increasing sales and also entering adjacent markets, yet forces a high level of demand visibility and supply chain coordination.

Critique from New Zealand Manufacturing Perspective

The New Zealand manufacturing industrial base is heavily dependent on coordination and synchronization of supply chains globally, as the country is distribution hub for a variety of industries. The critical nature of Vendor Managed Inventory (VMI) is especially important as a supply chain strategy in the broader frameworks of New Zealand's manufacturing base for example (Basnet, Corner, Wisner, Tan, 2003). VMI is critical for the efficient functioning of nearly every manufacturing industry's supply chain that is integrated into the New Zealand economy due to the need for assumption of shared risk across the supply chains that seek to maximize accuracy and velocity at the same time (Sari, 2008).

The adoption trends of VMI as a supply chain strategy throughout the New Zealand industries that must rely on it to both increase accuracy and efficiency but also share risk are contrarian to the first point the author of the article makes with regard to an abundance of automation and technology and little actual results (Fisher, 1997). Given the critical need to keep supply chains that are dependent on New Zealand's manufacturing industry for synchronization, the nation and its industries were forced into a more process-centric approach to adopting supply chain technologies first (Aldanondo, Vareilles, 2008). The criticality of supply chain coordination, integration and the need to continually create greater levels of collaboration forces New Zealand manufacturing to quickly get beyond the fascination with new technologies and concentrate on process-based efficiencies and solutions instead. As has been the case with supply chain best practices globally, New Zealand manufacturing industries, from durable goods to consumer products and consumer packaged goods, by definition must focus on collaborative strategies for ensuring a high level of supply chain performance (Attaran, Attaran, 2007).

The authors' main point of the article however concentrates on creating frameworks for aligning supply chain strategies to the specific requirements of products. From their position in the product lifecycle, to their classification as either an innovative or functional product, to the strategies used for enabling and sustaining demand, Fisher contends that there must be an alignment of supply chain processes and frameworks to these specific needs. He specifically shows that successes and failures how the need for these frameworks can have significantly different effects on how profitable a given product is and how capable companies are of being able to compete with these inherent strategies over the long-term. Beginning with a discussion of the extent to which a supply chain is demand-centric or not having a strong influence on its ability to fulfill demand for innovative products, to the definition of demand-driven supply chains as networks, the article illustrates how collaborative planning and forecasting in any supply chain is critical. As has often been discussed throughout manufacturing-centric supply chains, the concept of a Demand Driven Supply Network (DDSN), originally attributed to AMR Research (Barrett, 2007), has implications across the spectrum of products, from the simplistic to the more complex and mass customized. This is allegorical to the manufacturing supply chains throughout New Zealand that must concentrate on accurate forecasting and include lead time planning in order for products manufactured in-country to be used throughout the world. It is a critical component of any supply chain that is dependent on New Zealand manufacturing to include the DDSN-based framework as a means of being more aligned with the supply chain, trading, and manufacturing partners globally. The author also makes the point that commodity-like products are also inherently more stable and therefore more capable of being accurately forecasted over time, while the forecasting and replenishment processes of innovative products are by nature much more challenging and difficult to predict. The author (Fisher, 1997) further defines this reference by discussing the physically efficient vs. The market-responsive processes within supply chains, and the need for continuous replenishment in the context of both. One of the more complex supply chains strategies of collaborative planning, forecasting and replenishment (CPFR) specifically addresses this area of supply chain management. CPFR is predominantly found in the industries that New Zealand relies on from a manufacturing standpoint for the majority of its revenue, which are from the dairy products, meat and lumber industries. CPFR is critically important in these industries as the timeliness of delivery has a direct impact on the overall salability and value of inventory (Thompson, 2005). CPFR, for New Zealand's manufacturing industries, is crucial to retain the value of inventory and realize a suitable Return on Sales over time. Further, CPFR has a global perspective to it as well, as suppliers that form any broader network must be coordinated with to ensure food products don't languish in supplier channels over time. CPFR is a framework that allows these specific New Zealand industries to continually coordinate and gain logistics and fulfillment efficiencies as a result.

One point the author alludes to but does not address entirely is the concept of supply chain collaboration and the ability of suppliers, over time, to create a Network Effect of learning (Attaran, Attaran, 2007). The collaborative nature of supply chains has the potential to create more value from learning and knowledge over the long-term than would be possible by competing purely n price or availability. The development of knowledge as the key differentiator within a supply chain to the process level is what differentiates one nations' series of industries from another. Dr. Micheal Porter, in his extensive writing and research contributions on competitive theory, makes this point abundantly clear in discussions of the competitive advantage of nations. The ability of the New Zealand suppliers to create more knowledge and information sharing will in turn lead to more effective strategies with regard to continuous replenishment as well. This process centricism is evident in one of the most intricate and complex of tasks any manufacturer must excel at however is the product introduction process. The product launch process impacts each aspect of any supply chain, forcing it to be as collaborative as possible to meet demand for the initial orders, while also staying in close contact throughout the product development and initial manufacturing runs to ensure accuracy and quality. The new product development and introduction process forces the issues of collaboration and shared learning throughout entire supply chains, while at the same time forcing the need to align to a specific date of product introduction as well (Burkett, 2005). This is in many industries the most demand-driven of strategies in that it relies on the active planning, forecasting, and in durable goods, electronics and manufacturing industries, intensive coordination to ensure subassemblies will integrate with one another and be compatible. The author (Fisher, 19997) discusses the product introduction process from the standpoint of collaborative forecasting, yet in fact it is much more complex and intricate than his article defines.

Conclusion

In critiquing the article cited (Fisher, 1997) the need for frameworks that align with the innate aspects of a… READ MORE

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