The Different Supply Chain Models Explained

Supply chain management is crucial for any business manufacturing electronic devices such as computers and smartphones. The effectiveness of your strategy impacts your profits, the speed of delivery, working capital requirements, production speed and delivery to your customers who use an online marketplace to buy electronic components. Understanding the primary supply chain models can assist you in determining which one to implement for your company.

Efficient supply chain model

As the name implies, this model is focused on lowering costs and maximizing asset utilization. Commonly adopted by commoditized industries such as steel and cement, this approach works best for highly competitive sectors where production is scheduled on the basis of expected sales. With this, your company will need tools that would optimize each function with the application of effective collaboration processes that improve the supply chain and connect all of its branch departments.

The fast supply chain model

When businesses order trendy products to meet fad-based needs, they need their items quickly to accede to capricious consumer demand. Therefore, the time lapse between idea and end user must be speedy, with as few kinks and interruptions as possible.

The continuous flow model

Stable, mature industries often rely on this model. The focus is on providing a steady supply of items while keeping inventory surpluses to a minimum.

The agile supply chain model

Many manufacturers provide customized products to their clients that meet unique specifications. This model is suited for their needs, employing make-to-order techniques and producing small batches of these “boutique” items.

The custom-configured supply chain model

This approach combines the continuous flow and agile supply chain models and is particularly suited for companies that manufacture products whose parts can be assembled in a variety of different ways. Before the product is configured into its various iterations, this model operates using the continuous approach. Employing agility priorities takes precedence downstream after configuration happens.

The flexible supply chain model

Industries that experience high peaks of demand followed by periods of downtime need a supply chain model that matches this climate. The flexibility that characterizes this approach is needed when companies must adapt their manufacturing processes to accommodate changing and often sporadic customer requirements. Along with nimbleness, companies employing this model must also respond rapidly, possess an array of technical assets in order to solve unpredictable and complex problems and have an adaptable process flow that allows for adept pivoting.

For many manufacturers, there are appealing benefits in some or all of these different models. Consequently, procurement teams and other managers frequently question whether it would be advantageous for the manufacturer to implement a supply chain that simultaneously incorporates more than one of these approaches. Although this impulse is reasonable and reflects a desire for maximum efficiency, speed and flexibility, the reality is that there is a more tenable solution. Instead of weighing down one supply chain with numerous and sometimes warring requirements, it is often preferable to set up parallel chains that meet different yet compatible company needs. Ultimately, it is the organization that devotes a combination of mission-driven efficiency and creativity that leaves with the most effective supply chain hybrid or model.